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How Series EE Savings Bonds are Taxed
Many people have Series EE savings bonds that were purchased many years ago. Perhaps they were given to your children as gifts or maybe you bought them yourself and put them away in a file cabinet or safe deposit box. You may wonder: How is the interest you earn on EE bonds taxed? And if [...]
How is Disability Income Taxed?
Many Americans receive disability income. You may wonder . . . if, and how is disability income taxed? As is often the case with tax questions, the answer is … it depends. The key factor is who paid for the benefit. If the income is paid directly to you by your employer, it’s taxable to [...]
Controls are Ineffective When Managers Go Rogue
Management overrides of internal controls can make your company more vulnerable to fraud. This is true even when managers have innocent intentions — for example, they don’t feel they have time to follow proper accounts payable procedures because a vendor is requesting immediate payment. Your company is at even higher risk of fraud losses . [...]
Tax Responsibilities of COVID-Closed Businesses
Unfortunately, the COVID-19 pandemic has forced many businesses to shut down. If this is your situation, we’re here to assist you in any way we can, including taking care of the various tax responsibilities of COVID-closed businesses that must be met. Of course, a business must file a final income tax return and some other [...]
Tax Issues Divorcing Couples Should Understand
When a couple is going through a divorce, taxes are probably not foremost in their minds. But without proper planning and advice, some people find divorce to be an even more taxing experience. Several tax concerns need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are [...]
Support Black-Owned Businesses 11/28/2020
(This is Blog Post #929)
11/28/20 is Small Business Saturday
(This is Blog Post #928)
Ghost Employees and Other Payroll Scams
Ghost employees and other payroll scams are trouble for employers. They may be just as fictional as the paranormal activities in your favorite scary book or movie, but if you have ghost employees on your payroll, you have fraud. And if you have fraud, you have potentially significant financial losses. Anatomy of a scheme Ghost [...]
IRS Issues Guidance on Deductibility of PPP Loan-Funded Expenditures
Timing of Non-Deductibility of Forgiven PPP Loan-Funded Expenditures In guidance issued on 11/18/2020, the IRS has made it clear that taxpayers with a "reasonable expectation" that their Paycheck Protection Program (PPP) loan will be forgiven may not deduct expenditures that were paid with the proceeds of those loans, even if the actual forgiveness has not [...]
New Business? Start a Retirement Plan
If you recently launched a business, you may want to set up a tax-favored retirement plan for yourself and your employees. There are several types of qualified plans that are eligible for these tax advantages: A current deduction from income to the employer for contributions to the plan, Tax-free buildup of the value of plan [...]
California Small Business Hiring Credit FAQs
The California Legislature passed, and the governor signed, Senate Bill 1447 (click here for FTB Bill Analysis) into law creating a new small business hiring credit (SBHC) for small businesses impacted by economic disturbances in 2020. The Small Business Hiring Credit is also referred to as the “Main Street Hiring Credit”. Overview Taxpayers can use [...]
Mutual Fund Buy-Sell Tax Pitfalls
If you invest in mutual funds, be aware of some potential mutual fund buy-sell tax pitfalls that can surprise the unwary. Surprise sales You may already have made taxable “sales” of part of your mutual fund investment without knowing it. One way this can happen is if your mutual fund allows you to write checks [...]
21st Century Forensic Accounting
Forensic accountants are engaged for a wide variety of assignments, among them investigating fraud, auditing internal controls and quantifying damages associated with legal disputes. All of these require attention to detail and a diverse set of skills including mathematical, technological, legal and investigative. But the accounting landscape and client needs are constantly changing. Here’s how [...]
2021 Social Security Wage Base is Increasing
If your small business is planning for payroll next year, be aware that the 2021 Social Security wage base is increasing. The Social Security Administration recently announced that the maximum earnings subject to Social Security tax will increase from $137,700 in 2020 to $142,800 in 2021. For 2021, the FICA tax rate for both employers and [...]
IRS Expands Enforcement Focus on Abusive Micro-Captive Insurance Schemes
In IR 2020-226, the Internal Revenue Service, on 10/1/2020, encouraged taxpayers to consult an independent tax advisor if they participated in a micro-captive insurance transaction. The IRS encourages any taxpayer who has continued to engage in an abusive micro-captive insurance transaction to not anticipate being able to settle its transaction with the IRS or Chief [...]
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.
