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Dear Clients:

Due to COVID-19 we are limiting office appointments. In many cases we can prepare your income tax returns based on documents you send as a scan or via e-mail. Any daocuments you exchange with us should be sent via Dropbox or password protected via Adbobe for securley sending your documents. We can also send you a paper organizer and you can send it back to our office via mail or fax. We also offer the option of e-signing your returns via text at (213) 447-8459 when your returns are complete. Please call our office and inform us if you want to use any of these options.

Myself and the staff enjoy visiting with our yearly in-person tax clients each year; but this year we should make every attempt to forgo these in person meetings. With our existing technology, preparing your taxes remotely should present little, if any, issues or inconvenience.

We are monitoring the federal and state governments’ efforts to delay or accommodate potential tax payment or tax filing issues. The federal as well as the various state governments will likely have options in place to mitigate hardships associated tax filing and tax paying. We are reviewing the extent and nature of relief and its applicability to our clients. If you believe that you may be impacted, please contact our office to analyze your situation’s applicability to these new rules.

THANK YOU FOR UNDERSTANDING,

Jonathan Flores and Martha Flores


Since acting is a business, you’re allowed to write off tax deductions for some acting expenses up to the acting income you’ve earned. Consult your tax advisor about tax deductions and keep accurate records of your acting expenses. Possible tax deductions include: See attached.


Questionnaire and Supporting Documentation. Form 1040 Schedule C (Profit or Loss from Business). (Rev. May 2005).


All incorporation options are not created equal. When deciding between a corp vs. LLC, the best choice for your business not only helps you start off on the right foot, but also acts as a foundation for your company’s ongoing success and growth. As you consider which business type is right for you, thinking both about your short and long-term goals for your company is advisable.

When it’s time to incorporate, many small business owners find themselves wondering which business type to choose. Gaining a clear understanding of your options can feel overwhelming, especially if you’re just getting started. Let’s take a look at some consideration points when comparing LLC vs. corporation options. But first, let’s start with a quick definition of what it means to incorporate.

What is incorporation?

When you incorporate a business, you evolve from a sole proprietorship (or general partnership) into a company that’s formally recognized by its state of incorporation. In other words, it becomes a legal business entity of its own — separate from the individuals who founded it. The new company structure often falls into two categories: a limited liability company (LLC), or a corporation (corp). In this article, we’ll be focusing on LLCs, as well as two popular types of corporations — an S corporation (S corp) and a C corporation (C corp).

No matter how you choose to incorporate, there are certain benefits you can expect — like being shielded from personal liability, as well as increased credibility with customers. There are also additional advantages and disadvantages associated with each incorporation type


Taxpayers who get an unexpected or unsolicited phone call from the IRS should be wary – it’s probably a scam. Phone calls continue to be one of the most common ways that thieves try to get taxpayers to provide personal information. These scammers then use that information to gain access to the victim’s bank or other account. 


C-Corporation verses S-Corporation Comparison; Due dates are different.


Profit and Loss


President Donald Trump signed into law the bipartisan Paycheck Protection Program Flexibility Act of 2020 (P.L. 116-142) on June 5. The legislation aims to expand usability of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s ( P.L. 116-136) headliner small business loan program.


In consultation with Treasury Department, the Small Business Administration (SBA) has issued...


The IRS is postponing deadlines for certain time-sensitive actions due to the Coronavirus Disease 2019 (COVID-19) emergency. This relief affects employment taxes, employee benefit plans, exempt organizations, individual retirement arrangements (IRAs), Coverdell education savings accounts, health savings accounts (HSAs), and Archer and Medicare Advantage medical saving accounts (MSAs).


The IRS has issued guidance on coronavirus-related distributions and plan loans.


