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Taxes - 360 Global Business LLC https://staging.360globalbusinessllc.com Tax Preparation, Bookkeeping & Payroll in Orlando, FL Fri, 13 Nov 2026 21:40:33 +0000 en-US hourly 1 https://wordpress.org/?v=7.1.4 https://staging.360globalbusinessllc.com/wp-content/uploads/2025/11/fav.png Taxes - 360 Global Business LLC https://staging.360globalbusinessllc.com 32 32 What the IRS Already Knows About Your Business (And What You Need to Have Ready) https://staging.360globalbusinessllc.com/what-the-irs-already-knows-about-your-business-and-what-you-need-to-have-ready/ Wed, 19 Aug 2026 18:37:32 +0000 https://360globalbusinessllc.com/?p=1404 Most small business owners imagine an IRS audit as a random event, a lottery they hope they never win. The reality is that audits are increasingly data-driven. The IRS receives third-party financial data, cross-references it with your return, and flags discrepancies automatically. Here is what the IRS already knows about your business, and what you […]

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Most small business owners imagine an IRS audit as a random event, a lottery they hope they never win. The reality is that audits are increasingly data-driven. The IRS receives third-party financial data, cross-references it with your return, and flags discrepancies automatically. Here is what the IRS already knows about your business, and what you need to have ready.

What the IRS Receives Automatically

1099-K data from payment processors. If you accept credit cards, your processor sends the IRS a 1099-K reporting those card payments, no matter the amount. Payment apps and online marketplaces such as PayPal and Venmo send one once your payments pass $20,000 and 200 transactions in a year. If that number does not reconcile with your reported income, the IRS can flag the mismatch.

1099-NEC data from clients. Businesses that paid you $2,000 or more for work in 2026 ($600 or more for payments made before 2026) generally must report those payments to the IRS. If reported payments exceed your declared income, the IRS will investigate.

W-2 and payroll tax data. The IRS receives employment tax data from every payroll deposit made on your behalf. Missing or mismatched deposits trigger automatic enforcement action.

What This Means for Your Business

The IRS does not need to audit you to know there is a discrepancy. Automated matching identifies gaps between third-party reporting and your filed return. When those gaps are significant enough, a notice or an audit follows. The best protection is clean, accurate records: every dollar of income accounted for, every deduction documented, every tax obligation paid and filed on schedule.

What Audit-Ready Actually Means

Not a drawer full of receipts. Clean monthly books with proper categorization. A profit and loss statement that matches your return. Bank statements that reconcile with your reported income. Documentation for every major deduction. At 360 Global Business LLC, we maintain your books throughout the year so that if the IRS comes calling, your response takes hours, not months. Twenty-seven years of federal tax experience means we know exactly what auditors look for, and exactly how to ensure they find nothing to question.

Get audit-ready before you need to be. Book a Tax Review

Shannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | 1-855-500-1514 | taxes@360globalbusiness.com

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The Year-End Tax Planning Checklist Every Small Business Owner Needs Before December 31 https://staging.360globalbusinessllc.com/the-year-end-tax-planning-checklist-every-small-business-owner-needs-before-december-31/ Wed, 19 Aug 2026 18:32:48 +0000 https://360globalbusinessllc.com/?p=1400 Most small business owners think about taxes in April. The business owners who consistently pay less think about taxes in October, November, and December, when they can still do something about it. Once the calendar year closes, your options narrow dramatically. Review Your Income and Projected Tax Liability Pull your year-to-date profit and loss statement. […]

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Most small business owners think about taxes in April. The business owners who consistently pay less think about taxes in October, November, and December, when they can still do something about it. Once the calendar year closes, your options narrow dramatically.

Review Your Income and Projected Tax Liability

Pull your year-to-date profit and loss statement. Calculate your estimated net income for the full year. If that number is higher than last year, you have time to act. If you do not know what the number is, that is the first thing to fix.

Maximize Retirement Contributions

Contributions to a SEP-IRA can be made up to the tax filing deadline including extensions. Solo 401(k) contributions require the plan to be established before December 31. If you have not maximized your retirement contributions, calculate the maximum allowable contribution now and fund it before year-end. The tax savings are immediate and significant.

