Our Blogs

On our blogs you will find our Tax Sherpa Stories series as well as additional posts covering all manner of tax topics. Some items are timely as there are multiple tax filing dates throughout the year and some items are important larger concepts.

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BOI Reporting Update

Understand the latest on Beneficial Ownership Information Reporting ...more

tax concepts

October 16, 2024•2 min read

Understanding the Growing Number of People with Disabilities: Insights and Implications

Disability numbers are skyrocketing since 2020. What's the cause? What does this mean for the disability portion of the Social Security program, OASDI? ...more

tax concepts

September 09, 2024•3 min read

Analyzing Trump's Social Security Tax Plan: My Take on the Financial Times' $1.5 Trillion Claim

Debunking claims about Trump's Social Security tax plan, we explore the numbers and implications for sustainable solutions. Read more on our latest blog post! ...more

tax concepts

August 03, 2024•4 min read

Social Security: What You Need to Know

Discover what upper-class Social Security checks could look like in 2025 and how high earners can strategically plan for these changes. Learn key tax strategies and the importance of Medicare gap cove... ...more

tax concepts

July 15, 2024•2 min read

LLCs and S Corporations - End the Confusion

Confused about LLCs and S Corporations? Our latest blog post breaks down the benefits, steps, and tax implications of electing S Corporation status for your LLC. Discover how to optimize your tax stra... ...more

tax concepts

June 25, 2024•29 min read

Hiring Your Kids | Tax Sherpa Routes

Learn how hiring your children can save you on taxes while teaching them valuable financial skills. This strategy can reduce your tax burden, boost retirement savings, and provide essential financial ... ...more

tax concepts

May 25, 2024•20 min read

The Hidden Tax: Navigating Inflation and Federal Deficit Impact on Your Finances

Explore strategies to combat inflation and the federal deficit's impact on your finances with Tax Sherpa's expert guidance. ...more

tax concepts

February 19, 2024•15 min read

The Tax Relief for American Families and Workers Act of 2024 - What We Know So Far

Explore the Tax Relief for American Families and Workers Act of 2024 in our latest blog. Understand its impact on small businesses and families, covering tax credits, deductions, and key legislative c... ...more

tax concepts

January 17, 2024•1 min read

Navigating the Corporate Transparency Act: A Comprehensive Guide by Tax Sherpa

The Tax Sherpa Guide to the Beneficial Owners Information Report required by the Corporate Transparency Act. This new reporting requirement went into effect Jan 1, 2024. ...more

tax concepts

January 03, 2024•22 min read

Mastering Expense Management: Navigating Accountable Plans for Small Business Success

Dive into our comprehensive guide on Accountable Plans, tailored for solopreneurs and small business owners. Learn how to optimize your tax strategy, ensure IRS compliance, and effectively manage busi... ...more

tax concepts

December 18, 2023•20 min read

Senator's Bold Tax Play: A Wake-Up Call for Entrepreneurs?

Senator J.D. Vance has introduced a special tax of 35% on large endowments. What does this mean for solopreneurs, freelancers, and small business owners? ...more

tax concepts

December 15, 2023•5 min read

Understanding Self Employment Tax: A Comprehensive Guide for Freelancers and Independent Contractors

Solopreneurs and independent contractors, take charge of your taxes! Our guide, 'Understanding Self Employment Tax,' simplifies the essentials of SE tax, including deductions, credits, and smart strat... ...more

tax concepts

December 12, 2023•19 min read

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Frequently Asked Questions

What's the difference between tax advisory and just filing my taxes?

Filing your taxes each year is a necessary task, but it is always backwards looking. Tax advisory works with you throughout the year to make sure that you are on the right track when it comes to your taxes and have strategies in place to save money now.

I've heard about tax write-offs for small businesses. What exactly can I write off, and how does it benefit my business?

Tax write-offs, also known as tax deductions, are expenses that a business incurs that can be subtracted from its revenue to reduce the amount of taxable income. Common write-offs include office supplies, mileage, rent for a business location, and advertising expenses, among many others. By writing off legitimate business expenses, you can significantly reduce your taxable income, which can lead to a lower tax bill. It's essential, however, to maintain proper records and ensure that the expenses are truly business-related.

What's the difference between a tax deduction and a tax credit?

A tax deduction reduces the amount of your income that is subject to taxation, which in turn can lower your tax liability. Common deductions include expenses like mortgage interest, student loan interest, and business expenses. A tax credit, on the other hand, is a direct reduction of your tax bill. This means if you owe $1,000 in taxes and have a $200 tax credit, your tax due would be reduced to $800. Some popular credits include the Child Tax Credit, the Earned Income Tax Credit, and credits for energy-efficient home improvements.

I'm thinking of hiring an independent contractor instead of an employee. Are there different tax implications for each?

Yes, there are significant tax differences between hiring an employee and an independent contractor. When you hire an employee, you're responsible for withholding federal and possibly state income taxes, Social Security, and Medicare taxes from their paychecks. You also typically pay unemployment taxes on wages paid to employees. Independent contractors, on the other hand, are responsible for their own taxes. As a business owner, you'd provide them with a Form 1099-NEC (if you pay them $600 or more during the year) instead of a W-2, and they would be responsible for their own self-employment taxes. It's important to correctly classify your workers, as misclassifying can lead to penalties.

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