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Frequently Asked Questions

1.    Can your company handle 100% of a client’s accounting records?  - Return to list

We are our clients’ accounting department and more... Our company will maintain your books at your location or at our location based upon one of our staff accountant arrangements with you. We will make journal entries as often as your operations require. We will make any statement your business needs require available to you, your suppliers, your customers, and your employees promptly. We will prepare and possibly file your quarterly and annual returns timely unless extension to file was requested and granted. Whether you have a trust or you are planning an estate, we will perform the same type of assistance to your organization.

2.    In what fashion do you suggest a startup company to maintain its accounting records? - Return to list

It really depends on the level of operation and the economic resources available to the startup company. In instance where the young company can accommodate at least one accountant or a bookkeeper, this option is available to it. A small company with enough resource to outsource the task may choose this path as well. Either way, PC Touch Services Inc. will assist a startup company achieving its business goals through well-maintained accounting records.

3.    Can you help straighten out accounting and tax issues for the last 5 years? - Return to list

As long as all bank records and cancelled checks, invoices, bills, and other receipts information are available, we will reconstruct your accounting records and prepare your tax returns for filing. Then, all of your accounting and tax issues will be resolved to continue conducting business with peace of mind.

4.    Is bookkeeping necessary for filing business tax returns? - Return to list

Financial statements are the best document to rely upon for business tax returns preparation. They are similar to summaries of activities for specific period such as one year of a company’s operations. Financial statements are generated from bookkeeping work. As a result, it is necessary to maintain the books - bookkeeping.

5.   Does a company pay payroll tax weekly for monthly salaries? - Return to list

No. A company pays payroll tax after salaries were paid to employees and as payroll tax becomes due. Although salaries may be paid on a weekly, semi-monthly, or monthly basis, tax agencies set a maximum amount of tax for which employers can wait until the end of the current quarter to pay. Otherwise, penalties may apply on the amount due.

6.    What are the steps to compute payroll tax due for employees? - Return to list

There are a number of different methods to compute payroll tax. Marital status, number of exemptions, pay period impacts on payroll tax computations. This task should be delegated to a professional due to the monetary loss that may result from improper computation and filings.

7.    Can payroll return be filed without paying the tax? - Return to list

A business owner must consider the consequences of any decision before making it. Handling fiduciary fund is one of such delicate decisions. Although employers pay a portion payroll taxes out-of-pocket for their employees, about 50% of the payment is made on behalf of the employees. If the returns are not filed and full payment is not made, the employer will be assessed nonfiling penalties and interest. If the returns are filed without payment, an amount of up to 25% of the tax due amount may be assessed as penalties. The best option is to file and pay. In the event of some financial difficulties, file the return and postpone payments because you will save on the amount of nonfiling penalties.

8.    What can I do about notices regarding back taxes owed received from the IRS? - Return to list

The Internal Revenue Service (IRS) is very good at issuing timely nonfiling penalties. If you have been ignoring the service for a long time and want to straighten out matters now, our team of experienced accountants will help you update your accounting books, and with the filing of all required tax returns. Feel free to click on the “Contact us” link on this page to choose your most convenient means of contacting us.

9.    How concerned should a taxpayer be about the IRS if a state is conducting an audit? - Return to list

Our team of former government tax auditors can tell you based upon experience that the Internal Revenue Service (IRS) and New York State (NYS) have a very good relationship. Upon concluding an audit of a resident of the state or an entity conducting business within the state, the IRS sends NYS an RAR that discloses the adjustments made to one’s returns. NYS does the same as well. How likely is it that either one of the tax agency pursue the matter? You bet! It will. The earlier you act upon the matter, the least costly it will be.

10.     Does the IRS exchange information with New York State? - Return to list

Yes, the Internal Revenue Service (IRS) exchanges information with New York State based upon disclosure policies the two agencies have agreed upon. Other states have their own disclosure and exchange procedures in place with the Internal Revenue as well.

