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IRS Issues Guidance Related to the New Clean Vehicle Critical Mineral and Battery Components
As appearing in IRS Newswire IR-2023-64 The Internal Revenue Service just issued a proposed regulation related to certain requirements that must be met for critical minerals and battery components for the new clean vehicle credit. The Inflation Reduction Act (IRA) allows a maximum credit of $7,500 per vehicle, consisting of $3,750 in the case of [...]
Awarded Money in a Lawsuit or Settlement? It’s Only Tax-Free in Certain Circumstances
You generally must pay federal tax on all income you receive but there are some exceptions when you can exclude it. For example, compensatory awards and judgments for “personal physical injuries or physical sickness” are free from federal income tax under the tax code. This includes amounts received in a lawsuit or a settlement and [...]
Turn That Fraud Dispute into a Loyalty-Building Opportunity
If customers report fraud or suspicious charges on their accounts, what might seem like a challenge can actually be an opportunity for your business. Handle these disputes efficiently and you can regain — and even strengthen — customer loyalty. The alternative: angry customers, damage to your reputation and financial losses. Your customer dispute resolution processes [...]
Buying a New Business Vehicle? A Heavy SUV is a Tax-Smart Choice
If you’re buying or replacing a vehicle that you’ll use in your business, be aware that a heavy SUV may provide a more generous tax break this year than you’d get from a smaller vehicle. The reason has to do with how smaller business cars are depreciated for tax purposes. Depreciation rules Business cars are [...]
IRS Provides Roadmap on How to Value a Private Business
Revenue Ruling 59-60 is a landmark piece of IRS guidance that outlines the factors to consider when estimating the fair market value of a private business. Here’s an overview of those factors, along with other hidden details found in the ruling’s fine print. 8-factor approach Revenue Ruling 59-60 says that business valuation is an inexact [...]
Do You Run a Business from Home? You May be Able to Deduct Home Office Expenses
Many people began working from home during the COVID-19 pandemic — and many still work from their home offices either all the time or on a hybrid basis. If you’re self-employed and run your business from home or perform certain functions there, you might be able to claim deductions for home office expenses against your [...]
There Still May be Time to Make an IRA Contribution for Last Year
If you’re getting ready to file your 2022 tax return, and your tax bill is higher than you’d like, there may still be an opportunity to lower it. If you’re eligible, you can make a deductible contribution to a traditional IRA right up until this year’s April 18 filing deadline and benefit from the tax [...]
May 15 Tax Deadline Extended to October 16 for California Disaster Area Taxpayers
As reported in IR-2023-33 on 2/24/2023 Disaster-area taxpayers in most of California now have until October 16, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced last Friday. Previously, the deadline had been postponed to May 15, 2023 for these areas. The IRS is offering [...]
Child Tax Credit: The Rules Keep Changing But It’s Still Valuable
If you’re a parent, you may be confused about the rules for claiming the Child Tax Credit (CTC). The rules and credit amounts have changed significantly over the last six years. This tax break became more generous in 2018 than it was under prior law — and it became even better in 2021 for eligible [...]
Key Tax Issues in M&A Transactions
Merger and acquisition activity dropped dramatically last year due to rising interest rates and a slowing economy. The total value of M&A transactions in North America in 2022 was down 41.4% from 2021, according to S&P Global Market Intelligence. But some analysts expect 2023 to see increased M&A activity in certain industries. If you’re considering [...]
Can You Spot the Fraud Perpetrator? Look for Bad Behavior
Ask any business owner whose company has been defrauded by an employee, and you’ll probably hear a common refrain: “I never would have suspected that person!” In many cases, spotting fraud perpetrators before they commit a crime is difficult, especially if you don’t work closely with them on a daily basis. But many fraudsters exhibit [...]
Answers to Your Questions About 2023 Limits on Individual Taxes
Many people are more concerned about their 2022 tax bills right now than they are about their 2023 tax situations. That’s understandable because your 2022 individual tax return is due to be filed in 10 weeks (unless you file an extension). However, it’s a good time to familiarize yourself with tax amounts that may have [...]
Have Employees Who Receive Tips? Here are the Tax Implications
Many businesses in certain industries employ individuals who receive tips as part of their compensation. These businesses include restaurants, hotels and salons. Tip definition Tips are optional payments that customers make to employees who perform services. They can be cash or non-cash. Cash tips include those received directly from customers, electronically paid tips distributed to [...]
Valuing a Startup Business
Many startup ventures have never generated positive cash flow — or even revenue. How can a valuation analyst value a startup business when it has no track record? Without historical performance to rely on, valuators often turn to the entrepreneurs’ forecasts. However, no one can see into the future. So, prospective financial statements can be [...]
Retirement Plan Early Withdrawals: Make Sure You Meet the Requirements to Avoid a Penalty
Most retirement plan distributions are subject to income tax and may be subject to an additional penalty if you take an early withdrawal. What’s considered early? In general, it’s when participants take money out of a traditional IRA or other qualified retirement plan before age 59½. Such distributions are generally taxable and may be subject [...]
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.
