Tax and Business Solutions LLC

Tax and Business Solutions LLC We are a small tax and accounting practice with a strong professional background and significant exp

Trump Accounts vs. Other Kids’ Investment Accounts: Who May Benefit?Trump Accounts are a new tax-advantaged investment a...
06/14/2026

Trump Accounts vs. Other Kids’ Investment Accounts: Who May Benefit?

Trump Accounts are a new tax-advantaged investment account for children. They may be useful for some families, but they are not necessarily the best or most important option for everyone.
Here is a simple way to think about it.

1. Children born in 2025–2028
This group may receive the biggest direct benefit: a possible one-time $1,000 contribution from the U.S. Treasury, if the child meets the IRS requirements.
For these children, it may be worth reviewing the option even if the family is not planning to invest large amounts right away.

2. Children under 18 who were not born in 2025–2028
These children may still be able to have a Trump Account, but they generally do not receive the $1,000 government contribution.
For this group, the main possible benefit is tax-deferred long-term investing. Interest, dividends, and possible capital gains inside the Trump Account are generally not taxed each year while the money remains in the account. Instead, taxes are generally deferred until distributions are allowed, starting in the calendar year the child turns 18.
This may be more useful if the family plans to contribute regularly or invest larger amounts over time. For smaller balances, the tax deferral may be less significant, and a regular custodial brokerage account may be simpler and more flexible.

3. Children with earned income
If a child has earned income from a job or business activity, a Roth IRA may also be an option.
A Roth IRA can be very tax-efficient and may offer more flexibility than a Trump Account. Contributions to a Roth IRA can generally be withdrawn at any time without tax or penalty, because those contributions were already made with after-tax dollars. Earnings have separate rules.
A Trump Account may still be considered separately, but it should be compared with the Roth IRA and other family goals.

4. Families investing smaller amounts
If the family is only planning to invest a small amount, the tax benefit of a Trump Account may be limited.
A regular custodial brokerage account may be simpler and more flexible. Dividends, interest, and capital gain distributions may be taxable, but with a small account balance, the tax impact may not be significant.

5. Families investing larger amounts over time
If the family plans to invest consistently or contribute larger amounts, the Trump Account may become more attractive because investment growth is tax-deferred inside the account.
However, the trade-off is flexibility. Trump Accounts are designed for long-term growth, and access to the money is restricted.

This is not a one-size-fits-all decision. The best option depends on the child’s age, whether the child has earned income, how much the family plans to invest, and whether flexibility or long-term tax treatment is more important.

Important June Tax RemindersA few timely items to review before the second half of the year picks up.Second Estimated Ta...
06/07/2026

Important June Tax Reminders
A few timely items to review before the second half of the year picks up.

Second Estimated Tax Payment
Due June 15
If you are self-employed, receive 1099 income, rental income, or investment income,or do not have enough tax withheld from your paycheck - please review whether an estimated payment is required.

Contractors, W-9 Forms, and 1099s
Business owners: always collect Form W-9 before work begins and before payment is made. The current reporting threshold is $2,000 per year, so now is a good time to review your contractor payments year-to-date.
- Collect W-9 from all new contractors before work begins.
- Verify that contractors already paid or expected to reach $2,000 have a W-9 on file.
- Staying organized now avoids problems at 1099 time in January.

Partnership and Corporation Owners: Accountable Plans
If you own a partnership or corporation, now is a good time to review your accountable plan, especially if you are an S corporation owner.
- Confirm you have a current accountable plan on file.
- Ensure all reimbursements are properly documented.
- Verify that business expenses were reimbursed correctly

Don’t Forget to Track Your Mileage!Hi everyone,A quick reminder: mileage can be an important tax deduction, but only if ...
06/01/2026

Don’t Forget to Track Your Mileage!
Hi everyone,

A quick reminder: mileage can be an important tax deduction, but only if it is properly tracked.

Your mileage log can be in any format - an app, Excel sheet, Google Sheet, calendar, or paper notebook. What matters is that it includes the date, starting point and destination, miles driven, and the purpose of the trip.

