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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 [...]
5 Business Succession Options and Their Tax Implications
When it’s time to consider your business’s future, succession planning can protect your legacy and successfully set up the next generation of leaders or owners. Whether you’re ready to retire, you wish to step back your involvement or you want a solid contingency plan should you unexpectedly be unable to run the business, exploring different [...]
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 [...]
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 [...]
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 [...]
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 [...]
Speculative Financial Projections Won’t Pass Muster in Court
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 [...]
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 [...]
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 [...]
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 [...]
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.
