Tax Tips Archives - JT Tax Services

What Is a C Corporation and How Does It Work?

September 8, 2023

When starting a new business, it’s important to choose the right structure for your company. One popular option is a C Corporation. But what are they, exactly? Read on to learn more about C corporations, from a basic definition to their pros and cons.

Definition of a C Corporation

A C Corporation is a type of business structure in which the company is owned by shareholders who have limited liability for the company’s debts and obligations.

The corporation operates as a separate legal entity that can conduct business, own assets, and enter into contracts.

This means that the corporation can sue and be sued, enter into agreements, and pay taxes separately from its owners.

How a C Corporation Works

A C Corporation is managed by a board of directors who are elected by the shareholders.

The board of directors is responsible for making major business decisions, such as choosing the company’s officers, approving budgets, and setting corporate policies. The officers of the corporation, such as the CEO and CFO, are responsible for the day-to-day operations of the business.

C Corporations issue stock to shareholders, which represents their ownership in the business. Shareholders are not involved in the day-to-day operations of the business and do not have liability for the debts and obligations of the corporation.

Advantages of a C Corporation

One of the main advantages of a C Corporation is that it offers limited liability to its shareholders.

This means that the personal assets of the shareholders are protected from the corporation’s debts and obligations. Additionally, the corporation can raise capital by issuing stock to investors, which can help the business grow and expand.

Another advantage of a C Corporation is that it can deduct certain business expenses, such as salaries, benefits, and property taxes. This can help reduce the company’s tax liability and increase its profits.

Disadvantages of a C Corporation

One of the main disadvantages of a C Corporation is that it is subject to double taxation. This means that the corporation pays taxes on its profits, and then the shareholders pay taxes on any dividends they receive. This can result in a higher overall tax liability for the company and its shareholders.

Another disadvantage of a C Corporation is that it requires more formalities and paperwork than other business structures, such as a sole proprietorship or partnership. This can result in higher administrative costs and more time spent on compliance.

JT Tax Services: Taxes Made Easy

When it comes to taxes, knowledge is power. That’s why at At JT Tax Services, we give you the peace of mind that comes with knowing that you are working with experienced professionals with in-depth knowledge of all applicable tax laws and regulations.

We are located in Oxnard, California, contact us today by email (info@jttaxservices.com), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services. Feel free to contact us today!

Scammers are always on the lookout for new victims. Luckily, when it comes to tax scams, there’s a simple step that will help you avoid most of them. Keep reading to learn more.

The Simple Step That Will Help You Avoid Most Tax Scams

By: UNIKO Media Group

August 25, 2021

Scammers are always on the lookout for new victims. Luckily, when it comes to tax scams, there’s a simple step that will help you avoid most of them. Keep reading to learn more.

How to Avoid Most Tax Scams

As the old saying goes, knowledge is power. So it’s no coincidence that knowledge is the best way to prevent falling prey to a tax scam.

Knowing how the IRS interacts with taxpayers will help you notice more easily the odd behaviors that are the hallmark of scammers. Remember:

The IRS doesn’t normally initiate contact with taxpayers by email. Don’t reply to emails from people claiming to represent the IRS. And remember oficial IRS email addresses end with “irs.gov”
The IRS will never get in touch with you by text message or social media. If you receive this tye of message, don’t respond; someone is trying to scam you.
Private debt collectos may contact taxpayers for the collection of certain tax liablities, but only after the taxpayer has received a written notice.
IRS officers and agents may visit the home or place of business to discuss tax liabilities or delinquent tax returns. However, remember that payments will never be requested to a source other that the Treasury Department.
If you are visited by an IRS representative, don’t forget to ask for credentials. IRS officers and agents can provide two types of credentials: a pocket commission and a Personal Identity Verification Credential.

Knowing this information will help you avoid most tax scams. In case you have further questions, or need assistance navigating any process related to tax collection or tax liabilities, don’t hesitate to contact a tax expert for more information.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? Did you receive a letter from the IRS? JT Tax Services is here to help! We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email (info@jttaxservices.com), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services.

Scammers Are Targeting Immigrants: Here’s How to Protect Yourself and Others

By: UNIKO Media Group

August 6, 2021

Scammers are always looking for ways to take advantage of vulnerable people, including senior citizens and immigrants. Keep reading to learn how to protect yourself or other people you know from this malicious strategy.

What You Need to Know

The IRS has warned that scammers have chosen immigrants as some of their favorite victims.

According to the agency, this type of scam usually occurs with a phone call from the criminals. In these calls, scammers threaten immigrants with deportation, revocation of their driver’s license, or jail if they don’t pay a bogus tax bill.

