WCG blog contains articles and other cheeky items that are short, sweet and a bit sassy. They are designed to be quick reads about current small business tax deductions and other tax matters. As such, they might become outdated simply based on time or based on changing tax code. Just like email, the most recent post about a topic is probably the most accurate and current post (we try to alert you that a post supersedes an older post, but life on life’s terms gets in the way from time to time).

NEW BOOK: I Just Got A Rental, What Do I Do?

We are excited to announce the release of our second book. Purchasing a rental property is certainly challenging, but operating one to build wealth and find tax efficiency is equally challenging. This is our second book. Our first book, Taxpayer’s Comprehensive Guide to LLCs and S Corps, was first published in 2014 and was well-received by small business owners and tax professionals, so we thought a book on rental properties and real estate investments would be equally helpful. So, here we are with our first iteration, or the 2024-2025 edition. We plan to update annually.

Our book discusses entity structures and moves into asset management such as acquisition, cost segregation, rental safe harbors, repairs versus improvements, accelerated depreciation, and 1031 like-kind exchange. From there we discuss various rental considerations like passive activity losses, short-term rental loophole, real estate professional status, and material participation including what time counts, and what time doesn’t count. Finally, the good stuff! Rental property tax deductions such as travel, meals, automobiles, interest tracing, home office and common expenses. Fun! [more]

1099 Accountant for Contractors

You show up to work on Friday and there’s a retirement cake in the breakroom. Interestingly, you are coming back on Monday as a 1099 contractor using the same computer at the same desk with the same lousy chair that tilts ever so slightly to the left. Why did this happen? Why did you get converted from a W-2 employee to an independent contractor suddenly needing a 1099 accountant? [more]

Things were a bit busy! And Hey, it was summer, and we had some vision problems. We just couldn’t see ourselves writing blog posts.

Understanding IRS Underpayment Penalties

Dealing with taxes can be tricky, especially when it comes to IRS underpayment penalties. In 2024, these penalties are a bigger deal because the IRS recently bumped up the interest rate to 8% to align with the current landscape. This change means higher costs if you underpay your taxes. [more]

UPDATED: Real Estate Professional Defined

Let’s presume that you have a rental loss. Rental income is typically considered passive, meaning that you are not directly earning the income as you would with a W-2 job. Passive losses may be deducted from non-passive income such as wages, but there are limits (of course there are!). But wait! There’s more with the Net Investment Income Tax (NIIT) and how to avoid it. [more]

Rental Property Bookkeeping Services

WCG specializes in real estate investors and as such we provide accounting services for rental properties. Rental properties are a business like any other, and the proper tracking of revenue and more importantly the associated expenses are essential. The bookends to the varying service levels are your common single-family rental (SFR) home and that large commercial property with several tenants. [more]

Minimum Payroll with December Bonus

Small business owners can face two payroll challenges. First, they might not know what their annual revenue will be until Halloween or so (think realtor or some other commissioned sales). Since reasonable salary amounts are somewhat dependent on the financial health of the business, seasonal or unpredictable revenue makes determining a salary amount on January 1 difficult. [more]

Address Changes Are Messy

A lot of small business owners, especially solo operators, work from their home office. This is wonderful, however people change homes often and this can kickoff a bunch of address changes. IRS. State Revenue. State Payroll. FinCEN. Secretary of State. Yada yada! Here are the considerations- [more]

BOOK UPDATE: C Corporation as Mothership

Several sections of our book have discussed the various considerations of the mothership baby S Corp multi-entity arrangement. Another consideration is rather than the mothership being a multi-member limited liability company (MMLLC), it is a for-profit C corporation. Benefits? No mothership K-1. Cheaper increase of working capital. Among other benefits. More- [more]

JUST RELEASED: Rental Property Tax Deductions

Real estate investment is one of WCG CPAs & Advisors core competencies, and as such we get asked a bunch of questions on rental property tax deductions. Most of those questions involve travel expenses, depreciation, repairs versus improvements and short-term rental loophole deductions. Before we get into all that, let’s take a moment and review some basics in taxpaying life. [more]

May 2024 Book Updates

We are just coming out of tax season with a stack of notes with mostly good ideas, and likely some bad ones too. One of those pieces of paper (well, virtual paper with a fancy reMarkable tablet) had updates to our book with considering passive business ownership, lowering risk with rental partnerships and using an LLC holding company to own an airplane. [more]