Accelerate Deductible Expenses

If you anticipate significant income this year, consider accelerating deductible expenses into the current year: purchasing equipment, prepaying business insurance, stocking supplies, or investing in professional development before December 31. Every dollar of deductible expense reduces your taxable income.

Verify Payroll and 1099 Accuracy

W-2s and 1099-NECs must be issued by January 31. Before the year closes, verify your payroll records are accurate and that you have current addresses and tax identification numbers for every contractor you paid $2,000 or more in 2026 (the threshold was $600 for payments made before 2026).

Meet With Your Tax Professional Before Year-End

Not in February. Before December 31. The conversation in October or November is the one that actually changes your outcome. At 360 Global Business LLC, we offer year-end tax planning sessions designed to identify every legal strategy available to you before the books close.

Book your year-end session now. Schedule Here

Shannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | 1-855-500-1514 | taxes@360globalbusiness.com

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LLC or S-Corp: Why the Entity You Chose May Be Costing You Thousands in Unnecessary Taxes https://staging.360globalbusinessllc.com/llc-or-s-corp-why-the-entity-you-chose-may-be-costing-you-thousands-in-unnecessary-taxes/ Wed, 19 Aug 2026 18:30:25 +0000 https://360globalbusinessllc.com/?p=1398 One of the most expensive tax decisions a small business owner makes is the one they made at the beginning and then never revisited. Business entity structure directly determines how your business income is taxed. The entity type you chose when you filed your LLC may have made sense at $40,000 a year. At $150,000, […]

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One of the most expensive tax decisions a small business owner makes is the one they made at the beginning and then never revisited. Business entity structure directly determines how your business income is taxed. The entity type you chose when you filed your LLC may have made sense at $40,000 a year. At $150,000, the same structure could be costing you $10,000 or more in self-employment tax that you do not legally owe.

The Default LLC Problem

A single-member LLC with no special election is treated as a disregarded entity for federal tax purposes. Every dollar of net profit is subject to both income tax and self-employment tax at 15.3%. This is appropriate at lower income levels. As income grows, the self-employment tax burden becomes significant enough to warrant a different structure.

When the S-Corp Election Changes the Math

When an LLC elects S-corp tax treatment, the business income is split between a reasonable salary, which is subject to payroll taxes, and distributions, which are not subject to self-employment tax. At the right income level, the payroll tax savings on distributions more than offset the cost of running payroll. The conversation typically becomes relevant around $60,000 to $80,000 in net profit, and becomes clearly beneficial above $100,000.

This Is Not a One-Time Decision

Tax law changes. Your income changes. Your business structure should be reviewed regularly, not set once and forgotten. At 360 Global Business LLC, we evaluate entity structure as part of every business tax engagement. The question is not which entity sounds best. It is which structure produces the lowest legal tax liability given your specific situation this year.

Find out if your structure is still working for you. Book a Business Tax Strategy Session

Shannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | 1-855-500-1514 | taxes@360globalbusiness.com

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Home Office Deduction Done Right: What Qualifies, What Doesn’t, and What the IRS Will Ask https://staging.360globalbusinessllc.com/home-office-deduction-done-right-what-qualifies-what-doesnt-and-what-the-irs-will-ask/ Wed, 19 Aug 2026 18:18:48 +0000 https://360globalbusinessllc.com/?p=1394 The home office deduction is one of the most misunderstood deductions in small business tax. Some business owners skip it out of fear. Others claim it incorrectly and create unnecessary audit exposure. The truth is straightforward once you understand the rules. The Two Requirements That Actually Matter Regular and exclusive use. The space must be […]

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The home office deduction is one of the most misunderstood deductions in small business tax. Some business owners skip it out of fear. Others claim it incorrectly and create unnecessary audit exposure. The truth is straightforward once you understand the rules.

The Two Requirements That Actually Matter

Regular and exclusive use. The space must be used regularly and exclusively for business. A desk in the corner of your bedroom that you also use for personal tasks does not qualify. A dedicated room used only for client calls and professional work does.

Principal place of business. Your home office must be either your primary business location or where you regularly meet clients and customers.

The Two Methods

Simplified method: $5 per square foot, up to 300 square feet ($1,500 maximum). Simple to calculate. No depreciation recapture when you sell the home.