Business mileage may include driving to meet clients, visit job sites, purchase business supplies, attend business meetings, seminars, networking events, or other business-related appointments.

Mileage may also be deductible for medical and charitable purposes. Medical mileage may help in a year with significant medical expenses. Charitable mileage applies to miles driven while volunteering for a qualified charity.

Current mileage rates:
Business: 72.5¢ per mile
Medical: 20.5¢ per mile
Charitable: 14¢ per mile

Important note: commuting is not business mileage. Driving from home to a regular office or regular work location is usually considered commuting and is not deductible business mileage.

The best habit is simple: track mileage during the year, not at tax time. Estimated or rounded mileage entered at tax time may trigger questions or an IRS audit.

Possible IRS Penalty Refund Opportunity Related to COVID PeriodI would like to share an important tax update that may af...
05/18/2026

Possible IRS Penalty Refund Opportunity Related to COVID Period

I would like to share an important tax update that may affect taxpayers who paid IRS penalties and related interest during the COVID disaster period.

What happened?
A recent federal court case, Kwong v. United States, questioned whether the IRS had proper authority to continue assessing certain penalties and interest while the nationwide COVID federal disaster declaration was in effect.
The case mainly involves failure-to-pay penalties and related interest assessed during the period roughly covering January 2020 through July 10, 2023.

What is the current status?
The ruling is not final, and the government is expected to continue appealing the decision. This means the legal outcome is still uncertain.
However, the case has received significant attention in the tax community because it may eventually create refund opportunities for some taxpayers.

Who may be affected?
Potentially affected taxpayers may include:
• Individuals who paid IRS penalties during the COVID period
• Businesses that may have paid failure-to-pay or failure-to-file penalties during the COVID disaster period
• Taxpayers who paid related IRS interest connected to those penalties

What is being recommended right now?
Because refund claims are subject to strict IRS deadlines, many practitioners are recommending that potentially affected taxpayers consider filing Form 843, Claim for Refund and Request for Abatement, as a protective claim before July 10, 2026.
A protective claim does not guarantee a refund. It is simply a way to preserve possible refund rights while the court process continues.

What should taxpayers do now?
If you believe you may have paid IRS penalties or related interest during the COVID disaster period, this may be a good time to:
• Review your IRS account transcripts
• Check what penalties and interest were assessed and paid
• Discuss whether filing a protective claim may make sense for your situation

As with many developing tax matters, each case is different, and eligibility will depend on future court decisions and individual circumstances.

05/05/2026

IRS Notice CP53E Scam Alert: Do Not Fall Into the Trap

Recently, several of my clients experienced a similar situation.
They received an IRS Notice CP53E stating that their 2025 Form 1040 refund could not be direct deposited because of an issue with their bank information.

At first glance, the notice looked official. It included IRS branding, instructions to update direct deposit information, and a QR code.
But there was one major red flag: each of these clients actually owed taxes. They were not expecting a refund at all.

This is an important reminder to be very cautious with any notice, text message, email, or letter asking you to scan a QR code, click a link, call a phone number, or update personal or banking information.

If you receive something like this:
❌ Do not scan the QR code
❌ Do not click any links
❌ Do not call the phone numbers listed

✅ Go directly to IRS.gov
✅ Log in to your IRS Online Account
✅ Check your balance and official notices

If there is no matching notice in your IRS account, treat it as suspicious.

Stay alert, protect your personal and financial information, and do not fall into the trap.

Tax season is over, but the real opportunity is just beginning.Most people look at their federal tax bracket and assume ...
04/18/2026

Tax season is over, but the real opportunity is just beginning.

Most people look at their federal tax bracket and assume that’s the rate they pay. In reality, your effective tax rate - what you actually paid on your total income - is often much lower (or sometimes higher than expected). And knowing that number? That’s where smarter planning starts.