11.     Does a New York resident pay tax on income of a New Jersey corporation? - Return to list

The general rule is that a New York State resident pays tax on 100% of his or her income. It is irrelevant whether the resident’s income was earned within or without the state.

12.    Is tax shelter illegal? - Return to list

For several years already, the Internal Revenue Service (IRS) and most of the states in the country have made some drastic decisions about tax shelters. There has been much discussion about abusive tax shelters, which are the illegal tax shelters. There are some very sophisticated abusive tax shelters such as Son of Boss (SOS) in the industries that originated in the mid 1990s. If you should require advices, contact us immediately and we will evaluate the shelter for you.

13.    What is the difference between general business corporations and S corporations for New York State purpose? - Return to list

Since 2004, New York State (NYS) began to look at S Corporation almost in the same manner as Internal Revenue Service (IRS) considers this type of entity. The state eliminates its differential – between article 22 and 9A – tax for S Corporation. Now, the entity pays almost no tax to NYS. The entity has to be both a federal and state S corporation. Otherwise, like a general business corporation, both shareholders and corporation pay tax to NYS.

14.     Is it possible for New York State to conduct more than one audit of the same company at once? - Return to list

New York State has been making effort to combine its Income and Franchise Tax units while the Sales Tax unit will continue to exist separately. Until the complete convergence realizes, the eventuality of NYS conducting three different audits of the same entity has always been customary. A corporation could have a corporate, a payroll, and a sales tax audit concurrently. The manner in which the taxpayer allows all three audits to proceed should be addressed in consensus between the taxpayer and a professional tax matter representative. Our company can definitely play the latter role on your behalf.

15.   What is business allocation percentage? - Return to list

Business allocation percentage (BAP) is a methodology tax law makers of states created to allow corporation to allocate tax payments based upon business conducted within and without the state. The BAP is applied against entire net income (ENI) to compute required corporate tax payment to each state.

16.   What is a withholding audit? - Return to list

Every pay period, an employer must withhold tax on employees to remit to the tax agencies as the tax becomes due. Computation of payroll tax is very complex due to the number of factors that are involved. As a result, employers often make mistake and submit the improper amount of tax. In addition, employers also forget or simply fail to pay the tax. In an attempt to reconcile the tax agency’s records with the taxpayer, tax agencies conduct audit of the company’s payroll records. The process involves submitting other records that contain limited information related to payroll such as corporate tax returns to verify salaries, cost of goods sold, outside service line items, etc.

17.  What is an income tax audit? - Return to list

A portion of the taxes paid by corporations, and usually most of taxes paid by individuals are income taxes. Since corporation may pay tax on capital instead of income for the same purpose, the corporate tax is not always income tax. When an entity’s return fails to meet some essential criteria, it is reviewed and eventually submitted to tax auditors for audit. In this situation, the taxpayer has to submit all requested documents to the tax auditor for examination. Following his or her examination, the auditor will determine if either additional tax is due or no changes will be made to the return as filed. 

18.  What is a sales tax audit? - Return to list

For states like New York State (NYS) where individuals and companies pay tax on items bought or used, the tax agency may attempt to verify whether companies with fiduciary responsibility to collect sales tax remit the proper amount of tax. This process is known as a Sales Tax Audit.

19.   Do I have to pay myself salary from my own company? - Return to list

Shareholders of publicly traded companies have no problem understanding the separation between the personal assets and the company’s assets. By the same token, it is very difficult to convince some owners of closely held corporations to require their corporation to compensate them for their work. In some instances, tax agencies have forced owners to accept a reasonable compensation from the company to avoid delaying payment of tax.

20.   Do not-for-profit organizations pay any tax to the government? - Return to list

If application to become a tax exempt organization was filed and tax-exempt status granted, a not-for-profit organization may only be required to file tax exempt returns only for income and/or even sales tax for information purpose. However, the organization will still have a fiduciary responsibility to collect and remit payroll tax for most of its employees.