Regular method: Actual expenses proportional to office size. More complex, often larger deduction. Involves depreciation of the home, which creates a taxable event when the property sells. The right method depends on your home expenses, office size, and long-term plans.

What Triggers IRS Scrutiny

Claiming a home office does not automatically trigger an audit. What does trigger scrutiny: claiming a space that does not meet the exclusive use test, claiming 100% of home expenses as business use, or inconsistency between reported home office income and expenses over multiple years.

What You Should Have Ready

A floor plan showing the office space and measurements. Receipts for home expenses. Evidence of business activity in the space. If you can produce this documentation on request, the deduction is solid.

Claim what you are owed, correctly. Book a Tax Review

Shannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | 1-855-500-1514 | taxes@360globalbusiness.com

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Quarterly Estimated Taxes: The Complete Guide for Self-Employed and Small Business Owners https://staging.360globalbusinessllc.com/quarterly-estimated-taxes-the-complete-guide-for-self-employed-and-small-business-owners/ Wed, 19 Aug 2026 18:17:30 +0000 https://360globalbusinessllc.com/?p=1392 The IRS does not wait until April to collect what you owe. As a self-employed person or business owner, you are required to pay taxes four times a year. If you do not, you will pay penalties whether or not you file on time. This is one of the most common and most expensive surprises […]

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The IRS does not wait until April to collect what you owe. As a self-employed person or business owner, you are required to pay taxes four times a year. If you do not, you will pay penalties whether or not you file on time. This is one of the most common and most expensive surprises for new business owners.

Why Quarterly Payments Exist

When you earn a paycheck as an employee, your employer withholds federal income tax and FICA taxes. When you are self-employed, no one withholds anything. You are responsible for both the income tax and the self-employment tax (15.3% on the first $160,200 of net earnings). If you do not pay throughout the year, you owe it all at once in April, plus an underpayment penalty on top.

The Four Deadlines

Q1 (Jan 1 to Mar 31): Due April 15. Q2 (Apr 1 to May 31): Due June 16. Q3 (Jun 1 to Aug 31): Due September 15. Q4 (Sep 1 to Dec 31): Due January 15 of the following year. Missing any of these generates an automatic underpayment penalty, even if you pay everything by April.

How to Calculate What You Owe

The safest method is the prior year safe harbor: pay at least 100% of last year’s tax liability (110% if your AGI exceeded $150,000) across the four quarters, and you will avoid penalties regardless of how your income changes. If your income this year is significantly different, calculate 90% of what you expect to owe.

What to Do If You Missed a Payment

Pay as soon as possible. The penalty is calculated based on how much you owe and how long it has been outstanding. A partial catch-up payment still reduces the total penalty. Waiting only makes it larger.

Stop guessing. Start planning. Book a Tax Planning Session

Shannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | 1-855-500-1514 | taxes@360globalbusiness.com

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The S-Corp Payroll Trap: How the IRS Finds Business Owners Who Are Underpaying Themselves https://staging.360globalbusinessllc.com/the-s-corp-payroll-trap-how-the-irs-finds-business-owners-who-are-underpaying-themselves/ Wed, 19 Aug 2026 18:16:14 +0000 https://360globalbusinessllc.com/?p=1390 Operating your business as an S-corporation comes with a significant tax advantage. Distributions to shareholders are not subject to self-employment tax. But the IRS has a rule designed to prevent business owners from taking advantage of it without limits. It is called the reasonable salary requirement. And it is one of the most frequently violated […]

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Operating your business as an S-corporation comes with a significant tax advantage. Distributions to shareholders are not subject to self-employment tax. But the IRS has a rule designed to prevent business owners from taking advantage of it without limits. It is called the reasonable salary requirement. And it is one of the most frequently violated rules in small business tax.

What the Rule Actually Requires

If you are an owner-employee of your S-corp, the IRS requires that you pay yourself a reasonable salary before taking any distributions. That salary is subject to payroll taxes. The IRS defines reasonable based on what you would pay someone else to do your job. If you are a consultant billing $200 per hour, paying yourself $20,000 in salary while taking $180,000 in distributions will raise flags.