CostSegEZ is WCG’s Preferred Provider

Cost segregation or costseg as the cool kids say allows you accelerate depreciation (and therefore lower taxes and increase cash) on real estate. With a cost segregation report or a cost segregation study (CSS), all the bricks are figuratively torn down and put into different piles. Cost segregation studies used to be for the rich and shameless with some reports being several thousands of dollars, but that is not the case with CostSegEZ. [more]

WCG Partners with BiggerPockets

WCG CPAs & Advisors is thrilled to partner with BiggerPockets. Located in Denver, Colorado, BiggerPockets is the premier online resource for real estate investing and strategy. They started in 2004 primarily as an education resource for real estate investors, and have grown to have over 2,000,000 members who collaborate, share stories and help each other. [more]

Crash Course on Investing

You’ve decided to open that retirement plan personally or through your small business – what now? Or maybe your friends at WCG created some tax savings that you would like to put to work. The world of investing sounds like a foreign language when listening to most financial advisors. At WCG we like to keep things simple. [more]

Year-End Tax Planning

The holidays are coming and people start thinking about year-end moves to minimize their taxes. Every day between Christmas and New Year’s Day we field a zillion questions on year-end tax planning. While some ideas are great, there are pitfalls and sucker-holes. [more]

Taxpayer’s Guide to LLCs and S Corps: 2023-2024

WCG and Jason Watson, CPA, have released the 2023-2024 Edition of Taxpayer’s Comprehensive Guide to LLCs and S Corps. Over 400 pages of pure pleasure! This edition has updated 2024 data such as IRA and 401k limits including Social Security wage limits, but it also has a bunch of new information spread out various chapters such as customized multi-entity structures, expanded reasonable shareholder salary sections, more tax reduction mechanics among various little tidbits gleaned from hundreds of small business consultations. Riveting! [more]

FinCEN Beneficial Ownership Information

If you are a small business owner, you just had another chore added to your list. After years of delays, the first stage of the Corporate Transparency Act (CTA) goes into effect on January 1, 2024. It imposes a new federal filing requirement for most corporations and limited liability companies (LLCs) with very few exceptions. 99% of the small business owners out there will have complete FinCEN’s Beneficial Ownership Information filing. Yuck! [more]

Am I Doing Everything to Save Taxes

During tax planning season which is May, June and July, and then again in November and December, we get asked quite often “What else can I do to save taxes?” The real question is about cash, right? (not taxes) You can probably save at least $25,000 in taxes by sending $100,000 to the American Red Cross. Having said that, we created a fillable PDF as a checklist to ensure you are turning over every rock as you saves taxes and build wealth. [more]

How to Annoy Your Tax Accountant in 6 Easy Steps

At times inquiring minds ask us how to annoy their tax accountant for whatever reason. Being the helpful CPA firm that we are, WCG feels compelled to help those who ask. So, here it is- How to annoy your tax accountant in 6 easy steps. [more]

Recently Updated: Reducing Taxes

One of our primary focuses at WCG is ensuring you are paying the least amount of taxes allowed by law. Of course, right? Some of our other primary focuses are helping you build wealth and leverage the most of your financial worlds for you and your family. However, these focuses or objectives are not isolated; in our tax reduction strategy sessions we discuss how they are very much related to each other and intertwined. [more]

Pay More Taxes

Yeah, you’re reading that right. Our website and various articles express ways to save on taxes, but they also had an undertone of building wealth. Building wealth is your primary and perhaps only mission; not saving taxes. If we can do both, Yay! This article will take building wealth one step further and broach a topic not often discussed- paying more in taxes. Wait! What? That sounds crazy, especially from a tax accountant. [more]

Short-Term Rental Tax Loophole

The STR loophole can be summarized easily- if your rental property has an average guest-stay of 7 nights or fewer, then it is considered short-term. Next, if you have a short-term rental, the losses especially during the early years are deemed non-passive and therefore deductible beyond the passive loss limitations. [more]

No S Corp for Traveling CRNAs

WCG continuously reviews our services to ensure we are providing the best tax strategy with efficiency. Upon a lot of discussion and reflection, we are recommending that nomadic or traveling CRNAs do not operate as an S Corp. This includes any professional that provides direct services to clients or patients. Why? [more]

529 to Roth IRA Conversion

For those parents who either over-funded a 529 college savings account or where the funds were never needed, there is a provision in the SECURE 2.0 Act allowing beneficiaries to perform a 529 to Roth IRA conversion starting in 2024. There are some rules- [more]

