Business Accountant Austin TX

Remote Work and Taxes: Does Your Remote Workforce Create Income Tax Nexus in 2024?

Remote work has become the new normal, but it’s not without its tax implications. As companies navigate the post-pandemic landscape, one important question remains: does remote working create income tax nexus for your business? In other words, if your employees are working from different states, could this mean you owe taxes in those states too? Let’s break it down.

Nexus is the connection a business has with a state that subjects it to that state’s tax laws. Whether through sales, property, or employee activities, your business could be responsible for taxes in any state where it has nexus. With remote work now more prevalent than ever, this is a question all businesses need to ask themselves.

❓ How to Know If Remote Working Creates Nexus

The shift to remote work has resulted in employees working from different states—states they may not have worked from before. If your employees have been working remotely in other states, your company may have created nexus in those states. Nexus can mean having to comply with payroll withholding, income tax, and even sales tax regulations in each new location.

While some states have offered temporary relief for businesses due to the pandemic, those rules are often changing, so it’s essential to stay informed.

💡 Individual Income Tax Payment and Withholding

Any individual income tax and related payroll withholdings are usually sourced to the state where the employee performed their work. As many employees are now telecommuting due to COVID-19, certain states and cities have adopted the ‘Convenience of the Employer’ test.

This means that the wages of those remote workers are sourced to the employer’s location unless it was decided to have the employee in another state based on the employer’s necessity, rather than the employee’s convenience. For example, Philadelphia-based employers who are working outside the city are exempt from the city’s wage tax for the days spent working.

📆 Apportionment

There’s also the issue of apportionment; many states still use a three-factor method of property, payroll, and sales to help calculate the business tax apportionment factor. As employees are now working from home, states could insist that the compensation paid is creating a payroll factor numerator.

💡 State Taxes

Remote work can also affect your company’s state tax obligations. Normally, a business would have nexus for state tax purposes if it has a physical presence in the state. However, with employees working remotely, your company may have a tax presence in multiple states without ever setting foot there.

While some states have temporarily suspended nexus rules due to the pandemic, others have not provided guidance, leaving businesses in uncertain territory.

❓ What States Are Doing

As of now, states are handling nexus rules in different ways. Some, like Alabama, have stated that remote work won’t create nexus, while others, such as Utah and Nebraska, have taken a stricter approach. With the tax landscape constantly evolving, it’s important to stay up-to-date with the latest guidance.

Make Your Next Move

Remote work isn’t going anywhere, and neither are its tax implications. To ensure your business stays compliant with the latest nexus rules, it’s essential to have a proactive strategy in place.

Reach out to us today! Whether your team is working from Texas or telecommuting from across the country, we’ll help you navigate the complexities of remote work and individual income tax in 2024. Let’s make sure your business is covered, no matter where your employees are.

Urgent: New Federal Filing Requirement for LLCs and Corporations – Act Before the December 31 Deadline!

If you’re a business owner with an LLC or corporation, we’ve got an important update for you. There’s a new federal requirement under the Corporate Transparency Act that means you need to file a Business Ownership Information (BOI) Report with FinCEN. But before you start worrying about complicated filing processes or hefty fines, let’s break it down.

⚠️ Don’t Get Ripped Off

You may have already come across some alarming emails or ads warning of severe penalties or offering to file this report for outrageous fees. Don’t fall for it. We’ve seen people charging hundreds or even thousands of dollars for something that takes only 5–10 minutes to complete. These high fees are totally unnecessary, and it’s nothing more than taking advantage of business owners.

❓ Why Is This Required?

In a nutshell, the U.S. government is asking if your LLC or INC has any foreign ownership. That’s the key focus of this filing – simple as that.

📆The Deadline You Need to Know

This filing isn’t optional. Your BOI Report is mandatory and needs to be submitted by December 31, 2024. If you don’t file it in time, there could be penalties, so don’t let this slip through the cracks.