How the IRS Identifies Violators

The IRS runs automated screening that compares the ratio of W-2 wages to total S-corp distributions. When that ratio falls outside reasonable ranges for your industry and revenue level, it becomes a trigger for examination. An audit costs you the back taxes, plus penalties, interest, and the payroll taxes that should have been paid all along.

The Right Way to Structure S-Corp Compensation

Your reasonable salary should be documented in writing, based on comparable market wages, run through actual payroll, and reviewed annually as your revenue changes. At 360 Global Business LLC, we help S-corp owners establish compliant payroll structures that protect them from audit exposure while legally minimizing overall tax liability.

Have you paid yourself a defensible salary this year? Book a Business Tax Consultation: 360globalbusinessllc.com/tax-services

Shannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | 1-855-500-1514 | taxes@360globalbusiness.com

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The Tax Mistake That Quietly Costs Florida Small Business Owners Thousands Every Year https://staging.360globalbusinessllc.com/the-tax-mistake-that-quietly-costs-florida-small-business-owners-thousands-every-year/ Wed, 19 Aug 2026 17:55:46 +0000 https://360globalbusinessllc.com/?p=1386 After 27 years in federal taxation, I can tell you the most expensive tax mistake small business owners make has nothing to do with cheating the IRS.It is paying taxes on money you were never supposed to owe.The gap between what you legally owe and what most business owners actually pay is enormous — and […]

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After 27 years in federal taxation, I can tell you the most expensive tax mistake small business owners make has nothing to do with cheating the IRS.It is paying taxes on money you were never supposed to owe.The gap between what you legally owe and what most business owners actually pay is enormous — and it is not filled by aggressive strategies or loopholes. It is filled by someone who knows how to read your books and apply the tax code correctly.The Most Common Missed Deductions in Small Business Tax Returns

Misclassified expenses. When personal and business transactions run through the same account, deductible expenses get overlooked. Vehicle use, home office, professional development, meals with business purpose — these are legitimate deductions that require clean documentation to claim.Retirement contributions. SEP-IRA, SIMPLE IRA, Solo 401(k) — these are among the most powerful deductions available to self-employed and small business owners. Most do not maximize them because no one walked them through the math.Section 179 and bonus depreciation. Equipment, software, vehicles used for business — these can often be deducted in full in the year of purchase. Most business owners never ask.Health insurance premiums. Self-employed business owners can deduct 100% of health insurance premiums paid for themselves and their families. This one alone changes tax liability for many clients.Why Your Tax Bill Feels WrongIf you finish tax season feeling like you paid too much and are not sure why — you probably did. Not because your prior preparer was dishonest. Because federal tax law is detailed, and the difference between a return that captures everything you are owed and one that leaves money behind is the experience of the person preparing it.At 360 Global Business LLC, tax preparation is not data entry. It is a review of your full financial picture. Twenty-seven years of federal tax experience means we know what you are leaving on the table.Ready to stop overpaying? Book a Tax Review: 360globalbusinessllc.com/tax-servicesShannon C. Williams | CEO, 360 Global Business LLC | 27 Years Federal Tax Educator and Consultant | SDVOSB · WOSB · MBE | U.S. Air Force Veteran | Phone: 1-855-500-1514 | taxes@360globalbusiness.com

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Florida Small Business Tax Guide: What Every Orlando Business Owner Needs to Know https://staging.360globalbusinessllc.com/florida-small-business-tax-guide-orlando/ Sun, 09 Aug 2026 14:53:38 +0000 https://360globalbusinessllc.com/florida-small-business-tax-guide-orlando/ Florida is one of the most tax-advantaged states in the country for small business owners. No personal income tax. No inheritance tax. A corporate income tax rate that applies only under specific circumstances. For business owners who understand the rules, Florida provides a uniquely favorable environment. But favorable does not mean simple. Federal tax obligations […]

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Florida is one of the most tax-advantaged states in the country for small business owners. No personal income tax. No inheritance tax. A corporate income tax rate that applies only under specific circumstances. For business owners who understand the rules, Florida provides a uniquely favorable environment.

But favorable does not mean simple. Federal tax obligations remain fully in force, and Florida has its own set of requirements that can catch unprepared business owners off guard. This guide covers what every Florida small business owner needs to understand.

