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What's with the ads?


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About AngelaAHLevy

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  1. Only if, upon receiving their 1099's, they did not report that income and pay taxes on it. As a 1099 worker, you are responsible for paying regular income tax, 100% of FICA and AND a self employment tax. (The 2nd half of FICA and the SE tax are the share that would have been paid by an employer if not self employed). If anything, the teachers could have a claim against LA for the SE taxes that they paid which, if the IRS deems they were actually employees and not contractors, should have been paid by LA.
  2. This is correct. Gift Cards are referred to as "Prepaid Revenue," aka Unearned Revenue. Large multi-billion dollar corporations have trouble with this too, they just have deeper pockets to recover with. I have audited and found significant issues with a corporation so large that at least 50% of the people reading this have one of their products in their home. Mistakes can be as costly as fraud.
  3. I am going to explicate a specific phrase in your post which is so very pervasive in our largely faith-based homeschool community. (This is not an attack on you or your choice Random! I just think this phrase is worth discussing). Make no mistake folks - these homeschool programs are MULTI-MILLION DOLLAR BUSINESSES and we are the target market. This is NOT bad, but we cannot allow ourselves to buy into these buzzy phrases about service and being a blessing and sharing our heart, etc. Businesses. Run by people who are passionate about their purpose, mission and target market? Sure. But businesses!!!!! Likewise with Veritas last night and their offer to give grace and extend the hand of God to the LA community. The fact is - we are a target market for VP too, and they offered a discounted service in hopes of gaining significant market share and securing future revenue. It's the same reason milk is discounted at the grocer! Again - this is not bad, but let's don't be naive about it! I think it's ok to keep a warm heart and remain faithful in our community while also participating shrewdly in a business transaction as consumers, just as these businesses are doing so. And -- We talk about "taking God's name in vain" and think it refers to using OMG. But that's doesn't seem all that hard, does it, to not utter God's name casually like that? I have long felt that we should dig a little deeper and see with clear eyes that taking God's name in vain is a far more insidious practice -- far more tempting, far more potentially gainful. It is ok for a business to say "these are our values, we'll share them," but we should be wary of any business that positions themselves as a blessing to the community or striving to be one. Any business' number one goal should be to remain in business (e.g. pay their bills, and keep going for as long as the owners wish to keep going) by serving their customers and stakeholders (owners!) well. And if the owners view God as the primary stakeholder, then great!!!
  4. 1. LLC does not protect you from tax debt unless it is an LLC that has elected to be taxed as a corporation, rather than taxed as a partnership. The former is less common, as it comes with the same kind of complications that other entity types bring. Thus: Any tax owed is owed by the owner. 2. If you are collecting fees in advance of performing the service, you essentially have what is called "Unearned Revenue." This is actually a liability. From a tax perspective, it is possible to not pay taxes on this Unearned Revenue. When you actually perform the service, the unearned revenue must be reclassified to Earned Revenue, or in accounting parlance -- it gets "recognized." If Landry Academy never bothered to recognize the revenue when services were actually performed, then they collected cash, never recorded it as revenue, and basically failed to pay income tax on a lot lot lot of revenue. This is called fraud. And you can be guilty of fraud, even it's just that your records are disorganized. It can be difficult to keep track of unearned revenue and then recognize it at the right time. 3. A prepaid model of this type can only last so long as it is growing. If the amount of prepaids owed exceeds growth, then - imagine this - you have a semester which is 100% comprised of students who paid last year or some other time -- meaning no revenue is coming in and yet you have to still provide the service and incur the costs of doing so. This is when you collapse. You either collapse because you actually collapsed (as in, used the money and don't have it anymore), or because the government collapses you for collecting prepaids and then failing to keep it in an escrow account or otherwise holding it until recognized. I guarantee you that farm is up for auction and this business is closing not just because of contractor misclassification. There's a big debt owed to the IRS here and it has to do with income tax/revenue AND/OR the prepaid cash was not held in escrow until recognized and they literally do not have the money to keep operations going.
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