❓ How to File

We’ve partnered with FinCEN Advisors to make this process quick and easy for you. You can e-File your BOI Report in just a few minutes! It’s a one-time filing, unless your LLC or INC ownership changes down the road, in which case you’ll need to submit an updated report.

What You Need to e-File

Filing is simple, but you’ll want to have these details ready before you start:

📌 Your company’s legal name and any trade names (if applicable)
📌 The address of your principal place of business
📌 The state of formation where your LLC or INC was originally registered
📌 Your company’s EIN number
📌 Information on each beneficial owner: name, date of birth, residential address, identification number, and a copy of their driver’s license or passport

Which Plan Should You Choose?

When filing your BOI Report with FinCEN Advisors, go for the most affordable starter plan if you’re only reporting one LLC or corporation. If you have more entities, choose the best pricing option to save money.

Why We Can’t File This for You

While we’d love to handle this for you, our firm’s professional liability limits us from filing legal documents on your behalf. That’s why we’re informing you about this requirement and providing you with an easy way to e-File and avoid penalties.

Don’t Miss the Deadline!

To avoid potential fines, be sure to e-File your BOI Report by December 31, 2024. Or, if you prefer, you can file it yourself on the official FinCEN website.

How the New FTC Rule on Fake Reviews Affects Your Business

Have you been leaning on online reviews to boost your brand’s credibility? Well, buckle up—because the Federal Trade Commission (FTC) just dropped a new rule on fake reviews and testimonials, and if you’re not careful, you might find yourself in hot water.

Here’s the scoop on what you need to know to stay out of trouble—and how it could actually be a good thing for your business.

❓ What’s the New Rule About?

The FTC is tired of fake reviews muddying the waters for consumers and businesses alike. They’ve had enough of shady testimonials, AI-generated nonsense, and reviews from insiders pretending to be regular folks. The goal? Keep things real and fair for everyone.

Here’s the breakdown:

📌 Fake Reviews: Posting or paying for reviews that are fake—whether it’s a bot, your best friend, or someone who hasn’t even seen your product—is now a no-go.
📌 Buying Reviews: Handing out freebies or cash for positive or negative reviews? Nope. Not unless you’re being fully transparent about it.
📌 Insider Reviews: If your employees, managers, or even relatives are leaving glowing reviews without mentioning they’re on your payroll (or in your family group chat), that’s a problem.
📌 Controlling Review Websites: You can’t run a review site and act like it’s impartial if you’re using it to push your own products. People see right through that.
📌 Review Suppression: Hiding bad reviews through intimidation or legal threats? Yeah, not allowed anymore. And don’t think you can get away with only showing the good stuff.

❓ How Could This Affect Your Business?

If you’ve been cutting corners with fake reviews, it’s time to stop. The FTC sees them as a way to rig the system, and now they’ve got more muscle to crack down on it. Violating this rule could lead to fines or legal drama you don’t want.

But here’s the upside: if you’ve been doing things by the book, this new rule can actually work in your favor. It’s going to level the playing field. No more competing with businesses that buy their way to the top with fake reviews. Plus, consumers will trust reviews more, knowing they reflect actual experiences.

❓ What Should You Do Now?

1️⃣ Audit Your Reviews: Take a hard look at your reviews. If you’ve got any that were paid for or written by someone with ties to your business, make sure that’s disclosed—transparency is key.
2️⃣ Be Upfront: If you’re offering an incentive for reviews, that needs to be clear in the review. No sneaky tactics allowed.
3️⃣ Use Legit Review Platforms: Stick to platforms that verify reviews. This gives you peace of mind that the feedback you’re getting is real.
4️⃣ Get Real Reviews: Ask your actual customers to leave reviews. Genuine feedback is way more valuable in the long run than fakes, and it keeps you on the right side of the law.

❓ Why Does This Matter to You?

Building trust with your customers is everything. This new FTC rule is all about making sure reviews reflect real customer experiences, which means more trust in the marketplace. Staying compliant not only protects you from legal headaches, but it also helps build your brand’s credibility.

