Roger Rossmeisl, CPA, Author at Roger Rossmeisl, CPA

17 Dec 2021

How are Court Awards and Out-of-Court Settlements Taxed?

Awards and settlements are routinely provided for a variety of reasons. For example, a person could receive compensatory and punitive damage payments for personal injury, discrimination or harassment. Some of this money is taxed by the federal government, and perhaps state governments. Hopefully, you’ll never need to know how payments for personal injuries are taxed. But here are the basic rules — just in case you or a loved one does need to understand them. Under tax law, individuals are permitted to exclude from gross income damages that are received on account of a personal physical injury or a physical sickness. It doesn’t matter if the compensation is from a court-ordered award or an out-of-court settlement, and it makes no difference if it’s paid in a...

17 Dec 2021

Tax Implications of Owning a Corporate Aircraft

Roger Rossmeisl, CPA

Small Business Tax Briefs

Tax Implications of Owning a Corporate Aircraft

If your business is successful and you do a lot of business travel, you may have considered buying a corporate aircraft. Of course, there are tax and non-tax implications for aircraft ownership. Let’s look at the basic tax rules. Business travel only In most cases, if your company buys a plane used only for business, the company can deduct its entire cost in the year that it’s placed into service. The cases in which the aircraft is ineligible for this immediate write-off are: The few instances in which neither the 100% bonus depreciation rules nor the §179 small business expensing rules apply or When the taxpayer has elected out of 100% bonus depreciation and hasn’t made the election to apply §179 expensing. In those cases, the depreciation schedule...

14 Dec 2021

Protecting Goods from Theft at Every Stage of Their Supply Chain Journey

Roger Rossmeisl, CPA

Fraud Briefs

Protecting Goods from Theft at Every Stage of Their Supply Chain Journey

The U.S. supply chain is overwhelmed and it’s expected to remain so for some time. With so many shipments tied up in ports and too few workers to watch them, cargo theft has become a significant problem. Yet theft from ports of entry isn’t the only way goods disappear. Criminals routinely target truck shipments as well. Cargo theft costs companies somewhere between $15 billion and $35 billion annually, according to the National Insurance Crime Bureau. To help prevent theft from hurting your company’s bottom line, protect your goods at every stage of their journey to customers. Contain cargo crime The fight against cargo theft starts when loading container ships. Make sure employees who handle your goods have passed criminal background checks. In addition to using secure locks, consider...

14 Dec 2021

3 Ideas That May Help Cut Your Year-End Tax Bill

Roger Rossmeisl, CPA

Individual Tax Briefs

3 Ideas that May Help Cut Your Year-End Tax Bill

If you’re starting to worry about your 2021 tax bill, there’s good news — you may still have time to reduce your liability. Here are three quick strategies that may help you trim your taxes before year-end. 1. Accelerate deductions/defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2022 payment in December, you can deduct the interest portion on your 2021 tax return (assuming you itemize). Pushing income into the new year also will reduce your taxable income. If you’re expecting a bonus at work, for example, and you don’t want the income this year, ask if your employer can hold off on paying it until January. If you’re self-employed, you can...

14 Dec 2021

Differences in Valuing S Corporations vs C Corporations

Roger Rossmeisl, CPA

Valuation Briefs

Differences in Valuing S Corporations vs C Corporations

Most U.S. businesses operate as so-called “pass-through” entities, including partnerships, limited liability companies (LLCs) and S corporations. For decades, the IRS and valuation professionals have been at odds over how to value pass-through businesses because of their unique tax characteristics. Taxation of pass-through entities For pass-through entities, all items of income, loss, deduction and credit pass through to the owners’ personal tax returns, and taxes are paid at the level of the individual owners. Distributions to owners generally aren’t taxable to the extent that owners have positive tax basis in the entity. For the most part, operating as a pass-through entity is a smart tax-saving strategy for entities that qualify. However, for minority owners that have no control over distributions, this favorable tax treatment may be less advantageous...

07 Dec 2021

There May Still Be Time to Cut Your Small Business 2021 Taxes

Roger Rossmeisl, CPA

Small Business Tax Briefs

There May Still Be Time to Cut Your Small Business 2021 Taxes

Don’t let the holiday rush keep you from considering some important steps to reduce your 2021 tax liability. You still have time to execute a few strategies. Purchase assets Thinking about buying new or used equipment, machinery or office equipment in the new year? Buy them and place them in service by December 31, and you can deduct 100% of the cost as bonus depreciation. Contact us for details on the 100% bonus depreciation break and exactly what types of assets qualify. Bonus depreciation is also available for certain building improvements. Before the 2017 Tax Cuts and Jobs Act (TCJA), bonus depreciation was available for two types of real property: land improvements other than buildings (for example fencing and parking lots), and “qualified improvement property,” a broad category of...

07 Dec 2021

New Digital Asset Reporting Requirements are Coming

Roger Rossmeisl, CPA

Individual Tax Briefs, Technology

New Digital Asset Reporting Requirements are Coming

The Infrastructure Investment and Jobs Act (IIJA) was signed into law on November 15, 2021. It includes new information reporting requirements that will generally apply to digital asset transactions starting in 2023. Cryptocurrency exchanges will be required to perform intermediary Form 1099 reporting for cryptocurrency transactions. Existing reporting rules If you have a stock brokerage account, whenever you sell stock or other securities, you receive a Form 1099-B after the end of the year. Your broker uses the form to report transaction details such as sale proceeds, relevant dates, your tax basis and the character of gains or losses. In addition, if you transfer stock from one broker to another broker, the old broker must furnish a statement with relevant information, such as tax basis, to the...

29 Nov 2021

Infrastructure Law Sunsets Employee Retention Tax Credit Early

Roger Rossmeisl, CPA

Automotive, Small Business Tax Briefs

Infrastructure Law Sunsets Employee Retention Tax Credit Early

The Employee Retention Tax Credit (ERTC) was a valuable tax credit that helped employers survive the COVID-19 pandemic. A new law has retroactively terminated it before it was scheduled to end. It now only applies through September 30, 2021 (rather than through December 31, 2021) — unless the employer is a “recovery startup business.” The Infrastructure Investment and Jobs Act of 2021 (IIJA 2021), which was signed by President Biden on November 15, 2021, doesn’t have many tax provisions but this one is important for some businesses. If you anticipated receiving the ERTC based on payroll taxes after September 30 and retained payroll taxes, you must determine how and when to repay those taxes and address any other compliance issues. The American Institute of Certified Public Accountants (AICPA)...

29 Nov 2021

KYC Rules Help Prevent Fraud and Offer Other Advantages

Roger Rossmeisl, CPA

Fraud Briefs

KYC Rules Help Prevent Fraud and Offer Other Advantages

For years, banks, financial service and investment companies, and exporters have been required to follow know-your-customer (KYC) processes to thwart criminal activity. Developed to help certain businesses comply with anti-money laundering and anti-terrorism regulations, these programs aren’t mandated for most nonfinancial businesses. But you might want to consider adopting some KYC principles anyway. They can help you prevent fraud — including occupational fraud and identity theft — and even boost your marketing and sales efforts. Enhanced due diligence As part of their KYC processes, financial institutions generally verify customers’ names, addresses, and dates of birth and check them against lists of known criminals. In addition, they monitor transaction trends and high-risk accounts to determine their risk and whether they merit filing suspicious activity reports with the government....

29 Nov 2021