vania-janet/multiturn-rag-retrieval-data huggingface dataset:
The contract is not with the guests. The guests will not be paying the $500 fee, the people paying for the wedding have a contract and they will be required to pay the fee.   That's reasonable to me. If an employee causes damage the employer can be liable; if I have guests at my home who cause damage I can be found liable. Why not wedding guests?
"When you pay the flight, hotel, conference attendance fees of $100: When you repay the credit card debt of $100: When you receive the gross salary of $5000: Your final balance sheet will show: Your final income statement will show: Under this method, your ""Salary"" account will show the salary net of business expense. The drawback is that the $4900 does not agree with your official documentation. For tax reporting purposes, you report $5000 to the tax agency, and if possible, report the $100 as Unreimbursed Employee Expenses (you weren't officially reimbursed). For more details see IRS Publication 529."
They're understaffed. There's one lady who works in the office and lives onsite. She's the right lady for the job because she is on top of absolutely everything, but she's way overworked. So the company above her probably justifies it that they're not putting in any extra payroll, just overworking the poor lady.
When the corporate tax rate is increased corporations either pass tax this on to 1. consumers through higher prices 2. Shareholders through smaller/fewer dividend payouts or 3. Employees through lower wages.   The paper argues that the tax burden mainly falls on the shareholders which is whoever owns the stock (capital income). Effectively investors and retirement accounts/mutual funds etc
One piece of documentation that might help here is a confirmation of your benefit selections through your employer for each year since the expenses in question were incurred, assuming you have a job with eligibility for benefits.  If you can prove which accounts you maintained through your/your spouse's (if applicable) employer(s), then it is relatively simple to go back through the records for those specific accounts and see if a specific expense was ever reimbursed.  Obviously, you can't prove through documentation that you didn't have accounts that don't exist. This seems like it would be more important for the accounts elected by a significant other, since I believe reimbursements from an account in your name would typically be reported to the IRS on your behalf anyway. Also, keep in mind that the IRS won't care about each line item individually.  Their focus will be on whether, for any given snapshot in time, your total reimbursed amount exceeded your total eligible expenses.
Suppose your company policy is that employees make purchases with their own personal credit cards and submit receipts for reimbursement. In this case the employer can simply reimburse and would not know or care if the employee is racking up rewards/points/cashback. The trick is, as the employee, you must always purchase business related items normally so you have receipts to show, and if you receive cashback on the side there seems to be a ""don't ask, don't tell"" rule that the IRS is OK with. It works the same way with heavy business travelers and airline miles- the free vacations those users get as perks are not treated as taxable income. However, I would not go out of my way to abuse this ""loophole"". Typically, things like travel (airfare, hotel, car rental, meals) are expected. But I wouldn't go purchase 100 company laptops on your personal card and ask the company to reimburse you. The company should purchase those 100 laptops on a company card and effectively reduce the sale price by the cashback received. (Or more realistically, negotiate a better discount with your account rep and just cut them a check.) Part 3: Would there be any difference between credit card points and brand-loyalty points? If the rental car were paid for with points earned directly on the rental car company's loyalty system (not a CC), would that yield a different result? There is no difference. Perhaps the simplest way to think about this is you can only deduct an expense that you actually incur. In other words, the expense should show up on a bank or CC statement. This is why when you volunteer and work 10 hours for a charity, you can't call that a ""donation"" of any amount of money because there is no actual payment made that would show up on a bank statement. Instead you could have billed the charity for your 10 hours of work, and then turned around and donated that same amount back to them, but it ends up being a wash."
how does a single employee LLC bring in 500k?  I mean if you want to have it in a low-tax environment, you can probably invest it in something and then pull them out? I don't think you can put away pre-tax earnings to then use on salary costs.
Almost every company I know of charges something like 2% per month on past due accounts.  They are not financial institutions, so it's probably quite legal.
"To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.  (IRS, Deducting Business Expenses) It seems to me you'd have a hard time convincing an auditor that this is the case.  Since business don't commonly own cars for the sole purpose of housing $25 computers, you'd have trouble with the ""ordinary"" test.  And since there are lots of other ways to house a computer other than a car, ""necessary"" seems problematic also."