21.   What is the New York State 11-month rule? - Return to list

In situations where someone resides in New York State (NYS) for a portion of a calendar year that did not exceed 11 months, the part-year resident cannot be held as a resident of NYS. This is briefly the NYS 11-month rule.

22.    Can an individual taxpayer pay tax to New York State and New Jersey for the same year? - Return to list

No. Taxpayers don’t pay tax to two different states on the same income for the same year. In most instances, the wrong amount of tax paid to one state can be refunded. The taxpayer has to be knowledgeable of the necessary actions to take in a timely manner. Consult us for proper tax professional advice.

23.   Is there any withholding requirement for a New York State foreign corporation employing New York State residents? - Return to list

New York (NY) income tax rate had been over 6.8% for a very long period of time. As a result, it has exceeded the tax rate of the neighboring states for a long period of time as well. When a company employs residents of Connecticut (CT) to work in NY, they withhold the equivalent of the NY tax rate on employees. On the other side, they have to withhold the equivalent of the Connecticut tax rate plus the difference between the NY and CT tax rates to match the NY’s full withholding amount required.

24.   Is there any tax to withhold on nonresident working in New York? - Return to list

Unless an employee is a resident of California (CA), for instance, while working in New York (NY), the employer is usually required to withhold NY income tax on the employee for remittance purposes to the state. This is due to the fact that NY tax rate is one of the highest in the country.

 25.   Is there any need to withhold NYC tax on a NYC resident employed on Long Island? - Return to list

New York City (NYC) residents pay income tax to New York State (NYS) and to the City of New York. Employers paying salaries or wages to NYC residents are required to withhold NYC resident tax in addition to NYS tax regardless of the work location.

26.   Does a partnership pay tax to New York State? - Return to list

Partnerships pay no income tax to the New York State. However, partnerships conducting business in New York City (NYC) are required to pay unincorporated tax to the city. Sole proprietorships fall under the same category of taxpayer for the City of New York.

27.   How can NYS ask someone to pay tax on the loss from a Federal S corporation? - Return to list

A federal S corporation pays no income tax to the Internal Revenue Service (IRS). The same is true for New York State (NYS) S corporation since tax year 2004. However, in situations where the federal S corporation was not an NYS S Corporation, the state requires that the Federal loss is not reported on the NYS tax return. The shareholder’s income increases as result. This may be called payment of tax on the federal loss.

28.   Why is withholding tax due to New York if the employees work in a neighboring state?  - Return to list

New York State (NYS) income tax rate is usually higher than that of any of the neighboring states. When a resident of NYS works in New Jersey (NJ), for instance, the employer is only required to withhold NJ tax for that state. However, the employee will not have enough tax withheld upon him or her for NYS. As a result, the difference between the two tax rates must be withheld and remitted to NYS.

29.   Can New York State take money out of my bank account for tax due? - Return to list

There have been instances where New York State (NYS) asked financial institutions to withdraw from customers’ money in their custody and give it to the state as payments for delinquent tax due. The institution is only required to give notice to the customer and a short period of time to resolve the issue  prior to handing over the cash. Yes, NYS can take money out of one’s bank account for tax due.

30.   Is it possible to stop my bank from sending my savings to the IRS of any state? - Return to list

It is possible to stop such unauthorized withdrawal. However, there are multiple steps to take to succeed. We can advise you in resolving such issues. Please contact us promptly.

Wilson & John

Wilson Louis-Elias, EA
John Thomas, CPA - right

Two former government tax auditors who, jointly, bring decades of experiences, skills and knowledge to you. Do not delay to contact them about all of your personal and business tax matters. Your tax problem cannot wait because the consequences can be too devastating...

Services Overview:
- IRS & State Representation in
  Individual & Business Tax Matters
- Individual Tax Returns
- Business Tax Returns
- Information Tax Returns
- Not-for-Profit Tax Returns
- Payroll Services, including 
  Payroll return, Paychecks,   
  and Direct Deposit
- Trust and Estates Administration
- Business Creation Assistance 


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