Holding Company Versus Management Company

Holding companies and management companies are not the same thing. One, as the name suggests, holds or owns underlying assets (other businesses). The other offers management services in exchange for fees, and typically doesn’t own underlying assets. [more]

IRS Delays High Earner Roth 401k Requirement

The IRS postponed a SECURE Act provision that would require all those 50 or older who also earn more than $145,000 to be required to make catch-up 401k contributions into their post-tax (Roth) account. The can got kicked down the road until 2026. [more]

FasTrac 1040 Tax Return Preparation

WCG recently brought back the FasTrac 1040 tax return preparation designed specifically for those taxpayers who have a straightforward tax footprint yet want the expertise of a CPA firm to prepare the tax returns. Our fee for FasTrac 1040 tax returns will be a flat $525. What qualifies as FasTrac and why is it missing a t and a k? We’ll answer the former first. [more]

Reducing Taxes

One of our primary focuses at WCG is ensuring you are paying the least amount of taxes allowed by law. Some of our other primary focuses are helping you build wealth and leverage the most of your financial worlds for you and your family. However, these focuses or objectives are not isolated; they are very much related to each other and intertwined. [more]

Pausing Some New Clients Until May 2023

To maintain the highest level of client satisfaction and ensure a positive client experience, WCG continuously analyzes our workflow and our firm resources. As of November 2022, WCG regrets that we are pausing certain new client engagements to maintain our service standards. Having said that, we have some exceptions– [more]

CRNA Tax Deductions

WCG has more than 100 Certified Registered Nurse Anesthetists as businesses owners, and it is one of the fastest growing segments in our client base in 2022. As such, naturally we have had several discussions with CRNAs regarding their tax deductions. Increased tax deductions is one of the primary reasons to ditch that W-2 job and convert to a 1099 contractor. [more]

Client Communications

Healthy relationships start with managing expectations, especially communications. Generally, WCG relies on emails and text messages as our initial communication style. We do this for two reasons- first, it allows you to take your time and fit our needs into your busy schedule. Second, it memorializes the conversation and becomes a part of your client record. [more]

Cost Segregation in a Nutshell

With a cost-segregation report, all the bricks are figuratively torn down and put into different piles. Technically and with full-on geek-speak, cost segregation separates property elements that are “dedicated, decorative or removable” from those that are “necessary and ordinary for operation and maintenance of the building.” These piles are called asset classes and they are maintained separately within your property’s depreciation schedule. [more]

CPA Concierge Services

According to “legendary” facts, a 1950s building manager in Manhattan was wrestling with complaints from tenants about long waits for the elevator. Thinking that people were simply bored, he installed floor to ceiling mirrors next to the elevators. Complaints stopped. Regardless of being bored or in a hurry, people generally do not like to wait. Unlike Disney or a sports event, WCG does not have lines that a person can easily see. [more]

Pass-Through Entity Tax Deduction

As you consider your tax planning this year, please be aware that you might live in a state that has a pass-through entity tax (PTET) on the books for 2022. Why do you care? Well, it could provide you increased federal tax savings. Keep reading if you dare. [more]

Tax Planning Services

There is nothing worse than the fear of the unknown since most human responses will be the worse case scenario. In other words, without proper data resulting from tax planning, people will make use of their own data… and it’ll be wrong, and will lead to a tax surprise. Another thing that is bad is having cash in the bank, but not knowing how much is yours and how much is Uncle Sam’s. [more]

Tax Resolution, Audit Defense

From time to time you might receive a tax notice from the IRS, state or local taxing authority. These are never pleasant. Further, it is a common misconception that the government and their respective employees are never wrong. However, their systems are run by humans, and while we like to believe that the brightest people are employed by our government, sadly they are like any other human. [more]

Roth 401k Versus Traditional 401k

Summer is tax planning time and we get a lot of questions about solo 401k contributions, and whether they should be Roth 401k contributions or traditional (pre-tax) 401k contributions. Our general answer is Roth for a few reasons. Before we get into that, let’s review a couple of things. [more]

Tax Planning Strategies

Tax planning strategies are commonly addressed in December as small business owners and other taxpayers start to freak out about bringing in the New Year. However, tax planning is an ongoing and fluid dynamic, and it should be performed methodically throughout the year. [more]

November 2021 Class

WCG has been actively recruiting new team members since this summer. We created a bunch of podcasts describing our culture and leadership. We attended numerous career events at University of Colorado – Colorado Springs and Denver University including meetings with Pikes Peak Community College. Oh! Let’s not forget three internal referrals. Nothing is as amazing as a current team member referring another person to join WCG! The November 2021 Class is impressive! 3 Managers, and 3 Supervisors. Incredible! [more]