In Singapore, this is sufficiently common that the Singapore IRS has a page on their website dedicated to informing employers of how to properly pay this under Responsibilites of an Employer.   Specifically, tax paid by employer is taxable income for the employee (as it's really the employee's responsibility), so they must pay tax for that tax.  A tax-on-tax is computed for the tax paid, which also would be owed by the employer if they were paying the full tax rate for the employee. As a clarification, this is not the employer being truly responsible for the employee's income; this is the employer compensating the employee further to offset their taxable income.  This is effectively a fringe benefit, although it may be particularly useful in countries where either tax evasion is common (and thus an employer must compete with employers willing to pay under the table) or where employers are competing with others in nearby countries with lower tax rates.  It is not the same thing as the employer making your income nontaxable, though, and has implications for your tax filing. Significantly, it is likely that if you have additional income beyond income from that employer, it is likely to be taxed at your highest tax rate, as the employer will likely calculate the tax due based on their income being the only income you have in that year. *Edit based on emphasis in question: I'm not from Singapore nor am I a lawyer, but based on my reading of the IRAS website, it looks like you do not have to file if you have no other source of income, because they have a No-Filing Service which takes income information from your employer automatically and generates a tax bill, which presumably would be fully paid in your case.  This only aplies if you have no other sources of income, however; you still have to file if you have other sources of income since your employer would not know about them. If you are eligible for this service, you should get a letter informing you as such.  They also have a tool to check your filing status on their website.
Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1. I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses. I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;) Mariette IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.
"No, but you can better see who is making that profit possible.  I've worked for companies where some divisions were making a profit according to their books. But when you take into account the resources they were consuming, especially IT, they were really operating at a loss.  In the case of IT I don't think its beneficial to ""make a profit"", but they should at least charge the other departments their cost just so you can see how those other departments are impacting the company as a whole."
"Wait, are you sure you've got that right? What you're describing is a tax credit that counts against your total owed.   In normal operations, companies get to ""write off"" all of their expenses and they only pay taxes on the net profit of the operation. So I guess you could say that if it cost me $100M to move a factory off shore, and my marginal tax rate was 35%, then I would ""save"" $35M in taxes ( it still cost me the $100M, but it only felt like it cost $65M).   This is true of any business expense. I (not Romney, apparently) don't know of any special treatment that offshoring activities get one way or the other."
"If you elect to have the company treated as an S corp, the profits/losses of the company will pass through to the shareholders (i.e. you) on a Schedule K-1 form every year. These amounts on the Schedule K-1 are taxable whether or not the company actually distributed the money to you. Typically, the company will distribute profits to the shareholders because they will have to pay taxes on this amount. https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/What-is-a-Schedule-K-1-Tax-Form-/INF19204.html So the money held in the company's bank accounts won't appear on your taxes per se, but the profits/losses as reported on the company's tax return will pass through to you on the Schedule K-1. Typically these amounts are taxed as income. Your tax accountant can advise you on how much money you can/should take through regular payroll and how much can be distributed as a shareholder, as well as help you prepare the corporate tax returns and schedule(s) K-1 every year. There are tax advantages to taking money out of the company through distributions instead of payroll, but the amounts can be scrutinized and subject to a criterion of ""reasonable compensation"", hence my recommendation for a tax accountant."
For the employee, this is an identical tax situation to an at-the-money option purchase. They're buying an asset with a specific cost basis. For the company, you are just issuing shares from treasury as authorized... debit cash, credit additional paid-in-capital and equity. There is no tax consequence for this money received.
On form 8829, line 20 you can list utilities paid for the home office. You have two choices: 1) You can list the entire amount under column (b) as an indirect expense. You will then get a deduction for the fraction of the amount based on what fraction of your home is an office. This makes sense if the service equally benefits your entire home. 2) You can compute the portion of the expense reasonably attributable to the business/office and list that amount under column (a). This entire amount will be deducted. Which option you choose depends on how well you think you can allocate the expense between your office and the rest of your home. For example, I have had to do this with electricity, but I specifically measured the electricity used by my office. If you think you can defend allocating a larger portion to the office, use option 2. If you would have paid the same amount even if you didn't have an office, it's hard to justify allocating more of the expense to the office than its portion of the home. If you opted for a more expensive service or otherwise incurred additional costs, it makes sense to allocate a higher fraction to the office and to calculate that yourself.
