Helping Small Businesses with Federal Taxes
As a small business owner, you may face challenges in complying with federal tax laws. From the risk of underpaying taxes to meeting tax deadlines to keeping up with changes to the tax code, it takes a skilled tax attorney to help you understand your federal tax obligations.
Regal Tax & Law Group, PC is a premier tax practice serving business clients throughout San Francisco and across the nation. Before you become involved in a tax controversy, you need the informed representation we provide. Well-versed in the applicable provisions of the Internal Revenue Code, we know that federal tax law compliance is essential for ensuring the viability of your business.
Our legal team can help you navigate a myriad of tax law issues so you can focus on the bottom line: growing your business. When you become our client, you will have confidence, knowing our experienced federal small business tax lawyers are in your corner.
Common Federal Tax Issues Facing Small Businesses in San Francisco
Small businesses have a number of complex tax responsibilities, not the least of which is accurately reporting their business income and deductions on their tax returns. Given the complexities of the Internal Revenue Code and IRS rules, accidental noncompliance by small businesses is not uncommon, often resulting in tax penalties.
This is where Regal comes in. Our experienced tax lawyers can help you avoid common tax errors such as:
- Underpaying estimated taxes — Businesses structured as sole proprietorships, partnerships and S corporations that expect to owe tax of $1,000 or more for the year are required to make estimated, quarterly tax payments. The IRS can assess a 20 percent penalty against a small business for underestimating and underpaying taxes. Ultimately, making estimated tax payments requires you to maintain accurate financial records and track income, expenses and deductions on an ongoing basis.
- Not separating business and personal expenses — Only business-related expenses can be deducted from your income for tax purposes, which makes it crucial to separate these from your personal expenses. In the event of an IRS business audit, you must be able to prove expenses are business-related, which makes good recordkeeping essential.
- Not taking the proper deductions — The IRS only allows you to deduct “ordinary and necessary” expenses (see IRS Publication 535); however, small business owners commonly deduct phones, home offices, travel, and other expenses which the IRS considers to be personal and therefore not deductible. Taking improper deductions can result in significant tax penalties.
- Not Reporting Cash Payments — Cash-based small businesses such as restaurants, hair salons, and retail stores must maintain detailed records of income and expenses and report this information to the IRS. The IRS will likely audit your small business if you fail to report all sources of income.
- Misclassifying employees — Misclassifying an employee as an independent contractor, whether inadvertently or intentionally, is considered payroll tax fraud, which can result in significant penalties. A skilled tax lawyer can help to ensure that you properly classify employees according to the complex 20 factor test used by the IRS.
- Filing late/failing to file — You must file business tax returns in a timely manner, and the filing deadlines are based on how your business is structured. There are different forms and deadlines for C-Corporations, S-Corporations, and Limited Liability Companies (LLCs), and there is a penalty for filing late. Similarly, failing to file your tax returns can result in a 25 percent penalty, which will be added to the overall tax bill.
Why Choose Regal Tax & Law Group, PC
Given the complexities of the American tax system, the biggest challenges small businesses face are the time involved in preparing and filing tax returns and the cost of compliance. Let’s face it: federal tax compliance is a year-round job.
While tax preparation software is available that can help your business stay compliant with federal taxes, your filing requirements are likely to change as your company grows. Moreover, software may not be up-to-date if/when tax law changes. The best way to understand and adhere to applicable federal tax regulations is to consult with an experienced tax lawyer.
Regal Tax & Law Group, PC has been advising small business owners for over 10 years, regularly assisting our clients with regulatory compliance and tax controversies. When you consult with us, we will work to help you understand the federal tax requirements for your business and remain compliant with IRS rules.
We represent business clients, such as realtors, investors, and construction tradesmen, on a variety of tax-related issues, including:
- Tax Audits
- Tax disputes and litigation
- Income tax evasion
- Levies and liens
- Installment agreements
- Wage garnishments
- Administrative appeals
Our experienced tax attorneys have a proven history of helping our clients avoid tax penalties and routinely resolve over $5 million in tax issues each year on their behalf. If you run a small business in California, you need the trustworthy tax advice we provide. Please contact our office today for a complimentary consultation.
Helping Small Businesses Across California including Alameda, Napa, Marin and San Mateo Counties