Tuesday, July 30, 2019

Registered Agent Responsibilities

What are my duties as a registered agent or as an appointed agent?

A registered or appointed agent’s duties are:
  • To receive or accept, and forward to the represented entity at the address most recently provided to the registered agent by the represented entity, or otherwise notify the represented entity at that address regarding, any process, notice, or demand that is served on or received by the registered agent; and
  • Provide the notices required or permitted by law to be given to the represented entity to the address most recently provided to the registered agent by the represented entity.

Who can be a registered agent?

Generally, an individual Texas resident or an organization that is registered or authorized to do business in Texas with a business office at the same address as the entity's registered office may consent to serve as the registered agent. Although an officer, owner, or employee may serve as an entity's registered agent, an entity may not serve as its own registered agent. An entity may contract for the provision of registered agent services from another business entity, such as a service company. The secretary of state, or other governmental agency or authority, cannot serve as an entity's registered agent

My registered agent resigned or moved. Do I need to file anything with the secretary of state?

Yes. A domestic or foreign filing entity is required to continuously maintain a registered agent and registered office in Texas. Failure to do so may result in the involuntary termination of a domestic filing entity or in the revocation of a foreign filing entity's registration. Therefore, it is important that an entity file a statement of change of registered agent and/or registered office with the secretary of state to keep the name of the registered agent and the registered office address current. See Form 401 (WordPDF).

Friday, July 26, 2019

2020 Draft of the W-4

The Internal Revenue Service released the 2020 draft for Form W-4 on May 31, 2019.

For most taxpayers, the draft of the 2020 W-4 intends to simplify the process of reporting the amount of federal withholding an employee wants from each paycheck. Anyone who wishes for a more accurate calculation of their federal withholding can answer a set of straightforward questions on the worksheets.
Two other ways to handle withholding are to use worksheets for individuals with other sources of income who wish to calculate additional withholding amounts. The employer will not be provided these sheets, thus assuring the taxpayer’s privacy. An employee can also use a Withholding Calculator to determine the most accurate withholding.
In the draft 2020 W-4, there are no more allowances but, rather, a shift toward dependents and deductions to align with the new tax law.  For example, the Child Tax Credit increased to $2,000 for children younger than 17 (and $500 for other dependents). Some itemized deductions that are still on the books include qualifying home mortgage interest, charitable contributions, state and local taxes (SALT), and medical expenses in excess of 10 percent of one’s income. However, due to the changes in the tax law, significantly fewer people will itemize deductions because of the increase to the standard deduction, as well as the cap to SALT ($10,000). 

Source: Paychex

Tuesday, July 2, 2019

How to Handle Multiple Rental Activities and the 199A Deduction

There’s a lot of confusion out there around your rental activity and Section 199A. Your Section 199A considerations multiply when you have multiple rental activities. Here’s what you need to consider:

·         Are your rental activities multiple trades or businesses, or one trade or business?
·         Can you aggregate the rentals for Section 199A purposes? Do you want to?
·         How does the Section 199A rental safe harbor impact your Section 199A deduction if you use it?

Whether your rental activities are each a trade or business, or they constitute one trade or business, is inherently based on the facts of your particular situation. The IRS also believes that multiple trades or businesses will generally not exist within an entity unless it can use different methods of accounting for each trade or business under the Section 466 regulations. These regulations explain that you can’t consider a trade or business separate and distinct unless you keep a complete and separable set of books and records for that trade or business.

This determination is an important factor for you if any one rental activity (taken individually) doesn’t rise to the level of a trade or business, but all the rental activities (viewed collectively) do rise to the level of a trade or business. One of the factors the IRS looks to when determining whether a rental activity is a trade or business is the number of properties rented.


The Section 199A regulations allow you to aggregate multiple trades or businesses such that you treat the aggregated group as one trade or business for determining your Section 199A deduction. This is an important consideration if one or more of your rental businesses have insufficient wages or un-adjusted basis in assets (UBIA) to get the maximum Section 199A deduction for that property.

The final regulations tell us you can aggregate, in most circumstances, provided that the rental activities share centralized administrative functions, such as accounting, legal, and human resources functions. The big wrinkle is the type of rental business: you generally can’t aggregate residential rental businesses and commercial rental businesses with each other because they aren’t the same type of property.

Rental Safe Harbor

Along with the final regulations, the IRS gave you an optional safe harbor to deem your rental activities as qualifying for the Section 199A deduction. The safe harbor isn’t the best strategy because most rentals qualify as a trade or business anyway.