James and Kate Sawyer were married on New Years Day of 2017. Before their marriage, Kate lived in New York and worked as a hair stylist for one of the citys top salons. James lives in Atlanta where he works for a public accounting firm earning an annual salary of $100,000. After their marriage, Kate left her job in New York and moved into the couples newly purchased 3,200-square-foot home in Atlanta. Kate incurred $2,200 of moving expenses. This includes paying the moving company and travel to Atlanta.

Kate decided to try her hand at making it on her own in business, and with Jamess help, she started Kates Beauty Cuts LLC. Kate ran an ad in the local newspaper and officially opened her shop on January 24, 2017. By the end of the year, Kates Beauty Cuts LLC generated $40,000 of net income. She is very excited about the start of the new business and looks forward to another successful year.

What is the main tax issue/issues present here that should be researched?