Michael Williams, CPA

How apportionment rules impact multi-state S-Corps Running an S-corporation in Texas has its benefits, including no state income tax. However, new rules come into play once your business starts earning revenue in other states. -What is apportionment? Apportionment is the method states use to divide a business's income when it operates in more than one state. Most states use a formula based on sales, property, and payroll. This formula helps them figure out what share of your income belongs to their state. Texas S-corps don't pay state income tax, but many other states do. If your company earns money or has workers or property in those states, you may owe income tax there, even though you're based in Texas. For example, let's say your S-corp sells products in California. California will use its own apportionment formula to figure out how much income you earned there. If your business has inventory stored in California or employees working there, the state may claim a larger portion. Each state sets its own rules, so one state may rely mostly on sales while another may factor in payroll or property taxes too. -What are the filing requirements for multi-state S-corps? Once a state determines you owe tax there, you must file a tax return in that state, even if your main office is still in Texas. This is where things get more complex. You'll need to track income and expenses by state and apply the correct apportionment formula. Some states use single-sales factor formulas, while others use three-factor formulas with equal or weighted values. Also, even though S-corps are pass-through entities federally, many states treat them differently. Some tax the S-corp itself, while others tax the shareholders. If your shareholders live in Texas, they may not pay state tax on their share of income. If they live in another state, they may owe taxes there, even if the company is based in Texas. Understanding apportionment rules can help your S-corp avoid penalties and make smarter expansion decisions. Staying on top of state-specific tax rules protects your profits and keeps your business compliant as it grows across state lines. #SCorp #businesslaw #TexasLawyers #AustinLawyer #Litigation #Trademarks #EstatePlanning #Taxation www.blazierlaw.com 512-467-2622

As a Texas Income Tax Professional who has spent years helping clients navigate complex tax rules — including the wild world of digital assets — I want to share a timely heads-up that's especially relevant right now in early 2026. The IRS recently reminded tax professionals (via FS-2025-06) that custodial digital asset brokers (think major centralized exchanges) are now required to report certain transactions on the brand-new Form 1099-DA, "Digital Asset Proceeds from Broker Transactions." Here's what matters most for your 2025 tax year (the returns many of us are preparing or will soon file): Brokers must report gross proceeds from sales, exchanges, and certain dispositions of digital assets that occurred in calendar year 2025. These 1099-DA forms are being furnished to clients by February 17, 2026 (with copies to the IRS). Important catch: For 2025 transactions, brokers are not required to report cost basis — that's still the taxpayer's responsibility (and it will be mandatory for certain "covered" assets starting in 2026 transactions). Many clients are receiving (or will soon receive) these forms showing only the sales proceeds — no built-in gain/loss calculation. That means detailed recordkeeping is more critical than ever: tracking acquisition dates, costs, transfers between wallets/exchanges, and applying the proper basis methods (FIFO, specific ID, etc.). Key action items for clients right now: Gather all transaction history from every platform, wallet, and exchange used in 2025. Reconcile everything against incoming 1099-DAs — discrepancies are common in this first year. Document your basis calculations meticulously — the IRS emphasizes this in their guidance. Note: DeFi platforms and many non-custodial/foreign brokers are generally not required to issue 1099-DAs yet. This is a phased-in change designed to bring crypto reporting closer to traditional securities — but the 2026 filing season is where the real growing pains (and opportunities for accuracy) show up. If you're a business owner, investor, or high-net-worth individual with crypto activity, let's connect! I'm helping Texas clients reconstruct basis, review 1099-DAs, and ensure compliant, optimized filings before the April deadline. Drop a comment if you've already received your 1099-DA, or DM me if you'd like to discuss how this impacts your specific situation. #DigitalAssets #CryptoTax #TaxPreparation #IRS1099DA #TexasCPA #TaxTips #BlockchainTax

Mastering your financial statements is essential for any Texas service-based business owner—yet many avoid them due to complexity. Learning to read balance sheets (assets/liabilities/equity), income statements (revenue/expenses/profit), and cash flow statements (inflows/outflows) unlocks better decision-making, risk management, and strategic planning. TexBookkeeper provides specialized, flat-fee online bookkeeping for Texas professionals like Air BnB owners, appliance repair businesses, architects, and chiropractors—monthly reconciliations, clear and understandable financial statements, sales/franchise tax handling, QuickBooks management, and CPA-ready year-end files—so you gain the knowledge and control needed to lead with confidence and drive sustainable growth. Find Out How TexBookkeeper Can Help: TexBookkeeper.com #Bookkeeping #FinancialStatements #TexasBusiness #ServiceBusiness #Entrepreneurship #TexBookkeeper #FinancialLiteracy #BusinessGrowth #QuickBooksOnline #TexasBookkeeper #OnlineTexasBookkeeping #TexasBusiness #TexasBookkeeping #TexasSmallBusiness #OnlineTexasBookkeeper #BookkeepingServices #BookkeeperTips #SmallBusinessOwner #VirtualBookkeeper #SmallBusiness

Is your business ready for Texas's expanded sales tax rules on data processing services? The Texas Comptroller just adopted a sweeping update to Rule § 3.330. Even though the effective date is April 2, 2025, the rule may apply retroactively, putting businesses on the hook for past exposure. Here’s what you need to know: 🔸New tests, new burden: The ancillary and separate value tests replace the “essence of the transaction” test, adding complexity to how services are evaluated. 🔸Broader definitions = broader tax base: More services now qualify as taxable data processing. If you offer or rely on digital services in Texas, now’s the time to revisit your tax positions. ↪️ Read our full breakdown to understand your risk and next steps: https://ow.ly/boYC50VNinm #Texas #Tax

Converting from a General Partnership (GP) to a Limited Partnership (LP) is a standard practice that doesn't typically raise audit flags. A CPA in the DFW area reviewed 30 years' worth of tax returns and found no audits triggered by oil and gas working interests. These tax benefits are well-established, dating back many years in the tax code. If a CPA suggests these deductions against active income are invalid, it may be time to seek a second opinion. #OilAndGas #TaxBenefits #CPA #LimitedPartnership