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How to Work with a Forensic Accountant
Forensic accountants are professionals who have received specialized training to uncover fraud and protect against fraud threats. They’re uniquely qualified to review financial statements and business records and to interview employees to find evidence of misrepresentations and theft. In many cases, they’re able to help recover missing funds. So if you suspect fraud and possibly [...]
The Deductibility of Corporate Expenses Covered by Officers or Shareholders
Do you play a major role in a closely held corporation and sometimes spend money on corporate expenses personally? These costs may wind up being nondeductible both by an officer and the corporation unless proper steps are taken. This issue is more likely to arise in connection with a financially troubled corporation. Deductible vs. nondeductible [...]
California AB-150 Provides SALT Cap Work-Around
While Congress develops legislation that would eliminate, and/or otherwise mitigate, the current TCJA implemented state and local tax (SALT) limit on an individual taxpayer's ability to take the itemized deduction for state and local taxes, California has just passed legislation which offers a work-around that will allow many Californians to mitigate the effects of the [...]
“Stepped-Up Basis” on Inherited Property – Will it Last?
If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. The current rules Under the current fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death value. So, [...]
Preventing Fraud in your Construction Company
Fraud is costly for all victimized companies, but it’s even worse in the construction sector. According to the Association of Certified Fraud Examiners’ Report to the Nations: 2020 Global Study on Occupational Fraud and Abuse, construction companies affected by fraud lose a median $200,000 per fraud incident, compared with $125,000 per incident for all organizations. [...]
How New Business Start-up Expenses are Handled on your Tax Return
Despite the COVID-19 pandemic, government officials are seeing a large increase in the number of new businesses being launched. From June 2020 through June 2021, the U.S. Census Bureau reports that business applications are up 18.6%. The Bureau measures this by the number of businesses applying for an Employer Identification Number. Entrepreneurs often don’t know [...]
Can Taxpayers Who Manage Their Own Investment Portfolios Deduct Related Expenses?
Do you have significant investment-related expenses, including the cost of subscriptions to financial services, home office expenses and clerical costs? Under current tax law, these expenses aren’t deductible through 2025 if they’re considered investment expenses for the production of income. But they’re deductible if they’re considered trade or business expenses. For years before 2018, production-of-income [...]
Who in your Business Can Be Hit with the “Trust Fund Recovery Penalty”?
There’s a harsh tax penalty that you could be at risk for paying personally if you own or manage a business with employees. It’s called the “Trust Fund Recovery Penalty” and it applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because taxes are considered [...]
Prevent Conflicts of Interest from Costing Your Business
Without trust between you and your employees, your business probably wouldn’t be very successful. Delegating responsibility, sharing ideas, working as a team — all require a certain level of trust. However, too much trust can lead to occupational fraud and conflicts of interest. To maintain the proper balance, establish a policy that outlines your disclosure [...]
How Fraud Perpetrators Target Military Personnel and Veterans
According to the Federal Trade Commission, veterans lost approximately $60 million to fraud in 2020. Active-duty military personnel and their spouses and dependents also suffered big financial losses to fraud last year. In fact, in 2020, military consumers lost more than the general public to fraud — a median $600 compared to $311 for nonmilitary [...]
10 Facts About the Pass-Through Deduction for Qualified Business Income
Are you eligible to take the deduction for qualified business income (QBI)? Here are 10 facts about this valuable tax break, referred to as the pass-through deduction, QBI deduction or §199A deduction. It’s available to owners of sole proprietorships, single member limited liability companies (LLCs), partnerships and S corporations. It may also be claimed by [...]
IRS Audits May Be Increasing, So Be Prepared
The IRS just released its audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them. Latest statistics Overall, just 0.5% [...]
Can Non-Working Spouses Contribute to an IRA?
Married couples may not be able to save as much as they need for retirement when one spouse doesn’t work outside the home — perhaps so that spouse can take care of children or elderly parents. In general, an IRA contribution is allowed only if a taxpayer earns compensation. However, there’s an exception involving a [...]
Are You Liable for Fraudulent Credit and Debit Card Charges?
Credit and debit card fraud was already a big problem when COVID-19 hit. Although how much payment card fraud increased in 2020 depends on the source, most experts agree that, like most types of fraud, it flourished during the pandemic. COVID-19-related prevention and treatment scams and increased online shopping likely contributed to this rise. If [...]
Seniors May Be Able to Write Off Medicare Premiums
Are you age 65 and older and have basic Medicare insurance? You may need to pay additional premiums to get the level of coverage you want. The premiums can be expensive, especially if you’re married and both you and your spouse are paying them. But there may be a bright side: You may qualify for [...]
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.
