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Beware of Overly Optimistic Projections Used to Value a Business
Business valuation experts often rely on prospective financial statements when applying the discounted cash flow (DCF) method to value a private business interest. However, when management prepares financial projections for another purpose — such as a loan application — repurposing them to estimate fair market value for litigation purposes may raise a red flag. A [...]
Drive Down Your Business Taxes with Local Transportation Cost Deductions
Understanding how to deduct transportation costs could significantly reduce the tax burden on your small business. You and your employees likely incur various local transportation expenses each year, and they have tax implications. Let’s start by defining “local transportation.” It refers to travel when you aren’t away from your tax home long enough to require [...]
Senior Tax-Saving Alert: Make Charitable Donations from your IRA
If you’ve reached age 70½, you can make cash donations directly from your IRA to IRS-approved charities. These qualified charitable distributions (QCDs) may help you gain tax advantages. QCD basics QCDs can be made from your traditional IRA(s) free of federal income tax. In contrast, other traditional IRA distributions are wholly or partially taxable, depending [...]
Healthy Savings: How Tax-Smart HSAs Can Benefit your Small Business and Employees
As a small business owner, managing health care costs for yourself and your employees can be challenging. One effective tool to consider adding is a Health Savings Account (HSA). HSAs offer a range of benefits that can help you save on health care expenses while providing valuable tax advantages. You may already have an HSA. [...]
Know the Risks Before Outsourcing Business to Contractors
If your business is particularly busy, you may temporarily outsource some of its work to third-party contractors. Hiring contractors can be a cost-effective way to manage seasonal — or even ordinary — customer demands without hiring new employees or making other long-term investments. However, third parties can introduce some financial, legal and reputational risks. So [...]
When Can You Deduct Business Meals and Entertainment?
You’re not alone if you’re confused about the federal tax treatment of business-related meal and entertainment expenses. The rules have changed in recent years. Let’s take a look at what you can deduct in 2024. Current law The Tax Cuts and Jobs Act eliminated deductions for most business-related entertainment expenses. That means, for example, that [...]
How Inflation Will Affect Your 2024 and 2025 Tax Bills
Inflation can have a significant impact on federal tax breaks. While recent inflation has come down since its peak in 2022, some tax amounts will still increase for 2025. The IRS recently announced next year’s inflation-adjusted amounts for several provisions. Here are the highlights. Standard deduction. What does an increased standard deduction mean for you? [...]
Don’t Overlook the Cost Approach When Valuing a Private Business
There are three commonly accepted techniques for valuing a closely held business: the cost (or asset-based) approach, the market approach and the income approach. Valuation professionals routinely consider all three approaches before deciding which is most appropriate for the circumstances or choosing to use a blend of approaches. Some people mistakenly assume that the cost [...]
Get Tax Breaks for Energy-Saving Purchases This Year Because They May Disappear
The Inflation Reduction Act (IRA), enacted in 2022, created several tax credits aimed at promoting clean energy. You may want to take advantage of them before it’s too late. On the campaign trail, President-Elect Donald Trump pledged to “terminate” the law and “rescind all unspent funds.” Rescinding all or part of the law would require action [...]
Self-Employment Tax: A Refresher on How it Works
If you own a growing, unincorporated small business, you may be concerned about high self-employment (SE) tax bills. The SE tax is how Social Security and Medicare taxes are collected from self-employed individuals like you. SE tax basics The maximum 15.3% SE tax rate hits the first $168,600 of your 2024 net SE income. The [...]
Are Your Job Candidates Honest? A Look at Resumé Fraud
Job applicants must work hard to stand out in a crowded marketplace. For some, that means bending the truth — or outright lying — about their experience, skills and education. According to a survey performed by resumé-writing service StandOut CV, a staggering 64.2% of Americans have lied on their resumé at least once. Bad hires [...]
BOI Reporting Requirements Paused Again as of 12/27/2024
In a surprising turn of events, the Fifth Circuit Court of Appeals has reinstated a nationwide injunction that halts the enforcement of beneficial ownership information (BOI) reporting requirements. This decision, made on Thursday, reverses an earlier order from the same court issued just days prior. The court's latest action aims "to preserve the constitutional status [...]
FinCEN Extends BOI Reporting Deadline to 1/13/2025
Following a significant federal Court of Appeals decision on December 23, 2024, the Financial Crimes Enforcement Network (FinCEN) has once again mandated that reporting companies file Beneficial Ownership Information (BOI). However, recognizing the confusion and delay caused by a recent preliminary injunction, FinCEN has graciously extended the deadline for compliance. . Here's how it breaks [...]
U.S. Appeals Court Reinstates Beneficial Ownership Information Reporting Requirement
In a significant legal development, a U.S. Appeals Court has lifted a temporary block on the enforcement of a key anti-money laundering law, known as the Beneficial Ownership Information (BOI) reporting requirement. This decision ensures that the January 1, 2025, deadline for reporting will proceed as planned. . On Monday, a three-judge panel from the [...]
BOI Reporting Deadline Extension Proposed in House Budget Bill
Good news for small businesses: The deadline for filing Beneficial Ownership Information (BOI) reports might be extended by a year. The House of Representatives has proposed a continuing resolution that includes this extension, pushing the deadline from January 1, 2025, to January 1, 2026, for companies formed or registered before January 1, 2024. . This [...]
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.
