Glynn D Murphy CPA

06/04/2026

Important steps for future business owners
Thinking of starting a business? One of the most important first steps for new entrepreneurs and future business owners is to ensure the right business structure is chosen. That’s not all though, there’re a few other tips and best practices for those starting out. Let’s take a look.
Choose a business structure
Each business structure has different tax filing requirements and legal considerations. Knowing the difference between them can help determine which option is best. The most common are:
• Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business.
• Partnership: An unincorporated business with ownership shared between two or more people.
• Corporation: Also known as a C corporation. It's a separate entity owned by shareholders.
• S corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
• Limited liability company: A business structure allowed by state statute.
Choose a tax year
A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:
• Calendar year: 12 consecutive months beginning January 1 and ending December 31.
• Fiscal year: 12 consecutive months ending on the last day of any month except December.
Apply for an employer identification number
An EIN is also called a federal tax identification number. It's used to identify a business. Most businesses need one even if they don’t have employees. They can get an EIN for free directly from the IRS in minutes.
Make sure all employees have completed these forms
• Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
• Form W-4 Employee's Withholding Allowance Certificate
Pay all applicable taxes
The form of business determines what taxes must be paid and how to pay them. Authorized users of certain entity types can securely access and manage their federal tax records and information online through Business Tax Account. BTA supports access for the following organizational types: sole proprietorships, partnerships, S corporations, C corporations, federal, state and local governments, Indian tribal governments, and tax-exempt organizations.
Check state specific requirements
Prospective business owners should visit their state's website for info about state requirements.

06/02/2026

Is that activity just a hobby or a business?
Many people have hobbies - things they enjoy doing in their spare time - and some even make a little extra money from them. However, there’s a difference between a hobby and a business, especially how each is treated when it comes to filing taxes.
Businesses operate to make a profit while hobbies are for pleasure or recreation. Here are some common questions people should ask themselves when deciding if what they’re doing is a hobby or business. No single thing is the deciding factor.
Questions to help taxpayers decide if they have a hobby or business
• Is there an intent to make a profit?
• If the activity makes a profit, how much is it?
• Can they expect to make a future profit from the appreciation of the assets used in the activity?
• Do they depend on income from the activity for their livelihood?
• Are any losses due to circumstances beyond their control or are the losses normal for the startup phase of their type of business?
• Are operations adjusted to improve profitability?
• Is the activity carried out like a business with complete and accurate books and records kept?
• Do the taxpayers and their advisors have the knowledge needed to carry out the activity as a successful business?
Taxpayers should review all the factors to make the best decision. Regardless of the decision, if they’re paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. These payments are taxable income and must be reported on federal tax returns.
Additionally, if they received payment in the form of digital assets, they may also get a Form 1099-DA. Whether taxpayers have a hobby or run a business, good recordkeeping throughout the year will help when they file taxes.

05/26/2026

Summer fun has begun: How common activities could impact the next tax return
Summer hasn’t officially started, but summertime events and happenings certainly have. Most people aren’t thinking about taxes when there’s summer fun to be had, but there’s some common activities that could impact taxpayers in the next filing season. Let’s look at a few.
Summer day camp
If a taxpayer is sending a child to summer day camp, the cost may count toward the Child and Dependent Care Credit.
Marriage
Summer is peak wedding season. Newlyweds can make their tax filing easier by taking two simple steps now:
• First, report any name change to the Social Security Administration.
• Next, notify the United States Postal Service, employers and the IRS of any address change. To officially change their mailing address with the IRS, taxpayers must complete and submit Form 8822, Change of Address. See page 2 of the form for detailed instructions.
Part-time/seasonal work
Summer seasonal and part-time workers may not earn enough to owe federal income tax, but they’re encouraged to file a tax return in the next filing season to get any refund they may be owed. Part-time and seasonal workers can visit IRS.gov to learn more about who should file a tax return.
Some taxpayers earn income over the summer through a side hustle or doing gig work. They can visit the Gig economy tax center at IRS.gov to learn how participating in the gig economy can affect their taxes. If taxpayers are paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. For more information, go to IRS.gov/1099k.
Travel
Most kids may have the summer off, but parents generally don't – and business travel happens year-round. Tax deductions are available for certain people who travel away from their home or main place of work for business reasons. Whether a business traveler is away for a few nights or all summer long, it’s important for them to remember the tax rules related to business travel.
Summer vacations are also something that should be considered, depending on how they are paid for. Taxpayers that sell digital assets to pay for a summer trip might get a 1099-DA, so keep good records.

