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An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt
As reported via IRS Tax Tip 2023-58 on 4/27/2023 When a taxpayer can't pay their full tax liability or if paying would cause financial hardship, they may want to consider applying for an Offer in Compromise. This agreement between a taxpayer and the IRS settles a tax debt for less than the full amount owed. [...]
Understanding Digital Asset Reporting and Tax Requirements
As reported via IRS Tax Tip 2023-45 on 4/5/2023 All taxpayers that filed a 2022 tax year Forms 1040 and 1040-SR were required to check a box indicating whether they received digital assets as a reward, award or payment for property or services or disposed of any digital asset that was held as a capital [...]
How to Treat Tips for Tax Purposes
As reported via IRS Fact Sheet 2022-37 in October 2022 Tip income is taxable and must be reported People who work in restaurants, salons, hotels and similar industries often receive tips for the customer service they provide. Tips can be taxable income, but it's important for people working in these areas to understand important details [...]
Tax Responsibilities When Closing a Business
As reported via Tax Tip 2022-122 on 8/10/2022 There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It's also important to notify the IRS of their plans. Business owners must take these steps when closing a business: File a [...]
Beware of Disaster Charity Scams
As reported via IR-2022-119 on 8/4/2022 People should donate carefully after a disaster After an emergency or disaster, people rally to help victims by donating money. Unfortunately, this can give criminals an opportunity to prey on them by soliciting donations for fake charities. Scammers may also pose as federal agencies to dupe disaster victims trying [...]
What is Residual Fraud Risk – and What Can Your Business Do About It?
By regularly analyzing risk, business owners and executives can better understand and manage the likelihood and potential impact of fraud. In general, there are two types of business risk: inherent and residual. Inherent risk is what exists before management takes steps to mitigate the organization’s exposure. Residual risk is what remains after management has implemented [...]
Key 2024 Inflation-Adjusted Tax Parameters for Small Businesses and their Owners
The IRS recently announced various inflation-adjusted federal income tax amounts. Here’s a rundown of the amounts that are most likely to affect small businesses and their owners. Rates and brackets If you run your business as a sole proprietorship or pass-through business entity (LLC, partnership or S corporation), the business’s net ordinary income from operations [...]
Key 2024 Inflation-Adjusted Tax Amounts for Individuals
The IRS recently announced various 2024 inflation-adjusted federal tax amounts that affect individual taxpayers. Most of the federal income tax rate bracket thresholds are about 5.4% higher than for 2023. That means that you can generally have about 5.4% more income next year without owing more to the federal government. Standard deduction Here are the [...]
Master Class in Automotive Modular Assembly
As posted to the AutoLine Network YouTube Channel on 9/11/2023 (Run Time 10 min, 13 sec) AutoLine's John McElroy interviews Caresoft's Han Ly at the International Motor/Mobility Show in Munich. Caresoft, a company that specializes in vehicle teardowns and benchmarking, provides insights into how Tesla designs its cars for modular assembly, notably how it eliminates [...]
IRS Outlines Withdrawal Process for Employee Retention Tax Credit (ERTC) Claims
As reported via IR-2023-193 on 10/19/2023 Special initiative aimed at helping businesses concerned about an ineligible claim amid aggressive marketing, scams As part of a larger effort to protect small businesses and organizations from scams, the Internal Revenue Service announced the details of a special withdrawal process to help those who filed an Employee Retention [...]
11 Exceptions to the 10% Penalty Tax on Early IRA Withdrawals
If you’re facing a serious cash shortfall, one possible solution is to take an early withdrawal from your traditional IRA. That means one before you’ve reached age 59½. For this purpose, traditional IRAs include simplified employee pension (SEP-IRA) and SIMPLE-IRA accounts. Here’s what you need to know about the tax implications, including when the 10% [...]
A Cost Segregation Study May Cut Taxes and Boost Cash Flow
Is your business depreciating over 30 years the entire cost of constructing the building that houses your enterprise? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. Depreciation basics Business buildings generally have a 39-year depreciation period [...]
Beware of Fixed-Value Provisions and Other Business Valuation Faux Pas in Buy-Sell Agreements
Buy-sell agreements are a critical tool for closely held businesses and professional practices. The valuation provisions of these agreements play a significant role when buyouts happen. Unfortunately, shareholders in a New York law firm recently learned a hard lesson: While a fixed-value provision has the benefit of simplicity, failure to tie that formula to the [...]
What You Need to Know About Restricted Stock Awards
Restricted stock awards are a popular way for companies to offer equity-oriented executive compensation. Some businesses offer them instead of stock option awards. The reason: Options can lose most or all of their value if the price of the underlying stock takes a dive. But with restricted stock, if the stock price goes down, your [...]
Choosing a Business Entity: Which Way to Go?
If you’re planning to start a business or thinking about changing your business entity, you need to determine what will work best for you. Should you operate as a C corporation or a pass-through entity such as a sole-proprietorship, partnership, limited liability company (LLC) or S corporation? There are many issues to consider. Currently, the corporate federal [...]
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.
