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August 2015

How Do I? Form a partnership for tax purposes

A business operated by two or more owners can elect to be taxed as a partnership by filing Form 8832, the Entity Classification Election form. A business is eligible to elect partnership status if it has two or more members and:

is not registered as anything under state law,
is a partnership, limited partnership, or limited liability partnership, or
is a limited liability […]

FAQ: Can an S corporation own an interest in another business entity?

An S corporation may own an interest in another business entity. An S corporation can be a member of an affiliated group by owning 80 percent or more of the stock of a C corporation. The group then can elect to file on a consolidated basis, if other affiliated group rules are met. But the S corporation itself cannot join […]

How do I? Compute withholding using the part-year employment method

Employers generally withhold from wages by way of the wage-bracket or percentage method (Code Sec. 3402(b) and Code Sec. 3402(c)). However, an employee may request that the amount of tax withheld by the employer from the employee’s wages be computed on the basis of the part-year employment method (Reg. §31.3402(h)(4)-1(c)(1)). Under this method, an individual who is employed no more […]

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