Discovering that a client has crossed a state's economic nexus threshold is the start of the work, not the end. What happens next determines whether the client pays only the tax it should have collected or pays that tax plus penalties, interest and the cost of a full audit. The difference usually comes down to the order in which things are done.

The instinctive move is to go to the state's website and register immediately. Sometimes that is right. Often it is the most expensive ...

Sales tax gets the attention because it is visible: it appears on the receipt, the seller collects it, and the seller files the return. Use tax is its quieter twin, and it is the one that produces surprise assessments for businesses that never sell a taxable product at all. A professional services firm that buys a server from an out-of-state vendor that did not charge tax, a contractor that pulls materials from its own inventory for a job, a manufacturer that buys equipment online: each may ...

Every tax and accounting firm holds exactly the data identity thieves want: names, Social Security numbers, dates of birth, bank account numbers, income and employer details, often for whole families. That is why federal law treats a firm that prepares tax returns as a financial institution for data security purposes, and why the IRS now asks every preparer, at each PTIN renewal, to acknowledge that a written information security plan is required.

A written information security plan, ...

Most fee disputes, scope arguments and malpractice claims against small accounting firms trace back to one document: an engagement letter that was missing, out of date, or written for a different service. Tax engagement letters usually get attention because the season forces it. Letters for bookkeeping, financial statement and advisory work are where firms cut corners: a one-page template from years ago, a scope line that says "accounting services," and nothing about what happens when the ...

Every January, information returns land on whoever in the firm has the time, and that is usually the person with the least training. The work looks clerical: collect vendor data, total payments, generate forms, transmit. Then the penalty notices arrive in the fall, and they are almost never about lateness. They are about wrong payees, mismatched TINs, missing backup withholding and corrections handled the wrong way.

This year has more rule churn than most. The One Big Beautiful Bill ...

Ask a client when payroll taxes are due and most will name the quarterly Form 941 date. That is the date the return is due, and it is usually the least risky date on the payroll calendar. The penalties that actually hurt employers come from the deposit schedule: monthly or semiweekly, set by a lookback period the client has never heard of, and overridden by a next-day rule that applies the moment a large payroll hits.

This post separates the two calendars. First the ...

Most practitioners learn pass-through taxation one return at a time. A firm takes on a few partnerships, a handful of S corporations, and the preparer works out basis, allocations and distributions as each file demands it. That works until a client asks a forward-looking question: should we elect S status, should we admit this investor, what happens if one owner leaves, what does the buyer's offer actually mean after tax. Those questions require a working command of two different systems, ...

"Partnership vs. LLC" is a comparison clients ask about all the time, and it rests on a category error. A multi-member LLC is taxed as a partnership by default. It files Form 1065, issues Schedules K-1, and follows Subchapter K. The real decision for a multi-owner LLC is whether to keep that default or elect to be taxed as an S corporation by filing Form 2553.

The general comparison chart (self-employment tax, ownership limits, formalities) is a starting point. This ...