Ineffective S Corp Elections

Limited Liability Companies (LLCs) are amazingly flexible in structuring a deal. However, certain agreements inside and outside the Operating Agreement might make the S Corp election ineffective. Why? Special allocations are simply not allowed in a S Corp. That’s easy. However, the outside agreements such as employment, buy-sell, redemption, options, warrants, debt instruments, etc., can create a second class of stock. [more]

2022 Tax Brackets and Limitations

The IRS has released a bunch of tax related numbers for the 2022 tax year including brackets, standard deductions, max 401k contributions, gift tax limitations, among other things. [more]

Taxpayer’s Guide to LLCs and S Corps: 2021-2022 Edition

WCG and Jason Watson, CPA, have released the 2021-2022 Edition of Taxpayer’s Comprehensive Guide to LLCs and S Corps. 430 pages of pure pleasure! This edition has updated 2021 data such as IRA and 401k limits including Social Security wage limits, but it also has a bunch of new information spread out various chapters such as customized multi-entity structures, expanded reasonable shareholder salary sections, more tax reduction mechanics among various little tidbits gleaned from hundreds of small business consultations. Riveting! [more]

New S Corp Puppy! Now What?

You just got a new S Corp puppy and you are wondering what happens next? Not much. You do you! But! There are some traps and pitfalls to be aware of such as payroll processing, understanding how common deductions such as home office and mileage change, 401k limitations and filing deadlines. [more]

Real Estate Investing

WCG receives about 1-2 emails or phone calls per week from people saying, “I am jumping into real estate investing and need some guidance.” Cool! But there are several paths to the coveted real estate investor name tag, and this article walks you through the common ones plus some other tidbits. [more]

Reducing Taxes

One of our primary focuses at WCG is ensuring you are paying the least amount of taxes allowed by law. Some of our other primary focuses are helping you build wealth and leverage the most of your financial worlds for you and your family. However, these focuses or objectives are not isolated; they are very much related to each other and intertwined. [more]

Onboarding Modulation

To maintain the highest level of client satisfaction and ensure a positive client experience, WCG continuously analyzes our workflow and our firm resources. As of this writing, August 9, 2021, WCG regrets that we are pausing new business advisory service engagements to maintain our service standards. We have one exception- see below. We will re-assess WCG’s resources November 1, 2021. This might sound like a jerk thing to say… but we would definitely be jerks if we said we could, but failed to deliver. [more]

S Corporation vs C Corporation

UFC #4,785 S Corp vs C Corp, $24.95 on pay per view. Many business owners are faced with the S corporation vs C corporation business entity type selection conundrum. Interestingly, an S corporation is not an entity type but rather a tax election. To better understand the differences and to assist in the S corporation vs C corporation question, let’s briefly run through a comparison table. [more]

No good excuses… lots of bad ones.

2020 Tax Season Reflections

This tax season was exceptionally challenging. There are many reasons for this such as new workflow software, unexpected growth and a zillion retroactive tax code changes (the states were the worst). As a result, our turnaround times increased substantially. But where WCG failed you… where our team struggled the most… was in our communication and managing expectations. We didn’t realize this until March 25 or so, and we didn’t have an elegant way of fixing the problem. [more]

NEW! Tax Patrol Services

WCG is happy to announce an additional service for our clients. Tax Patrol is a wonderful tax service for those who don’t need all the business advisory bells and whistles, but from time to time want some love from an experienced tax consultant and business advisor. Have a quick tax question? Need to know the depreciation rules as you buy that new car? Wondering what your April tax bill is going to be in August? Tax Patrol is like ski patrol… you might not use it, but you sleep better knowing you have it. [more]

2021 Fee Increases

No one likes price increases, but they are a fact of life. WCG takes fee increases very seriously, and only after a lot of reflection and analysis. So many crusty old CPA firms simply add $25 every year to the tax preparation fee… or 5%… or some other arbitrary number. While that seems to work for some, it does not sit well with us. Arbitrary numbers to an accounting firm??!! [more]

Tax season in full swing!

Remote Work Arrangement

Working remotely is the big topic of 2020 and will extend into 2021 and beyond. It was necessary for so many businesses and people naturally loved it. As such many businesses are delaying and or entirely scrapping any plans to return to the workplace. However, research is starting to show that 100% remote work employees is just not sustainable in the long-term. [more]

Man, we have been just scrambling! The blending of our Summit Accounting Solutions and WCG families… expansion into Denver… more tax law changes like PPP now being non-taxable (although not all states are onboard)… hiring new people and training, and all that good stuff. Oh, and we typically update our book over the Christmas break and that didn’t happen either.