Ignore these intimidation tactics. Don’t engage the scammers in any way, as they may try to get you to reveal personal information. Remember that the IRS will never make threats over the phone or request that a specific payment method (such as gift cards) be used to pay your taxes.

It’s worth remembering that in most occasions, when the IRS wants to contact you, they will do it by mail and not by phone.

How to Protect Yourself and Others

It bears repeating: the IRS will never make threats in their communications with you. By keeping in mind this simple rule, you will be able to prevent scammers from intimidating you and parting you with your money.

Another way to protect you is to take advantage of the multilingual resources that the IRS keeps constantly updated. The agency offers content in many languages other than English, including Spanish, Chinese simplified and traditional, Vietnamese, Korean, and Russian.

If you know someone who might be a potential victim of scammers, don’t hesitate to share this information with them. You could sabe them money and many future headaches.

Additionally, you can always turn to a tax profesional you trust when you have questions. The tax experts at JT Taxes stand ready to offer the knowledgeable assistance you need to file and pay your taxes with confidence.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? Do you have questions about the Child Tax Credit? At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

Remember: You Must Also Pay Taxes on Income From Hobby Activities

By: UNIKO Media Group

July 7, 2021

Whether it’s knitting, fishing, or reading books, we all need a hobby. However, if your hobby activity is a source of income, then you should make sure to report it on your tax return.

Paying Taxes on Income From Hobby Activities

Let’s begin with some basic definitions. A hobby is an activity you pursue for pure enjoyment, without intentions of making a profit.

While this seems like a clear-cut definition, things are not always so simple. For example, it happens often that people begin selling the products of their hobby. Do they have to report that income on their tax return?

The answer is yes. If you receive income from an activity you carry out with no intention of making a profit, then you should report it on your tax return, specifically on Schedule 1, Form 1040.

On the other hand, any income from for-profit activities should be reported on Schedule C.

When determining whether an activity is a hobby or a for-profit business, the following factors are taken into account:

Whether you carry out that activity like a business, and maintain complete and accurate books and records.
Whether the time and effort you put into the activity shows you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether any losses are due to circumstances beyond your control or are normal for the startup phase of their type of business.
Whether you change the way you carry out that activity to improve profitability.
Whether you have the knowledge needed to carry out the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

If you find it difficult to figure out whether an activity is a hobby or a business, don’t hesitate to contact a tax professional. They will help you figure out the tax strategy that better fits your unique situation.

Contact the Experts at JT Tax Services

Do you need help preparing your taxes? At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

Remember: Tax Season Is Almost Here!

By: UNIKO Media Group

February 3, 2021

Tax season begins Friday, February 12! This means that starting from that date, the IRS will accept and process 2020 tax returns. Here are some tips you should keep in mind to ensure that your tax filing experience is smooth, agile, and stress-free.

General Tips

The IRS recommends that all taxpayers consider these tips as they prepare their tax return:

Combining electronic filing with direct deposit ensures that you get your refund as soon as possible.
Don’t count on receiving your refund by a specific date, especially if you plan to use that money to pay bills.
Remember that unemployment compensation is taxable

The Documents You Should Gather

This is the right time to get your tax records in order, so make sure to have all the documents that apply among the following:

Any receipts, canceled checks, and other documents that support an item on your return.
Forms W-2, Wage and Tax Statement
Form 1099-MISC, Miscellaneous Income
Form 1099-INT, Interest Income
Form 1099-NEC, Nonemployee Compensation
Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
Form 1095-A, Health Insurance Marketplace Statements

Other Important Tax Dates to Keep in Mind

In addition to February 12, other important dates that taxpayers should keep in mind during 2021 include:

Thursday, April 15. Due date for filing 2020 tax returns or requesting extension of time to file.
Thursday, April 15. Due date for paying 2020 tax owed to avoid owing interest and penalties.
Friday, October 15. Due date to file for those requesting an extension on their 2020 tax returns.

More Tips About Taxes

Interested in learning more about taxes? Then you’ve come to the right place! Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

At JT Tax Services, we give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email (info@jttaxservices.com), telephone, or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services.

This Important Tax Deadline Is Less Than One Month Away

By: UNIKO Media Group

January 8, 2021

The year has just begun, but an important tax deadline is already less than one month away. If you are an employer, don’t forget that you should issue and file wage statements by Monday, February 1, 2021. Keep reading to discover what are the statements and forms you should keep in mind.

Form W-2

Companies should complete and file a W-2 form for every employee to whom they pay a salary. Don’t forget that you should also send your employees copies of their W-2 forms by February 1, 2021, so that they can file their taxes before the due date (April 15, 2021).

Form W-3

This form (official name: Transmittal of Wages and Tax Statements) is a detailed summary of all the W-2 forms filed by your company. This form is used by the Social Security Administration (SSA) to keep track of the salaries, commissions, tips, and other compensations that employees receive throughout the year.