Here’s how to calculate your effective tax rate:
Take your total tax paid and divide it by your taxable income.
You can find these directly on your Form 1040:
• Taxable income - typically on Form 1040, line 15 (verify for your specific year)
• Total tax - typically on Form 1040, line 24 (verify for your specific year)

That’s it. One simple calculation that gives you a clearer picture of your financial reality.

Why does this matter?
Because once you understand your true rate, you can:
• Plan better for next year
• Adjust your withholdings or make accurate estimated payments
• Avoid surprises (and penalties)
• Make more strategic decisions as an individual or business owner

For small business owners, this is especially powerful - it helps you manage cash flow, set aside the right amount for taxes, and stay in control instead of reacting later.

Tax season shouldn’t just be about filing, it should be about learning and planning ahead.
If you’ve already received your return, now is the perfect time to review it, understand your numbers, and build a smarter strategy for the year ahead.

Business Ownership Means Owning Your NumbersAs a business owner, your responsibility does not end with signing documents...
03/01/2026

Business Ownership Means Owning Your Numbers

As a business owner, your responsibility does not end with signing documents at the end of the year. It begins long before that - with your books and recordkeeping.

When I prepare filings, I ask many detailed questions. This is not by accident, and it is not to complicate the process. It is part of my professional due diligence and it ensures that everything is accurate, complete, and defensible.

However, sometimes I hear:“I don’t know… I’m not an accountant.” This is where we reach a stopping point. If I cannot get the necessary information, I cannot properly complete the work.

Whether you run a small business or operate as a sole proprietor, you are expected to know your numbers - or have a reliable system that tracks them. For example:
- How much money did you contribute to your business?
- How much did you take out?
- What were your actual income and expenses?
- How many business miles did you drive, and do you have a mileage log?
- Do you have supporting documentation?

You have two clear options:
* Track everything yourself carefully and consistently, or
* Hire a qualified bookkeeper or accountant to do it for you.

There is no workable solution in the middle. You cannot:

“Not have time” to gather receipts (paper or electronic),
Estimate your numbers,
Guess,
Use rough rounded amounts,
Hope it will somehow balance out.

Accurate books are not optional. They are the foundation of your financial reporting. If the records are incomplete or unclear, everything built on them will be unreliable. And ultimately, the responsibility - including penalties, additional taxes, and audits - belongs to the business owner.

Being a business owner means taking ownership not only of revenue and growth, but also of compliance and documentation.

Good records protect you.
Clear numbers protect you.
Understanding your financial activity protects you.

Let’s build your business on solid ground - not assumptions.

This Week’s Reminder: Your Tax Return Is Your ResponsibilityAs we move through tax season, I want to remind you of somet...
02/23/2026

This Week’s Reminder: Your Tax Return Is Your Responsibility

As we move through tax season, I want to remind you of something extremely important: your tax return is ultimately your responsibility.

No matter how experienced your tax preparer is, no matter how busy you are, and no matter how complicated your situation may seem, you should never sign a tax return without reviewing it.

At a minimum, every taxpayer should carefully review:
- Form 1040
- Schedule C (if you are a sole proprietor)

Do not sign blindly.
Do not assume everything is correct.
Do not rely on trust alone.

We are all human. Mistakes happen, especially during tax season. And even a small error can result in additional tax, penalties, interest, and unnecessary stress. For instance, recently, I reviewed a 2024 tax return for a sole proprietor. I didn’t even have the supporting documents, I simply looked at whether the numbers made sense. On Schedule C, I saw a home office deduction of about $20,000. That immediately raised questions. After looking closer, I found the issue: property tax had been entered as $78,837 instead of $7,837. Just one extra digit.

That single typo significantly overstated expenses and understated income, and could have resulted in thousands of dollars in additional tax, penalties, and interest, not to mention audit risk.

One digit. One mistake. A potentially very expensive problem. This is exactly why you must review your return before signing.

If reviewing your return feels overwhelming, create a plan for yourself. You don’t have to understand everything at once. Each year, focus on learning one part of your return. For example, this year you could:
- Learn where your W-2 wages appear on Form 1040
- Understand where your federal tax withheld is reported
- Notice why some numbers from your W-2 do not fully carry over to the return
- Understand how much federal tax you prepaid during the year
Step by step, year by year, your confidence and understanding will grow.