05/21/2026

Homeowners should review any tax benefits for homeownership
The year is nearly half over which makes it a good time to remind homeowners and future homeowners to review their eligibility for any tax deductions, programs and housing allowances. If eligible, these tax benefits could help with some of the common costs of being a homeowner.
Deductible house-related expenses
Taxpayers must itemize their deductions to deduct homeownership expenses. Most home buyers take out a mortgage to buy their home, and their mortgage lender may bundle other home-related costs.
The costs the homeowner can deduct are:
• State and local real estate taxes, subject to a $40,000 limit or $20,000 if married filing separately
• Home mortgage interest, within the allowed limits
Homeowners can't deduct any of the following items:
• Insurance including fire and comprehensive coverage and title insurance
• The amount applied to reduce the principal of the mortgage
• Wages paid to domestic help
• Depreciation
• The cost of utilities, such as gas, electricity or water
• Most settlement or closing costs
• Forfeited deposits, down payments or earnest money
• Internet or Wi-Fi system or service
• Homeowners’ association fees, condominium association fees or common charges
• Home repairs
Mortgage Interest Credit
The Mortgage Interest Credit helps people with lower income afford homeownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid. A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government.
Ministers and military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don't have to reduce their deductions based on the allowance.
More information
• Publication 530, Tax Information for Homeowners
• Publication 936, Home Mortgage Interest Deduction

05/19/2026

A more detailed look at what the right to be informed means
All taxpayers have the right to know what they need to do to comply with tax laws. This is one part of the Right to be Informed, one of the 10 fundamental rights that make up the IRS Taxpayer Bill of Rights.
The right to be informed means taxpayers have the right to:
• Know and understand what they need to do to comply with the tax laws
• Have clear explanations of the laws and IRS procedures in all forms, instructions, publications, notices and correspondence
• Be informed of IRS decisions about their tax accounts
• Receive clear explanations of the outcomes of IRS decisions
To make sure taxpayers are informed, the IRS will:
• Include within certain notices any amount of tax, interest and certain penalties the taxpayer owes
• Explain why the taxpayer owes any balance due
• Explain the specific reasons why a refund claim was denied
• Post information on IRS.gov to help taxpayers understand their IRS notice or letter
• Send a letter when the agency makes an assessment. That letter must include:
o Information on how the taxpayer can appeal the decision
o An explanation of the entire process from audit through collection
o Details on how the Taxpayer Advocate Service can help
• Send an annual statement to taxpayers who enter into a payment plan, also known as an installment agreement. The statement will include how much the taxpayer:
o Owes at the beginning of the year
o Paid during the year
o Still owes at the end of the year
• Make forms and publications available on IRS.gov.
• Use social media to provide helpful tax information to a wide audience of taxpayers.

05/07/2026

05/04/2026

National Small Business Week 2026: Avoid the scam
It’s National Small Business Week, and the IRS is sharing resources and highlighting key topics each day throughout the week. One of those topics is scams. Back in March, the annual Dirty Dozen list of common tax scams was announced. These scams and schemes target taxpayers, businesses of all sizes and tax professionals. Let’s look at a couple that could affect businesses and entrepreneurs as well as tax professionals supporting small businesses.
Spear-phishing and malware campaigns targeting businesses and tax professionals
Tax pros and businesses can be targets of “new client” or “document request” emails that deliver malicious links or attachments to steal client data or access systems.
• Businesses, tax pros, and individuals should always be cautious of any suspicious requests or unusual behavior before sharing any sensitive information or responding to an email.
• Warning signs may include unexpected requests for sensitive information, mismatched or unfamiliar sender addresses, urgent payment demands, or links directing users to websites that do not clearly originate from IRS.gov.
• Be aware that by gaining access to a hacked email account, scammers can locate a genuine email from a previous victim's email account sent to their tax professional.
Bogus “Self-Employment Tax Credit”
• Scammers are promoting a broad “self-employment tax credit” which can lead to inaccurate filings.
• Many taxpayers do not qualify for these credits. Taxpayers should rely on trusted sources like Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C) and qualified tax professionals, not social media promotions, when determining eligibility for credits.
Additional tips to avoid the scam
• Businesses can take proactive steps to safeguard their business and employees by using anti-malware/anti-virus software with automatic updates and requiring strong passwords with multi-factor authentication. Only enter personal data on secure websites (https) to prevent unauthorized access. See Publication 5961, Protect your business from tax scams PDF, for more information.
• Protect the Employer Identification Number. Keep it secure and up to date. Use Form 8822-B, Change of Address or Responsible Party — Business, to make any necessary EIN updates promptly, ensuring its integrity and minimizing the risk of identity theft or fraudulent activity.
Reporting fraud or scams
• Report suspected tax fraud, scams, identity theft, or other tax-related wrongdoing at IRS.gov/submitatip.
• Tell us about data losses related to W-2 scams by emailing [email protected] and providing contact information. In the subject line, type “W2 Data Loss” so that the email makes it to the right people. Don’t attach any employee personally identifiable information.
• Contact the Federation of Tax Administrators to receive information on how to report victim information to states using the State Data Breach Contacts
More information
• IRS National Small Business Week 2026 webpage
• IRS 2026 Dirty Dozen list