The IRS has released guidance that provides temporary administrative relief to help certain retirement plan participants or beneficiaries who need to make participant elections by allowing flexibility for remote signatures. Specifically, the guidance provides participants, beneficiaries, and administrators of qualified retirement plans and other tax-favored retirement arrangements with temporary relief from the physical presence requirement for any participant election (1) witnessed by a notary public in a state that permits remote notarization, or (2) witnessed by a plan representative using certain safeguards. The guidance accommodates local shutdowns and social distancing practices and is intended to facilitate the payment of coronavirus-related distributions and plan loans to qualified individuals, as permitted by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) ( P.L. 116-136).


The IRS has released a revenue procedure that describes temporary safe harbors for the purpose of determining the federal tax status of certain arrangements that hold real property as trusts in response to the COVID-19 emergency. Specifically, the Service has provided temporary relief to arrangements that are treated as trusts under Reg. §301.7701-4(c) which are, or have tenants who are, experiencing financial hardship as a result of COVID-19, to allow them to make certain modifications to their mortgages loans and their lease agreements, and to accept additional cash contributions without jeopardizing their tax status as grantor trusts. This revenue procedure also indicates that a cash contribution from one or more new trust interest holders to acquire a trust interest or a non-pro rata cash contribution from one or more current trust interest holders must be treated as a purchase and sale under Code Sec. 1001 of a portion of each non-contributing (or lesser contributing) trust interest holder’s proportionate interest in the trust’s assets.


The IRS has announced various extensions of deadlines for qualified opportunity funds and their investors due to the Coronavirus pandemic.


The IRS has issued proposed regulations clarifying the definition of a qualifying relative for various tax benefits for tax years 2018 through 2025 in which the dependent exemption amount is zero. During these years, the exemption amount will be inflation adjusted as provided in annual IRS guidance in determining whether an individual is a qualifying relative such as for head of household filing status and $500 child tax credit.


Proposed regulations provide guidance regarding the elimination of the deduction for expenses related to qualified transportation fringe benefits (QTFs) provided to an employee. The Tax Cuts and Jobs Act (P.L. 115-97) eliminated the deduction, effective for amounts paid or incurred after December 31, 2017.


Proposed regulations would define expenditures for direct primary care arrangements and health care sharing ministry memberships as amounts paid for medical care. Thus, amounts paid for those arrangements may be deductible medical expenses. The proposed regulations also clarify that amounts paid for certain arrangements and programs, such as health maintenance organizations (HMO) and certain government-sponsored health care programs, are amounts paid for medical insurance.


Proposed reliance regulations clarify the definitions of "real property" that qualifies for a like-kind exchange, including incidental personal property. Under the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97), like-kind exchanges occurring after 2017 are limited to real property used in a trade or business or for investment. Comments are requested.


The 2017 tax filing season launched on January 23. The IRS predicted a few speedbumps for taxpayers, especially for taxpayers who file early in anticipation of early refunds. The agency expects to receive more than 150 million individual income tax returns. The vast majority of individual income tax returns will be filed electronically and the IRS has extra safeguards in place to protect taxpayers from cybercrime.


National Taxpayer Advocate Nina Olson, in a recent report to Congress, urged the IRS to change its culture from one that is enforcement-oriented to one that is service-oriented. Such a change, Olson provided, would create an environment that encourages taxpayer trust and confidence. In the report, Olson also highlighted key areas for tax simplification and the top-10 most litigated tax issues.


An S corporation can own an interest in another business entity. It can also be a partner in a partnership or a member of a limited liability company (LLC). An S corporation can own 80 percent or more of the stock of a C corporation, which can elect to join in the filing of a consolidated return with its affiliated C corporations. However, an S corporation is ineligible to be a member of the affiliated group and to join in the election to file a consolidated return.


Foreign travel expenses may be subject to allocation if the taxpayer engages in personal activities while traveling on business. A portion of the foreign travel expenses may be nondeductible if the individual engages in substantial nonbusiness activity. The allocation rules apply where the individual engages in substantial nonbusiness activity at, near, or beyond the business destination; or, when the personal destination is en route to and from the business destination.