Florida Has No Personal Income Tax — Here Is What That Means for You

Florida does not impose a state personal income tax. For sole proprietors, single-member LLCs, S-Corporation shareholders, and partners in a partnership, this means that business income passing through to your personal return is taxed only at the federal level in Florida — not by the state.

This is a significant advantage over business owners in states like California, New York, or New Jersey, where state income taxes on pass-through income can range from 5% to 13%.

Florida Corporate Income Tax

Florida does impose a corporate income tax — but only on C-Corporations and entities treated as C-Corporations for tax purposes. The current Florida corporate income tax rate is 5.5% on Florida net income, with the first $50,000 of net income exempt for qualifying small businesses.

S-Corporations, LLCs taxed as partnerships or disregarded entities, and sole proprietorships are generally not subject to Florida corporate income tax. Their income flows to the owner’s federal return.

Florida Sales Tax — Common Issues for Service Businesses

Florida imposes a 6% state sales tax, with county surtaxes bringing the effective rate to 6.5–7.5% in most areas. Orange County (Orlando) has a combined rate of 6.5%.

Most professional services — tax preparation, accounting, bookkeeping, legal, medical — are not subject to Florida sales tax. However, certain services attached to tangible personal property or digital products may be taxable. Business owners in retail, food service, rental, and certain digital service industries need to understand their sales tax obligations carefully.

Failure to collect and remit required sales tax triggers penalties and interest from the Florida Department of Revenue.

Employer Tax Obligations in Florida

Florida employers must register with the Florida Department of Revenue and comply with:

  • Florida Reemployment Tax (formerly Unemployment Tax) — paid quarterly on employee wages
  • Federal Payroll Taxes — FICA (Social Security and Medicare), FUTA, and federal income tax withholding
  • Federal Quarterly Deposits — Form 941 quarterly payroll tax returns
  • Year-End Reporting — W-2s for employees, 1099s for independent contractors

Florida’s new hire reporting requirement applies to all employees hired or rehired — reports must be submitted to the Florida New Hire Reporting Center within 20 days of the hire date.

Annual Business Tax Registration

Florida businesses must renew their business registration annually with the Florida Division of Corporations (Sunbiz.org). LLCs pay an annual fee; corporations file annual reports. Failure to file results in administrative dissolution of the business entity.

Federal Tax Obligations — The Bigger Picture

While Florida’s state tax burden is low, federal obligations are substantial. Business owners must address:

  • Federal income tax on all business income
  • Self-employment tax (15.3% on net self-employment income for sole proprietors and partners)
  • Estimated quarterly tax payments if annual tax liability exceeds $1,000
  • Depreciation and asset tracking for business equipment and property
  • Retirement plan contributions (SEP-IRA, Solo 401(k), SIMPLE IRA)

The Most Common Tax Mistakes Florida Business Owners Make

  1. Not making estimated quarterly payments — resulting in underpayment penalties at year-end
  2. Misclassifying employees as contractors — triggering IRS and Florida DOL audits
  3. Mixing personal and business finances — destroying the audit trail and the liability protection of an LLC
  4. Not tracking mileage and business expenses — leaving deductions unclaimed
  5. Waiting until April to think about taxes — losing the opportunity for proactive planning

Working With a Florida Tax Professional

Florida’s combined state and federal tax environment rewards business owners who plan proactively. The difference between reactive tax filing and proactive tax strategy can add up to real money every year for a growing small business.

At 360 Global Business LLC, we serve business owners across Florida — from Orlando to Miami, Tampa to Jacksonville — with tax preparation, strategic planning, bookkeeping, and payroll services built on 27 years of federal tax experience.

To schedule a consultation: 1-855-500-1514 | info@360globalbusiness.com | 2295 S Hiawassee Rd., Suite 104, Orlando, FL 32835

This guide is for educational purposes. Tax laws change. Consult a qualified tax professional for advice specific to your situation.

Shannon C. Williams | Federal Tax Educator | Founder, 360 Global Business LLC

The post Florida Small Business Tax Guide: What Every Orlando Business Owner Needs to Know first appeared on 360 Global Business LLC.

