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Explore SEP and SIMPLE Retirement Plans for Your Small Business
Suppose you’re thinking about setting up a retirement plan for yourself and your employees. However, you’re concerned about the financial commitment and administrative burdens involved. There are a couple of options to consider. Let’s take a look at a Simplified Employee Pension (SEP) and a Savings Incentive Match Plan for Employees (SIMPLE). SEPs offer easy [...]
Beyond the Fraud Risk Assessment: Managing Nuanced Threats
Annual fraud risk assessments can be very effective in finding obvious fraud threats and documenting internal controls that are in place to minimize them. However, these assessments can overlook evolving and behavioral risks that could cause significant financial losses if bad actors exploit them. You can help boost the power of your risk-reduction program by [...]
What Tax Documents Can Your Safely Shred? And Which Ones Should You Keep?
Once your 2024 tax return is in the hands of the IRS, you may be tempted to clear out file cabinets and delete digital folders. But before reaching for the shredder or delete button, remember that some paperwork still has two important purposes: Protecting you if the IRS comes calling for an audit, and Helping [...]
Divorcing Business Owners Can’t Afford to Skimp on Valuation Expertise
Dividing marital assets can be a long, complicated process, especially if a divorce case involves a private business interest. Failure to hire a business valuation professional — whether to try to save money or time — can prove disastrous in court. Complex valuation matters Business valuators can provide answers to five critical financial questions in [...]
Turn a Summer Job into Tax Savings: Hire Your Child and Reap the Rewards
With summer fast approaching, you might be considering hiring young people at your small business. If your children are also looking to earn some extra money, why not put them on the payroll? This move can help you save on family income and payroll taxes, making it a win-win situation for everyone! Here are three [...]
In the News: 3 Updated Fraud Risks
Fraud schemes are always evolving. Once frauds are widely publicized and consumers and businesses learn to spot common scams, enterprising criminals change their tactics. So even if you were able to recognize the red flags of fraud a couple of years ago, you may be vulnerable to new or tweaked scams in 2025. For the [...]
Small Business Alert: Watch Out for the 100% Penalty
Some tax sins are much worse than others. An example is failing to pay over federal income and employment taxes that have been withheld from employees’ paychecks. In this situation, the IRS can assess the trust fund recovery penalty, also called the 100% penalty, against any responsible person. It’s called the 100% penalty because the [...]
Discover if you Qualify for “Head of Household” Tax Filing Status
When you prepare your tax return, you’ll check one of the following filing statuses: single, married filing jointly, married filing separately, head of household or qualifying widow(er). Only some people are eligible to file a return as a head of household. But if you’re one of them, it’s more favorable than filing as a single [...]
FAQs About the Excess Earnings Method in Business Valuation
Valuation professionals use various methods to determine the fair market value of a private business or business interest. One of the more debated techniques is the excess earnings method. Here are answers to some common questions about this controversial method. What’s the excess earnings method? The U.S. Department of the Treasury originally developed the excess [...]
Are You a Tax-Favored Real Estate Professional?
For federal income tax purposes, the general rule is that rental real estate losses are passive activity losses (PALs). An individual taxpayer can generally deduct PALs only to the extent of passive income from other sources, if any. For example, if you have positive taxable income from other rental properties, that generally counts as passive [...]
Deduct a Loss from Making a Personal Loan to a Relative or Friend
Suppose your adult child or friend needs to borrow money. Maybe it’s to buy a first home or address a cash flow problem. You may want to help by making a personal loan. That’s a nice thought, but there are tax implications that you should understand and take into account. Get it in writing You [...]
Keep Password “Spraying” from Compromising your Network
Cybercriminals are always looking for novel ways to gain unauthorized access to online accounts and IT networks. Password “spraying” is a newer scheme you and your IT department need to know about and guard against. Traditional cyberattacks attempt to breach a single account with multiple password attempts. But password spraying schemes use common passwords to [...]
6 Essential Tips for Small Business Payroll Tax Compliance
Staying compliant with payroll tax laws is crucial for small businesses. Mistakes can lead to fines, strained employee relationships and even legal consequences. Below are six quick tips to help you stay on track. (1) Maintain organized records Accurate recordkeeping is the backbone of payroll tax compliance. Track the hours worked, wages paid and all [...]
Turning Stock Downturns into Tax Advantages
Have you ever invested in a company only to see its stock value plummet? (This may become relevant in light of recent market volatility.) While such an investment might be something you’d rather forget, there’s a silver lining: you can claim a capital loss deduction on your tax return. Here are the rules when a [...]
A Blueprint for Valuing Construction Companies
Determining the value of a construction company is complex and requires a deep understanding of industry-specific challenges and financial metrics. Whether a construction business owner is planning a sale or merger, securing financing, preparing for succession, or navigating legal matters, an accurate valuation is essential. Professional valuation experts analyze a range of factors unique to [...]
Disclaimer
This blog is designed to provide competent and reliable information regarding the subject matter covered. However, it is being provided with the understanding that the blogmaster is not engaged in rendering investment advice. Laws and practices often vary from state to state and if investment assistance is required, the services of a licensed investment professional should be sought. The blogmaster resolutely encourages the reader/viewer to do their own research and due diligence before acting on any information contained herein. As such, Roger Rossmeisl specifically disclaims any liability that is incurred from the use or application of the contents of this blog. It should also be noted that the views contained in this blog are not necessarily representative of the opinions/beliefs of the other owners, management and/or employees of Kho & Patel CPAs.
