04 May 2021
0

Importance of Meeting Tax Return and Payment Deadlines

Roger Rossmeisl, CPA
Individual Tax Briefs
Importance of Meeting Tax Return and Payment Deadlines

The May 17 deadline for filing your 2020 individual tax return is coming up soon. It’s important to file and pay your tax return on time to avoid penalties imposed by the IRS. Here are the basic rules. Failure to pay  Separate penalties apply for failing to pay and failing to file. The failure-to-pay penalty is 1/2% for each month (or partial month) the payment is late. For example, if payment is due May 17 and is made June 22, the penalty is 1% (1/2% times 2 months or partial months). The maximum penalty is 25%. The failure-to-pay penalty is based on the amount shown as due on the return (less credits for amounts paid through withholding or estimated payments), even if the actual tax bill turns out to...

17 Apr 2021
0

Be Careful When Claiming “Made in USA”

Roger Rossmeisl, CPA
Fraud Briefs
Be Careful When Claiming "Made in USA"

Recently, the Federal Trade Commission (FTC) settled a lawsuit with a company it says made false and misleading claims about its consumer products. Specifically, the company advertised on its website and social media accounts that its goods were “Made in USA,” even though most of them were imported. This is a violation of the FTC Act, and if your business is making similar claims about foreign-made products, you too could find yourself in legal hot water. Patriotic promotion One of President Biden’s first actions in office was to sign an executive order requiring federal agencies to buy American goods (with at least 55% of their components U.S.-made) and services whenever possible. Many consumers and companies also prioritize buying U.S.-made goods. So it’s easy to understand why manufacturers,...

17 Apr 2021
0

ARPA Tax Break May Make Child Care Less Expensive

Roger Rossmeisl, CPA
Individual Tax Briefs
ARPA Tax Break May Make Child Care Less Expensive

The new American Rescue Plan Act (ARPA) provides eligible families with an enhanced child and dependent care credit for 2021. This is the credit available for expenses a taxpayer pays for the care of qualifying children under the age of 13 so that the taxpayer can be gainfully employed. Note that a credit reduces your tax bill dollar for dollar which, in effect can make child care less expensive. Who qualifies? For care to qualify for the credit, the expenses must be “employment-related.” In other words, they must enable you and your spouse to work. In addition, they must be for the care of your child, stepchild, foster child, brother, sister or step-sibling (or a descendant of any of these), who’s under 13, lives in your home for...

17 Apr 2021
0

Update on California Classic Car Smog Exemption Bill AB 220

Roger Rossmeisl, CPA
Automotive
Update on California Classic Car Smog Exemption Bill AB 220

As posted to Mike Frankovich's YouTube Channel on 4/15/2021 (Run time: 8 min, 47 sec) If you're like me, you have trouble understanding why California continues to make it so difficult to engage is what is one of the most quintessential of California pastimes . . . classic car ownership. Since the smog check exemption changed from a 30 year rolling average to a set, 1975 and older cut-off back on 4/1/2005 classic car enthusiasts owning post-1975 vehicles have tirelessly petitioned their elected officials for relief. The latest California Classic Car Smog Exemption Bill, AB220, has just been amended to require collector car insurance to obtain a smog exemption on classic cars built during the years 1976-1982. In this clip Mike Frankovich discusses the assembly bill and what...

17 Apr 2021
0

CDTFA Releases Updated Pub 34, Motor Vehicle Dealers

Roger Rossmeisl, CPA
Automotive
CDFTA Releases Updated Pub 34, Motor Vehicle Dealers

The California Department of Tax and Fee Administration (CDTFA) has updated Publication 34 (Motor Vehicle Dealers), to include 2020 legislation that, effective 1/1/2021, imposes new reporting and payments requirements on certain used vehicle dealers. The new discussion, entitled "Used Vehicle Dealers" (in the section on "Motor Vehicle Sales"), provides in part that effective 1/1/2021, certain used vehicle dealers are required to pay sales tax on their retail sales of vehicles when a vehicle registration application is submitted to the Department of Motor Vehicles (DMV). The CDTFA previously discussed these changes in California Department of Tax and Fee Administration Special Notice L-766, 11/01/2020. The CDTFA also made a number of nonsubstantive changes to the publication. Publication 34 is designed to help motor vehicle dealers understand California’s sales and...

14 Apr 2021
0

The Interview Before the Fraud Interview

Roger Rossmeisl, CPA
Fraud Briefs
The Interview Before the Fraud Interview

When Anna, the CEO of a small manufacturing company, received an anonymous report about fraud in the accounting department, she wasn’t sure how to act. After all, the complaint could be accurate, but there was also a chance that it wasn’t. She called her company’s attorney, who recommended a forensic accountant to investigate. He also suggested that she perform some preliminary interviews to gather facts — but to be careful not to interrogate employees. If you’re in a position similar to Anna’s, here’s how to conduct interviews before a fraud expert comes on the case.  Investigation prep In advance of requesting any interviews, decide what information you’re looking for. Knowing what you want helps you get to the truth of the matter quickly and avoid getting sidetracked by...

13 Apr 2021
0

How to Ensure Life Insurance Isn’t Part of Your Taxable Estate

Roger Rossmeisl, CPA
Individual Tax Briefs
How to ensure life insurance isn't part of your taxable estate

If you have a life insurance policy, you may want to ensure that the benefits your family will receive after your death won’t be included in your estate. That way, the benefits won’t be subject to federal estate tax. Current exemption amounts For 2021, the federal estate and gift tax exemption is $11.7 million ($23.4 million for married couples). That’s generous by historical standards but in 2026, the exemption is set to fall to about $6 million ($12 million for married couples) after inflation adjustments — unless Congress changes the law. In or out of your estate Under the estate tax rules, insurance on your life will be included in your taxable estate if: Your estate is the beneficiary of the insurance proceeds, or You possessed certain economic ownership...

08 Apr 2021
0

Consider a Heavy SUV as Your New Business Vehicle

Roger Rossmeisl, CPA
Small Business Tax Briefs
Consider a Heavy SUV as Your New Business Vehicle

Are you thinking about buying or replacing a vehicle that you’ll use in your business? If you consider a heavy SUV, you may be able to benefit from lucrative tax rules for those vehicles. Bonus depreciation  Under current law, 100% first-year bonus depreciation is available for qualified new and used property that’s acquired and placed in service in a calendar year. New and pre-owned heavy SUVs, pickups and vans acquired and put to business use in 2021 are eligible for 100% first-year bonus depreciation. The only requirement is that you must use the vehicle more than 50% for business. If your business usage is between 51% and 99%, you can deduct that percentage of the cost in the first year the vehicle is placed in service. This...

07 Apr 2021
0

When Divorcing Business Owners Minimize Profits

Roger Rossmeisl, CPA
Fraud Briefs
When Divorcing Business Owners Minimize Profits

Dividing a marital estate is rarely easy. But it’s made much harder if a divorcing spouse owns a private business and attempts to artificially deflate its profits or hide assets. If you or your attorney suspects this type of deception, engage a forensic accountant to investigate. Key questions When working on divorce cases, fraud experts ask several questions about private business interests. For example, does a spouse own a cash business that may have unreported income? Does the owner receive special (or excessive) perks or tax write-offs that affect the business’s profitability? Are numbers intentionally reported incorrectly to affect the business’s value? n addition, experts investigate whether the company has any subsidiaries or is part of any other business ventures. Sometimes, a business owner may be a silent...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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