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The S-Corp Accountable Plan: Stop Paying Tax on Money That Should Be Tax-Free https://staging.360globalbusinessllc.com/s-corp-accountable-plan-shareholder-employee-reimbursements/ Sun, 09 Aug 2026 14:53:37 +0000 https://360globalbusinessllc.com/s-corp-accountable-plan-shareholder-employee-reimbursements/ If you operate an S-Corporation and you pay business expenses from your personal pocket — mileage, home office, software subscriptions, continuing education, cell phone — there is a high probability that one of two things is happening: Either you are absorbing those business expenses personally without any reimbursement from the corporation, or your corporation is […]

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If you operate an S-Corporation and you pay business expenses from your personal pocket — mileage, home office, software subscriptions, continuing education, cell phone — there is a high probability that one of two things is happening:

Either you are absorbing those business expenses personally without any reimbursement from the corporation, or your corporation is reimbursing you and those reimbursements are appearing on your W-2 as taxable income when they absolutely should not be.

Both scenarios cost you real money every year. The fix is a document called an Accountable Plan.

What Is an Accountable Plan?

An Accountable Plan is a formal, written employer reimbursement policy governed by Treasury Regulation Section 1.62-2. When properly implemented, it allows your S-Corporation to reimburse you — the shareholder-employee — for legitimate business expenses you paid personally, completely free of payroll taxes and income taxes.

Without an Accountable Plan, any reimbursement your S-Corp pays you is classified as a distribution or as additional W-2 wages. With an Accountable Plan, those same reimbursements are non-taxable business expense reimbursements — to you personally and to the corporation.

What Expenses Qualify?

  • Business mileage (at the IRS standard rate)
  • Home office expenses (proportional square footage calculation)
  • Cell phone and internet (business-use percentage)
  • Professional development, continuing education, and certifications
  • Business meals (50% deductible to the corporation)
  • Software subscriptions and tools
  • Office supplies purchased personally

The Three Requirements

To qualify as an Accountable Plan under Treasury Reg. 1.62-2, the plan must satisfy three requirements:

  1. Business Connection: Every reimbursed expense must have a legitimate, documentable business purpose.
  2. Adequate Accounting: The employee (you) must submit receipts, mileage logs, or expense reports within a reasonable period — generally 60 days of incurring the expense.
  3. Return of Excess: Any advances paid beyond actual expenses must be returned to the corporation within a reasonable time.

What the Plan Must Be

An Accountable Plan is a written document — a formal corporate policy adopted by the S-Corporation. It does not need to be complex. It does need to be in writing, signed, dated, and on file with the corporation. Most S-Corp owners we work with either have never created one or were never told they needed one.

The Annual Tax Impact

The dollar impact varies based on what you spend and your tax bracket. But as a general benchmark: an S-Corp owner who runs $15,000 to $30,000 of annual business expenses through an Accountable Plan instead of ignoring them can save between $3,000 and $8,000 in combined income and payroll taxes per year.

That is a recurring, annual benefit — not a one-time event.

How We Help

At 360 Global Business LLC, we review S-Corp structure, compensation, and reimbursement policies as part of our tax strategy service. If you are operating an S-Corporation without an Accountable Plan, you are overpaying — and it is a straightforward fix.

Contact us at 1-855-500-1514 or info@360globalbusiness.com to discuss your S-Corp tax strategy.

This article is for educational purposes. Tax results vary. Consult a qualified tax professional.

Shannon C. Williams | Federal Tax Educator | 360 Global Business LLC | Orlando, Florida

The post The S-Corp Accountable Plan: Stop Paying Tax on Money That Should Be Tax-Free first appeared on 360 Global Business LLC.

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The Augusta Rule: How Florida Business Owners Can Generate Tax-Free Income From Their Own Home https://staging.360globalbusinessllc.com/augusta-rule-tax-free-home-rental-business-owners/ Sun, 09 Aug 2026 14:53:37 +0000 https://360globalbusinessllc.com/augusta-rule-tax-free-home-rental-business-owners/ If you own a business in Florida and you own your home, there is a provision in the Internal Revenue Code that most business owners have never heard of — and it may be one of the most straightforward tax strategies available to you right now. It is called the Augusta Rule. It is legal, […]

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If you own a business in Florida and you own your home, there is a provision in the Internal Revenue Code that most business owners have never heard of — and it may be one of the most straightforward tax strategies available to you right now.

