02 Jan 2023
0

How AI and Machine Learning Help Fight Fraud

Roger Rossmeisl, CPA
Fraud Briefs
How AI and Machine Learning Help Fight Fraud

The biannual Association of Certified Fraud Examiners “Report to the Nations” has repeatedly concluded that the longer fraud schemes remain undetected, the greater the losses for the victimized organizations. According to the 2022 report, the average fraud lasts 12 months and leads to a median loss of $117,000. But schemes that last 25 to 36 months result in a median loss of $300,000, and if fraudsters are able to conceal their theft for five years, the median loss rises to $800,000. Fortunately, advancements in artificial intelligence (AI) and machine learning (ML) have changed the landscape of fraud detection — and shortened the lifespan of fraud schemes. What do these terms mean, and how does the technology help organizations fight fraud? Explaining the technologies AI simulates human intelligence and...

02 Jan 2023
0

2023 Q1 Tax Deadlines for Businesses and Other Employees

Roger Rossmeisl, CPA
Small Business Tax Briefs
2023 Q1 Tax Deadlines for Businesses and Other Employees

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2023. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. If you have questions about filing requirements, contact us. We can ensure you’re meeting all applicable deadlines. January 17 (The usual deadline of January 15 is on a Sunday and January 16 is a federal holiday) Pay the final installment of 2022 estimated tax. Farmers and fishermen: Pay estimated tax for 2022. If you don’t pay your estimated tax by January 17, you must file your 2022 return and pay all tax due by March 1, 2023, to avoid an estimated tax penalty. January 31 File 2022 Forms W-2, “Wage...

02 Jan 2023
0

Sold Stock Before Year-End? Watch Out for the Wash Sale Rule

Roger Rossmeisl, CPA
Individual Tax Briefs
Sold Stock Before Year-End? Watch Out for the Wash Sale Rule

If you sold stock shares at a loss at the end of 2022 to offset gains that you’ve realized during 2022, it’s important to watch out for the “wash sale” rule. The loss could be disallowed 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 you participate in any...

02 Jan 2023
0

How Business Valuators Estimate the DLOM in a Volatile Market

Roger Rossmeisl, CPA
Valuation Briefs
How Business Valuators Estimate the DLOM in a Volatile Market

When valuing a business, recent market volatility may well translate into higher discounts for lack of marketability (DLOM) because investors generally will pay less for illiquid, risky investments. However, there’s a silver lining to economic uncertainty: It provides an opportunity for wealthy individuals to gift private business interests at significant discounts, potentially saving a substantial amount in taxes. DLOM basics Marketability is the ability to quickly or readily convert property to cash at minimal cost, according to the International Valuation Glossary — Business Valuation. Also implied is a high degree of certainty that an expected selling price will be realized. The two most popular sources of empirical data valuators use to support DLOMs are restricted stock and pre-initial public offering (IPO) studies. These studies suggest that discounts for...

01 Jan 2023
0

Do you Qualify for the QBI Deduction and What Can you Do to Help Qualify?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Do you Qualify for the QBI Deduction and What Can you Do to Help Qualify?

If you own a business, you may wonder if you’re eligible to take the qualified business income (QBI) deduction. Sometimes this is referred to as the pass-through deduction or the Section 199A deduction. The QBI deduction is: Available to owners of sole proprietorships, single member limited liability companies (LLCs), partnerships, and S corporations, as well as trusts and estates. Intended to reduce the tax rate on QBI to a rate that’s closer to the corporate tax rate. Taken “below the line.” In other words, it reduces your taxable income but not your adjusted gross income. Available regardless of whether you itemize deductions or take the standard deduction. Taxpayers other than corporations may be entitled to a deduction of up to 20% of their QBI. For 2022, if...

15 Dec 2022
0

Worker Classification 101: Employee or Independent Contractor

Roger Rossmeisl, CPA
Small Business Tax Briefs
Worker Classification 101: Employee or Independent Contractor

As posted to IRS.gov as Tax Tip 2022-117 on 8/2/2022 A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors. An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public. Independent contractor vs. employee Whether a worker is an independent...

11 Dec 2022
0

Impact of OTA Updates on Dealership Fixed Ops

Roger Rossmeisl, CPA
Automotive
Impact of OTA Updates on Dealership Fixed Ops

As posted to the Bellavia Blatt YouTube Channel on 11/18/22, and the Fixed Ops Roundtable YouTube Channel on 11/18/22 (Run Time: 14 min, 59 sec) As EVs continue to represent a greater percentage of total new vehicle sales, ongoing challenges continue to present themselves forcing automobile dealers to combat the continued erosion of their profits. In this clip, automotive attorney Len Bellavia sits down virtually with Ted Ings at the "Fixed Ops Roundtable" to discuss a number of current issues impacting dealers.  On the subject of over-the-air (OTA) updates, Len reports that GM and Stellantis have announced that the transition to OTAs will cost manufacturers $25 billion per year in lost revenues which will be "coming out of the hides of the fixed ops department of these dealerships". ...

10 Dec 2022
0

Answers to your Questions about Taking Withdrawals from IRAs

Roger Rossmeisl, CPA
Individual Tax Briefs
Answers to Your Questions about Taking Withdrawals from IRAs

As you may know, you can’t keep funds in your traditional IRA indefinitely. You have to start taking withdrawals from a traditional IRA (including a SIMPLE IRA or SEP IRA) when you reach age 72. The rules for taking required minimum distributions (RMDs) are complicated, so here are some answers to frequently asked questions. What if I want to take out money before retirement?  If you want to take money out of a traditional IRA before age 59½, distributions are taxable and you may be subject to a 10% penalty tax. However, there are several ways that the 10% penalty tax (but not the regular income tax) can be avoided, including to pay: qualified higher education expenses, up to $10,000 of expenses if you’re a first-time homebuyer and...

10 Dec 2022
0

What Are Your Job Applicants Hiding?

Roger Rossmeisl, CPA
Fraud Briefs
What Are Your Job Applicants Hiding?

Checkster, a reference checking company, has found that 78% of job candidates either misrepresent or consider misrepresenting themselves during the hiring process. And a survey by career advice company ResumeLab reveals that 56% of applicants either lied or “stretched the truth” in recent interviews. Findings of other studies vary, but the takeaway is generally consistent: Don’t assume résumé claims or interview answers are truthful. Verify applicant representations and consider performing formal background checks. Why it matters Some job candidate misrepresentations are relatively benign. A Monster “Future of Work” study finds that many applicants (60%) say they’ve mastered a skill when, in reality, their knowledge is basic. A beginner level Excel user may claim mastery in the software, but if the job calls for little or no Excel...

10 Dec 2022
0

Choosing a Business Entity? Here are the Pros and Cons of a C Corporation

Roger Rossmeisl, CPA
Small Business Tax Briefs
Choosing a Business Entity? Here are the Pros and Cons of a C Corporation

If you’re launching a new business venture, you’re probably wondering which form of business is most suitable. Here is a summary of the major advantages and disadvantages of doing business as a C corporation. A C corporation allows the business to be treated and taxed as a separate entity from you as the principal owner. A properly structured corporation can protect you from the debts of the business yet enable you to control both day-to-day operations and corporate acts such as redemptions, acquisitions and even liquidations. In addition, the corporate tax rate is currently 21%, which is lower than the highest noncorporate tax rate. Following formalities In order to ensure that a corporation is treated as a separate entity, it’s important to observe various formalities required by your state....

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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