PPP Loan Forgiveness is Taxable Today

There has been a lot of activity over the last 6 months regarding PPP loan proceeds becoming taxable income or not. We’ll come right out and say it. Under current law including the recent IRS Revenue Ruling 2020-27, and current interpretations of the law supported by several tax court cases, your PPP loan is taxable. Boom! [more]

No Posts (sorry)

We were busy with our merger and blending our families between WCG and Summit Accounting Solutions.

WCG Merges with Summit Accounting Solutions

In a year that seems to have an endless supply of unpleasant news around every corner wouldn’t it be refreshing to greet the last quarter of 2020 with a joyful surprise? We thought so too! We are delighted to announce the merger with south Denver-based tax and accounting firm Summit Accounting Solutions. [more]

Jason Schneider Named as Managing Partner

Jason Schneider had his own tax and accounting firm, and rented space from WCG when it was Watson CPA Group in 2013. Over the course of several years, Jason and Tina Watson have become friends with Jason Schneider, and occasionally discussed combining forces. [more]

S Corporation vs C Corporation

UFC #4,785 S Corp vs C Corp, $24.95 on pay per view. Many business owners are faced with the S corporation vs C corporation business entity type selection conundrum. Interestingly, an S corporation is not an entity type but rather a tax election. To better understand the differences and to assist in the S corporation vs C corporation question, let’s briefly run through a comparison table. [more]

SBA EZ PPP Loan Forgiveness Application

The SBA alongside the Treasury Department released an EZ PPP Loan Forgiveness Application that is designed to streamline the loan forgiveness process for many small business owners. Not all, but most. As you are aware, the PPP Flex Act made a bunch of changes most notably extending 8 weeks to 24 weeks for the covered period, and also adjusting the payroll cost hurdle from 75% to 60% (easier to jump over). Now they’ve made forgiveness easier too… like a drive through. [more]

SBA PPP Loan Forgiveness FAQs

We have put together a quick list of frequently asked questions involving the SBA’s Paycheck Protection Program and specifically the PPP loan forgiveness component. We have another blog post about the PPP loan calculation; this one here is not necessarily about how to calculate the PPP loan forgiveness amount. We will post another one just on the reiterations of that calculus. This post is just about some questions and answers. [more]

PPP Loan Forgiveness Calculation

As part of the CARES Act due to this COVID-19 nonsense, the SBA handed out about $600 billion in Paycheck Protection Program (PPP) loans which also contained an amazing forgiveness component. This blog post attempts to synthesize the complicated PPP loan forgiveness calculation, but we also must warn readers and small business owners of two huge things. [more]

No Posts (sorry)

We were busy with SBA’s Paycheck Protection Program (PPP) stuff. As you might know, we assembled a PPP task force that consists of Jason, Amanda, Nate, Kate, Chelsea and Sam. This is a global shout out to this group of professionals who over the past four weeks has helped over 250 small business owners receive over $9.2 million in loans. If you have any PPP related questions, please email the task force at [email protected].

But! We also managed to host a blood drive where we had 51 donors. Each donation saves an estimated 3 lives, and the current blood supply is low! Check out our cool video.

COVID-19 Tax Stimulus

There’s been a flurry of activity surrounding the COVID-19 tax stimulus with changes in tax filing deadlines, paid sick leave, tax credits, stimulus payments, and all kinds of other stuff. We have attempted, to the best of our abilities during a challenging tax season, to synthesize all the changes into one spot. Some of this we ripped off from other authorities, and some is actually original thought. [more]

SBA Paycheck Protection Program

The CARES Act was just signed into law on Friday, March 27 and it included a killer SBA loan called the Paycheck Protection Program (PPP). WCG has applied for this loan ourselves since our ability to predict our future is gone like most small businesses. [more]

COVID-19 Benefits

Here we are on March 21, 2020. Many of us are sequestered in our home trying to figure out basic life matters like food and budgets, and having where the heck do we go from here thoughts. Amidst all the chaos, we wanted to take a moment to turn to the future and imagine life on the backside of COVID-19. The good side of COVID-19. The benefits of COVID-19. Huh? [more]