Debit (increase) Expense ""wedding expenses"" by $1000. If he paid with a credit card: Credit (increase) Liability ""credit card"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. When he pays off the credit card: Debit (decrease) Liability ""credit card"" by $1000. Credit (decrease) Asset ""cash"" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset ""cash"". Credit (decrease) Capital ""shareholder equity"". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it ""capital"", others call it ""equity""): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big ""one thing"". 2: Every transaction must update two or more accounts.
In most cases the rent paid by the company would be include as part of your salary for tax purposes, so your income would still be seen as $5000 per month.
It's wrong in several situations:  One, the business owner counts this as a business expense, which it is not, and therefore reduces the company's profit and taxes. That would be tax avoidance and probably criminal.  Two, someone who is not the sole owner counts this as a business expense, which it is not, reduces the company's profit and when profits are shared, the company pays out less money to the other owners. That's probably fraud.  Third, if the owner or owners of a limited liability company draw out lots of money from the company with the intent that the company should go bankrupt with tons of debt that the owners are not going to pay, while keeping the money they siphoned off for themselves. That would probably bankruptcy fraud.  Apart from being wrong, there is the obvious risk that you lose control over your company's and your own expenses, and might be in for a nasty surprise if the company has to pay out money and there's nothing left. That would be ordinary stupidity. If you have to tell your employees that you can't pay their salaries but offer them to admire your brand new Ferrari, that's something I'd consider deeply unethical.
"The OP does not explain ""what we pay for processing the transaction (cost of debiting the customer)"".  Who exactly do you pay?  Someone else, or your own employees/contractors?  I will assume that $0.10 is paid to your own employees. Dr $10cash from money people give you Cr $10 liability to them because it is their money in your accounts. Dr $0.10 cash payment of paycheques or supplier invoices Cr $0.10 income statement Operating Eexpense  Dr 0.20 liability to depositors for fees they pay, resulting in $9.80 remaining liability for their money you still have. Cr 0.20 income statement Fee Revenues"
Judgement, settlement, insurance proceeds, etc etc. These would probably be recorded as a negative expense in the same category where the original expense was recorded.
As @Dilip suggested in the comments, the problem is the accountability of the reimbursement plans. In order for the reimbursement to be non-taxable, there has to be a reimbursement plan and policy set up by the employer, it has to be done per receipt, and accounted for correctly. If the employer just cuts you a check - the conditions may not be met, and as such - the reimbursement becomes taxable. In your case, it seems like the employer has not set up a proper (accountable) reimbursement plan, thus your reimbursements are taxable. @Joe pointed out that since the employer also doesn't withhold taxes (as he should), you may have an unexpected tax bill on April 15. This Chron article describes the distinction between the accountable and non-accountable plans. Only with the accountable plans the reimbursements are non-taxable.
This is the point of the article. Somehow a company which is so successful has, for tax purposes, such a razor thin margin. So their taxation clearly isn't in keeping with its actual ability to pay, passing along the burden to other businesses and individuals.
If the company loses money, do the workers have to dip into their savings to keep the company afloat? If not, isn't the sense of ownership a bit one sided (all the upside, none of the risk)?   Was the company founded as a co-op? If not, how was the transition made?
Yes, the business can count that as an expense but you will need to count that as income because a computer = money.
"We will bill our clients periodically and will get paid monthly. Who are ""we""? If you're not employed - you're not the one doing the work or billing the client. Would IRS care about this or this should be something written in the   policy of our company. For example: ""Every two months profits get   divided 50/50"" They won't. S-Corp is a pass-through entity. We plan to use Schedule K when filing taxes for 2015. I've never filled a schedule K before, will the profit distributions be reflected on this form? Yes, that is what it is for. We might need extra help in 2015, so we plan to hire an additional   employee (who will not be a shareholder). Will our tax liability go   down by doing this? Down in what sense? Payroll is deductible, if that's what you mean.  Are there certain other things that should be kept in mind to reduce the tax liability? Yes. Getting a proper tax adviser (EA/CPA licensed in your State) to explain to you what S-Corp is, how it works, how payroll works, how owner-shareholder is taxed etc etc."
