What it Will Take to Build a Better Automotive Battery Supply Chain

As posted to the Climate One YouTube page on 7/17/23 Run Time 58 minutes, 47 seconds (when beginning at Time Stamp 21:33) Climate One clip description: Demand for lithium ion batteries is expected to grow 500% by 2030, and the race for raw materials is on. Lithium mines around the world are opening or expanding, while children as young as six in the Congo carry sacks of cobalt-laced rocks on their backs for less than $2 a day. Recycling presents promising opportunities, yet before millions of batteries can be recycled, they have to be made in the first place. At the same time, advances in battery chemistry continue to be made, and it’s not hard to imagine a near future when batteries don’t require lithium or cobalt at...

Reduce the Impact of the 3.8% Net Investment Income Tax

High-income taxpayers face a regular income tax rate of 35% or 37%. And they may also have to pay a 3.8% net investment income tax (NIIT) that’s imposed in addition to regular income tax. Fortunately, there are some ways you may be able to reduce its impact. Affected taxpayers The NIIT applies to you only if modified adjusted gross income (MAGI) exceeds: $250,000 for married taxpayers filing jointly and surviving spouses, $125,000 for married taxpayers filing separately, $200,000 for unmarried taxpayers and heads of household. The amount subject to the tax is the lesser of your net investment income or the amount by which your MAGI exceeds the threshold ($250,000, $200,000, or $125,000) that applies to you. Net investment income includes interest, dividend, annuity, royalty and rental income, unless...

Traveling for Business This Summer? Here's What You Can Deduct

If you and your employees are traveling for business this summer, there are a number of considerations to keep in mind. Under tax law, in order to claim deductions, you must meet certain requirements for out-of-town business travel within the United States. The rules apply if the business conducted reasonably requires an overnight stay. Note: Under the Tax Cuts and Jobs Act, employees can’t deduct their unreimbursed travel expenses on their own tax returns through 2025. That’s because unreimbursed employee business expenses are “miscellaneous itemized deductions” that aren’t deductible through 2025. However, self-employed individuals can continue to deduct business expenses, including away-from-home travel expenses. Rules that come into play The actual costs of travel (for example, plane fare and cabs to the airport) are deductible for out-of-town business trips....

Good Acquisition? Not if Your Sellers Hiding Something

If you’re considering buying a company, fraud may be the last thing on your mind. Unfortunately, you can’t afford to ignore the possibility that your acquisition target is hiding something — possibly something that will have negative financial and legal implications after the deal is complete. To ensure the transaction is what it appears to be, acquaint yourself with the issues and include a forensic accounting expert on your deal team. Look at the numbers During the due diligence process of a merger or acquisition, forensic experts review financial statements for subtle warning signs of fraud. These include excess inventory, a large number of write-offs, an unusually high number of voided discounts for returns, insufficient documentation of sales and increased purchases from new vendors. Another suspicious sign...

Benefits of a Living Trust for Your Estate

You may think you don’t need to make any estate planning moves because of the generous federal estate tax exemption of $12.92 million for 2023 (effectively $25.84 million if you’re married). However, if you have significant assets, you should consider establishing a living trust to avoid probate. Probate is a court-supervised legal process intended to make sure a deceased person’s assets are properly distributed. However, going through probate typically means red tape, legal fees and your financial affairs becoming public information. You can avoid this with a living trust (also commonly called a family trust, grantor trust and revocable trust). How they work You establish the living trust and transfer legal ownership of assets for which you wish to avoid probate to it (such as your main home,...

Keep These DOs and DON'Ts in Mind When Deducting Business Meal and Vehicle Expenses

If you’re claiming deductions for business meals or auto expenses, expect the IRS to closely review them. In some cases, taxpayers have incomplete documentation or try to create records months (or years) later. In doing so, they fail to meet the strict substantiation requirements set forth under tax law. Tax auditors are adept at rooting out inconsistencies, omissions and errors in taxpayers’ records, as illustrated by one recent U.S. Tax Court case. Facts of the case In the case, a married couple claimed $13,596 in car and truck expenses, supported only by mileage logs that weren’t kept contemporaneously and were made using estimates rather than odometer readings. The court disallowed the entire deduction, stating that “subsequently prepared mileage records do not have the same high degree of...

Business Valuation Pros Can Wear Two Hats

In adversarial situations — such as divorces, contract breaches and shareholder disputes — you might need to hire an outside business valuator to evaluate complex financial matters. To get the most from these professionals, it’s important to understand the two key roles they can play in conflict resolution. Keeping these roles separate helps prevent valuators from being seen as “hired guns” by judges, juries, arbitrators and mediators. Expert witnesses Valuators often serve as expert witnesses in litigation. In this role, they may provide written opinions and verbal testimony on financial issues concerning: The value of a business, including the fair market value or fair value of a specific owner’s business interest, Economic damages, including temporary lost profits and diminution in business value, Formal rebuttal of...

Being a Gig Worker Comes With Tax Consequences

In recent years, many workers have become engaged in the “gig” economy. You may think of gig workers as those who deliver take-out restaurant meals, walk dogs and drive for ride-hailing services. But so-called gig work seems to be expanding. Today, some nurses have become gig workers and writers in Hollywood who recently went on strike have expressed concerns that screenwriting is becoming part of the gig economy. There are tax consequences when performing jobs that don’t involve taxes being deducted from a regular paycheck. The bottom line: If you receive income from freelancing or from one of the online platforms offering goods and services, it’s generally taxable. That’s true even if the income comes from a side job and even if you don’t receive an...

The IRS Has Just Announced 2024 Amounts for Health Savings Accounts

The IRS recently released guidance providing the 2024 inflation-adjusted amounts for Health Savings Accounts (HSAs). HSA fundamentals An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual” who is covered under a “high-deductible health plan.” In addition, a participant can’t be enrolled in Medicare or have other health coverage (exceptions include dental, vision, long-term care, accident and specific disease insurance). Within specified dollar limits, an above-the-line tax deduction is allowed for an individual’s contributions to an HSA. This annual contribution limitation and the annual deductible and out-of-pocket expenses under the tax code are adjusted annually for inflation. Inflation adjustments for next year In Revenue Procedure...

Financial Statement Fraud: Don't Believe Everything You Read

Financial statements are central to understanding any business. A public company’s balance sheet, income statement and cash flow statement enable investors, lenders, the media and other stakeholders to value the company, forecast short- and long-term performance, and determine potential credit risk, among other purposes. To ensure analysis of a company is accurate and insightful, financial statements must be reliable. For this reason, financial statement fraud — the exaggeration or outright fabrication of numbers by insiders, such as owners and executives — is extremely dangerous. It can lead to criminal charges, lawsuits, large financial losses and even the company’s demise. It’s critical that your business do everything possible to prevent this type of fraud. More common than you might think Financial statement fraud involving large public companies has received...