26 Apr 2025
0

Maximizing Employee Transportation Fringe Benefits

Roger Rossmeisl, CPA
Individual Tax Briefs
Maximizing Employee Transportation Fringe Benefits

There are some nice tax breaks for transportation-related employee fringe benefits. If your employer offers these tax-favored fringes, you should probably take advantage of them by signing up. Here’s a quick summary of the current federal tax treatment of transportation-related benefits. Mass transit passes For 2025, employer-provided mass transit passes for train, subway and bus systems are tax-free to a recipient employee up to a monthly limit of $325. Thanks to an unfavorable change in the 2017 Tax Cuts and Jobs Act (TCJA), your company can’t deduct the cost of this benefit. However, your company may offer a salary-reduction arrangement that allows you to set aside up to $325 per month from your salary to pay for transit passes with your own money. That way, you pay...

26 Apr 2025
0

Help Prevent Fraud in Your Family Business

Roger Rossmeisl, CPA
Fraud Briefs
Help Prevent Fraud in Your Family Business

Statistics on fraud rates in family-run businesses are scant. This is probably because most family enterprises keep incidents of financial malfeasance under wraps and don’t involve law enforcement or the courts. Because punishing offenders is critical to preventing future fraud, such secrecy can encourage schemes and raise the risk of large financial losses. So although your family business may be different from those run by unrelated individuals, it needs just as many internal controls to prevent bad behavior. Antifraud policies are critical Fraud prevention efforts in family businesses often are hampered by loyalty and affection. One of the biggest potential obstacles is failing to acknowledge that someone in the family could be capable of initiating or overlooking illegal activities. If there’s a black sheep in your flock,...

26 Apr 2025
0

Exploring Business Entities: Is an S Corporation the Right Choice?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Exploring Business Entities: Is an S Corporation the Right Choice?

Are you starting a business with partners and deciding on the right entity? An S corporation might be the best choice for your new venture. One benefit of an S corporation One major advantage of an S corporation over a partnership is that shareholders aren’t personally liable for corporate debts. To ensure this protection, it’s crucial to: Adequately finance the corporation, Maintain the corporation as a separate entity, and Follow state-required formalities (for example, by filing articles of incorporation, adopting bylaws, electing a board of directors and holding organizational meetings). . Handling losses If you anticipate early losses, an S corporation is more favorable than a C corporation from a tax perspective. Shareholders in a C corporation generally don’t benefit from such losses. However, as an S corporation shareholder, you can deduct your share of losses on...

25 Apr 2025
0

The Extended 2024 Gift Tax Return Deadline is Looming

Roger Rossmeisl, CPA
Individual Tax Briefs
The Extended 2024 Gift Tax Return Deadline is Looming

If you made significant gifts to your children, grandchildren or other heirs last year, it’s important to determine whether you’re required to file a 2024 gift tax return. And in some cases, even if it’s not required to file one, you may want to do so anyway. Requirements to file The annual gift tax exclusion was $18,000 in 2024 (increased to $19,000 in 2025). Generally, you must file a gift tax return for 2024 if, during the tax year, you made gifts: That exceeded the $18,000-per-recipient gift tax annual exclusion for 2024 (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $36,000 annual exclusion for 2024, That exceeded the $185,000 annual exclusion in 2024 for...

25 Apr 2025
0

Speculative Financial Projections Won’t Pass Muster in Court

Roger Rossmeisl, CPA
Valuation Briefs

Business valuation professionals often rely on client-prepared financial projections to calculate lost profits and diminution in value. However, courts may exclude expert testimony that’s based on speculative or unreliable projections. To withstand scrutiny, valuators must support their conclusions with market-based evidence and a rigorous analysis of case-specific facts. The landmark case Endless River Technologies, LLC v. TransUnion, LLC (6th Cir., Dec. 18, 2024) serves as a recent example of how expert testimony may be inadmissible due to flawed financial assumptions. Trial court admits valuation evidence In Endless River Technologies, the U.S. Court of Appeals for the Sixth Circuit addressed a contractual dispute. The case involved ownership of the source code for a proprietary platform that served as an online marketplace for insurance leads. In 2014, the parties entered into...