Form 1099-MISC

File a 1099-MISC Form for every person to whom you paid the following during the last year:

At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
At least $600 in:
- Prizes and awards.
- Other income payments.
- Medical and health care payments.
- Crop insurance proceeds.
- Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
- Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
- Payments to an attorney.
- Any fishing boat proceeds.

As is the case with Forms W-2, you should also send Forms 1099-MISC to recipients before February 1, 2021.

Form 1099-NEC

You should file Form 1099-NEC, Nonemployee Compensation, if all the following statements apply:

You made the payment to a person who is not your employee
The payment was for services in the course of your trade or business
You made the payment to an individual, a partnership, an estate, or a corporation
Payments were at least $600 during the year

Also in this case, keep in mind that recipients of Forms 1099-NEC should receive their copies by February 1, 2021.

More Tips About Taxes

Do you want to learn more about taxes and Economic Impact Payments? Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

At JT Tax Services we have the experience, the knowledge, and the drive to assist you in the preparation of your taxes. We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

The IRS Begins Delivering Second Round of Economic Impact Payments

By: UNIKO Media Group

December 30, 2020

The Internal Revenue Service (IRS) announced that it has begun delivering a second round of Economic Impact Payments (EIP) as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021.

The agency began sending payments through direct deposit yesterday (Tuesday), and it will begin sending paper checks today.

Do I Have to Take Any Actions to Receive my Economic Impact Payment?

Economic Impact Payments are automatic. This means that no action is needed on the part of recipients. The IRS has requested taxpayers not to contact financial institutions or the IRS itself with payment timing questions.

Keep in mind that the delivery method may be different for the second stimulus payment. If you received the previous Economic Impact Payment, but don’t receive a direct deposit, then you will receive a check or a debit card.

On the other hand, if you were eligible but didn’t receive either the first or the second payment, you will be able to claim it when you file your taxes for 2020.

How Much is the Second Stimulus Check?

The amounts of the second stimulus payment will be determined as follows: up to $600 for individuals; up to $1,200 for married couples filing jointly: and up to $600 for every qualifying child

Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing jointly and surviving spouses, you will receive the full amount of the second payment.

How Can I Check the Status of My EIP?

You will be able to check the status of your payment using the online tool Get my Payment. The service is offline at the moment as the information is being updated. However, the IRS expects that the tool will be available again shortly.

More Tips About Taxes

Do you want to learn more about taxes and Economic Impact Payments? Here are some previous posts you may find interesting.

Contact the Experts at JT Tax Services

We are located in Oxnard, California. Contact us today by email, telephone, or through our social media accounts on Facebook, Twitter, and LinkedIn to learn more about our services.

Don’t Forget This Essential Step if You Are Starting a New Business

By: UNIKO Media Group

September 24, 2020

Starting a new business is a process that involves many steps, and one of the most important is getting an Employer Identification Number, or EIN.

Read on to learn more about this important step and to discover how to apply for an EIN.

What Is An Employer Identification Number?

An Employer Identification Number (EIN), also known as Federal Tax Identification Number, is used to identify employers for tax purposes, and most businesses need one. EINs have nine digits and are assigned by the Internal Revenue Service. If you already have an EIN and the organization or ownership of your business changes, then you may need a new number.

How to Know if I Need an EIN?

Finding out whether you need an EIN is a very simple process. Ask yourself the following six questions. If you answer “Yes” to any of them, then you need an EIN.

Does your company has employees?
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
Does your business operate as a corporation or partnership?
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?
Are you involved with any of the following types of organizations?

Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
Estates
Real estate mortgage investment conduits
Non-profit organizations
Farmers’ cooperatives
Plan administrators

How to Apply for an EIN?

You can apply for an EIN in a variety of ways, including by fax, mail, telephone (for international applicants), and online. The IRS offers this service for free and issues only one EIN per responsible party per day.

Keep This in Mind About EINs

Above all, an important fact to keep in mind about EINs is that you must make sure to keep your business mailing address, location, and responsible party up to date. EIN holders must report changes in the responsible party within 60 days. Therefore you must be diligent when any of these modifications take place.

Contact the Experts at JT Tax Services

If you are starting a new business and need help choosing the right structure, contact the experts at JT Tax Services today. We have the experience, the knowledge, and the drive to assist you. With our advice, you can file your taxes with the peace of mind that comes with knowing that you are limiting your liability while staying compliant with federal and state tax regulations.

We are located in Oxnard, California. Contact us by email, telephone, or through our social media accounts on Facebook, Twitter, and LinkedIn to learn more about our services.

