20 Feb 2025
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FinCEN Reinstates Beneficial Ownership Reporting Mandate with New March 21, 2025 Deadline

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
FinCEN Reinstates Beneficial Ownership Information Mandate with New March 21, 2025 Deadline

In a major development for U.S. businesses, the Financial Crimes Enforcement Network (FinCEN) has announced the reinstatement of the beneficial ownership information (BOI) reporting mandate under the Corporate Transparency Act (CTA). The decision comes on the heels of a February 18, 2025, ruling by the U.S. District Court for the Eastern District of Texas, which lifted a preliminary injunction in the case of Smith, et al. v. U.S. Department of the Treasury, et al. (Case No. 6:24-cv-00336). With this ruling, the filing requirement is back in effect, and a new deadline of March 21, 2025, has been set for most reporting companies. This announcement, detailed in FinCEN Notice FIN-2025-CTA1, marks a significant shift after months of legal uncertainty surrounding the CTA’s BOI requirements. The reinstated mandate...

16 Feb 2025
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Savings Bonds and Taxes: What You Need to Know

Roger Rossmeisl, CPA
Individual Tax Briefs
Savings Bonds and Taxes: What You Need to Know

When considering the advantages of U.S. Treasury savings bonds, you may appreciate their relative safety, simplicity and government backing. However, like all interest-bearing investments, savings bonds come with tax implications that are important to understand. Deferred interest Series EE Bonds dated May 2005 and after earn a fixed rate of interest. Bonds purchased between May 1997 and April 30, 2005, earn a variable market-based rate of return. Paper Series EE Bonds, issued between 1980 and 2012, were sold at half their face value. For example, you paid $25 for a $50 bond. The bond isn’t worth its face value until it matures. New electronic EE Bonds earn a fixed rate of interest that’s set before you buy the bond. They earn that rate for the first 20 years,...

16 Feb 2025
0

Operating as a C Corporation: Weigh the Benefits and Drawbacks

Roger Rossmeisl, CPA
Small Business Tax Briefs
Operating as a C Corporation: Weigh the Benefits and Drawbacks

When deciding on the best structure for your business, one option to consider is a C corporation. This entity offers several advantages and disadvantages that may significantly affect your business operations and financial health. Here’s a detailed look at the pros and cons of operating as a C corporation. Tax implications A C corporation allows the business to be treated and taxed separately from you as the principal owner. The corporate tax rate is currently 21%, which is lower than the highest non-corporate tax rate of 37%. One of the primary disadvantages of a C corporation is double taxation. The corporation’s profits are taxed at the corporate level and then any dividends distributed to shareholders are taxed again at the individual level. This can result in a higher overall tax...

16 Feb 2025
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It’s Critical to Set the Stage Before Valuing a Business

Roger Rossmeisl, CPA
Valuation Briefs
It's Critical to Set the Stage Before Valuing a Business

Before you contact a business valuation professional, ask yourself the following five questions to help streamline the valuation process and avoid unnecessary confusion down the road: (1) Who’s hiring the valuator? The party that hires a valuation expert is typically responsible for putting up a retainer and paying the invoices. Attorneys may ask the client to hire the valuator directly to avoid collection issues. However, attorneys sometimes hire the valuator directly to help preserve attorney-client privilege. When businesses are valued for non-litigation purposes, the company (or its owners) typically assumes responsibility for hiring and paying the valuator. (2) What’s being valued? Identify exactly what’s being valued. Provide the valuator with basic information, such as: The company’s name, The type of entity (S corporation, partnership or trust), and The...

16 Feb 2025
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Adoption Tax Credits: Easing the Financial Journey of Parenthood

Roger Rossmeisl, CPA
Individual Tax Briefs
Adoption Tax Credits: Easing the Financial Journey of Parenthood

There are two tax breaks that help eligible parents offset the expenses of adopting a child. In 2025, adoptive parents may be able to claim a credit against their federal tax for up to $17,280 of “qualified adoption expenses” for each child. This is up from $16,810 in 2024. A tax credit is a dollar-for-dollar reduction of tax. Also, adoptive parents may be able to exclude from an employee’s gross income up to $17,280 in 2025 ($16,810 in 2024) of qualified expenses paid by an employer under an adoption assistance program. Both the credit and the exclusion are phased out if the parents’ income exceeds certain limits detailed below. Parents can claim both a credit and an exclusion for the expenses of adopting a child. But they...

