Frequently Asked Tax Questions

FAQ Table of Contents

To make it easier for you, we are sharing answers to the most frequent questions we receive regarding starting a business, filing taxes, and compliance with the federal, state and county regulations. Also, we are sharing the links available from the federal, state, county, and city government offices that provides detailed information for some questions. Please keep in mind that regulations vary by state, county and city. For this reason is important to follow the state guidelines and regulations.

The content here shared is very general and for informative purpose ONLY. It does not replace a consultant with an specialist. We do not guarantee that the information in the links shared from the government offices is up to date; federal and state guidelines, regulations, and laws are constantly been updated, for this reason it is recommended to consult with a specialist.

General Questions

  • Who Must File a U.S. Income Tax Return?
  • Comparison of Various Business Entities
  • U.S. Taxation of Foreigners
  • Can I Save Money When I Do My Own Bookkeeping?
  • Is Outsourced Accounting Right For Your Organization?

Starting a Business

Where do I find information and regulations to start my business?

The following links contain information and instructions on how to start a business.

  • Federal Regulations: Internal Revenue Service (IRS)
    IRS is the government agency of the Department of the Treasury, responsible for collecting taxes and the administration of the Internal Revenue Code. It has also overseen various benefit programs, and enforces portions of the Affordable Care Act.

    • Internal Revenue Service Guidelines
  • State of Florida Business Regulations
    The State of Florida office is dedicated to providing useful and timely information about Florida, including web links, facts, subjects and issues of interest to Florida residents and visitors.

    • Starting a Business in Florida
    • Florida Business Professional Regulations Request a License
    • Florida Division of Corporations Corporate Registration
  • Miami-Dade County Business Regulations
    Is the governing body of unincorporated Miami-Dade County and has broad, regional powers to establish policies for Miami-Dade County services. The government provides major metropolitan services countywide and city-type services for residents of unincorporated areas.

    • Miami-Dade Business Regulations and Resources
  • City of Miami Regulations
    The City of Miami is the “Watchdog” for the fair and consistent application of civil service rules and regulations for the benefit of City of Miami employees, administration, and residents.

    • City of Miami Requirements Guidelines
    • City of Miami Business Incentives Economic Initiatives
  • City of Doral
    The City of Doral government is a charter city responsible for the administration of all City Affairs. The City of Doral offers a wide range of services through its departments including the Office of the City Manager, Office of the City Clerk, Finance Department, Community Development Department, Public Works Department, Parks and Recreation Department, and Police Department.

    • City of Doral Business Regulations

What are the federal laws on labor?

The United States Department of Labor (DOL) fosters and promotes the welfare of the job seekers. It administers a variety of Federal labor laws including those that guarantee workers’ rights to safe and healthful working conditions; wage and hour standards, unemployment insurance benefits, reemployment services, and some economic statistics.

  • Department of Labor Guidelines
    • DOL Minimum Wage Provisions
    • DOL Vacation, Holidays and Sick Pay Provisions
    • DOL Fair Labor Standards Act Laws and Poster Compliance

Federal Corporate Income Tax Return Guidelines, Instructions, Requirement and Schedule

What are the regulations and schedules to file corporate income taxes?

Depending on the taxes to file, please click in any of the following links:

  • Federal – Internal Revenue Service (IRS)
    • IRS Business and Self Employed Calendar in English
    • IRS Business and Self Employed Calendar in Spanish
    • IRS Corporations Guidelines and Laws
    • IRS Corporations 1120 Instructions
    • IRS Individual or Self Employed Guidelines and Law
Form Business Entity Due Date Extension
1120 C-Corporation March 15th September 15th
1120S S-Corporation March 15th September 15th
1065 Partnership April 15th September 15th
1040/1040NR Individual or Self Employed April 15th October 15th
  • Florida State Department of Revenue
    • Florida Corporate Income Tax Guidelines
  • City of Miami Calendar
    • City of Miami Business Taxes
    • City of Miami Tangible Personal Property Taxes
    • City of Miami Real Estate Taxes

Payroll Services

Where do I find payroll information for payroll federal tax return?

Payroll taxes as other taxes required federal and state filing. The following links provide guidelines depending on the case.

  • Federal Payroll Taxes Guidelines, Laws, and Deadlines
    • Employer’s Tax Guide IRS Circular E
    • Federal Quarterly Employer Tax Return – 941 Form
    • Federal Unemployment Tax Return (FUTA) – 940 Form
    • Transmittal of Wages and Tax Statement – W3 and W2 Forms
    • Independent Contractor Payments Report – 1099 Form
  • State Payroll Taxes Guidelines
    • Florida State Filing and Paying Taxes
    • State Income Information Reemployment Tax Filing

Independent Contractors also known as Self Employed

  • How do I determine if I am an employee or an independent contractor?
    • Facts to determine if you or someone who provide services in your business is an independent contractor.
  • I am an Independent Contractor what are my income tax obligations?
    • Self Employed Tax Center
    • Federal Income Tax Filing Instructions – 1040 Form
    • What is a W-9 Form?
      • W-9 is one of the most commonly used IRS forms. Individuals and entities use the form to provide their taxpayer identification number to entities that will pay them income during the tax year. If you have your own business or work as an independent contractor, a client may request that you provide a W-9 so they can accurately report the payments they make to you. It is the Request for Taxpayer Identification Number and Certification – W-9 Form

Sales Tax

Is my company required to file and pay Florida State Sales Taxes?