If something looks unusually high, unusually low, or simply doesn’t make sense, ask questions. That is what your tax preparer is there for. A good preparer should be ready and willing to explain. But the final responsibility belongs to the taxpayer.

Review. Ask. Understand. Then sign.
Your signature means you agree that the return is complete and accurate. Make sure it truly is.

A simple monthly system to track income & expensesRunning a business is hard enough, your bookkeeping shouldn’t be a onc...
02/15/2026

A simple monthly system to track income & expenses

Running a business is hard enough, your bookkeeping shouldn’t be a once-a-year scramble. The goal is simple: track income and expenses every month so you stay organized, reduce tax-time stress, and can request tax projections during the year instead of being surprised at filing time.

Option 1: Excel / Google Sheets (best for fewer accounts + fewer transactions)
Monthly workflow (repeat every month):
- Download transactions (bank + credit card) into your spreadsheet
- Label each transaction with a clear category, and add a short description if needed (vendor/purpose) so it’s easy to understand later

Income categories: income / transfers (moving money between accounts) / returns and refunds.
Expense categories, examples: supplies, office expenses, software, tools, contractors, advertising & marketing, travel, vehicle / mileage, insurance etc

What you get from this:
- a month-by-month summary that’s very close to a Profit & Loss
- visibility into profit trends and top spending categories

Option 2: QuickBooks (best for higher volume, multiple accounts, growing businesses)

QuickBooks helps, but it’s not automatic magic. It still needs your input and routine.
Ongoing workflow (weekly or monthly):
- Categorize transactions regularly (income, expenses, transfers)
- Attach details when needed (payee, memo, receipts)

Monthly non-negotiables:
- Reconcile all accounts (bank + credit card)
- Review key reports: Profit & Loss + Balance Sheet

Quarterly (recommended):
- Review financial statements with your accountant
- Tax projections (based on year-to-date results)

Whether you choose Excel or QuickBooks, the system only works if it’s updated regularly. When your tracking is current, you can run tax projections during the year and plan ahead, so final tax numbers don’t feel like a shock.

Operating in more than one city or state? Don’t miss these licensing + tax pitfalls.A lot of business owners think, “I r...
02/07/2026

Operating in more than one city or state? Don’t miss these licensing + tax pitfalls.

A lot of business owners think, “I registered my business = I’m done.” In reality, registration is only one piece. Licensing and local tax reporting can apply as soon as you expand where you work or where you sell.

1) Multi-state reminder: one state registration ≠ all states
When your business is registered in State A, that registration generally supports your activity within that state only. It doesn’t automatically cover operations in other states.

If you expand into State B (new location, employees, projects, inventory, etc.), you may need to register in that state, too.

And here’s what surprises many businesses:
Even without a physical location in another state, sales alone can trigger requirements. Many states have sales thresholds (dollar amount and/or transaction count) that can require registration and additional compliance once you cross them.

2) Washington reminder: SOS + IRS + WA DOR still doesn’t replace city licensing

In Washington, even after you register with the Washington Secretary of State, the IRS, and the Washington Department of Revenue, many cities still require a city business license if you:

have a physical location in the city, and/or
provide services or make sales within city limits.

3) City examples (WA): same state, very different rules
Here’s how requirements can differ by city (always confirm for your specific situation):

Everett
City license required
Local tax filings required (typically quarterly or annually)
Annual license renewal required

Bellevue
City license required (generally obtained once)
City tax filings required (typically quarterly or annually)
No annual renewal requirement

Seattle
City license required
Tax reporting required (typically quarterly or annually)
Annual license renewal required

Redmond
City license required
No city income reporting requirements

✅ Bottom line: Every time you plan to expand services or sales into a new city (even for mobile/service businesses), check that city’s rules for licensing, renewals, and local tax reporting before you assume you’re covered.

Address

PO BOX 917
Seattle, WA
98038

Telephone

+12065517516

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