Dock David Treece
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Thank you for the question. I’m not too familiar with lending standards or processes in India or China, but in the United States, you would typically work with a bank that has an international department – especially one that specializes in foreign trade. This is a relatively niche area, but you should be able to identify a couple of banks in your region that do business in both India and China. They should be able to help structure a finance solution for your Import/Export operations.
Best of luck,
Thanks for the question, David. My understanding is that SDE is equal to net income before taking out taxes, depreciation, compensation to company owners (including benefits), non-recurring costs, and interest expense. For purposes of calculating SDE, you would add back in any interest expenses paid.
Hope this helps.
Thanks for the question. I’m not a FUTA expert, but I imagine you are correct that the owner of an LLC is probably exempt from FUTA. This is probably at least partly due to the fact that the IRS does not recognize the right of LLC owners to pay themselves a salary. Any money that owners take from the company is considered a draw. They’ll still owe income taxes and self-employment tax, but given that the IRS doesn’t classify this as a salary, I doubt he would be eligible for unemployment if he became “separated” from his employment with his own company.
I hope this helps. You may want to check with a certified accountant if you have more specific questions.
Hi, Richard, and thank you very much for the question.
I imagine that the title company will be happy to provide you with a lien release to sign and documentation to cancel your promissory note. Now that your buyer has refinanced the property, they will surely want to see those issues resolved so there is no confusion later on.
If you haven’t heard anything from the title company that provided your payoff check, you might follow-up with them so they can get you what you need.
Hope this helps!
Thanks for the question! It’s important to remember that self-employment tax doesn’t replace income tax – you have to pay them both. This can bring your total income tax liability up to the levels you mentioned, depending on your individual tax bracket.
When you’re employed as a W-2 employee at a company, your employer pays have of your FICA tax (about 7.5%) and you pay half. When you work for yourself, you have to pay the full FICA tax (about 15%) in addition to income taxes. Self-employment tax isn’t actually a new tax – it’s just that you’re having to pay the full tax yourself.
Hope this helps. If you have other individual income tax questions, we would suggest speaking with a licensed accountant.
Have a great day,
Hi Danielle. Great question!
According to the IRS website, you must meet several criteria to be considered a “qualified joint venture.”
Here are the criteria from the IRS website:
“A qualified joint venture is a joint venture that conducts a trade or business where (1) the only members of the joint venture are a married couple who file a joint return, (2) both spouses materially participate in the trade or business, and (3) both spouses elect not to be treated as a partnership. A qualified joint venture, for purposes of this provision, includes only businesses that are owned and operated by spouses as co-owners, and not in the name of a state law entity (including a limited partnership or limited liability company). Note also that mere joint ownership of property that is not a trade or business does not qualify for the election. The spouses must share the items of income, gain, loss, deduction, and credit in accordance with each spouse’s interest in the business. The meaning of ‘material participation’ is the same as under the passive activity loss rules in section 469(h) and the corresponding regulations (see Publication 925, Passive Activity and At-Risk Rules). Note that, except as provided in section 469(c)(7), rental real estate income or loss generally is passive under section 469, even if the material participation rules are satisfied, and filing as a qualified joint venture will not alter the character of passive income or loss.”
Your business with your husband may qualify as a “qualified joint venture” if you meet these criteria. However, it may also depend on the nature of your business. If your business collects passive revenue by renting real estate, for instance, you may not qualify.
You can read more directly at the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorporated-businesses
Hope this helps,
Hello, Becky. Thanks for the question.
For individual tax advice, you should consult a licensed accountant. However, we can tell you that generally personal loans to LLCs are treated the same way as capital contributions. When you contribute or lend money to an LLC, you’re generally able to recoup those funds later tax-free.
However, your loan to your LLC should not have any tax implications. You won’t be able to write it off as a deductible expense, but it also shouldn’t qualify as taxable revenue through your LLC. Because your loan isn’t income or an expense, it may not belong on Schedule E.
Again, this is all subject to individual circumstances, which is why it’s best to involve a professional accountant.
Hope this helps,
Thanks for the question, Anna. If you’d like to send us some information on your company, we’ll be sure to consider you during our next regular update.
Thanks for the question. We try to provide links to sources we use and helpful forms for business owners. However, we also come by information through interviews and years of industry experience. Sometimes it’s hard to link to everything because it’d be distracting for our readers. We’ll give your suggestion some consideration and see how we might provide readers with access to more of our sources. In the meantime, please feel free to let us know if there is specific information you’d like to source and we’ll try to point you in the right direction.
Good luck with your postgraduate studies, and thanks again for the comment!
Hi, Dorothy. Great question!
The short answer to your question is no, the IRS does not have a requirement that you charge interest on owner-financed real estate purchase. You can actually make an interest-free loan in owner financing.
HOWEVER, and this is a big however, the IRS does have rules about loans that are made at below-market interest rates. In these instances, the IRS taxes you based on what interest income you would’ve derived if you had made the loan at a certain minimum interest rate. This is called “imputed interest.”
Thanks again for the question – it’s a very interesting topic, and definitely something for us to explore further. Be sure to check back later and see what we come up with!
Hi, Harold – thanks for the question!
Though they do charge fees, Turbo Tax is still a great provider. Features like automatically adjusting your tax liability based on IRA contributions will vary by product, but you can save on taxes by making pre-tax contributions to a retirement plan regardless of what tax filing software you choose.
If you’d like more information on what other tax filing software solutions we recommend, be sure to check out this buyer’s guide: https://fitsmallbusiness.com/best-tax-software-provider-turbotax-vs-hr-block/
Hope this helps!
Hi, Nicole. Thanks for the question. You’re right – it looks like Capital One is currently restructuring their Spark Business Checking product. It doesn’t sound like they’ll be getting rid of the product since they indicate that current account holders won’t be affected. You will probably be able to open an account shortly, once they’ve made the changes they want. If you’d prefer to find another provider for a small business checking account, we have a good article on the subject. You can read it here: https://fitsmallbusiness.com/best-small-business-checking-account/
If fees are a particular concern and you’d like to read more about some other low-cost business checking account providers, be sure to check out this comparison article: https://fitsmallbusiness.com/best-free-business-checking/
Dock David TreeceModerator1 year, 7 months ago
Hi, Don, and thanks for the question. If you have a Limited Liability Company or Business Partnership, you can use a per diem rate to reimburse employees for business travel if you prefer. Per diem reimbursements will not be taxable to your employee, if they provide an expense report. However, some expenses like business meals are only 50% tax-deductible. If you’re traveling for your own business and trying to manage your own deductions, you can’t claim a deduction for business travel that’s more than the actual expenses incurred.
I hope this helps. We have a great article on travel expenses and per diem reimbursements – you can check it out here if you’d like to learn more: https://fitsmallbusiness.com/expense-report-form-policy-template/