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Filing Jointly or Separately as a Married Couple: What’s the Difference?
When you file your tax return, a tax filing status must be chosen. This status is used to determine your standard deduction, tax rates, eligibility for certain tax breaks and your correct tax. The five filing statuses are: Single Married filing jointly, Married filing separately, Head of household, and Qualifying surviving spouse. If you’re married, [...]
Factoring Industry Risk into the Business Valuation Equation
There’s generally a trade-off between risk and return in business valuation. Investors expect to receive a higher return as a company exposes them to greater risk. Industry-specific risk is an important consideration when estimating an investor’s expected return. Here’s how valuators measure industry risk and factor it into their analyses. Key factors Virtually every business [...]
9 Tax Considerations if you’re Starting a Business as a Sole Proprietor
When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. Here are nine considerations: 1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, you’re currently eligible to claim [...]
If You Gave to Charity in 2023, Check to See That Your Have Substantiation
Did you donate to charity last year? Acknowledgment letters from the charities you gave to may have already shown up in your mailbox. But if you don’t receive such a letter, can you still claim a deduction for the gift on your 2023 income tax return? It depends. What the law requires To prove a [...]
Keep Fraud Off Your Restaurant’s Menu
The restaurant business is notoriously tough — even without the many fraud threats. The fact is, when you’re operating on very thin profit margins, you can’t afford to lose a cent to thieves. To protect your business from ill-intentioned employees, customers and vendors, take steps to fortify your restaurant against fraud. Gaps for exploitation Your [...]
Update on IRS Efforts to Combat Questionable ERTC Claims
The Employee Retention Tax Credit (ERTC) was introduced back when COVID-19 temporarily closed many businesses. The credit provided cash that helped enable struggling businesses to retain employees. Even though the ERTC expired for most employers at the end of the third quarter of 2021, it could still be claimed on amended returns after that. According [...]
IRAs: Build a Tax-Favored Retirement Nest Egg
Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t changed is that they can help you save for retirement on [...]
Should Your Business Offer the New Emergency Savings Accounts to Employees?
As part of the SECURE 2.0 law, there’s a new benefit option for employees facing emergencies. It’s called a pension-linked emergency savings account (PLESA) and the provision authorizing it became effective for plan years beginning January 1, 2024. The IRS recently released guidance about the accounts (in Notice 2024-22) and the U.S. Department of Labor [...]
Ready, Set, Value!
When the parties know what to expect at each phase of a business valuation project, it makes the process easier for everyone. This awareness promotes collaboration and timeliness, as well as minimizes potential surprises, misunderstandings and rework. Here’s the five-step process that’s used when valuing a business or interest in a business. Engaging a valuation [...]
Answers to Your Tax Season Questions
The IRS announced it opened the 2024 income tax return filing season on January 29. That’s when the tax agency began accepting and processing 2023 tax year returns. Here are answers to seven tax season questions we receive at this time of year. (1) What are this year’s deadlines? The filing deadline to submit 2023 [...]
Generative AI Can Help Prevent, Detect and Investigate Fraud
You may already be familiar with artificial intelligence (AI) and even use it in business applications. What about generative AI (Gen AI)? Gen AI typically is used to create new content (such as text, images, code and video) from raw data and includes such popular systems as Grok, ChatGPT and DALL-E. Gen AI can also [...]
Tax-Favored Qualified Small Business Corporation Status Could Help Your Thrive
Operating your small business as a Qualified Small Business Corporation (QSBC) could be a tax-wise idea. Tax-free treatment for eligible stock gains QSBCs are the same as garden-variety C corporations for tax and legal purposes — except QSBC shareholders are potentially eligible to exclude from federal income tax 100% of their stock sale gains. That [...]
The Kiddie Tax Could Affect Your Children Until They’re Young Adults
The so-called “kiddie tax” can cause some of a child’s unearned income to be taxed at the parent’s higher marginal federal income tax rates instead of at the usually much lower rates that a child would otherwise pay. For purposes of this federal income tax provision, a “child” can be up to 23 years old. [...]
Timing Counts When Valuing a Business
In today’s uncertain markets, the value of a business may change significantly over time. So it’s important to choose the valuation date carefully. Often, the date is prescribed by law or a judge. But sometimes attorneys or others, such as the executor in an estate valuation, are allowed to decide between different dates. A fundamental [...]
Does Your Business Have Employees Who Get Tips? You May Qualify for a Tax Credit
If you’re an employer with a business where tipping is routine when providing food and beverages, you may qualify for a federal tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. Credit fundamentals The FICA credit applies to tips that your staff members receive from customers [...]
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.
