Forms

Small Business Taxes & Management^TM--Copyright 1999-2006, A/N Group, Inc.

We've created a number of important tax and business forms to aid you in drafting corporate resolutions, fringe benefit plans, preparing your return, planning, etc. While every effort has been made to make the material presented here as accurate as possible, these forms are not a substitute for competent tax or legal advice. We'll be adding to this list regularly. In many cases we've completed the forms with sample data, entered in italics.

Self-Insured Medical Reimbursement Plan

You can provide a self-insured medical plan to officers and employees. The business simply reimburses employees for expenses incurred. You can put a floor or cap on the amount of the reimbursement. The amounts should not be income to the employees. If you discriminate in favor of highly compensated employees, some or all of the reimbursement will be taxable to them.

Promissory Note

Without a formal note, borrowings between related parties can be recharacterized by the IRS. This note should work in most circumstances.

Board Meeting Authorizing Loan from Shareholder

You should have board approval for any borrowings from shareholders.

S Corporation Shareholder Basis Worksheet

Your basis in an S corporation is critical in determining your ability to deduct losses and computing your gain on the sale of the stock.

Excessive Compensation Repayment Agreement

If the IRS claims the salary of an employee/shareholder of a regular (C) corporation is excessive, it can deny a deduction for a portion of the salary. The excess would be considered a dividend. You may be able to avoid that problem by a board resolution requiring the employee to pay back the amount deemed excessive.

Restriction on Transferability of Shares

In a closely held corporation you may want to restrict the transferability of shares to prevent taking on dissident shareholders.

Partnership and LLC Basis Worksheet

If you don't have sufficient basis in a partnership or LLC you can't deduct passthrough losses. Worse, distributions from the entity could produce taxable income. Use this form to calculate your basis.

Policy Statement for Vehicles not Used for Personal Purposes

You may be able to avoid keeping vehicle logs if you can meet the rules under Reg. Sec. 1.274-6T. For complete details see Cars--Special Rule for Substantiating Business Use in our October 1, 1999 issue. We've included a sample policy statement here.

Policy Statement for Vehicles not Used for Personal Purposes Except Commuting

This policy statement is similar to the one immediately above, but allows employees to use the vehicle for commuting to and from work. Please see the reference article for complete details.

Earnings and Profits Computation Worksheet

While intended for professionals, everyone who does business as a regular (C) corporation or an S corporation that converted from a C, should have some familiarity with the rules.

Board of Directors Resolution Adopting Defined Contribution Plan

Adopting a defined contribution pension plan? Use this form to have it formally adopted by the board of directors.

Election to Not Claim Special 30% or 50% Additional Depreciation Allowance

Electing not to claim the special additional depreciation allowance on new equipment? Attach this to your tax return.

Election to Forego the Carryback Period for Net Operating Loss

Generally, you must first carryback a net operating loss to the earliest available year. You might be better off by carrying the loss forward if you'll be in a higher bracket in future years. On a corporate return, you can make this election by just checking a box. On your individual return, you'll have to include a statement. Here's a sample one.

Election to Deduct Presidentially Declared Disaster Loss in Prior Tax Year

If you incur a disaster loss related to a Presidentially declared disaster loss, you can deduct the loss in the year it occurred or deduct it in the prior year by either simply claiming it on an unfiled return or file an amended return. For example, in March, 2004 your incur casualty loss when your home's roof collapses as a result of a heavy snowfall. Your home is located in the area declared by the President as a disaster area as a result of heavy snows. Normally you'd deduct the loss on your 2004 return, but under this special rule, you can deduct the loss on your 2003 return. If you haven't filed the return, you can simply deduct it on the return; if you've filed, you can file an amended return. Why take the loss in the prior year? In addition to getting the tax benefit earlier, there's a good chance your income for the year of the loss will be much less than for the prior year. That will mean your deduction will be worth more in the prior year. Caution. There are time limits on making the election and the election becomes irrevocable unless you get IRS premission. You must elect to take the deduction in the prior year and attach a statement to the return. Here's a sample statement.

Notice of Employer's Election Not to Withhold Income Taxes for Vehicle Fringe Benefit

The value of the personal use of a company-owned vehicle must be included in the income of the individual using the vehicle. Normally, an employer must not only include this value on the employer's W-2, the employer must also withhold employment and income taxes on the amount. The employer can make an election not to withhold income taxes. There are a number of situations where doing so can simplify payroll reporting. Here's the notification that must be provided to the employee.

--Last update 10/01/06