SBA Disaster Loan

The Small Business Administration has had SBA disaster loans in place for several years, but they were usually thought of in the context of hurricanes, fires, floods, etc. However, given the vagueness of the laws (which is good), the SBA economic injury disaster loans are available to small business owners affected by COVID-19. [more]

2019 Income Tax Payments Extended

The U.S. government will postpone the April 15 tax-payment deadline for millions of individuals, giving Americans another 90 days to pay their 2019 income-tax bills in an unprecedented move. The delay is available to people who owe $1 million or less and corporations that owe $10 million or less. [more]

Online Tax Accountant

With everyone freakin’ out about the Coronavirus (and me recovering from Deschutes Virus from their amazing IPA), perhaps it is time to revisit some of the personal services that people need such as an online tax accountant. Yeah, it might be a shift in the paradigm… but long before we had this panic, tax preparation was shifting to an online tax preparation engagement. [more]

Small Business Bookkeeping Offered by WCG

WCG has recently introduced a new bookkeeping function for business owners as your Fractional Controller. We will use Bench as our back office engine since we believe they remain an amazing and cost-effective approach to small business bookkeeping and financial reporting. However, we take over the interfacing, monitoring and financial statement delivery… a hands off option for you. Your first and only call is to us. [more]

SECURE Act and FCAA

The SECURE Act which stands for Setting Every Community Up for Retirement Enhancement of 2019 was signed December 20, 2019 as part of the FCAA Act of 2020. What do these Acts impact? It does some really cool things for small business owners, parents and those who work beyond 70. FCAA also addresses private mortgage insurance and health insurance expenses among other issues. [more]

Year-End Tax Planning

The holidays are coming and people start thinking about year-end moves to minimize their taxes. Every day between Christmas and New Year’s Day we field a zillion questions on year-end tax planning. While some ideas are great, there are pitfalls and sucker-holes. [more]

Charitable Donations Revisited
Whether you are actively involved in the charity, or it has a special meaning in your heart, we are here to help you understand the tax implications of your charitable donation… ’cause the best deduction is a tax deduction. [more]

Cannabis Industry Tax Overview
If you’ve been around the cannabis industry for more than a minute, you know that it’s not the get rich scheme many thought it would be. There is a ton of questions and few answers. Then again, as we would tell any small business owner, “if it was easy, everyone would be doing it.” [more]

Tax Planning Strategies
Tax planning strategies are commonly addressed in December as small business owners and other taxpayers start to freak out about bringing in the New Year. Tax planning is an ongoing and fluid dynamic, and it should be performed methodically throughout the year. [more]

Be Reasonable People! (Small Business Tax Deductions)
Small business tax deductions are critical for reducing taxable income. The tax code and the IRS basically say, “Hey, we are cool with deducting business expenses provided you are attempting to earn a profit which we will one day tax nicely.” But! Being reasonable is just as important. [more]

Watson CPA Group is now WCG Inc
The Watson CPA Group PLLC is now WCG Inc. Why? Simplicity and elegance when expanding ownership to valuable employees, CPAs and enrolled agents. Sure we could have kept an LLC but a C Corp made sense. [more]

RCReports Reasonable Salary Case Study
Recently we had a foot and ankle physician group in Rhode Island complete two different RCReports interviews to determine a reasonable salary for their S Corp. The first draft yielded a shareholder salary of $193,762 yet the second draft returned $112,728. [more]

Form 1040-SR Benefits
Thanks to Section 41106 of the Bipartisan Budget Act of 2018 (yawn), seniors now have their own tax form, Form 1040-SR. Oh, you missed that on Ellen? No worries… we got your covered with this blog post about the simple new tax form. [more]

States With Highest Income (USA Today Reprint)
Median household income in the United States hit an all time high in 2018, according to data from the U.S. Census Bureau’s American Community Survey. The recently-released data shows that the typical American household now has an income of $61,937 a year, up slightly from $61,423 in 2017. [more]

Small Business Bookkeeping
Anyone can balance a checkbook. They teach you that in high school. But, small business bookkeeping is much more than balancing and reconciling a checkbook. Ensure you are paying the least amount of taxes by having accurate financial statements and tax returns! [more]

Press Release: Michelle Day, EA, Named Partner
WCG (formerly Watson CPA Group) is proud to announce Michelle Day, EA, as our latest Partner. She then came to WCG in December of 2017 as a Tax Manager of Pod D where she quickly took command of her team and became a well-respected leader of the firm. [more]

