19 Dec 2024
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BOI Reporting Deadline Extension Proposed in House Budget Bill

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
BOI Reporting Deadline Extension Proposed in House Budget Bill

Good news for small businesses: The deadline for filing Beneficial Ownership Information (BOI) reports might be extended by a year. The House of Representatives has proposed a continuing resolution that includes this extension, pushing the deadline from January 1, 2025, to January 1, 2026, for companies formed or registered before January 1, 2024. . This 1,500-page funding bill, aimed at preventing a government shutdown by extending funding through to March 14, 2025, is up for a vote soon. Section 122 of the document specifically addresses this extension, amending the existing law to reflect the new deadline. . AICPA's Role in Advocacy . Melanie Lauridsen, Vice President of Tax Policy & Advocacy at the AICPA, celebrated this move in a LinkedIn post, noting it as a long-fought victory. The AICPA, along with...

17 Dec 2024
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To File or Not to File: Navigating BOI Reporting After the Texas Injunction

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
To File or Not to File: Navigating Beneficial Ownership Information Reporting after the Texas Injunction

The landscape of compliance with the Beneficial Ownership Information (BOI) Reporting requirement under the Corporate Transparency Act (CTA) has changed dramatically following a recent federal court decision. Here’s what businesses need to know about the current status and next steps. . Background on the Corporate Transparency Act The CTA mandates that certain businesses report detailed information about their beneficial owners, officers, and control persons to the Financial Crimes Enforcement Network (FinCEN). This law, aimed at curbing money laundering, terrorist financing, and tax evasion, was set to see its first major compliance deadline on January 1, 2025. However, the path to enforcement has hit significant roadblocks. . Legal challenges have been mounting, with multiple lawsuits questioning the constitutionality of the CTA. A pivotal moment came when the U.S. District Court for...

15 Dec 2024
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Unlocking the Mystery of Taxes on Employer-Issued Non-Qualified Stock Options

Roger Rossmeisl, CPA
Individual Tax Briefs
Unlocking the Mystery of Taxes on Employer-Issued Non-Qualified Stock Options

Employee stock options remain a potentially valuable asset for employees who receive them. For example, many Silicon Valley millionaires got rich (or semi-rich) from exercising stock options when they worked for start-up companies or fast-growing enterprises. We’ll explain what you need to know about the federal income and employment tax rules for employer-issued nonqualified stock options (NQSOs). Tax planning objectives  You’ll eventually sell shares you acquire by exercising an NQSO, hopefully for a healthy profit. When you do, your tax planning objectives will be to: 1. Have most or all of that profit taxed at lower long-term capital gain rates. 2. Postpone paying taxes for as long as possible. Tax results when acquiring and selling shares NQSOs aren’t subject to any tax-law restrictions, but they also confer no special tax advantages. That...

15 Dec 2024
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The Amount You and Your Employees Can Save for Retirement is Going Up Slightly in 2025

Roger Rossmeisl, CPA
Small Business Tax Briefs
The Amount You and Your Employees Can Save for Retirement is Going Up Slightly in 2025

How much can you and your employees contribute to your 401(k)s or other retirement plans next year? In Notice 2024-80, the IRS recently announced cost-of-living adjustments that apply to the dollar limitations for retirement plans, as well as other qualified plans, for 2025. With inflation easing, the amounts aren’t increasing as much as in recent years. 401(k) plans The 2025 contribution limit for employees who participate in 401(k) plans will increase to $23,500 (up from $23,000 in 2024). This contribution amount also applies to 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan. The catch-up contribution limit for employees age 50 or over who participate in 401(k) plans and the other plans mentioned above will remain $7,500 (the same as in 2024). However, under the...

15 Dec 2024
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Donating Private Stock? Be Sure to Get a Business Valuation

Roger Rossmeisl, CPA
Valuation Briefs
Donating Private Stock? Be Sure to Get a Business Valuation

While many people donate cash or volunteer for their favorite causes, charities also welcome donations of company stock. Stock donations can offer a tax bonus to donors if the shares have appreciated. However, obtaining a business valuation from a “qualified appraiser” is critical to reap the tax benefits from a donation of private stock. Tax benefits If you’re feeling generous this year, you’re not alone. Total charitable giving in the United States is expected to increase by 4.2% in 2024, according to “The Philanthropy Outlook 2024–2025” by the Indiana University Lilly Family School of Philanthropy. This projected growth rate significantly outpaces the annualized average of 1.9% over the past 10 years. Tax breaks may be available for charitable contributions. But only donors who itemize deductions on their 2024...