So, as you continue growing your business, remember: authenticity always wins. Honest reviews lead to loyal customers, and fake ones? They’ll only lead to fines—or worse.

Don’t get caught off guard. The new rule is in effect soon, and you’ll want to be ready.

7 Must-Know Tax Tips for Global Entrepreneurs in 2024

You’re living your best life abroad, but there’s a nagging question in the back of your mind: Do I still have to deal with U.S. taxes?

Well, strap in because I’ve got the lowdown for you—and trust me, it’s not as mind-boggling as it seems.

💡 Tax Residency

Where you rest your head matters for U.S. taxes. If you’ve got a U.S. Green Card or Passport, Uncle Sam wants to know about all your income, whether it’s from a cozy corner in the U.S. or halfway across the globe. But, if you’re living that free-spirited life without these, how you make your money will dictate your tax status.

Becoming a U.S. Resident

Want to join the tax-paying elite in the U.S.? You’ve got some options:

📌 Snag a Green Card (basically the VIP pass for foreigners).
📌 Rack up enough days in the U.S. to pass the “Spending Time” test.
📌 Make a first-year election and wave the tax flag early.

And if you’ve got a U.S. Passport, you’re a full-time tax resident no matter where in the world you’re sipping that latte.

💡 Tax Rules for Non-Resident Aliens

If you’re not in the resident club, you’ll only pay taxes on what you make in the U.S. Different types of income might have different tax rates. Let’s say you’re selling stuff on Amazon USA – that means you’ve got U.S. nexus and owe U.S. taxes, no matter where you’re calling home.

✅ Filing Requirements

When tax season rolls around, Green Card and Passport holders use Form 1040, just like the locals. Non-resident aliens have their own form, 1040-NR. And remember, if you’ve got tax ties to a state, their rules can be a bit like the rules of a board game – they change depending on how you’re earning your bucks.

✅ Taxpayer ID

To join the tax party, you’ll need a special ID known as a Taxpayer Identification Number. It’s like your VIP pass to the U.S. tax scene. Foreign citizens can apply for an ITIN, but keep in mind, the process might involve sending your passport by mail, and it can take a while. If you’re rocking a Green Card or Passport, you’re required to get an SSN (Social Security Number) for tax filings and financial business in the U.S.

✅ Taxes

Good news! There are deals in place to ensure you’re not taxed twice. Many countries have treaties in place that let you use credits from both the U.S. and your home tax residency so you avoid double taxation.

✅ Reporting Foreign Accounts

If you’ve got a Green Card or U.S. Passport and some savings tucked away in a foreign account, there’s extra paperwork beyond the standard tax return. Even if it’s just a name on a safe deposit box, Uncle Sam wants to know. Skip the reporting, and the penalties can hit harder than you’d expect.

Taxes may seem like an endless maze of forms and jargon, but don’t worry. Our stellar team at Insogna CPA is here to help you breeze through it. We specialize in making sense of U.S. taxes for global entrepreneurs like you. No more tax headaches, just clear, straightforward answers.

Ready to untangle your U.S. tax situation?

Partnership Compliance in 2024: What Your Business Must Know

One of the most important compliance requirements for partnerships is registering with the appropriate state agency. This involves filing a partnership agreement, which outlines the terms of the partnership, with the state. In addition to registering with the state, partnerships may also need to obtain business licenses or permits, depending on the type of business they operate and the location.

Partnerships are also required to obtain a federal employer identification number (EIN) from the Internal Revenue Service (IRS). This number is used to identify the partnership for tax purposes, and partnerships are required to file annual tax returns with the IRS. Partnerships are not taxed at the entity level; instead, the partners report their share of the partnership’s income or loss on their individual tax returns.

Another compliance requirement for partnerships is maintaining accurate records. Partnerships are required to keep track of their income and expenses, as well as maintain records of any loans or investments made in the business. Accurate record-keeping is not only a legal requirement, but it also helps partnerships manage their finances and make informed business decisions.