Each sale, admission charge, storage, or rental is taxable unless the transaction is exempt. To learn more your responsibilities read the Florida Department of Revenue General and Industry Guidelines on Florida’s Sales and Use Tax

Estate Planning: Estate Transfer, Trusts and Wills

What is Estate Tax?

The estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. IRS Estate Tax

What is a Gift Tax?

The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.

Who pays gift taxes?

If you give someone money or property during your life, you may be subject to federal gift tax.

  • Federal Gift Tax Guidelines
  • State Gift Tax Guidelines

What is a Trust?

A relationship created at the direction of an individual, in which one or more persons hold the individual’s property subject to certain duties to use and protect it for the benefit of others. In legal terms, a trust enables a person to separate the legal ownership of property from the beneficial enjoyment of that property. It gives responsibility for managing and preserving trust property to a person or entity called the trustee. The beneficiaries of the trust are the ones who actually get to receive trust assets, according to whatever terms the trust establishes for distributions. There are different types of trust and methods of creation, if you are not sure how to create a trust call our office. We are glad to help you with your Estate Planning.

Personal Federal Income Tax Returns

Who Must File a U.S. Personal Tax Return?

In general U.S. Citizens, U.S. Resident Aliens (Green Card Holder), and Nonresident Aliens living in U.S. must file a U.S. income tax return.

Also, for the U.S. citizens living and/or working in a foreign country, the rules for filing U.S. income tax returns and paying estimated taxes are the same whether you are in the United States or abroad. Please be aware that your international income is taxed, regardless of where you reside. Additionally declaration of your foreign assets may also be required.

Employees also must file the income tax return statement. However, you must review the guidelines to see which is your case to file an U.S. income tax return:

  • U.S. Citizens and U.S. Resident Aliens (Green Card Holder)

    U.S. Citizens and U.S. Resident Aliens will file income tax return depending on their situation:

    • Federal U.S. Citizen Employee Guidelines – W2 & W3 Forms
    • Federal U.S. Citizen Individual or Self Employed Guidelines – 1040 Form

    Employers please see the Federal and State Payroll Taxes Guidelines, Laws, and Deadlines mentioned above.

  • Nonresidents Aliens U.S. Income Tax Return
    A non-resident alien living in the U.S., legally or illegally, for more than 183 days may be required to file a U.S. Individual Income Tax Return. Also, as a Non-Resident Alien (NRA) you may qualify as a tax resident and may be required to report your worldwide income.

    • A foreigner should test and calculate their days based on a the ‘Three-Year Look Back Rule formula’ using the Nonresident Alien Interview
    • Federal Nonresident Individual or Self Employed Guidelines
    • Federal Business or Employer Guidelines
    • U.S. Citizens and U.S. Legal Resident Alien Earning Income in a Foreign Country
      U.S. citizens and U.S. legal residents are considered U.S. Tax Residents. U.S. Tax Residents may be required to file a U.S. Income Tax Return for all the income earned and assets acquired “Worldwide” and may be able to apply for foreign earned income exclusions and foreign tax credits. A foreigner should also test and calculate their days based on a Three-Year Look Back Rule formula. To further test your requirement to file a current year income tax return, please fill out this Non-Resident Alien Interview and submit it to Rosillo & Associates.

      • Federal U.S. Citizens and Resident Aliens Abroad Overview
      • Federal U.S. Citizens and Resident Aliens Abroad Tax Rules
    • Foreigners Operating a US Trade or Business
      If a foreigner is operating a U.S. Trade or Business a tax filing obligations may be required for foreign owner/entrepreneurs and the U.S. business. To determine the business tax filing obligation and if the business must file a U.S. income tax return, a foreign investor needs to decide if his business model requires:

      • “Permanent establishment” to be in the United States
      • Performs its services in the U.S. continuously and frequently
      • Has an U.S. office, asset, and/or employees
      • Number of days owner(s) will stay in U.S. per year.
    • U.S. Tax Requirements for Foreign Investors
      A foreign investor in the U.S. should consider the “income” tax preparation and filing requirements for the foreign owner along with additional tax disclosures to explain the flow of funds across borders, which may require filing the following disclosures:

      • Foreign Gifts, Bequests, Loans, etc.
      • Foreign Source Income
      • Foreign Financial Assets Report including Bank Accounts
      • Foreign Tax Returns
    • Tax Treaties for Foreigners
      The United States has income tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. income taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income.