25 Apr 2025
0

Ways to Manage the Limit on the Business Interest Expense Deduction

Roger Rossmeisl, CPA
Small Business Tax Briefs
Ways to Manage the Limit on the Business Interest Expense Deduction

Prior to the enactment of the Tax Cuts and Jobs Act (TCJA), businesses were able to claim a tax deduction for most business-related interest expense. The TCJA created §163(j), which generally limits deductions of business interest, with certain exceptions. If your business has significant interest expense, it’s important to understand the impact of the deduction limit on your tax bill. The good news is there may be ways to soften the tax bite in 2025. The nuts and bolts Unless your company is exempt from §163(j), your maximum business interest deduction for the tax year equals the sum of: 30% of your company’s adjusted taxable income (ATI), Your company’s business interest income, if any, and Your company’s floor plan financing interest, if any. . Assuming your company doesn’t have significant...

25 Apr 2025
0

Can I Itemize Deductions on my Tax Return?

Roger Rossmeisl, CPA
Individual Tax Briefs
Can I Itemize Deductions on my Tax Return?

You may wonder if you can claim itemized deductions on your tax return. Perhaps you made charitable contributions and were told in the past they couldn’t be claimed because you didn’t have enough deductions to itemize. How much do you need? You can itemize deductions if the total of your allowable itemized write-offs for the year exceeds your standard deduction allowance for the year. Otherwise, you must claim the standard deduction. Here’s how we’ll determine if you can itemize or not for 2024 when your return is prepared. Standard deduction amounts The basic standard deduction allowances for 2024 are: $14,600 if you’re single or use married filing separate status, $29,200 if you’re married and file jointly, and $21,900 if you’re a head of household. . Additional standard deduction allowances...

25 Apr 2025
0

How a Business Owner’s Home Office Can Result in Tax Deductions

Roger Rossmeisl, CPA
Small Business Tax Briefs
How a Business Owner's Home Office Can Result in Tax Deductions

As a business owner, you may be eligible to claim home office tax deductions that will reduce your taxable income. However, it’s crucial to understand the IRS rules to ensure compliance and avoid potential IRS audit risks. There are two methods for claiming this tax break: the actual expense method and the simplified method. Here are answers to frequently asked questions about the tax break. Who qualifies? In general, you qualify for home office deductions if part of your home is used “regularly and exclusively” as your principal place of business. If your home isn’t your principal place of business, you may still be able to deduct home office expenses if: You physically meet with patients, clients or customers on your premises, or You use a storage area...

25 Apr 2025
0

Why You Should Exercise Caution When Investing in Crypto

Roger Rossmeisl, CPA
Fraud Briefs
Why You Should Exercise Caution When Investing in Crypto.

Driven by an increased interest in cryptocurrency, little regulatory oversight and the constant introduction of new coins, cryptocurrency fraud could reach unprecedented levels in 2025. Fraud perpetrators no longer need to rely only on phishing attacks or counterfeit coins — they’re now using artificial intelligence to scam crypto investors. Unfortunately, many law enforcement agencies don’t have the resources to keep up with the latest fraud schemes. it’s up to crypto investors to be on the lookout for potential fraud. AI enters the equation The first crypto scams involved Ponzi schemes and rug pulls, where promoters abandoned coins they introduced and disappeared with investors’ funds. Now, AI-powered frauds involving deepfake influencers have become almost run-of-the-mill. For example, “pig butchering,” where criminals build long-term relationships with their victims to...

25 Apr 2025
0

IRS Reopens Portal for 2024 Clean Vehicle Credit Claims, Offering Relief to Taxpayers and Dealers

Roger Rossmeisl, CPA
Automotive, Current Events
IRS Reopens Portal for 2024 Clean Vehicle Credit Claims, Offering Relief to Taxpayers and Dealers

In a significant update for taxpayers and auto dealers, the IRS has announced a critical change to its process for claiming clean vehicle credits for the 2024 tax year. This development, spurred by advocacy from the National Automobile Dealers Association (NADA), addresses widespread issues that prevented many from accessing the New Clean Vehicle Credit and the Previously-Owned Clean Vehicle Credit. Here’s what you need to know about this opportunity and how it could impact you. The Issue: Delays in Clean Vehicle Credit Processing For the 2024 tax year, claiming either the New Clean Vehicle Credit or the Previously-Owned Clean Vehicle Credit required dealers to submit IRS Form 15400, the Clean Vehicle Seller’s Report, through the IRS Energy Credits Online portal within 72 hours of a qualifying vehicle...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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