Hiring your kids at your business can have many benefits from teaching kids valuable life skills to getting some awesome potential tax breaks. First, payroll and unemployment taxes may not apply. If you run a single-member LLC, a spousal partnership, or a sole proprietorship, the IRS doesn’t require children under the age of 18 to pay Social Security or Medicare and those under 21 don’t require unemployment taxes on their behalf. Wages that you pay your kids are also considered a tax-deductible business expense – lowering your tax liability. Since these tax benefits can be quite substantial, be prepared for potential IRS scrutiny. Make sure to keep adequate documentation and payroll records to prove that your children are participating in the business. Your children, despite potentially being minors, may also have to file a tax return if their earned income exceeds the standard deduction. If you have tax trouble, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
Children: All for the Sake of the Tax BreaksAugust 25th, 2016
How to Help Your Business Survive the Lazy Days of SummerAugust 24th, 2016
When summertime rolls around, things around the office can tend to slow down. Instead of giving in to the vacations and the lazy haze of summer, take this time to tackle a couple of these tips.
1: Make your website mobile device friendly! 40% of people use their phone as their preferred method of surfing the internet, which means your site needs to work when people go to view it on a mobile device.
2: Create time for your top clients and top prospects. When you are at its busiest, it’s harder to develop any new relationships or strengthen current relationships with current clients. Reach out to these clients during this lull to create new opportunities.
3: Update your marketing materials. While it is wise to wait to spend the bulk of your marketing budget after vacation season is over, it is never too early to plan! Review your current brand and marketing strategies to determine where any gaps may be.
4: Tackle a long-term project. Everyone has something on their to-do list that sits there for a little longer than it should. Use the summertime break to finally tackle that project. From finally cleaning out that scary filing cabinet or researching that new business opportunity, attempting that project will make you feel better and help your business run just a bit smoother! If you need help with your business, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
That’s Insane! Part Five:August 23rd, 2016
Next in the insane ways people avoid taxes we have Lamar Odom, a NBA player who was making $9.3 million in 2007 but felt personally victimized by the IRS when we has told he couldn’t deduct $172,000 for “fitness fees” and $12,000 in NBA fines.
Odom decided to attempt his hand at being a tax attorney and argued with the IRS that his fitness fees should be a deduction because as a pro athlete, he is expected to stay fit and healthy making his fitness routine a business expense. He also argued that his fines were “common” among professional athletes and are work related, making them an ordinary and necessary business expense (despite them being assessed for doing things he shouldn’t be doing).
In the end, the tax court agreed with Odom and settled with him for roughly 10 cents on the dollar. If you have tax trouble, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
That’s Insane! Part Four:August 19th, 2016
For another installment of insane world of tax deductions, we take a look at, now aptly name, Chesty Love. This exotic dancer was able to successfully sue the IRS for her new breast implants to be considered a business deduction. Ms. Love was tired of the competitive nature of her job so she went straight to the source of higher tips – larger implants. She didn’t stop at any normal implant though, Ms. Love ended her procedure with a size 56 FF where each implant weighed 10 pounds.
This is how Ms. Love was able to convince the court that her implants should be a business deduction – she argued that they were useless outside the context of her job, that she planned to remove them once retired, and that they weren’t for appearance enhancement (in fact, she was continually ridiculed on the streets for her appearance). The court agreed, stating on record that her implants were so large that they could’ve only been for business purposes. If you have tax trouble, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
That’s Insane! Part Three:August 18th, 2016
Our series of ridiculous tax avoidance tactics continues with corrupt businessman William Zack and his illegal bribes. Mr. Zack ran several companies throughout the years that apparently weren’t making him enough money. In 1984, he began doing business with Ford where he started creating fake invoices in order to take money from his company undetected. This, however, required that he have some Ford employees in on the gig. Zack handed out bribes totaling more than $180,000.