16 Feb 2025
0

BEC Fraud: How to Protect Your Business from a Growing Threat

Roger Rossmeisl, CPA
Fraud Briefs
BEC Fraud: How to Protect Your Business from a Growing Threat

Business e-mail compromise (BEC) has emerged as one of the most financially damaging online crimes. According to the FBI’s Internet Crime Complaint Center (IC3), organizations lost nearly $56 billion across approximately 305,000 incidents between October 2013 and December 2023. Increasingly, gift cards are playing a key role in BEC scams. Understanding how these schemes work can help prevent them from harming your business. Role of gift cards To steal from companies, BEC perpetrators use social engineering and computer intrusion techniques. Their goal is to trick email users into transferring funds to them. Although several BEC variations are active, cybercriminals usually impersonate senior executives and target lower-level employees by asking workers to fulfill what might seem like routine requests. These include sending money via wire or writing a check. In...

16 Feb 2025
0

Tax Treatment of Intangible Assets

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Treatment of Intangible Assets

Intangible assets, such as patents, trademarks, copyrights and goodwill, play a crucial role in today’s businesses. The tax treatment of these assets can be complex, but businesses need to understand the issues involved. Here are some answers to frequently asked questions. What are intangible assets? The term “intangibles” covers many items. Determining whether an acquired or created asset or benefit is intangible isn’t always easy. Intangibles include debt instruments, prepaid expenses, non-functional currencies, financial derivatives (including, but not limited to, options, forward or futures contracts, and foreign currency contracts), leases, licenses, memberships, patents, copyrights, franchises, trademarks, trade names, goodwill, annuity contracts, insurance contracts, endowment contracts, customer lists, ownership interests in any business entities (for example, corporations, partnerships, LLCs, trusts and estates) and other rights, assets, instruments and...

07 Feb 2025
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Update on BOI Reporting from FinCEN 02-06-25 Alert

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
Update on BOI Reporting from FinCEN 02-06-25 Alert

In a significant development for businesses across the United States, the legal landscape surrounding the Corporate Transparency Act (CTA) has taken a pivotal turn with the case of Smith et al. v. U.S. Department of the Treasury. Here’s what you need to know about the current state of affairs and what might lie ahead: The Legal Background On January 7, 2025, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case Smith v. U.S. Department of the Treasury, halting the enforcement of the CTA's beneficial ownership information (BOI) reporting requirements. This decision was a direct response to concerns raised by the plaintiffs, Samantha Smith and Robert Means, regarding the applicability and implications of these regulations on their businesses. Recent Developments The Department...

21 Jan 2025
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Your Guide to Medicare Premiums and Taxes

Roger Rossmeisl, CPA
Individual Tax Briefs
Your Guide to Medicare Premiums and Taxes

Medicare health insurance premiums can add up to big bucks — especially if you’re upper-income, married, and you and your spouse both pay premiums. Read on to understand how taxes fit in. Premiums for Part B coverage  Medicare Part B coverage is commonly called Medicare medical insurance. Part B mainly covers doctors’ visits and outpatient services. Eligible individuals must pay monthly premiums for this benefit. Medicare is generally for people 65 or older. It’s also available earlier to some people with disabilities, and those with end-stage renal disease and ALS. The monthly premium for the current year depends on your modified adjusted gross income (MAGI), as reported on your Form 1040 for two years earlier. MAGI is the adjusted gross income (AGI) number on your Form 1040 plus...

21 Jan 2025
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Beware of Overly Optimistic Projections Used to Value a Business

Roger Rossmeisl, CPA
Valuation Briefs
Beware of Overly Optimistic Projections Used to Value a Business

Business valuation experts often rely on prospective financial statements when applying the discounted cash flow (DCF) method to value a private business interest. However, when management prepares financial projections for another purpose — such as a loan application — repurposing them to estimate fair market value for litigation purposes may raise a red flag. A recent New York statutory appraisal case provides a cautionary tale worth considering. Unrealistic projections sink expert’s analysis In Magarik v. Kraus USA, Inc., both parties in a buyout dispute hired business valuation professionals to estimate the fair value of the petitioning shareholder’s 24% interest in an S corporation that sold upscale plumbing fixtures. Although both experts applied the income and market approaches, their value conclusions were widely disparate. The shareholder’s expert estimated the value...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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