      • Federal Tax Treaties Overview

Real Estate Tax

  • Foreign Selling a Real Estate Property
    Foreigners who are in the process of selling a U.S. real estate property are subject to a tax withholding (FIRPTA) on the gross sales of the U.S. real price sale. It is possible to lower this expensive U.S. tax withholding by showing the estimated excessive income tax withholding due at the closing. To help us better analyze your situation, please send us the following:

    • Final closing selling statement (HUD) and related selling expenses
    • Seller contact information and U.S. tax identification number
    • Seller copy of passport. U.S. Visa and dates of entry and exit into and from the U.S. the last 4 years.
    • Buyer contact information and U.S. tax identification number
    • Withholding Agent’s address and Contact information

A foreign investor paying this withholding should still consider filing a U.S. personal income tax return to claim additional tax deductions. In addition, one should file for these and other credits to seek a refund of taxes after the above mentioned gross tax withholding was paid at closing.

Accounting, Bookkeeping and Taxes

If you desire a “Do-it-Yourself” accounting department for your organization, we recommend using a user-friendly, computerized and Internet-based accounting software. These are just a few vendors we work with and prefer:

  • Quickbooks Pro & Online
  • Magaya Logistics Software
  • Netsuite Accounting

Can I save money by doing my own bookkeeping?

If you think you can, then you should try, but be careful. It may cost a good deal more to remedy any problems you incur by doing it yourself, versus hiring an accountant at the onset. If your company’s staff is not proficient in accounting theory, accounting software, organizational skills or does not invest enough time to make sure the accounting information is correct, then it may cost you more to fix the issues in additional labor, tax accounting fees, taxes, extensions, penalties, interest, or more.

Here are some questions you should ask yourself to see if “Do-it-yourself” accounting is really for you:

  • Is your company proficient at keeping its accounting organized to provide timely and accurate financial information?
  • Can your accounting employee be more valuable doing something else to benefit the business (sales, production, cost control, personnel management, focused on core business to increase business value) over the cost of professional bookkeeping services?
  • How would the business benefit if the employee doing the bookkeeping could assist in the production of income, sales, quality control, customer satisfaction, or operations instead?
  • Could the employee doing the bookkeeping add to your bottom-line after covering their cost of their employment?
  • Is outsourced Accounting more efficient and beneficial for our organization?
    • When do the costs and effectiveness of Outsourcing Accounting Services become a good business decision?
      Perform the above analysis to estimate the costs of your in-house accounting department and request a fee proposal to compare.
    • What is the true cost of a proficient in-house accountant or bookkeeper?
      The following is an example of the possible expenses and considerations to analyze the real cost to operate your own in-house accounting department:

Effective Accounting Employee Annual Gross Pay Analysis

Cost of Employee for Accounting:

Resume should Include:
1) Accounting degree and extensive accounting +5 years experience as a full charge bookkeeper.
2) True Cost: $18.23/hr x 40hrs x 48 work weeks we adjusted 4 weeks for paid Holidays and Vacations from 52 weeks year

$35,000
Employer FICA/Medicare Taxes (7.65%) $2.678
Employee Benefits (3%) $1,050
Owner/Supervisor:
Annual opportunity time cost to manage employee (2hrs/wk x $100/hr for 48 weeks)
$9,600
Cost to correct “Do-It-Yourself” accounting ?
Accounting Fees, Penalties, Interest, etc. ?
Office Overhead Allocation: Computers, Rent, Supplies, etc.
$1,000
Estimates Accounting Department Monthly Costs “Do-it-Yourself” $4,111
Estimated Accounting Department Annual Costs “Do-it-Yourself” $49,328

Other Expenses to Consider

Accounting Software $750
Computer & Accessories, Desk, Chair, etc $3,000
Employee Turnover: Training Costs and New Employee (10%) $4,932
Employee Theft or Other Casualties!!! $ ??,???

To keep a proficient accounting records in your office, we estimate our clients pay the minimal cost:

Set-Up Cost: Excluding employee turnover, retraining, adding ’1 supervision. $8,000
Monthly Cost: Excluding penalties, interest, corrections, etc. $4,000

At a minimum, coordinate the accounting responsibilities between your staff and the supervision from accounting professionals and experts periodically. Remember, a business needs to focus on its customers, sales and core operations in order to increase the bottom-line efficiently.

Your business needs to do what it does best, its core business and client satisfaction, at maximum capacity to generate the most value.

Is your in-house accounting department helping to achieve this profitable goal?

At Rosillo & Associates Certified Public Accountant, we think of “Profit-per-Square-Foot.” both time and space are limited resources for a business and business owner limiting profit generation. As space is more expensive and technology is becoming less expensive, a business owner’s traditional processes and profit margins are changing.

Check our Accounting Packages and call our office to find out the prices for the package that fits your accounting needs and compare.

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