08 Dec 2019
0

Holiday Parties Provide Tax Breaks

Roger Rossmeisl, CPA
Small Business Tax Briefs
Holiday Parties Provide Tax Breaks

With Thanksgiving behind us, the holiday season is in full swing. At this time of year, your business may want to show its gratitude to employees and customers by giving them gifts or hosting holiday parties. It’s a good idea to understand the tax rules associated with these expenses. Holiday parties provide tax breaks.  Employee/client gifts may also be tax deductible by your business, but is the value taxable to the recipients? Customer and client gifts If you make gifts to customers and clients, the gifts are deductible up to $25 per recipient per year. For purposes of the $25 limit, you don’t need to include “incidental” costs that don’t substantially add to the gift’s value, such as engraving, gift wrapping, packaging or shipping. Also excluded from...

05 Dec 2019
0

Put the Brakes on Lapping Schemes

Roger Rossmeisl, CPA
Fraud Briefs
Put the Brakes on Lapping Schemes

Lapping is one of the most common ways crooked employees skim money from their employers. In these schemes, a perpetrator uses receipts from one account to cover theft from another. Here’s what it looks like and how you can put the brakes on lapping schemes. Starting small Lapping scams usually start small, with an employee pocketing a payment from ABC company and using a payment from XYZ company to hide the loss. As time goes on, however, the amounts get larger and the employee is forced to maintain detailed records to track the movement of money. This house of cards usually tumbles when the employee makes an error. One commonly cited example is the man who stole $150,000 by programming an elaborate computer scam based on 29-day cycles....

04 Dec 2019
0

Avoid the Wash Sale Rule When Selling Securities

Roger Rossmeisl, CPA
Individual Tax Briefs
Avoid the Wash Sale Rule When Selling Securities

If you’re planning to sell assets at a loss to offset gains that have been realized during the year, it’s important to be aware of, and avoid the wash sale rule. Avoid the wash sale rule: How the rule works Under this rule, if you sell stock or securities for a loss and buy substantially identical stock or securities back within the 30-day period before or after the sale date, the loss can’t be claimed for tax purposes. The rule is designed to prevent taxpayers from using the tax benefit of a loss without parting with ownership in any significant way. Note that the rule applies to a 30-day period before or after the sale date to prevent “buying the stock back” before it’s even sold. (If...

03 Dec 2019
0

Cost Segregation Studies Accelerate Depreciation

Roger Rossmeisl, CPA
Small Business Tax Briefs
Accelerate Depreciation Deductions with a Cost Segregation Study

Is your business depreciating over a 30-year period the entire cost of constructing the building that houses your operation? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And under current law, the potential benefits of cost segregation studies are now even greater than they were a few years ago due to enhancements to certain depreciation-related tax breaks. Depreciation basics Business buildings generally have a 39-year depreciation period (27.5 years for residential rental properties). Most times, you depreciate a building’s structural components, including walls, windows, HVAC systems, elevators, plumbing and wiring, along with the building. Personal property — such as equipment, machinery, furniture and fixtures — is eligible for...

02 Dec 2019
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Importance of an Estate Plan

Roger Rossmeisl, CPA
Estate Planning Briefs
Importance of an Estate Plan

Despite what you might think, the importance of an estate plan isn’t limited to only the rich and famous. In fact, your family is likely to benefit from a comprehensive plan that divides your wealth, protects your well-being and provides a compass for your family’s future. Dividing your wealth Estate planning is often associated with the division of your assets, and this is certainly a key component. It’s typically accomplished, for the most part, by drafting a will, which is the foundation of an estate plan. With a valid will, you determine who gets what. It can cover everything from the securities in your portfolio to personal property, such as cars, artwork or other family heirlooms. In contrast, if you die without a will — referred to as dying...

17 Nov 2019
0

Using Benford’s Law to Find Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Using Benfords Law to Find Fraud

Benford’s Law is a long-standing statistical precept that remains as relevant and widely accepted in fighting fraud as ever. By using Benford's Law to find fraud, experts can cut down fraudsters who unknowingly reveal their wrongdoings in dubious digits. Historical background The rule is named for Frank Benford, a physicist who noted that, in sets of random data, multidigit numbers beginning with 1, 2 or 3 are more likely to occur than those starting with 4 through 9. Studies have determined that numbers beginning with 1 will occur about 30% of the time, and numbers beginning with 2 will appear about 18% of the time. Those beginning with 9 will occur less than 5% of the time. Further, these probabilities have been described as both “scale invariant” and...

17 Nov 2019
0

Beware Tax-Related Scams

Roger Rossmeisl, CPA
Individual Tax Briefs
Beware Tax-Related Scams

“Thousands of people have lost millions of dollars and their personal information to tax scams,” according to the IRS. Criminals can contact victims through regular mail, telephone calls and email messages. Beware tax-related scams by being aware of these two scams the tax agency has seen in recent months. Fake property liens. A tax bill is sent from a fictional government agency in the mail. The fake agency may have a legitimate sounding name such as the Bureau of Tax Enforcement. The bill is accompanied by a letter threatening an IRS lien or levy based on bogus overdue taxes. (A levy is a legal seizure of property to satisfy a tax debt. A lien is a legal claim against your property to secure payment of...

17 Nov 2019
0

Estate Tax Relief for Family Businesses

Roger Rossmeisl, CPA
Estate Planning Briefs
Estate Tax Relief for Family Businesses

Fewer people currently are subject to transfer taxes than ever before. But gift, estate and generation-skipping transfer (GST) taxes continue to place a burden on families with significant amounts of wealth tied up in illiquid closely held businesses, including farms.  Fortunately, Internal Revenue Code §6166 provides some estate tax relief, allowing the estates of family business owners to defer estate taxes and pay them in installments if certain requirements are met. §6166 benefits For families with substantial closely held business interests, an election to defer estate taxes under §6166 can help them avoid having to sell business assets to pay estate taxes. It allows an estate to pay interest only (at modest rates) for four years and then to stretch out estate tax payments over 10 years in...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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