Entity Formations and Considerations Podcast
WCG just recorded its first small business podcast on business entity formations and considerations, and we also recorded video so you get to see our smiles. We got into the tax and business consultation industry to help people… to help small business owners leverage more from their hard efforts. [more]

Deducting Home Office Maintenance
If you spend 5 minutes on Google or 5 hours at cocktail party, you’ll find tons of articles on the home office deduction, deducting home office maintenance and the other typical deductions you’re entitled too. That’s easy. Today we’re going to focus on one of the not so common deductions; exterior maintenance. [more]

S Corp Transition Pains
One of the biggest headaches of electing to be taxed as an S Corp is calculating a reasonable shareholder salary. Once you elect S Corp Like King George in Hamilton, “What comes next?” The S Corp transition frankly speaking can be painful. Let’s run thought some of the transition concerns that we’ve experienced having done over a thousand S corporation elections in the past decade. [more]

Reasonable Shareholder Salary Using RCReports
One of the biggest headaches of electing to be taxed as an S Corp is calculating a reasonable shareholder salary. Once you elect S Corp status, the IRS requires all shareholders to pay themselves a reasonable officer compensation. [more]

Section 199A Separate Trade or Business
The Section 199A deduction was derived from the Tax Cuts and Job Acts and, thanks to our Congress, is one of the more complicated business tax deductions. One of the pebbles in your shoe is defining a Section 199A separate trade or business. [more]

Real Estate Professional Defined
Why designate myself as a real estate professional? To deduct rental losses that would otherwise be carried forward or to avoid net investment income tax. [more]

Charitable Donations Revisited
Whether you are actively involved in the charity, or it has a special meaning in your heart, we are here to help you understand the tax implications of your charitable donation… ’cause the best deduction is a tax deduction. [more]

Avoid the Hobby Loss Rule
We are living in the age of the “side hustle.” However, if you don’t have a business plan, specifically a documented profit motive, your side hustle could quickly become classified a hobby by the IRS, and that doesn’t sound nearly as cool. [more]

None! Sorry we were focused on rolling out our new website in between dirt bike riding and drinking some cocktails. Do you like our new site? The old one was good, but we needed a makeover.

Jason Watson Obtains California CPA Licensure
Huh? Many people assumed that since Jason had a last name of Watson, and he worked for WCG (formerly Watson CPA Group), that he was a CPA. Nope. Well, not until recently when the CBA issued a California CPA credential to Jason. [more]

Why Punish Specified Service Trades or Businesses
Being designated a specified service trade or business, or SSTB for short, for some business owners can appear like punishment. We cry foul, consider some theories and offer a solution. [more]

Small Business Accounting Methods
Many business owners ask if they should be cash or accrual when selecting the accounting method within their accounting platform. Most should stick with cash to prevent tax shocks and to keep things simple. [more]

Minimize Tax or Maximize Value
As mentioned elsewhere in our website and book, we encourage people to focus on building wealth and if they can save taxes along the way, then that is just icing on the cake. What do we mean here? [more]

Employee Ownership Discussions
Exit strategies or succession planning usually consider employee ownership as a strong possibility. No one gets out of this world alive so like it or not, the exit plan should be discussed. [more]

Section 199A Final Regulations Deep Dive
On January 18, 2019 the IRS and the Treasury Department released the Section 199A final regulations, including some much needed related guidance for SSTBs and other definitions. [more]

History of WCG (formerly Watson CPA Group)
The history of WCG (formerly Watson CPA Group) starts off like many CPA firms; work for someone else, create a brand in your basement and eventually build a business. [more]

None. We were busy with tax returns.

Home Office Depreciation
WCG (formerly Watson CPA Group) and our team of business consultants field a lot of questions about home offices and one of them is home office depreciation. We do not believe home office depreciation is a reimbursable expense given the code, and while others might think so we remain practical in our approach. [more]

Section 199A Self-Employed Health Insurance
Section 199A Self-Employed Health Insurance plus two other deductions on a Schedule C reduces qualified net business income for Section 199A calculation. This makes S Corps even more attractive. [more]

Section 199A S Corp Benefits
What about combining the Section 199A deduction and S Corp elections to create a combined Section 199A S Corp benefit? The answer is Yes, especially in certain situations. [more]

Rental Property: Section 199A Rental Income Safe Harbor
Section 199A offers a 20% deduction for businesses, but are rentals considered a trade or business? The answer is Yes on Section 199A rental income but there are some rules. [more]

Section 199A Final Regulations Treasury Decision 107892-18
The Treasury Department and the IRS held a public hearing on the proposed regulations on October 16, 2018, received 335 thought-provoking comments and later issued Section 199A final regulations. [more]

None. We were busy with consults, end of year tax planning and retooling for tax season.