05/02/2026

When you still don’t understand how taxes work …..

04/30/2026

It’s not too early to start planning for next year: Check withholding now
Even though the tax filing deadline for tax year 2025 passed a couple weeks ago, it’s not too early to start planning for next filing season. Planning now can help taxpayers avoid surprises next year. One action that can be taken is checking for proper tax withholding.
What is withholding?
Taxpayers need to pay their tax as they receive their income, and they do this through withholding. For employees, “withholding” refers to the federal income tax portion of each paycheck that an employer takes out for tax purposes. It can also be the amount from earnings self-employed people and others voluntarily set aside to pay their estimated taxes.
How taxpayers can check their withholding
The IRS Tax Withholding Estimator is a free, easy-to-use tool that helps workers and retirees estimate the amount of federal income tax to withhold from their paychecks now for the taxes they will owe next year.
The estimator reflects the changes to credits and deductions under the One, Big, Beautiful Bill. This includes the deductions for tips, overtime, car loan interest and enhanced deduction for seniors. It also accounts for updates tied to family-related credits, homeownership, and charitable giving.
What are the benefits of using the IRS Tax Withholding Estimator?
By using the estimator, taxpayers can manage their estimates based on any personal life change, such as buying a home, changing jobs, having a child or changing their marital status.
For people who recently completed their 2025 tax return, the IRS advises using the IRS Tax Withholding Estimator to consider all income sources such as full-time wages, side jobs and any sale of services or goods.
By adjusting tax withholding, taxpayers can:
• Prevent owing money and potential penalties at tax time
• Adjust withholding to increase take-home pay instead of waiting for a refund
What else taxpayers need
For an effective tax withholding estimate, taxpayers will need certain documents including:
• All income statements, including their spouse’s if filing jointly
• Data from other sources of earnings
• Their most recent income tax return
More information
• Publication 505, Tax Withholding and Estimated Tax
• Tax Withholding Estimator FAQs

04/28/2026

When and how to amend a tax return
Taxpayers who discover an error after filing a federal tax return may need to file an amended return. There are some instances where an amended return isn’t required such as when the IRS corrects errors during processing or requests missing forms or schedules separately.
Reasons to file an amended return
If there are changes to key items on the original return, including:
• Filing status
• Income
• Deductions
• Credits
• Dependents
• Tax liability
Taxpayers can use the Should I file an amended return? tool within the IRS Interactive Tax Assistant to help decide if they should file an amended return to correct an error or make other changes if they already filed.
Time limits
To claim a refund, an amended return must generally be filed within:
• Three years from the date the original return was filed, or
• Two years from the date the tax was paid, whichever is later
If the original return was filed early, the three-year period begins from the April tax deadline. Special rules apply when there are net operating losses, foreign tax credits, bad debts or other issues. Additionally, taxpayers in disaster relief situations, combat zone service, have bad debts, foreign tax credits, or loss or credit carrybacks, may have more time to file an amended return.
How to file an amended return
Taxpayers must file Form 1040-X, Amended U.S. Individual Income Tax Return. When filing, they should:
• Submit a corrected Form 1040, 1040-SR, or 1040-NR for the applicable tax year
• Attach any supporting documents and updated forms or schedules
Refunds and payments
For tax years 2021 and later, taxpayers may request direct deposit of refunds when filing electronically. If additional tax is owed, payment should be submitted with the amended return. The amended return replaces the original return, and the IRS will calculate any applicable penalties or interest if filed after the due date.
Status of amended return
Taxpayers can check the status of an amended return approximately three weeks after it’s submitted. It generally takes 8 to 12 weeks for it to be processed. However, in some cases, processing could take up to 16 weeks.
State tax considerations
Changes to a federal return may affect a taxpayer’s state tax liability. Taxpayers should contact their state tax agency for guidance and should not attach state returns to the federal amended return.