15 Dec 2024
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The Nanny Tax: What Household Employers Need to Know

Roger Rossmeisl, CPA
Individual Tax Briefs
The Nanny Tax: What Household Employers Need to Know

Hiring household help, whether you employ a nanny, housekeeper or gardener, can significantly ease the burden of childcare and daily chores. However, as a household employer, it’s critical to understand your tax obligations, commonly called the “nanny tax.” If you hire a household employee who isn’t an independent contractor, you may be liable for federal income tax and other taxes (including state tax obligations). If you employ a household worker, you aren’t required to withhold federal income taxes from pay. But you can choose to withhold if the worker requests it. In that case, ask the worker to fill out a Form W-4. However, you may be required to withhold Social Security and Medicare (FICA) taxes and to pay federal unemployment (FUTA) tax. 2024 and 2025 thresholds In...

15 Dec 2024
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Help Protect Your Employees’ 401(k) Plan Savings from Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Help Protect Your Employees' 401(k) Plan Savings from Fraud

Recently, a 401(k) plan participant was defrauded of approximately $740,000 when he fell victim to an elaborate scheme perpetrated by overseas criminals. However, even friends, family members and employers have been discovered stealing from 401(k) accounts, adding up to millions of dollars in losses every year. Here’s what your organization can do to help keep your employees’ retirement savings safe from theft. Assessing existing protections If your organization sponsors a 401(k) plan, assessing plan service providers’ protection systems and policies is essential. Most providers carry cyber fraud insurance that they extend to plan participants. But there may be limits to this protection if, for example, the provider determines that you (the sponsor) or employees (participants) opened the door to a security breach. Your plan’s documents may say that...

15 Dec 2024
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From Flights to Meals: A Guide to Business Travel Tax Deductions

Roger Rossmeisl, CPA
Small Business Tax Briefs
From Flights to Meals: A Guide to Business Travel Tax Deductions

As a business owner, you may travel to visit customers, attend conferences, check on vendors and for other purposes. Understanding which travel expenses are tax deductible can significantly affect your bottom line. Properly managing travel costs can help ensure compliance and maximize your tax savings. Your tax home Eligible taxpayers can deduct the ordinary and necessary expenses of business travel when away from their “tax homes.” Ordinary means common and accepted in the industry. Necessary means helpful and appropriate for the business. Expenses aren’t deductible if they’re for personal purposes, lavish or extravagant. That doesn’t mean you can’t fly first class or stay in luxury hotels. But you’ll need to show that expenses were reasonable. Your tax home isn’t necessarily where you maintain your family home. Instead, it...

15 Dec 2024
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You Don’t Have to Be in Business to Deduct Certain Vehicle Expenses

Roger Rossmeisl, CPA
Individual Tax Briefs
You Don't Have to Be in Business to Deduct Certain Vehicle Expenses

When you think about tax deductions for vehicle-related expenses, business driving may come to mind. However, businesses aren’t the only taxpayers that can deduct driving expenses on their returns. Individuals may also be able to deduct them in certain circumstances. Unfortunately, under current law, you may be unable to deduct as much as you could years ago. How the TCJA changed deductions For years before 2018, miles driven for business, moving, medical and charitable purposes were potentially deductible. For 2018 through 2025, business and moving miles are deductible only in much more limited circumstances. The changes resulted from the Tax Cuts and Jobs Act (TCJA), which could also affect your tax benefit from medical and charitable miles. Before 2018, if you were an employee, you potentially could deduct...

15 Dec 2024
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How Can You Build a Golden Nest Egg If You’re Self-Employed?

Roger Rossmeisl, CPA
Small Business Tax Briefs
How Can Your Build a Golden Nest Egg if you're Self-Employed?

If you own a small business with no employees (other than your spouse) and want to set up a retirement plan, consider a solo 401(k) plan. This is also an option for self-employed individuals or business owners who wish to upgrade from a SIMPLE IRA or Simplified Employee Pension (SEP) plan. A solo 401(k), also known as an individual 401(k), may offer advantages in terms of contributions, tax savings and investment options. These accounts are geared toward self-employed individuals, including sole proprietors, owners of single-member limited liability companies, consultants and other one-person businesses. How much can you contribute? You can make large annual tax-deductible contributions to a solo 401(k) plan. For 2024, you can make an “elective deferral contribution” of up to $23,000 of your net self-employment (SE)...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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