Does Your ITIN Expire This Year? Renew It to Avoid Refund Delays

By: UNIKO Media Group

September 5, 2020

If your ITIN expires this year, or if it already expired, you should renew it as soon as possible to avoid unnecessary refund delays when you file your tax return next year.

Read on to discover what ITIN stands for, what ITINs expire this year, and how to renew this important identification number.

What Is an ITIN?

It’s worth remembering that ITIN stands for Individual Taxpayer Identification Number. This is a 9-digit number that the Internal Revenue Service (IRS) assigns to those taxpayers who don’t qualify for a Social Security Number (SSN) but need an identification number for tax purposes.

What ITINs Expire in 2020?

The following ITINs expire on December 31, 2020. They must be renewed to avoid delays in your tax refund next year:

ITINs with middle digits 88
Those with middle digits 90, 91, 92, 94, 95, 96, 97, 98 or 99, if assigned before 2013 and if not already renewed

How to Renew an ITIN

To renew your ITIN, fill out Form W-7 and submit all required documentation. When you submit the form you are not required to attach a tax return, but you must indicate the reason why you need an ITIN.

Later this summer the IRS will send notices to people whose ITIN expires this year. The notices include instructions about how to renew the ITIN. If your ITIN expired already and you expect to file a tax return in 2021, you can renew your ITIN any time.

If you receive a renewal letter, you have the option of renewing ITINs for your entire family at the same time. This includes the tax filer, spouse, and any dependents claimed on the tax return.

Avoid These Common Mistakes When Renewing Your ITIN

These are some common mistakes people make when they renew their ITIN. Avoid them to ensure that the process is as agile and fast as possible.

Mailing identification documentation without a Form W-7
Missing information on the Form W-7
Insufficient supporting documentation, such as proof of U.S. residency or documents that support name changes.

Contact the Experts at JT Tax Services

Looking for expert, dependable advice on taxes? At JT Tax Services we have the experience, the knowledge, and the drive to assist you. With our advice, you can file your taxes with the peace of mind that comes with knowing that you are limiting your liability while staying compliant with federal and state tax regulations.

We are located in Oxnard, California. Contact us today by email, telephone, or through our social media accounts on Facebook, Twitter, and LinkedIn to learn more about our services.

3 Tools You Need After Filing Your Taxes

By: UNIKO Media Group

July 23, 2020

The deadline to file and pay your taxes was July 15. If you filed on time, well done! You’ve taken care of what’s arguably the hardest part. However, there is still some work to do. Read on to discover three tools you may find useful after filing your taxes.

Check the Status of Your Refund After Filing Your Taxes

Checking on your refund is easy with the online resources provided by the IRS. The online tool Where’s My Refund is available both on the IRS website and in the mobile app IRS2GO. The information on the website and the app is updated once a day, usually overnight, so there’s no need to check more often than that. To get the status of your refund, you’ll need the following:

The first Social Security Number on your tax return.
Tax filing status (single, married, head of household).
Expected refund amount.

If you don’t have access to a computer or a mobile phone, you can contact the IRS by phone at 800-829-1954.

How to Do a Paycheck Checkup

Doing a paycheck checkup will help you ensure that your employer is withholding the right amount of taxes from your paycheck. This precaution is a smart way to avoid unexpected year-end tax bills or a penalty. To do your paycheck checkup, use the Tax Withholding Estimator provided by the IRS itself.

How to Determine if You Need to Amend a Tax Return

If after filing your taxes you realize that there’s a mistake or information you forgot to include, you can use the interactive assistant Should I File an Amendment Return? to determine whether you should correct and error or make other changes to the tax return you already filed.

As a rule of thumb, the errors that you have to correct are those related to filing status, income, deductions, and credits. Usually, you don’t need to file an amendment return for math errors or if you forgot to attach a form or schedule. In those cases, the IRS will either correct the math error and notify you by mail or request any missing schedule or form, also by mail.

More Tax Resources

Do you want to get more useful information to file your taxes? We’ve got you covered! These are some previous posts you may find useful:

And if you still haven’t filed your taxes, don’t worry! You still have alternatives. Contact our experts at JT Tax Services; they will help you determine what’s the best course of action.

Get Help From the Experts at JT Tax Services

The world of taxes is besieged by myths and other outdated or otherwise unreliable advice. That’s why is important to get help from a tax expert who can guide you with professionalism providing trustworthy information.

At JT Tax Services we have the experience, the knowledge, and the drive to assist you. With our advice, you can file your taxes with the peace of mind that comes with knowing that you are limiting your liability while staying compliant with federal and state tax regulations.

We are located in Oxnard, California. Contact us by email, telephone, or through our social media accounts on Facebook, Twitter, and LinkedIn to learn more about our services.