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Don’t Mistake Kickbacks for Gifts
Kickbacks return a portion of the money exchanged in a business transaction as compensation for favorable treatment. They’re illegal in the United States and many other countries. Don't mistake kickbacks for gifts. Because kickbacks are often disguised as gifts, travel and entertainment, they can be hard to identify. Don't mistake kickbacks for gifts: intention of [...]
Consider Taxes When Retiring in Another State
When you retire, you may consider moving to another state — say, for the weather or to be closer to your loved ones. That said, don’t forget to consider taxes when retiring in another state as part of the equation. Establishing residency for state tax purposes may be more complicated than it initially appears to [...]
Summer Hire Tax Credits May Be Available
Is your business hiring this summer? If so, there may be some summer hire tax credits available to you. If the employees come from certain “targeted groups,” you may be eligible for the Work Opportunity Tax Credit (WOTC). This includes youth whom you bring in this summer for two or three months. The maximum credit [...]
Social Security Phone Scams
Despite the National Do Not Call registry and features such as caller ID, phone fraud is thriving in the mobile phone era. Using spoofed numbers — which appear to be connected to legitimate government offices and businesses or that resemble your own number — fraud perpetrators say anything and everything to try to steal your [...]
Beware the 100% Payroll Tax Penalty
If federal income tax and employment taxes (including Social Security) are withheld from employees’ paychecks and not handed over to the IRS, the so-called 100% Payroll Tax Penalty can be imposed. To make matters worse, the penalty can be assessed personally against a “responsible individual.” If a business makes payroll tax payments late, there are [...]
Dynasty Trusts Provide a Legacy
If a prime objective of your estate plan is to leave your mark, dynasty trusts provide a legacy. That means it might be the right estate planning vehicle for you. The Tax Cuts and Jobs Act substantially increased the generation-skipping transfer (GST) tax exemption. That makes a dynasty trust more appealing than ever. GST tax [...]
Chances of IRS Audit are Down
The IRS just released its audit statistics for the 2018 fiscal year, and the chances of IRS audit are down. Fewer taxpayers had their returns examined as compared with prior years. Even though less returns are being audited, that will be little consolation if yours is one of them. Chances of IRS audit are down: [...]
Consider a Roth 401(k) Plan
Roth 401(k) accounts have been around for 13 years now. Studies show that more employers are offering them each year. A recent study by the Plan Sponsor Council of America (PSCA) found that Roth 401(k) Plans are now available at 70% of employer plans, up from 55.6% of plans in 2016. However, despite the prevalence [...]
Employee Conflicts of Interest
One of the governing principles of the employee/employer relationship is that employees have a fiduciary duty to act in their employer’s interests. Undisclosed employee conflicts of interest can be a serious breach of this duty. In fact, when employees aren't on your side, companies often suffer financial consequences. Employee conflicts of interest: ignorance isn’t bliss [...]
Construction Company Anti-Fraud Checklist
According to the Association of Certified Fraud Examiners’ Report to the Nations: 2018 Global Study on Occupational Fraud and Abuse, organizations victimized by fraud lose a median $130,000. But construction companies, in particular, are even harder hit, with a median loss of $227,000. What can you do to protect your construction business? Adopt this construction [...]
Combining Business with Pleasure Travel
Summer is here, so you might be thinking about getting some vacation time. If you’re self-employed or a business owner, you have a golden opportunity for combining business with pleasure travel for a few extra days and offset some of the cost with a tax deduction. But be careful, or you might not qualify for [...]
Key Q3 2019 Deadlines for Businesses
Here are some of the key Q3 2019 deadlines for businesses and other employers that are tax related. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. July 31 Report income tax withholding and FICA taxes for the second quarter of 2019 (Form 941) and pay [...]
Leaving Specific Assets to Specific Heirs
Planning your estate around specific assets is risky and, in most cases, should be avoided. If you are leaving specific assets to specific heirs (such as homes, cars or stock), you may inadvertently disinherit them. Leaving specific assets to specific heirs: Illustrating the problem Let’s say Debbie has three children — Abbie, Mary Kate and [...]
Tax Implications of Selling Your Home
Spring and summer are the optimum seasons for selling a home. And interest rates are currently attractive, so buyers may be out in full force in your area. Freddie Mac reports that the average 30-year fixed mortgage rate was 4.14% during the week of May 2, 2019, while the 15-year mortgage rate was 3.6%. This [...]
Formula Funding Clause in Older Estate Plans
The gift and estate tax exemption is higher than it’s ever been. You can thank the Tax Cuts and Jobs Act (TCJA) for that. TCJA temporarily doubled the exemption to an inflation-adjusted $10 million. $20 million for married couples who design their estate plans properly. This year, the exemption amount is $11.4 million ($22.8 million [...]
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.
