automotive cpa Archives - Page 16 of 34

President Trump issued a Presidential Memorandum on 8/8/20 directing the Treasury Secretary to defer certain payroll tax obligations of certain American workers. Employers were immediately faced with the decision of whether to defer taxes, or continue to withhold as usual. The primary reason for the hesitation was the unanswered questions regarding deferral, key among them being what happens when an employee resigns (or is terminated) before the end of the year. This Blog Post seeks to outline, as of the time of this writing, what is known, and not known, about the payroll tax deferral and what business owners should consider before deciding to move forward . . . or not. The Presidential Memorandum The Presidential Memorandum states that the Treasury Secretary may defer the withholding, deposit,...

22 Sep 2020

Changes to Excess Business Losses

The Coronavirus Aid, Relief and Economic Security (CARES) Act made changes to excess business losses. This includes some changes that are retroactive and there may be opportunities for some businesses to file amended tax returns. If you hold an interest in a business, or may do so in the future, here is more information about the changes. Deferral of the excess business loss limits The Tax Cuts and Jobs Act (TCJA) provided that net tax losses from active businesses in excess of an inflation-adjusted $500,000 for joint filers, or an inflation-adjusted $250,000 for other covered taxpayers, are to be treated as net operating loss (NOL) carryforwards in the following tax year. The covered taxpayers are individuals, estates and trusts that own businesses directly or as partners in a...

13 Sep 2020

Journal Entries May Signal Financial Statement Fraud

Journal Entries May Signal Financial Statement Fraud

With a median loss of $954,000, financial statement fraud is the costliest type of white-collar crime, according to the Association of Certified Fraud Examiners. Fortunately, auditors and forensic accountants may be able to detect inflated income and other financial manipulation by testing journal entries. Unearthing suspicious entries Financial statement frauds come in many forms. For example, out-of-period revenue can be recorded to inflate revenue. Repair costs can be improperly capitalized as fixed assets to boost earnings. Accounts payable can be understated by recording post-closing journal entries to income. Or expenses can be reclassified to reserves and intercompany accounts, thereby increasing earnings. To detect these types of scams, auditors: Learn about the company’s financial reporting process and controls over journal entries, Identify and select journal entries and other adjustments...

13 Sep 2020

Employers Have Questions About FICA Deferrals

Employers Have Questions About FICA Deferrals

The IRS has provided guidance to employers regarding the recent presidential action to allow employers to defer the withholding, deposit and payment of certain payroll tax obligations. The three-page guidance in Notice 2020-65 was issued to implement President Trump’s executive memorandum signed on August 8. Even with the guidance, employers have questions about FICA deferral, specifically whether, and how, to implement the optional deferral. The President’s action only defers the employee’s share of Social Security taxes; it doesn’t forgive them, meaning employees will still have to pay the taxes later unless Congress acts to eliminate the liability. (The payroll services provider for federal employers announced that federal employees will have their taxes deferred.) Deferral basics President Trump issued the memorandum in light of the COVID-19 crisis. He directed the...

06 Sep 2020

How to Protect Your Investment Accounts from Fraud

How to Protect Your Investment Accounts from Fraud

Because the average investment account boasts a much larger balance that a typical checking or savings account, cybercriminals are particularly interested in hacking them. Financial institutions are largely responsible for ensuring the security of these accounts, but business customers and consumers also should adopt defensive measures. Here are five recommendations for how to protect your investment accounts from fraud. Select two-step authentication. Most financial service providers give customers the option of using a two-step verification process to prevent unauthorized access to their accounts. A two-step approach requires you both to log in to your account with a password and to verify your identity with, for example, a one-time code sent to your mobile phone. Choose complex and unique passwords. Criminals often gain access to bank...

30 Aug 2020

How Fraudsters Steal Unemployment Benefits

How Fraudsters Steal Unemployment Benefits

When Congress authorized an additional $600 in monthly unemployment benefits as part of the CARES Act, out-of-work Americans weren’t the only ones it helped. Criminals have descended like locusts on state unemployment insurance agencies. How fraudsters steal unemployment benefits is by using stolen identities to fraudulently claim both standard benefits and the additional funds administered by the Pandemic Unemployment Assistance (PUA) program. States have lost hundreds of millions of dollars. Individuals have also suffered, as government efforts to control fraud have clogged up benefit systems and delayed payments to the jobless. States struggle Washington state was the first to experience a COVID-19 outbreak and has since estimated losses of $650 million to unemployment insurance fraud. According to the Secret Service, a scam was detected when someone noticed...

23 Aug 2020

Bartering is a Taxable Transaction

During the COVID-19 pandemic, many small businesses are strapped for cash. They may find it beneficial to barter for goods and services instead of paying cash for them. If your business gets involved in bartering, remember that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the bartering is a taxable transaction for both parties. For example, if a computer consultant agrees to exchange services with an advertising agency, both parties are taxed on the fair market value of the services received. This is the amount they would normally charge for the same services. If the parties agree to the value of the services in advance, that will be considered the fair market...

23 Aug 2020

Protect Customer Data When Working Virtually

Protect Customer Data When Working Virtually

With cyberthieves active during COVID-19, the Internal Revenue Service and its Security Summit partners today urged tax professionals and other business owners to review critical security steps to ensure they protect customer data when working virtually. Many tax professionals and other businesses have expanded telework options this year as firms and other businesses work to keep personnel safe, practice recommended safety guidelines and use technology to serve their clients/customer virtually. (This post is excerpted from IRS Information Release (IR) 2020-167 issued 7/21/20.) During this period, the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency (CISA) have urged organizations to maintain a heightened state of alert as cybercriminals seek to exploit Covid-19 concerns. To assist businesses with the security basics, the IRS, state tax agencies and nation's tax...

23 Aug 2020

Crime Has Adapted to COVID-19