It is called the Augusta Rule. It is legal, it is codified, and it is consistently overlooked.

What Is the Augusta Rule?

The Augusta Rule takes its name from Augusta, Georgia — where homeowners have long rented their properties to visitors during the Masters Tournament, tax-free. The rule itself is codified in IRC Section 280A(g), and it allows any homeowner in the United States to rent their personal residence to their business for up to 14 days per calendar year and exclude that rental income entirely from their gross income.

You pay zero federal income tax on that rental income. Your business, however, deducts the full rental expense.

Read that again: the income is tax-free to you personally, and the business deduction is fully legitimate.

How It Works in Practice

Here is a practical example for a Florida business owner:

Your LLC or S-Corporation holds a quarterly strategy meeting, a team planning session, or a client training event at your personal home. Before the meeting, you research what a comparable venue — a hotel conference room, a co-working meeting space, or a banquet room — would charge for the same event. That is your benchmark for fair market value.

Your business pays you, the homeowner, that rental rate. The business records the expense as a venue or meeting cost. You deposit the payment into your personal account. You owe no federal income tax on that income.

At $1,500 to $3,000 per event across four quarterly meetings per year, you are looking at $6,000 to $12,000 of tax-free personal income paired with a legitimate business deduction — simultaneously.

The Requirements You Cannot Skip

The Augusta Rule is not a gray area — it is statute. But like any tax provision, it must be applied correctly to withstand scrutiny. Here are the non-negotiable requirements:

  • Your business must be a separate legal entity. The strategy requires your business (LLC, S-Corp, C-Corp) to pay you, the individual homeowner. It does not apply to sole proprietors paying themselves informally.
  • The rental must be for a legitimate business purpose. Meetings, planning sessions, training events, and board meetings all qualify. Personal gatherings do not.
  • The rate must reflect fair market value. Document comparable venue pricing in your market. If a comparable meeting space rents for $500/day in Orlando and you charge your business $2,000/day, that rate will not hold up. Be accurate and document it.
  • You must stay at or under 14 days per year. Exceed 14 days and the income becomes taxable. Track this carefully.
  • Documentation is everything. Agendas, sign-in sheets, meeting notes, invoices, and comparable rental data. If you cannot document the meeting occurred and the rate was reasonable, you cannot defend the deduction.

A Note on Florida Business Owners Specifically

Florida has no state income tax, which already gives Florida business owners an advantage. The Augusta Rule adds a federal layer on top of that advantage — generating federally tax-free income within a state that already taxes it at zero percent. For Florida business owners operating structured entities, this strategy is particularly powerful.

Common Mistakes to Avoid

The most common errors we see when business owners attempt to use this strategy without proper guidance:

  • Using it in a sole proprietorship (does not qualify)
  • Not documenting the business purpose of the meeting
  • Charging a rate that is not supported by market comparables
  • Exceeding 14 days and not tracking usage across the year
  • Not issuing a proper invoice from the homeowner to the business

The Bottom Line

The Augusta Rule is one of several tax provisions that business owners routinely miss — not because it is secret, but because no one told them it existed. It is written in the tax code. It has been used for decades. And with proper documentation and a structured business entity, it is available to you.

At 360 Global Business LLC, we work with business owners across Florida and nationwide to identify and properly implement strategies like this one. Our approach combines 27 years of federal tax experience with the precision that comes from treating every client’s return as a business-critical document.

If you would like to discuss whether the Augusta Rule applies to your situation, contact our office at 1-855-500-1514 or email info@360globalbusiness.com.

This article is for educational purposes only. Individual tax situations vary. Consult a qualified tax professional regarding your specific circumstances.

Shannon C. Williams is a Federal Tax Educator and Founder of 360 Global Business LLC — a full-service tax, accounting, bookkeeping, and payroll practice based in Orlando, Florida.

The post The Augusta Rule: How Florida Business Owners Can Generate Tax-Free Income From Their Own Home first appeared on 360 Global Business LLC.

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