287 High Street, Suite 319, Holyoke, Massachusetts 01040, United States
events
¡Nuestro noveno año!
Holyoke Tax Service is honored to have sponsored this great community event for all 9 years!
updates
Thank you for a great 'regular' season, and, as always, we are at your service throughout the year!
Do Sole-Proprietors Get Paid?
The short answer is no, at least not in the sense of getting a weekly paycheck, as one does from a job. The reason for this is that, while a sole-proprietorship can certainly hire employees, the business and the owner herself are indivisible, one-in-the-same, and cannot be split into employer and employee. This is true even if there is an LLC, but, as is often the case, the owner chooses to disregard it for tax purposes. In order pay herself a salary the business owner must establish a separate entity, such as a corporation, to do so (notwithstanding she is still the only one controlling the other entity).
Of course the real answer is that a sole-proprietor's pay is as much, or as a little, as the business's net income, regardless of whether she uses it for personal purposes, which some call a “draw,” or leaves it in the business bank account. No matter what some eager payroll services may tell you, that money is already yours, no intermediary necessary. While some prefer the security of a regular paycheck, it can never beat the upside of when your business is profitable, and you are rewarded for your own hard work. And from a tax perspective, for a small-business owner it is almost always preferable to be self-employed rather an employee, most notably due to the 20% Qualified Business Income Deduction, which only applies to self-employment earnings, not wages.
Since we mentioned Limited Liability Companies, will take the opportunity to remind everyone that while they limit the business's liability, you are still personally liable for your own actions, so, particularly when you're providing personal services, and it is only you, the LLC will not save you.
There are of course many more nuances to all of this, and at Holyoke Tax Service, we are always happy to help you with any of them.
BOIR
The on-again-off-again Beneficial Ownership Interest Reporting requirement is now off for the foreseeable future in most cases, as the Financial Crimes Enforcement Network (FinCEN) will not be requiring it for any U.S. entities or U.S. persons.
On the New & Improved Massachusetts Child & Dependent Care Credit
What great news when coming into the office on a Sunday morning!
With a little persistence was able to convince the Massachusetts Department of Revenue to conform to what the law (as perhaps a rare exception) quite unambiguously states. Goes to show that you really can win against the "system," not only in small things like this, but, with enough perseverance, and belief in your cause, big things as well.
Client: "Hi David
I think the letter you sent might have changed their mind. I received a refund of $226 and then got another one recently in the amount of $310, which I believe is is the amount you indicated was for the tax credit.
Thanks for your efforts. Much appreciated."
What I had previously written to client: "Hi .., apparently the DOR prefers to be obstinate. Chapter 62(x) says, "The credit is available to taxpayers who maintain a household that includes at least one individual who is (1) under the age of 13 and who qualifies for the federal exemption for dependents provided by Internal Revenue Code (“Code”) § 151. "You maintain a household that includes your son who is under age 13 and qualifies as a dependent (and whom you would have claimed as such, excepting that you released the exemption to his non-custodial parent). I will send a reply to the letter."
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About Us
Our Office
- 287 High Street, Suite 319, Holyoke, Massachusetts 01040
- Conveniently located near Holyoke City Hall and the Holyoke Transportation Center
- Please call, text, or message us for an appointment (please see our policy above)
David Yos
- Over fifteen years of tax preparation experience.
- Holyoke resident since 1999.
- Married to Jacqueline Yos, with two daughters and six grandchildren.
Our Services
- Preparation of all 1040 series tax forms
- Form 990 - Tax-Exempt Organizations
- Authorized IRS e-filer
- Small business returns
- Rental property returns
- Multi-state returns
- Your proactive adviser: W-4's, estimates, etc.
- Please ask about other services we may provide.