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4 Ways Corporate Business Owners Can Help Ensure Their Compensation is “Reasonable”
If you’re the owner of an incorporated business, you know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are paid as dividends, they’re taxed [...]
There’s a Favorable “Stepped-Up Basis” If You Inherit Property
A common question for people planning their estates or inheriting property is: For tax purposes, what’s the “cost” (or “basis”) an individual gets in property that he or she inherits from another? This is an important area and is too often overlooked when families start to put their affairs in order. Under the fair market [...]
Using Financial Statements to Value a Business
The starting point for a business valuation is generally the subject company’s financial statements. Here’s an overview of how historical financial statements can serve as the basis for a valuation professional’s conclusion under the cost, income and market approaches. Cost (or asset-based) approach Because the balance sheet identifies a company’s assets and liabilities, it can [...]
Taking Advantage of the Rehabilitation Tax Credit When Altering or Adding to Business Space
If your business occupies substantial space and needs to increase or move from that space in the future, you should keep the rehabilitation tax credit in mind. This is especially true if you favor historic buildings. The credit is equal to 20% of the qualified rehabilitation expenditures (QREs) for a qualified rehabilitated building that’s also [...]
Paperwork You Can Toss After Filing Your Tax Return
Once you file your 2022 tax return, you may wonder what personal tax papers you can throw away and how long you should retain certain records. You may have to produce those records if the IRS audits your return or seeks to assess tax. It’s a good idea to keep the actual returns indefinitely. But [...]
How Safe Are Your Business’s Paper Checks?
Recently, the Financial Crimes Enforcement Network (FinCEN) told U.S. financial institutions to exercise caution when processing paper checks because they might be fake. Paper checks? Didn’t those go the way of the dodo? Jokes aside, electronic transfers have indeed replaced paper checks for many consumer and business payments. Yet paper checks are still used at [...]
Retirement Saving Options for Your Small Business: Keep it Simple
If you’re thinking about setting up a retirement plan for yourself and your employees, but you’re worried 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) or a “savings incentive match plan for employees” (SIMPLE). SEPs are intended [...]
Tax Rules for Donating Artwork to Charity
If you’re an art collector, you may wonder about the tax breaks available for donating a work of art to charity. Several different tax rules may come into play in connection with such contributions. Basic rules Your deduction for a charitable contribution of art is subject to be reduced if the charity’s use of it [...]
Benchmarking to Gauge Risk in Business Valuation
Benchmarking — or comparing a company’s financials to those of industry peers and its own historical performance — can provide insight into future cash flows and operating risks. Business valuation professionals use the following types of benchmarks to assess company-specific risk and, in turn, a subject company’s expected return. Profitability Profitability metrics evaluate how much [...]
Some Taxpayers Qualify for More Favorable “Head of Household”Tax Filing Status
When preparing your tax return, we’ll check one of the following statuses: Single, married filing jointly, married filing separately, head of household or qualifying widow(er). Filing a return as a head of household is more favorable than filing as a single taxpayer. For example, the 2023 standard deduction for a single taxpayer is $13,850 while [...]
How to Outsmart Social Media Scammers
With billions of users worldwide, social media platforms can be a breeding ground for illicit activity — from simple identity theft to sophisticated and wide-ranging fraud schemes. Here’s an overview of some of the most common social media scams and tips to help prevent you or your business from becoming a fraud victim. Crooks find [...]
Choosing an Entity for Your Business? How About an S Corporation?
If you’re starting a business with some partners and wondering what type of entity to form, an S corporation may be the most suitable form of business for your new venture. Here are some of the reasons why. A big benefit of an S corporation over a partnership is that as S corporation shareholders, you won’t [...]
2023 Q2 Tax Calendar: Key Deadlines for Businesses and Employers
Here are some of the key tax-related deadlines that apply to businesses and other employers during the second quarter of 2023. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing [...]
7 Questions to Ask About a Business Valuation Report
Business valuation experts will usually provide formal written reports that explain how they arrived at their conclusions. Asking seven questions can help you determine whether an expert’s report is comprehensive and on-point. (1) Did the expert properly define the engagement? Most valuation reports start with a detailed description of the assignment. Beyond the name of [...]
Gift Tax Return Basics
Did you make large gifts to your children, grandchildren or other heirs last year? If so, it’s important to determine whether you’re required to file a 2022 gift tax return. And in some cases, even if it’s not required to file one, you may want to do so anyway. Filing requirements The annual gift tax [...]
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.
