03 Dec 2023
0

There May Still Be Time to Reduce your Small Business 2023 Tax Bill

Roger Rossmeisl, CPA
Small Business Tax Briefs
There May Still Be Time to Reduce Your Small Business 2023 Tax Bill

In the midst of holiday parties and shopping for gifts, don’t forget to consider steps to cut the 2023 tax liability for your business. You still have time to take advantage of a few opportunities. Time deductions and income If your business operates on a cash basis, you can significantly affect your amount of taxable income by accelerating your deductions into 2023 and deferring income into 2024 (assuming you expect to be taxed at the same or a lower rate next year). For example, you could put recurring expenses normally paid early in the year on your credit card before January 1 — that way, you can claim the deduction for 2023 even though you don’t pay the credit card bill until 2024. In certain circumstances, you also can...

03 Dec 2023
0

Levels of Value: Why it Matters in a Business Valuation

Roger Rossmeisl, CPA
Valuation Briefs
Levels of Value: Why it Matters in a Business Valuation

A business may have more than one value, depending on the purpose of the business valuation and the characteristics of the ownership interest. Before an expert starts working on a business valuation, it’s important to discuss the appropriate level of value. Otherwise, confusion over levels of value may lead to miscommunication and misinformed business decisions. Moreover, when multiple experts calculate different levels of value, discrepancies and disputes abound. Here’s an overview of the three main levels of value. 1. Controlling interests Control value is one level. The ability to control a business’s decisions has impact on value, especially on the value of a closely held business. Potential buyers often may be willing to pay a premium for the ability to control business decisions. The key to arriving...

26 Nov 2023
0

Unclaimed Property Voluntary Compliance Program Now Available in California

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Unclaimed Property Voluntary Compliance Program Now Available in California

California AB 2280 established a new Unclaimed Property Voluntary Compliance Program that waives interest for taxpayers who voluntarily come into compliance with unclaimed property reporting requirements. The State Controller’s Office (SCO) has now opened the sign up process for businesses to apply for the program. Unclaimed Property Reporting Explained California businesses holding property belonging to others must file with the SCO to report unclaimed financial assets held by the entity for longer than the dormancy period applicable to the property in question (see “Unclaimed Property Explained” below). Failure to comply without reasonable cause Businesses that fail to comply with the unclaimed property reporting requirements, and do not have reasonable cause, are subject to interest assessed at the rate of 12% on the value of the unclaimed property. There exists...

26 Nov 2023
0

Filing a Final Return for a Deceased Taxpayer

Roger Rossmeisl, CPA
Individual Tax Briefs
Filing a Final Return for a Deceased Taxpayer

As reported via IRS Tax Tip 2023-51 4/17/2023 After someone with a filing requirement passes away, their surviving spouse or representative should file the deceased person's final tax return. On the final tax return, the surviving spouse or representative should note that the person has died. The IRS doesn't need a copy of the death certificate or other proof of death. Usually, the representative filing the final tax return is named in the person's will or appointed by a court. Sometimes when there isn't a surviving spouse or appointed representative, a personal representative will file the final return and attach Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Things to know about filing the final tax return Generally, the final individual income tax return of a deceased...

26 Nov 2023
0

Tax Basics for Setting up a Businesses

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Basics for Setting up a Business

As reported via IRS Tax Tip 2023-103 9/5/2023 Starting a new business can seem overwhelming for new entrepreneurs or even seasoned professionals. The IRS has resources to help new business owners understand the tax responsibilities of running a business. Here are a few things any entrepreneur needs to do when starting their business. Choose a business structure The form of business determines which income tax return a business needs to file. The most common business structures are: Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business. Partnership: An unincorporated business with ownership shared between two or more members. Corporation: Also known as a C corporation. It's a separate entity owned by shareholders. S Corporation: A corporation that elects to pass corporate income,...

26 Nov 2023
0

Individual Home Energy Tax Credits for 2023

Roger Rossmeisl, CPA
Individual Tax Briefs
Individual Home Energy Tax Credits for 2023

Taxpayers who make home energy improvements in 2023 may be able to benefit from tax credits for a portion of the qualifying expenses. The credit amounts have been increased, and types of qualifying expenses were expanded, by the Inflation Reduction Act of 2022. This post is intended to assist taxpayers in comparing the tax credits available for making energy home improvements.  Who can claim energy credits There are two energy-related credits available to taxpayers who make qualifying improvements to their home: the Energy Efficient Home Improvement Credit,or the Residential Energy Clean Property Credit. A taxpayer may claim these credits in the year the qualifying improvement has been made to their primary home. Ordinarily, a taxpayer's primary home is where the taxpayer spends most of their time. Additionally, qualification...

26 Nov 2023
0

Tax Tips for New Parents

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Tips for New Parents

As reported via IRS Tax Tip 2023-89 in October 2019 Kids are expensive. Whether someone just brought a bundle of joy home from the hospital, adopted a teen from foster care, or is raising their grandchild. There are several tax breaks that can help. Here are some tax tips for new parents Get the child a Social Security or Individual Tax Identification number To claim parental tax breaks, the taxpayer must have their child or dependent's Social Security number, Adoption Tax Identification Number or Individual Tax Identification number. Confirming a child's birth is the only way the IRS can verify that the parent is eligible for the credits and deductions they claim on their tax return.   Check withholding A new family member might make taxpayers eligible for new credits...

26 Nov 2023
0

Employment Tax Considerations When Hiring Parents or Children

Roger Rossmeisl, CPA
Small Business Tax Briefs
Employment Tax Considerations When Hiring Parents or Children

As reported via IRS Fact Sheet 2019-14  in October 2019 One of the advantages of someone running their own business is hiring family members. But when including family members in business operations, certain tax treatments and employment tax rules apply. Here are some facts to know when working with a spouse, parent or child. Both spouses carrying on the trade or business If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a formal partnership agreement. If so, they should report income or loss from the business on Form 1065. They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. But, the spouses...

26 Nov 2023
0

Is Your Side Hustle a Hobby or a Business?

Roger Rossmeisl, CPA
Individual Tax Briefs
Is Your Side Hustle a Hobby or a Business?

As reported via IRS Tax Tip 2023-61  on 5/3/2023 Sometimes the line between having a hobby and running a business can be confusing, but knowing the difference is important because hobbies and businesses are treated differently when it's time to file a tax return. The biggest difference between the two is that businesses operate to make a profit while hobbies are for pleasure or recreation. Whether someone is having fun with a hobby or running a business, if they accept more than $600 for goods and services using online marketplaces or payment apps, they could receive a Form 1099-K. Profits from the sale of goods, including personal items, and services is taxable income that must be reported on tax returns. There are a few other things people should...

25 Nov 2023
0

An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt

Roger Rossmeisl, CPA
Individual Tax Briefs, Small Business Tax Briefs
An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt

As reported via IRS Tax Tip 2023-58  on 4/27/2023 When a taxpayer can't pay their full tax liability or if paying would cause financial hardship, they may want to consider applying for an Offer in Compromise. This agreement between a taxpayer and the IRS settles a tax debt for less than the full amount owed. The goal is a compromise that's in the best interest of both the taxpayer and the agency. The application fee for an offer in compromise is $205. Low-income taxpayers don't have to pay this fee, and they should check if they meet the definition of low-income in the instructions for Form 656, Offer in Compromise. When reviewing applications, the IRS considers the taxpayer's unique set of facts and special circumstances affecting their...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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