pte - Linkenheimer LLP CPAs & Advisors

Q2 Estimates and PTE Payments Due June 17th

As we navigate through the second quarter of the year, it’s crucial to stay on top of your tax obligations to ensure smooth financial operations and compliance. In particular, we’d like to draw your attention to four important matters: Q2 estimate payments, the California Pass-Through Entity (PTE) elective tax payment, S-Corp estimated payments, and Form 3536 for LLC fees.

Q2 Estimate Payments: For those of you who are required to make quarterly estimated tax payments, the deadline for the second quarter is swiftly approaching. If you are self-employed, a freelancer, a sole proprietor, or have other sources of income not subject to withholding, you likely need to make estimated tax payments to cover your tax liabilities.

The due date for Q2 estimate payments is June 17, 2024, since June 15 falls on a weekend this year. Missing this deadline can result in penalties and interest charges, so it’s essential to ensure your payment is submitted on time. If you need assistance calculating your estimated tax liability or determining the appropriate payment amount, please don’t hesitate to reach out to us. We’re here to help you navigate the complexities of tax compliance and ensure […]

By Linkenheimer LLP|2024-06-13T13:15:46+00:00June 7th, 2024|payments, pte, tax deadlines|0 Comments

Tax Tips When Buying the Assets of a Business

After experiencing a downturn in 2023, merger and acquisition activity in several sectors is rebounding in 2024. If you’re buying a business, you want the best results possible after taxes. You can potentially structure the purchase in two ways:

Buy the assets of the business, or
Buy the seller’s entity ownership interest if the target business is operated as a corporation, partnership or LLC.

In this article, we’re going to focus on buying assets.

Asset purchase tax basics

You must allocate the total purchase price to the specific assets acquired. The amount allocated to each asset becomes the initial tax basis of that asset.

For depreciable and amortizable assets (such as furniture, fixtures, equipment, buildings, software and intangibles such as customer lists and goodwill), the initial tax basis determines the post-acquisition depreciation and amortization deductions.

When you eventually sell a purchased asset, you’ll have a taxable gain if the sale price exceeds the asset’s tax basis (initial purchase price allocation, plus any post-acquisition improvements, minus any post-acquisition depreciation or amortization).

Asset purchase results with a pass-through entity

Let’s say you operate the newly acquired business as a sole proprietorship, a single-member LLC treated as a sole proprietorship for tax […]

By Linkenheimer LLP|2024-05-20T16:50:11+00:00May 20th, 2024|business, pte|0 Comments

Important Reminder on Mandatory e-Pay and S-Corporation Pass-Through Entity Tax

We hope this message finds you well. As we navigate through the financial year, we would like to draw your attention to some significant updates from the California Franchise Tax Board (FTB) that might impact your business operations.

Firstly, based on the guidelines detailed on ftb.ca.gov, it is crucial to note that businesses are required to enroll in the Mandatory e-Pay program once they make an estimate or extension payment exceeding $20,000 or when they file an original tax return with a total tax liability exceeding $80,000. Once you meet this threshold, all future payments, regardless of the amount, duration, or taxable year, must be made electronically. Failure to comply can result in a 1% noncompliance penalty on the amount paid.

Moreover, as highlighted in the FTB Tax News from May 2022, the FTB reminds taxpayers that, beginning from the tax year 2021, payments made for the S-Corporation Pass-through Entity Elective Tax will count toward the Mandatory e-Pay requirement. Hence, if your payment for the S-Corporation Pass-through Entity Elective Tax causes you to meet the threshold, you must enroll in the Mandatory e-Pay program and make all future S-corporation payments electronically.

We understand […]

By Linkenheimer LLP|2023-10-09T16:47:51+00:00October 9th, 2023|pte|0 Comments