2019 Edition of Taxpayer’s Comprehensive Guide to LLCs and S Corps
Our 2019 book is built for the small business owner who is wondering about entity structures, late S Corp elections, reasonable shareholder salary, how payroll works, small business tax deductions and retirement options. [more]

Section 199A Frequently Asked Questions
The proposed regulations that the IRS drafted and released on August 8 helped clarify some of the issues with Section 199A. We have created a short list of frequently asked questions. [more]

Press Release: Stephanie Torgerson Named Payroll Manager
WCG (formerly Watson CPA Group) is excited to announce Stephanie Torgerson as our new Payroll Manager. Processing payroll and payroll services takes a special person. [more]

Business Meals Tax Deduction Updated
IRS recently released Notice 2018-76 which essentially restores the business meals tax deduction for small business owners. Another win from the Tax Cuts and Jobs Act. [more]

2018: Section 179 Deduction for Business Vehicle
The Section 179 deduction is excellent for equipment, including business vehicles, so buying stuff for your business has never been more tax friendly. [more]

Difference Between CPA and Enrolled Agent
WCG (formerly Watson CPA Group) employs both Certified Public Accountants and Enrolled Agents. We get the “what is the difference between CPA and EA” question all the time. [more]

Updated: Section 199A Qualified Business Income Deduction
On August 8th the IRS published proposed regulations to help better explain the Section 199A Qualified Business Income Deduction including anti-abuse rules. [more]

Top Income Earnings By State
Want to know how your income stacks up against your peers in your home state? Here is a list of then top income earnings by state from low to high. There are a few surprises. [more]

Maximize Section 199A Deduction
To maximize Section 199A deduction requires balancing reasonable S corp shareholder salary and net business income. The magical number is 27.9%. See examples. [more]

Adding Your Spouse to Payroll
We get a lot of calls and emails from business owners who ask about adding their spouse to payroll. There are several reasons where this might make sense, but there are also some pitfalls and things you need to be aware of. [more]

Sally Rhoades, CPA, Named Partner at WCG (formerly Watson CPA Group)
WCG (formerly Watson CPA Group) is proud to announce Sally Rhoades, CPA, as our latest partner. As a Colorado Springs CPA, Sally started her career with WCG (formerly Watson CPA Group) January 2014 as a tax return preparer. [more]

C Corps Remain a Bad Idea for Most Business Owners
Should I revoke S Corp status and go to C Corp? The answer is No. The primary motivation is the seemingly attractive 21% tax rate for C corporations but this is a sucker hole for business owners for two painfully obvious reasons. [more]

What is My Tax Home
This is a tricky question… and it is one that a lot of taxpayers are very interested in since your tax home is where you will generally pay taxes and commuting to your tax home is not deductible. [more]

Advanced Degrees as Qualified Education Expenses
Two recent tax court cases highlight the difficulty in deducting advanced degrees as qualified education expenses. The rule is quite simple, but the application is quite challenging. [more]

Blue Book for Tax Cuts and Jobs Act of 2017
The Joint Committee on Taxation produces a Blue Book following significant tax law, and attempts to clarify vague tax codification and offers explanations. Why can’t the law simply speak for itself? It can… [more]

Sales Tax Update: South Dakota v. Wayfair
Sales tax nexus from the Quill case was defined as physical presence, but with Wayfair, the Court changed this to “substantial nexus.” Amazon retailers will be hit hard with sales tax compliance. [more]

Press Release: Sarah Hintz as Tax Manager
WCG (formerly Watson CPA Group) is excited to announce Sarah Hintz, CPA as one of our new Tax Managers. She will join the team approximately August 6, 2018. [more]

Press Release: Candace Avis as Tax Manager
WCG (formerly Watson CPA Group) is excited to announce Candace Avis, CPA, EA as one of our new Tax Managers. She will join the team approximately August 6, 2018. [more]

Mortgage Interest Deduction Under TCJA
Two big things changed with the Tax Cuts and Jobs Act of 2017 for homeowners. The amount of your property tax deduction and mortgage interest deduction is now limited. Here are the highlights- [more]

Meals and Entertainment After TCJA 2017
Given the new meals and entertainment landscape TCJA of 2017, we believe business owners need to be aware of the possible interpretations of the new rules. [more]

Archived 2018 Blog Posts