How Job-Juggling Remote Workers Can Threaten Your Company

Although some businesses now require employees to work full-time in the office, many others allow employees to work remotely one or more days a week. The popularity of remote positions can make attracting and retaining employees easier. However, some workers may be tempted to take on multiple remote jobs without informing their employers. In addition to affecting employee productivity, this can lead to leaks of intellectual property (IP) and proprietary knowledge to competitors. Or employees may use what they’ve learned working for you to run side businesses that directly compete with yours. Here’s how to minimize such risks. Provide solid oversight The same technology that makes it easy for companies to offer remote positions can also enable workers to juggle multiple jobs simultaneously. Some employees may feel they...

Casualty Loss Tax Deductions May Help Disaster Victims in Certain Cases

This year, many Americans have been victimized by wildfires, severe storms, flooding, tornadoes and other disasters. No matter where you live, unexpected disasters may cause damage to your home or personal property. Before the Tax Cuts and Jobs Act (TCJA), eligible casualty loss victims could claim a deduction on their tax returns. But currently, there are restrictions that make these deductions harder to take. What’s considered a casualty for tax purposes? It’s a sudden, unexpected or unusual event, such as a hurricane, tornado, flood, earthquake, fire, act of vandalism or a terrorist attack. Many unable to claim a tax break  For losses incurred from 2018 through 2025, the TCJA generally eliminates deductions for personal casualty losses, except for losses due to federally declared disasters. Note: There’s an exception to...

ESOP Valuations Under Increased IRS Scrutiny

An employee stock ownership plan (ESOP) can facilitate the transfer of a business to the owner’s children or employees over a period of years in a tax-advantaged way. However, the IRS recently issued a statement warning businesses about a range of compliance issues related to ESOPs and announcing plans to ramp up compliance enforcement. The IRS has identified numerous issues, such as improper valuation of employer stock, prohibited allocation of shares to disqualified persons and failure to follow tax law requirements for ESOP loans, causing the loans to be prohibited transactions. In light of this warning, business owners who are interested in pursuing an ESOP should seek the advice of business valuators and other professional advisors to ensure compliance with the rules. Here’s some critical information...

What Types of Expenses Can't be Written Off by your Business?

If you read the Internal Revenue Code (and you probably don’t want to!), you may be surprised to find that most business deductions aren’t specifically listed. For example, the tax law doesn’t explicitly state that you can deduct office supplies and certain other expenses. Some expenses are detailed in the tax code, but the general rule is contained in the first sentence of §162, which states you can write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” Basic definitions In general, an expense is ordinary if it’s considered common or customary in the particular trade or business. For example, insurance premiums to protect a store would be an ordinary business expense in the retail...

What are the Tax Implications of Winning Money or Valuable Prizes?

If you gamble or buy lottery tickets and you’re lucky enough to win, congratulations! After you celebrate, be aware that there are tax consequences attached to your good fortune. Winning at gambling For tax purposes, it doesn’t matter if you win at the casino, a bingo hall or elsewhere. You must report 100% of your winnings as taxable income. They’re reported on an “Other income” line of your 1040 tax return. To measure your winnings on a particular wager, use the net gain. For example, if a $40 bet at the racetrack turns into a $130 win, you’ve won $90, not $130. You must separately keep track of losses. They’re deductible, but only as itemized deductions. Therefore, if you don’t itemize and instead take the standard deduction, you...

2023 Q4 Tax Calendar: Key Deadlines for Businesses and Other Employers

Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2023. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. Note: Certain tax-filing and tax-payment deadlines may be postponed for taxpayers who reside in or have businesses in federally declared disaster areas. Monday, October 2 The last day you can initially set up a SIMPLE IRA plan, provided you (or any predecessor employer) didn’t previously maintain a SIMPLE IRA plan. If you’re a new employer that comes into existence after October 1 of the year, you can establish a SIMPLE IRA plan as...

Dont Let Your Industry be your Fraud Destiny

Occupational fraud risk isn’t necessarily shared evenly by all business sectors. Certain industries — for example, construction, real estate, manufacturing and transportation — are usually more vulnerable to employee theft, according to the Association of Certified Fraud Examiners (ACFE). Other industries may not have greater fraud exposure but face specific threats. Here are some industry-related risks and how businesses in these sectors can prevent fraud with strong internal controls. Construction Some types of fraud are more prevalent in the construction industry, particularly payroll and billing fraud. Segregation of accounting duties — having them performed by more than one employee — is critical to reducing both types. To prevent payroll fraud, have someone independent of your accounting department verify the names and pay rates on your payroll. If you...

Management Interviews are a Critical Part of the Business Valuation Process

When preparing a business valuation, quantitative data — from tax returns, financial statements, contracts and other sources — is important. But there’s more to a company than numbers. Qualitative factors also contribute to a company’s overall value. It isn’t always easy, however, to gain insight into qualitative aspects of a business’s operations. Websites and marketing materials can provide only limited insight. So there’s almost no substitute for conducting a one-on-one interview with a company’s owner or management team. Answering key questions Depending on why a business valuation is being sought, your valuator will ask a variety of questions during the management interview. Among other things, interviews usually provide answers to the following key questions about a company’s operations and outlook: Does the company have adequate management depth? A company’s...

It's Important to Understand How Taxes Factory into M&A Transactions

In recent years, merger and acquisition activity has been strong in many industries. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law. Stocks vs. assets From a tax standpoint, a transaction can basically be structured in two ways: 1. Stock (or ownership interest) sale. A buyer can directly purchase a seller’s ownership interest if the target business is operated as a C or S corporation, a partnership, or a limited liability company (LLC) that’s treated as a partnership for tax purposes. The now-permanent 21% corporate federal income tax rate under the Tax Cuts and Jobs Act (TCJA) makes buying the stock of a C corporation somewhat more attractive. Reasons: The corporation will pay less tax and...