An employer must withhold income taxes from compensation paid to common-law employees (but not from compensation paid to independent contractors). The amount withheld from an employee's wages is determined in part by the number of withholding exemptions and allowances the employee claims. Note that although the Tax Code and regulations distinguish between withholding exemptions and withholding allowances, the terms are interchangeable. The amount of reduction attributable to one withholding allowance is the same as that attributable to one withholding exemption. Form W-4 and most informal IRS publications refer to both as withholding allowances, probably to avoid confusion with the complete exemption from withholding for employees with no tax liability.


Taxpayers who are self-employed must pay self-employment tax on their income from self-employment. The self-employment tax applies in lieu of Federal Insurance Contributions Act (FICA) taxes paid by employees and employers on compensation from employment. Like FICA taxes, the self-employment tax consists of taxes collected for Social Security and for Medicare (hospital insurance or HI).


The American Taxpayer Relief Act of 2012, signed into law on January 2, 2013, extended the American Opportunity Tax Credit through (and including) the 2017 tax year. The credit, which is an enhanced version of the Hope tax credit for tuition, allows taxpayers to claim a credit against federal income taxes for costs of tuition and other qualified educational expenses paid for the taxpayer, his or her spouse, or a dependent claimed on the tax return who is enrolled at an eligible educational institution. An eligible educational institution would include any accredited public, nonprofit, or private college, university, vocational school, or other post-secondary institution.


Taxpayers with children should be aware of the numerous tax breaks for which they may qualify. Among them are: the dependency exemption, child tax credit, child care credit, and adoption credit. As they get older, education tax credits for higher education may be available; as is a new tax code requirement for employer-sponsored health care to cover young adults up to age 26. Employers of parents with young children may also qualify for the child care assistance credit.

While Congress extended the reduced individual income tax rates with passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act) in late 2010, it also extended several educational tax benefits as well through 2012. As families plan their upcoming tax year, it is important to keep these benefits in mind.

Often, individuals end up with an unexpected tax liability on April 15. There are several options available to pay off your tax debt, stop accruing penalties and interest and secure peace of mind. Each payment method has its advantages and disadvantages depending on your financial, and personal, circumstances, and each option should be discussed with a tax professional prior to making a decision. Our office would be glad to answer any questions you have about each payment method.

No. Even though trash pickup and neighborhood oversight provided by a governmental entity such as a town or county can be figured into the amount of deductible property taxes paid by a homeowner, a payment to a nongovernmental entity is not a deductible tax.

On December 18, 2007, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007 (Mortgage Debt Relief Act), providing some major assistance to certain homeowners struggling to make their mortgage payments. The centerpiece of the new law is a three-year exception to the long-standing rule under the Tax Code that mortgage debt forgiven by a lender constitutes taxable income to the borrower. However, the new law does not alleviate all the pain of all troubled homeowners but, in conjunction with a mortgage relief plan recently announced by the Treasury Department, the Act provides assistance to many subprime borrowers.

Do you know where your 401(k) plan funds are? Errors can and do occur, sometimes with devastating results. By taking an active role in the management of your account, you can quickly uncover any errors, make good investment choices, and ascertain a secure, comfortable retirement. Here are some guidelines to help you get the most out of your 401(k) plan.


Maintaining good financial records is an important part of running a successful business. Not only will good records help you identify strengths and weaknesses in your business' operations, but they will also help out tremendously if the IRS comes knocking on your door.


After your tax returns have been filed, several questions arise: What do you do with the stack of paperwork? What should you keep? What should you throw away? Will you ever need any of these documents again? Fortunately, recent tax provisions have made it easier for you to part with some of your tax-related clutter.


With home values across the country at the highest levels seen in years, you may find that you could actually have a gain from the sale of your home in excess of the new IRS exclusion amount of $500,000 ($250,000 for single and married filing separately taxpayers). In order to determine your potential gain or loss from the sale, you will first need to know the basis of your personal residence.


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