In short, yes. If you are paying workers who are not reported on a 1099 or W2 (for instance you are paying workers in cash and have no record of their payroll or payments), EDD may assess a fraud penalty and could open a criminal investigation. If your contractors are… [Read more]

IRS selects returns for audit based on numerous criteria. Here are some common ways your return can be selected for an audit: You fail to report income that reported on a W2 or 1099 (this can be from a sale of real estate, 1099-S; non-employee compensation as an IC; 1099-MISC… [Read more]

There are a variety of different notices that IRS sends to taxpayers, not all of which are as intimidating as many assume them to be. To most, the initial response upon receiving any notice from IRS is a mild amount of panic and confusion. In many cases, this response is… [Read more]

Tax season is often a daunting annual recurrence for business owners. For most businesses, this is because there’s a personal side of taxes too. As a business owner, there’s a high level of personal liability entangled in taxes.  Taxes are a necessary evil, and understanding how they work is too…. [Read more]

A 1099 worker, or contractor, is filed differently from a traditional full-time W-2 employee. While employees are eligible for benefits including worker’s compensation and federal unemployment, 1099 contractors are not. Businesses often utilize 1099 contractors to perform work that may not include a long-term need or that is an inconsistent… [Read more]

It’s that time of year again, tax season. Needless to say, 2020 was an unexpected year for most. The COVID pandemic played a role in the lives of most, from corporate businesses to small mom and pop business owners. Government involvement in the economy attempted to help businesses survive the… [Read more]

While there is no official guaranteed way to avoid having your taxes audited by IRS, there are a few tips that you can follow to lower your likelihood of being audited. In 2019, IRS audited 0.45% of submitted tax returns. For reference, that’s approximately one out of every 220 taxpayers. … [Read more]

Let us tell you a story. Some 15 years ago, we encountered a case in which a man’s wife passed away.  In the subsequent months, he received credit card bill after credit card bill of which he had no prior knowledge. The bills added up to nearly a million dollars… [Read more]

The Employment Development Department (EDD) is the largest tax collection agency in the state of California. They’re responsible for collecting payroll taxes from over 17 million workers annually, accounting for over $31 billion in tax payments. The agency also offers various services to California residents through the Job Service, State… [Read more]