06 Jul 2020
0

Ways to Chip Away at Your 2019 Business Tax Bill

Roger Rossmeisl, CPA
Small Business Tax Briefs
Ways to Chip Away at Your 2019 Business Tax Bill

The extended federal income tax deadline is coming up fast. As you know, the IRS postponed until July 15 the payment and filing deadlines that otherwise would have fallen on or after April 1, 2020, and before July 15.  Here's some ways to chip away at your 2019 business tax bill. Retroactive COVID-19 business relief The Coronavirus Aid, Relief and Economic Security (CARES) Act, which passed earlier in 2020, includes some retroactive tax relief for business taxpayers. The following four provisions may affect a still-unfiled tax return — or you may be able to take advantage of them on an amended return if you already filed. Liberalized net operating losses (NOLs). The CARES Act allows a five-year carryback for a business NOL that arises in a tax year...

27 Jun 2020
0

Efforts to Corral Coronavirus Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Efforts to Corral Coronavirus Fraud

The COVID-19 pandemic has opened the floodgates to scam artists attempting to profit from sick, anxious and financially vulnerable Americans. Frontline efforts to corral Coronavirus fraud are being headed up by the Federal Trade Commission (FTC), U.S. Justice Department (DOJ) and other government agencies. Here are some of the fraud schemes they’re actively investigating —  and the perpetrators they’ve rounded up. Peddling false hope The FTC has sent warning letters to almost 100 businesses for making scientifically unsubstantiated claims about their products. Companies from California to Virginia, Indiana to Florida have touted (mostly online or by phone) “treatments” for COVID-19, even though the federal government hasn’t approved any vaccines or cures for the disease. Letter recipients must stop making deceptive claims immediately and notify the FTC within 48...

27 Jun 2020
0

Business Charitable Contribution Rule Changes Under the CARES Act

Roger Rossmeisl, CPA
Small Business Tax Briefs
Business Charitable Contribution Rul Changes under the CARES Act

In light of the novel coronavirus (COVID-19) pandemic, many businesses are interested in donating to charity. In order to incentivize charitable giving, the Coronavirus Aid, Relief and Economic Security (CARES) Act made some liberalizations to the rules governing charitable deductions. Here are two  changes that affect businesses: The limit on charitable deductions for corporations has increased Before the CARES Act, the total charitable deduction that a corporation could generally claim for the year couldn’t exceed 10% of corporate taxable income (as determined with several modifications for these purposes). Contributions in excess of the 10% limit are carried forward and may be used during the next five years (subject to the 10%-of-taxable-income limitation each year). What changed? Under the CARES Act, the limitation on charitable deductions for corporations...

27 Jun 2020
0

There’s Still Time to Make a 2019 IRA Contribution

Roger Rossmeisl, CPA
Individual Tax Briefs
Theres Still Time to Make a 2019 IRA Contribution

Do you want to save more for retirement on a tax-favored basis? If so, and if you qualify, you can make a  2019 IRA contribution for the 2019 tax year between now and the extended tax filing deadline and claim the write-off on your 2019 return. Or you can contribute to a Roth IRA and avoid paying taxes on future withdrawals. You can potentially make a contribution of up to $6,000 (or $7,000 if you were age 50 or older as of December 31, 2019). If you’re married, your spouse can potentially do the same, thereby doubling your tax benefits. The deadline for 2019 traditional and Roth contributions for most taxpayers would have been April 15, 2020. However, because of the novel coronavirus (COVID-19) pandemic, the IRS...

27 Jun 2020
0

IRS Payment Options for Those Owing Taxes

Roger Rossmeisl, CPA
Individual Tax Briefs
IRS Payment Options for Those Owing Taxes

In a News Release (IR 2020-48), the IRS has provided a list of payment options available to taxpayers who need to make a tax payment or who owe taxes they can’t pay.  Taxpayers who owe taxes Taxpayers who owe taxes can choose among the following payment options: Electronic funds withdrawal (EFW) Taxpayers who electronically file their tax returns using tax preparation software or a tax professional can pay any taxes they owe from their bank account using EFW. EFW is free and available when electronically filing a tax return with an amount due. IRS Direct Pay IRS Direct Pay allows taxpayers to pay their federal taxes, separately from filing their return, directly from their bank account, without any fees or preregistration. Taxpayers can schedule payments up to 30 days in advance...

25 Jun 2020
0

Non-GAAP Measures Can Be Misleading

Roger Rossmeisl, CPA
Fraud Briefs
Non-GAAP Measures Can Be Misleading

Not all companies follow U.S. generally accepted accounting principles (GAAP). Many smaller businesses, for example, have adopted the AICPA’s Financial Reporting Framework for Small and Medium-Sized Entities because it’s easier to follow. Other businesses may use non-GAAP measures because they don’t believe GAAP provides readers of financial reports with enough information to make informed decisions.  Non-GAAP accounting is, in a nutshell, any measure a company uses that relies on a methodology not included in GAAP. But not all measures are necessarily created equal. Some non-GAAP measures can be misleading, and have the potential to mislead investors, lenders and the public. History lesson Historically, U.S. companies have used non-GAAP measures sparingly. Yet according to financial data provider Audit Analytics, in 2017, 97% of financial statements produced by S&P 500...

24 Jun 2020
0

What Qualifies as a “Coronavirus-Related Distribution”?

Roger Rossmeisl, CPA
Individual Tax Briefs
What Qualifies as a "Coronavirus-Related Distribution"?

As you may have heard, the Coronavirus Aid, Relief and Economic Security (CARES) Act allows “qualified” people to take certain “coronavirus-related distributions” from their retirement plans without paying tax. So how do you qualify? In other words, what’s a coronavirus-related distribution? Early distribution basics In general, if you withdraw money from an IRA or eligible retirement plan before you reach age 59½, you must pay a 10% early withdrawal tax. This is in addition to any tax you may owe on the income from the withdrawal. There are several exceptions to the general rule. For example, you don’t owe the additional 10% tax if you become totally and permanently disabled or if you use the money to pay qualified higher education costs or medical expenses New exception Under the CARES...

22 Jun 2020
0

COVID-19 Individual Tax Questions Answered

Roger Rossmeisl, CPA
Individual Tax Briefs
COVID-19 Individual Tax Questions Answered

The Coronavirus (COVID-19) pandemic has affected many Americans’ finances. Here are some COVID-19 individual tax questions answered. My employer closed the office and I’m working from home. Can I deduct any of the related expenses? Unfortunately, no. If you’re an employee who telecommutes, there are strict rules that govern whether you can deduct home office expenses. For 2018–2025 employee home office expenses aren’t deductible. (Starting in 2026, an employee may deduct home office expenses, within limits, if the office is for the convenience of his or her employer and certain requirements are met.) Be aware that these are the rules for employees. Business owners who work from home may qualify for home office deductions. My son was laid off from his job and is receiving unemployment benefits. Are they...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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