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Don’t Forget Income Taxes When Planning Your Estate
As a result of the current estate tax exemption amount ($12.06 million in 2022), many estates no longer need to be concerned with federal estate tax. Before 2011, a much smaller amount resulted in estate plans attempting to avoid it. But now, because many estates won’t be subject to estate tax, more planning can be [...]
Putting a Price Tag on Intangible Assets
Intangible assets — such as patents, copyrights and trademarks — are essential to the operations of many companies, but they’re rarely reported on the balance sheet. And even when they are reported due to an acquisition, book value is often based on historical cost under U.S. Generally Accepted Accounting Principles (GAAP). However, historical cost may [...]
Can Homeowners Deduct Seller-Paid Points?
In its latest report, the National Association of Realtors (NAR) announced that July 2022 existing home sales were down but prices were up nationwide, compared with last year. “The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” said NAR Chief Economist Lawrence Yun. However, he added that [...]
Don’t Let Fraud Break the Bonds of Your Family Business
According to Family Enterprise USA, 87% of U.S. companies are family businesses, which are responsible for 54% of gross domestic product or $7.7 trillion. Although family businesses are an economic pillar of strength, several studies have found that they’re more vulnerable to occupational fraud than other companies. Here’s what you need to know if you [...]
Separating Your Business From Its Real Estate
Does your business need real estate to conduct operations? Or does it otherwise hold property and put the title in the name of the business? You may want to rethink this approach. Any short-term benefits may be outweighed by the tax, liability and estate planning advantages of separating real estate ownership from the business. Tax [...]
Is Your Income High Enough to Owe Two Extra Taxes?
High-income taxpayers face two special taxes — a 3.8% net investment income tax (NIIT) and a 0.9% additional Medicare tax on wage and self-employment income. Here’s an overview of the taxes and what they may mean for you. 3.8% NIIT This tax applies, in addition to income tax, on your net investment income. The NIIT [...]
Valuing Goodwill in Divorce: Recent Cases Provide Insight
Goodwill is one of the most confusing aspects of valuing a business interest for divorce cases. In many states, goodwill needs to be valued and then divided into two pieces: business and personal goodwill. Unfortunately, significant differences in methods and theories exist on this complex issue, as recent case law demonstrates. Key definitions According to [...]
Year-End Tax Planning Ideas for your Small Business
Now that Labor Day has passed, it’s a good time to think about making moves that may help lower your small business taxes for this year and next. The standard year-end approach of deferring income and accelerating deductions to minimize taxes will likely produce the best results for most businesses, as will bunching deductible expenses [...]
Protect Your Public Company with an Insider Trading Policy
Successful stock trading requires access to information — preferably publicly available information. However, some investors attempt to get a jump on the market by using insider knowledge to make buying, selling and holding decisions. Federal and state laws prohibit trading by anyone with material nonpublic information about a stock’s underlying company. And it’s illegal for [...]
Home Sweet Home: Do You Qualify for Office Deductions?
If you’re a business owner working from home or an entrepreneur with a home-based side gig, you may qualify for valuable home office deductions. But not everyone who works from home gets the tax break. Employees who work remotely can’t deduct home office expenses under current federal tax law. To qualify for a deduction, you [...]
Valuing LLC Profits Interest Awards
Limited liability companies (LLCs) sometimes award employees and contractors a unique form of equity-based compensation known as “profits interests.” These interests aren’t actively sold on a public market, so a customized valuation approach is required. Here’s an overview of how business valuation pros determine what these awards are worth for tax and financial reporting purposes. [...]
Self Employed? Build a Nest Egg with a Solo 401(k) Plan
Do you own a successful small business with no employees and want to set up a retirement plan? Or do you want to upgrade from a SIMPLE IRA or Simplified Employee Pension (SEP) plan? Consider a solo 401(k) if you have healthy self-employment income and want to contribute substantial amounts to a retirement nest egg. [...]
An “Innocent Spouse” May Be Able to Escape Tax Liability
When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can come after either spouse to collect the entire tax — not just the part that’s attributed to one spouse or the other. This includes [...]
Using Adverse Media to Head Off Fraud
Many financial companies search for negative news, also known as “adverse media,” as part of their due diligence process for potential customers. But this type of screening isn’t only effective for banks. Any company can use adverse media to scrutinize customers, vendors and business partners. Screening these subjects can help uncover issues — such as [...]
Why an LLC Might be the Best Choice of Entity for Your Business
The business entity you choose can affect your taxes, your personal liability and other issues. A limited liability company (LLC) is somewhat of a hybrid entity in that it can be structured to resemble a corporation for owner liability purposes and a partnership for federal tax purposes. This duality may provide you with the best [...]
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.
