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S Corporation Officers as Employees

Generally, officers of a corporation are employees for employment tax purposes, and their compensation is wages. Thus, their wages are subject to Social Security, Medicare, and federal unemployment taxes along with withholding for federal income tax purposes. Only a corporate officer who does not perform any services or who performs only minor services and who neither receives nor is entitled to receive, either directly or indirectly, any compensation is not considered an employee.

Valuation of Inventories

An inventory is an itemized list of goods held for sale or for consumption in a manufacturing or merchandising business. In order to properly calculate gross profit from operations, leading to a determination of taxable income for that business, the taxpayer must adopt a method of valuing its inventory.

Disabled Access Credit

If you operate a small business, you may be entitled to take a nonrefundable income tax credit for expenditures incurred to make your business accessible to disabled individuals. The amount of the credit is limited to 50 percent of the amount of eligible access expenditures for a year that exceed $250 but that do not exceed $10,250.

Alternative Minimum Tax for Individuals

Congress enacted the alternative minimum tax (AMT) to prevent any taxpayer with substantial income from avoiding at least a minimum tax liability. High-income taxpayers often benefit from huge tax savings by making use of certain deductions, credits, exemptions, and losses, and without the AMT, they might be able to completely and legally escape income taxation. The AMT is a separate tax computation that basically eliminates many deductions and credits. It works to recapture some of those tax breaks available primarily to high-income taxpayers and to maintain tax equity.

Section 527 Political Groups

A political organization subject to Section 527 of the Internal Revenue Code (usually called a 527 organization) is a party, committee, association, fund, or any other type of organization run primarily to directly or indirectly accept contributions and/or make expenditures for an exempt function. The exempt function of a political organization is influencing or attempting to influence the nomination, election, or any other type of selection of an individual to any public office or to an office in a political organization.