Partnerships may also be subject to industry-specific regulations and compliance requirements. For example, partnerships operating in the healthcare industry may be subject to HIPAA regulations, while those in the financial industry may need to comply with SEC or FINRA regulations.

Finally, partnerships may also be subject to employment laws and regulations if they have employees. This includes complying with minimum wage laws, overtime laws, and anti-discrimination laws. Partnerships may also be required to provide certain benefits, such as workers’ compensation insurance, to their employees.

To sum it up, partnerships need to meet a wide range of compliance requirements, including:

✅ Registering with the state and filing Partnership Agreements
✅ Getting an EIN
✅ Keeping accurate financial records
✅ Complying with industry-specific regulations
✅ Following employment laws

Nailing these requirements not only keeps your partnership legal but also helps it thrive ethically and responsibly.

Got Partnership Compliance Questions?

Don’t stress over compliance or tax complexities! Whether you’re forming a new partnership or reviewing your current setup, we’re here to help. Reach out to us today, and let’s make sure your partnership requirements are squared away for 2024.

Short-Term Rentals and Taxes Explained in 2024

These special (and sometimes complex) taxation rules are based upon the length of time you rent your property out and with varying tax outcomes. In some situations, the rental income may be tax-free. In other situations, your rental income and expenses may need to be treated as a business, as opposed to a rental activity. The following is a general synopsis of the rules governing short-term rentals (those rented for average rental periods of 30 days or less).

📌 Rented for Fewer Than 15 Days During the Year

When a property is rented for fewer than 15 days during the tax year, the rental income is not reportable, and the expenses associated with that rental are not deductible. Interest and property taxes are not prorated, and the full amounts of the qualified mortgage interest and property taxes are reported as itemized deductions (as usual) on the taxpayer’s Schedule A.

💡 The 7-Day and 30-Day Rules

Rentals are generally passive activities.

However, an activity is not treated as a rental if either of these statements applies:

1️⃣ The average customer use of the property is for 7 days or fewer—or for 30 days or fewer if the owner (or someone on the owner’s behalf) provides significant personal services.
2️⃣ The owner (or someone on the owner’s behalf) provides extraordinary personal services without regard to the property’s average period of customer use.

If the activity is not treated as a rental, then it will be treated as a trade or business, and the income and expenses, including prorated interest and taxes, will be reported on Schedule C instead of Schedule E, the IRS form used to report longer-term real estate rentals. IRS Publication 527 states: “If you provide substantial services that are primarily for your tenant’s convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C.” Substantial services do not include furnishing heat and light, cleaning public areas, collecting trash, and such.

💡 Exception to the 30-Day Rule

If the personal services provided are similar to those that generally are provided in connection with long-term rentals of high-grade commercial or residential real property (such as public area cleaning and trash collection), and if the rental also includes maid and linen services that cost less than 10% of the rental fee, then the personal services are neither significant nor extraordinary for the purposes of the 30-day rule.

💵 Profits and Losses on Schedule C

Profit from a rental activity is not subject to self-employment tax, but a profitable rental activity that is reported as a business on Schedule C is subject to this tax.

A loss from this type of activity is still treated as a passive activity loss unless the taxpayer meets the material participation test – generally, providing 500 or more hours of personal services during the year or qualifying as a real estate professional.

Losses from passive activities are deductible only up to the passive income amount, but unused losses can be carried forward to future years. A special allowance for real-estate rental activities with active participation permits a loss against nonpassive income of up to $25,000 – but phases out when one’s modified adjusted gross income is between $100K and $150K. However, this allowance does NOT apply when the activity is reported on Schedule C.

Rental Property Tax Help

Navigating the tax rules for short-term rentals can feel overwhelming, but you don’t have to do it alone. Reach out today, and we’ll work with you to ensure you’re maximizing the tax benefits for your rental property and avoiding any costly surprises. Let us help you turn those short-term rentals into long-term wins for your finances in 2024!