Strange that they're holding you personally legally liable rather than the company. That's normally a big part of the corporate veil. You need a lawyer, not a stackexchange.
Their net income hangs around zero because they raise expenses as reinvestment in the company (line items like $16.09B in Research &amp; Development expense last year).  Retained earnings is a balance sheet item reflective of assets they're holding for projects in a later fiscal period; they aren't waiting for the next period to reinvest.
Some employers offer commuter benefits that allow you to pay some commuter costs (trains, parking, bikes, vansharing, etc) with pre-tax money (up to $120ish a month). Employers commonly use companies such as WageWorks to provide this benefit. This would lower your taxable income by over $1000 per year.
IRS Publication 463 is a great resource to help you understand what you can and can't deduct.  It's not a yes/no question, it depends on the exact company use, other use, and contemporaneous record keeping.
It's not YOUR problem, but it is mine. every expense garnered from using insurance makes the cost go up. and as the article stated, that employer had 1/4 mil hit to his insurance due to drugs etc. that is sure to increase his insurance rates, thus he needs to be more mindful of whom he hires. thus, anyone who wants to get hired by a large experienced company needs to keep this in mind. people don't like to think how their freedoms can negatively impact other people. never could it be argued that freedom has a negative impact.
If the company pays for Group Term Life Insurance, some of that premium payment may be taxable.  If memory serves, that's what's included in W-2 Box C. W-2 Box C has no bearing on Schedule C.
"There is not one right way. It depends on the level of detail that you need. One way would be: Create the following accounts: When you pay the phone bill: When you are paid with the reimbursement: That is, when you pay the phone bill, you must debit BOTH phone expense to record the expense, and also reimbursements due to record the fact that someone now owes you money. If it's useful you could add another layer of complexity: When you receive the bill you have a liability, and when you pay it you discharge that liability. Whether that's worth keeping track of depends. I never do for month-to-month bills. Afterthought: I see another poster says that your method is incorrect because a reimbursement is not salary. Technically true, though that problem could be fixed by renaming the account to something like ""income from employer"". The more serious problem I see is that you are reversing the phone expense when you are reimbursed. So at the end of the year you will show total phone expense as $0. This is clearly not correct -- you did have phone expenses, they were just reimbursed. You really are treating the expense account as an asset account -- ""phone expenses due to be reimbursed by employer""."
"You are confusing entirely unrelated things. First the ""profit distribution"" issue with Bob's S-Corp which is in fact tax evasion and will probably trigger a very nasty audit. Generally, if you're the sole employee of your own S-Corp, and the whole S-Corp income is from your own personal services, as defined by the IRS - there's no profit there. All the net income from such a S-Corp is subject to SE tax, either through payroll or through your K-1. Claiming anything else would be lying and IRS is notorious for going after people doing that. Second - the reclassification issue. The reason employers classify employees as contractors is to avoid payroll taxes (which the IRS gets through Bob's S-Corp, so it doesn't care) and providing benefits (that is Bob's problem, not the IRS). So in the scenario above, the IRS wouldn't care whose employee Bob is since Bob's S-Corp would have to pay all the same payroll taxes. The reclassification is an issue when employees are abused. See examples of Fedex drivers, where they're classified as contractors and are not getting any benefits, spend their own money on the truck and maintenance, etc. The employees are the ones who sued for reclassification, but in this case the IRS would be interested as well since a huge chunk of payroll taxes was not paid (driver's net is after car maintenance and payments, not before as it would be if he was salaried). So in your scenario reclassification is not as much a concern to Bob as his tax evasion scheme claiming earnings from performing personal services as ""profits from S-Corp"". A precedent to look at, as I mentioned elsewhere, would be the Watson v Commissioner case."
Assuming you are saying that the company issues 20,000 additional shares of its own stock and sells them for $8 each: The money from the sale is not income and not part of earnings.  It is capital and appears on the balance sheet as part of shareholder's equity. With no other transactions, yes, the total of shares outstanding is increased by 20,000 to 100,000.