Jul 252012
 

The IRS is continuing to go after taxpayers who attempt to use S corporations to avoid payroll taxes.  Generally speaking, a wage-earning taxpayer is subject to a variety of payroll taxes, which can include income, Social Security, Medicare, and unemployment taxes.   Sometimes, business owners reach the conclusion that they can pay themselves very little in terms of salary and then call the rest of the company’s earnings a distribution, in order to escape payroll taxes. The problem with this strategy is that the IRS will aggressively pursue taxpayers whom they feel are paying themselves an “unreasonably” low salary in an More…

Nov 112011
 
Florida Employers Could See Major Unemployment Tax Hike

If the Florida legislature fails to act soon, Florida business owners could see a significant increase in their unemployment tax bill.  Business owners will see their bill go up to $172 starting Jan. 1, 2012 as the state continues to feel the effects of a lingering recession, sluggish payroll growth and double digit unemployment.  While certainly disturbing, the tax hike is not altogether unexpected, because it was supposed to occur two years ago.  Employers were initially bracing for a large tax hike in 2010, but state legislators decided to stall the increase in the hopes that the economy would recover. More…

Oct 072011
 
It Seems The Federal Government Has Had Enough Of Medical Marijuana

On Wednesday we posted a blog discussing the recent IRS ruling against medical marijuana dispensaries’ ability to take deductions for payroll, expenses, etc.  Now it appears that the DOJ has begun cracking down on these facilities as well.  Federal prosecutors have begun warning pot dispensaries in California that they must shut down in 45 days or face criminal charges and confiscation of their property, even if they are operating legally under the state’s medical marijuana laws.  According to U.S. Attorney Laura Duffy of San Diego, “under United States law, a dispensary’s operations involving sales and distribution of marijuana are illegal and More…

Oct 052011
 
IRS Rules Against Medical Marijuana Dispensaries

The IRS has ruled that dispensaries of medicinal marijuana cannot deduct standard business expenses such as payroll, security, or rent.  In a ruling against Harborside Health Center of Oakland California, one of the nation’s largest medical marijuana dispensaries and one that is considered a model for the industry, the IRS held that the company owed $2.5 million in back taxes for the years 2007 and 2008. The basis for the IRS ruling was Section 280E of the Internal Revenue Code, which was originally enacted to target drug kingpins and cartels, and bans any tax deductions related to “trafficking in controlled More…

Sep 142011
 
Florida Documentary Stamp Tax And Transfers To LLCs

In Florida, documentary stamp tax is generally levied at the rate of $.70 per $100 (or portion thereof) on documents that transfer an interest in real property, such as warranty deeds, quit-claim deeds, easements, and deeds in lieu of foreclosure.  An exception is Miami-Dade County, where the rate is $.60 per $100 (or portion thereof) when the property is a single-family residence.  The tax is calculated based on the amount of consideration that passes between the buyer and the seller, which may include the amount of a mortgage on the property. In an effort to avoid paying these taxes, individuals More…

Jun 222011
 
Florida Sales Tax Holiday Highlights The Duty To Collect And Remit Florida Sales Tax

Florida parents will no doubt be delighted to hear that Governor Scott recently signed a bill into law that provides tax breaks on certain clothing items up to $75 and school supplies up to $15.  This tax break will be in effect from August 12th through the 14th, which corresponds with the three days leading up to the start of the school year.  Only certain items are eligible to be purchased without incurring sales tax and the Florida Department of Revenue makes it quite clear that vendors are responsible for collecting sales tax on all items which are not included.  More…