Zack was eventually caught and charged with fraud, but being the “savvy” businessman that he was, Zack petitioned the US Tax Court in order to write off the bribes he paid in order to reduce his now rather large tax bill. The court agreed, seeing the bribes as operating losses. The idea of deducting illegal activities is actual 100% legal in many foreign nations such as Germany – the catch? You just have to report who the bribe was paid to. If you have tax trouble, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
That’s Insane! Part Two:August 16th, 2016
Next up in our series of crazy ways people have legally avoided taxes is Jan Van Dusen, the definition of a crazy cat lady. At one point, Ms. Van Dusen had taken in so many cats that she was caring for 70-plus cats at one time in her home. It’s safe to assume that caring for that many animals is going to come with a rather large price tag. On one tax return, Ms. Van Dusen tried to write off $12,068 for items such as cat food and vet bills. Normally, these would be considered personal taxes but Jan Van Dusen was prepared to take on the IRS herself in order to save her cats. Eventually, she was able to convince the IRS that her operation was more of an animal shelter organization, since her house was so overrun by felines that she was unable to ever have people over, and was able to get deductions for most of her claims. If you have tax trouble, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
That’s Insane! Part One:August 15th, 2016
This series will outline some of the most insane ways people have legally avoided paying taxes. Remember, these posts are just to give you a glimpse into the sometimes odd thinking of the US Tax Court, not to give you any ideas on how to get out of your taxes.
First up we have Justin Rohrs, a man who slid his truck off an embankment, totaled his car, and was charged with driving under the influence. After being denied his insurance claim of $33,629, Rohrs attempted to deduct the loss of his vehicle from his taxes. He was originally denied, but somehow the US Tax Court decided that Rohrs’ deserved a casualty loss deduction for his truck. According to tax law, if an accident was not caused by your own willful negligence or actions, the costs from the accident are a valid deduction. Somehow, a judge was convinced that drunk driving was not acting with negligence – moral of the story, don’t think you will be able to convince any other judge of the same. If you have tax trouble, contact our office at 816-524-4949 or check out our website at Hoorfarlaw.com.
Ways to Get PaidAugust 11th, 2016
While there are many ways to pay the IRS, there are only a few methods to get money out of the IRS.
The first method, direct deposit, is the most popular and most-favored by taxpayers. It is a free service that automatically deposits the tax refund in your checking account or savings account. You can even have the IRS split the tax refund up into different accounts instead of having one large deposit. This method is also the fastest way of getting money from the IRS, with the average wait time of 21 days from the acceptance of an e-filed return.
The second method, U.S. Series I savings bonds, is probably the least-favored method. It allows a taxpayer to use all or a portion of their tax refund to buy a savings bond for the taxpayer or for anyone else the taxpayer chooses. The amount of the bonds purchased must be in $50 increments and are made possible by completing Form 8888.
The third method, a paper check, is the slowest method in getting a tax refund. This option is available to anyone who does not desire or does not qualify for direct deposit or obtaining a savings bond. Under this method, the taxpayer receives a check from the IRS for the amount of their tax refund. The disadvantage to this method is that it can take up to 12 weeks to process the refund and the check is mailed to you, which could result in the check being lost in the mail.
If you are have tax trouble, feel free to contact us at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
Asserting the Defense of Failure to State a ClaimAugust 9th, 2016
A Plaintiff in a lawsuit, the person who started the lawsuit, has failed to state a claim up on which relief can be granted if, assuming their allegations are true, the Plaintiff has failed to describe facts on which the law offers relief.
If you have been sued and need some legal assistance, contact our law office at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
When Do Child Support Modifications Take EffectAugust 4th, 2016
An order modifying a child support order is only retroactive to the date the prevailing party made the request. This means that a child support order can only modify child support up to when the modification request was made. Any child support that was to be paid before the modification request was made is unchanged.
If you have a child support order you would like to try and modify, contact our law office at 816-524-4949 or www.Hoorfarlaw.com.