Liz Smith, CPA, MSTFP

A petty cash fund is a small amount of cash on hand, usually less than $500, used to cover incidentals or nominal expenses. Since accounting for petty cash only involves minor expenses, it can either be done manually or made easier with bookkeeping software. In addition to the manual method, I’ll show you how to…

Purchasing a rundown house, fixing it up, and then reselling it has become a very popular side gig for many Americans. For most house flippers, the profit from selling the house will be taxed as ordinary income and is subject to self-employment taxes. However, there are a few ways you can lower your house flipping…

Use our free MACRS depreciation calculator to compute the deductible amount for each year of the asset’s life. The IRS’s MACRS depreciation tables are included, along with an explanation of how to use them to calculate MACRS depreciation by hand. How to use our MACRS depreciation calculator Step 1: Enter the cost of your asset. The…

TurboTax Online is perfect for business owners who need full-service tax preparation and filing, while TurboTax Desktop is the go-to option for small businesses that prefer handling their own partnership and S-corp (S Corporation) tax returns. We’ll compare these two versions head-to-head — exploring their customer service, helpful tools, ease of use, and unique features…

The limited liability company (LLC), S corporation (S-corp), and C corporation (C-corp) are three popular business structures that can be used for asset protection and income strategy. Think of choosing between these three business entities like roommate arrangements. An LLC would be akin to having an opportunity to share responsibility for the bills and home…

The key difference between FreeTaxUSA vs TurboTax lies in the use case. FreeTaxUSA stands out with its affordable pricing for individual tax filers and straightforward UI, making it an excellent choice for budget-conscious individuals and those with simpler tax situations. On the other hand, TurboTax provides a more comprehensive and user-friendly experience, particularly for complex…

We’re excited to compare two popular tax prep products to help you determine the best fit for your business. I have analyzed TurboTax vs H&R Block by comparing their features, customer service, ease of use, and other offerings. The optimal choice ultimately depends on individual needs, the complexity of the tax situation, preferred support options,…

TaxSlayer and TurboTax are accounting software that differ in key aspects that cater to distinct user needs. After assessing both software, I like that TaxSlayer offers tiered, cost-effective solutions and find it to be better suited for self-employed individuals. While TurboTax is pricier, I find that it provides a user-friendly and comprehensive experience that’s best…

The primary difference between active vs material participation is that active participation requires less involvement. If you participate “materially” instead of “actively,” that level of participation may affect how and when you can take a loss on your tax return, how much of a loss you can take, and the available options for tax strategy….

The deductibility of business credit card payments depends on what kind of credit card charges the payments are covering. If only some of the credit card charges are deductible, then only the portion of the payment relating to the deductible expenses can be included on the tax return. The IRS lets you deduct “ordinary and…

A personal holding company (PHC) is closely held C corporation (C-corp), where at least 60% of its income is from passive investments like stocks, bonds, and rental activities. A company may be classified as a PHC when cash generated from the sale of business assets is not distributed to shareholders in an attempt to avoid…

The standard mileage rate generally results in higher deductions, but the actual method might be better if you drive very few miles. If you go with the standard mileage rate in the first year, you can switch between the two methods later on; however, if you select the actual method the first year, you’ll be…