11 Nov 2019
0

Business Owners Should be Prepared for IRS Audits

Roger Rossmeisl, CPA
Small Business Tax Briefs
Business Owners Should be Prepared for IRS Audits

Many business owners ask: How can I avoid an IRS audit? The good news is that the odds against being audited are in your favor. In fiscal year 2018, the IRS audited approximately 0.6% of individuals. Businesses, large corporations and high-income individuals are more likely to be audited but, overall, audit rates are historically low.  That said, business owners should be prepared. There’s no 100% guarantee that you won’t be picked for an audit, because some tax returns are chosen randomly. However, completing your returns in a timely and accurate fashion with our firm certainly works in your favor. And it helps to know what might catch the attention of the IRS. Business owners should be prepared: audit red flags A variety of tax-return entries may raise red...

08 Nov 2019
0

Typosquatters Profit from Common User Errors

Roger Rossmeisl, CPA
Fraud Briefs
Typosquatters profit from common user errors

The Web has opened plenty of new avenues for criminal behavior. For example, you may have heard of cybersquatting. Someone registers a site’s domain name that includes a trademark and then tries to profit by selling that name to the trademark owner.  But are you familiar with typosquatting? You should be because typosquatters profit from common user errors.  These schemes can make just about any organization, along with visitors to its website, the victims of fraud. Fat fingers Like cybersquatting, typosquatting (also known as URL hijacking) involves the purchase of domain names in bad faith. It takes advantage of an inclination among users known as “fat fingers” — basically, our tendency to hit the wrong keys and enter misspelled trademarks or brands. For example, in a case involving...

07 Nov 2019
0

Crummey Trusts Are Still Relevant

Roger Rossmeisl, CPA
Estate Planning Briefs
Crummey Trusts are Still Relevant

Traditionally, trusts used in estate planning contain “Crummey” withdrawal powers to ensure that contributions qualify for the annual gift tax exclusion. Today, the exclusion allows you to give up to $15,000 per year ($30,000 for married couples) to any number of recipients.  Now that the gift and estate tax exemption has reached an inflation-adjusted $11.4 million, fewer people have to worry about gift and estate taxes. But, for many affluent people, the annual exclusion continues to be an important estate planning strategy. Thus, Crummey trusts are still relevant. Reasons to make annual exclusion gifts Despite the record-high exemption, there are two important reasons to make annual exclusion gifts. First, if your wealth exceeds the exemption amount, an annual gifting program can reduce or even eliminate your liability for...

06 Nov 2019
0

When is Tax Due on Series EE Savings Bonds?

Roger Rossmeisl, CPA
Individual Tax Briefs
When is Tax Due on Series EE Savings Bonds?

You may have Series EE savings bonds that were bought many years ago. Perhaps you store them in a file cabinet or safe deposit box and rarely think about them. You may wonder how the interest you earn on EE bonds is taxed. And if they reach final maturity, you may need to take action to ensure there’s no loss of interest or unanticipated tax consequences. Series EE Savings Bonds: Interest Deferral 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 were sold at half their face value. For example, if you own a $50 bond, you paid $25 for it. The...

05 Nov 2019
0

Why Affinity Fraud is Particularly Heinous

Roger Rossmeisl, CPA
Fraud Briefs
Why Affinity Fraud is Particularly Heinous

Affinity fraud is particularly heinous.  Perpetrators exploiting connections of race, religion, age, politics and profession is one of the cruelest forms of criminal deception. Fraudsters often belong to the groups they target and, in addition to stealing money, weaken the bonds within communities. Affects individuals and businesses Affinity fraud targets individuals. But it can also hurt businesses if a big chunk of their workforce is affected. If your company employs a large percentage of immigrants, for example, they may be susceptible to fraud perpetrated by other immigrants and could, as a result, be left penniless. In addition to the effect such emotional trauma can have on company morale, it could make employees more susceptible to stealing in their own efforts to recoup their losses. Even people who usually...

04 Nov 2019
0

Business Website Cost Tax Treatment

Roger Rossmeisl, CPA
Small Business Tax Briefs
How to Treat Your Business Website Costs for Tax Purposes

These days, most businesses need a website to remain competitive. It’s an easy decision to set one up and maintain it. But determining the proper tax treatment for the costs involved in developing a website isn’t so easy.  That's because the IRS hasn’t yet released guidance on business website cost tax treatment.  Consequently, you must apply existing guidance on other costs to the issue of website development costs. Hardware and software First, let’s look at the hardware you may need to operate a website. The costs involved fall under the standard rules for depreciable equipment. Specifically, once these assets are up and running, you can deduct 100% of the cost in the first year they’re placed in service (before 2023). This favorable treatment is allowed under the...

27 Oct 2019
0

Tax Credits for College Costs

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Credits for College Costs

We all know the cost of college is expensive. The latest figures from the College Board show that the average annual cost of tuition and fees was $10,230 for in-state students at public four-year universities — and $35,830 for students at private not-for-profit four-year institutions. These amounts don’t include room and board, books, supplies, transportation and other expenses that a student may incur.  If only there were tax credits for college costs. Two tax credits Fortunately, the federal government offers two sizable tax credits for college costs that you may be able to claim: The American Opportunity credit. This tax break generally provides the biggest benefit to most taxpayers. The American Opportunity credit provides a maximum benefit of $2,500. That is, you may qualify for a...

27 Oct 2019
0

Get the Goods on Hidden Assets

Roger Rossmeisl, CPA
Fraud Briefs
Get the Goods on Hidden Assets

Hidden assets can be an issue in a variety of contexts — from divorce to bankruptcy to fraud. An acrimonious divorce, ownership dispute or occupational theft incident could all lead an individual or business to wrongfully hide items of value. In such cases, fraud experts use a variety of tools to uncover the assets — and the truth.  Here's how to get the goods on hidden assets. Net worth analysis Experts often start their searches with a net worth analysis that looks at changes in a person’s worth, reconciling those changes with income and expenses. The first step is to reconstruct this data, which may involve some detective work. Experts search for clues in a variety of places, including: Bank records, Real estate and court filings, Payroll...

27 Oct 2019
0

How to Withdraw Cash from your Corporation

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
How to Withdraw Cash from your Corporation

Do you want to withdraw cash from your closely held corporation at a low tax cost? The easiest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient, since it’s taxable to you to the extent of your corporation’s “earnings and profits.” But it’s not deductible by the corporation. Fortunately, there are several alternative methods that may allow you to withdraw cash from a corporation while avoiding dividend treatment. Here are five ideas: (1) Capital repayments To the extent that you’ve capitalized the corporation with debt, including amounts that you’ve advanced to the business, the corporation can repay the debt without the repayment being treated as a dividend. Additionally, interest paid on the debt can be deducted by the corporation. This assumes that the...

27 Oct 2019
0

Tax Issues When Divorcing

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Issues When Divorcing

In addition to the difficult personal issues that divorce entails, several tax concerns need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are four tax issues when divorcing that you should to understand. (1) Alimony or support payments For alimony under divorce or separation agreements that are executed after 2018, there’s no deduction for alimony and separation support payments for the spouse making them. And the alimony payments aren’t included in the gross income of the spouse receiving them. (The rules are different for divorce or separation agreements executed before 2019.) (2) Child support No matter when the divorce or separation instrument is executed, child support payments aren’t deductible by the paying spouse (or taxable to...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

RECENT BLOG ENTRIES

JOIN OUR E-NEWS

LET’S GET SOCIAL

Twitter
Facebook
LinkedIn
logo ©2019 Roger Rossmeisl | Effusion