22 Jun 2020
0

CARES Act Liberalizes NOLs

Roger Rossmeisl, CPA
Small Business Tax Briefs
CARES Act Liberalizes NOLs

The Coronavirus Aid, Relief, and Economic Security (CARES) Act eliminates some of the tax-revenue-generating provisions included in a previous tax law. Here’s a look at how the CARES Act liberalizes NOLs, providing businesses with relief from the novel coronavirus (COVID-19) crisis. NOL deductions Basically, you may be able to benefit by carrying a net operating loss (NOL) into a different year — a year in which you have taxable income — and taking a deduction for it against that year’s income. The CARES Act includes favorable changes to the rules for deducting NOLs. First, it permanently eases the taxable income limitation on deductions. Under an unfavorable provision included in the Tax Cuts and Jobs Act (TCJA), an NOL arising in a tax year beginning in 2018 and later...

18 Jun 2020
0

Give Employees a Voice to Report Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Give Employees a Voice to Report Fraud

Before the novel coronavirus (COVID-19) pandemic struck, employees who suspected occupational fraud in their organizations had multiple options for notifying their employers. For example, they could use interoffice mail to send information anonymously or meet with HR personnel in person.  In today's work from home environment, do you give employees a voice to report fraud? Reporting options for employees working from home are more limited — particularly if they wish to remain anonymous. The current working environment only highlights the necessity for a fraud hotline or online portal that workers can access anywhere, anytime. If your business doesn’t already offer a confidential reporting mechanism, start thinking about how you can establish one. Limiting damage One of the best ways to give employees a voice to report fraud and...

18 Jun 2020
0

Are Your Independent Contractors Properly Classified?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Are your independent contractors properly classified

As a result of the coronavirus (COVID-19) crisis, your business may be using independent contractors to keep costs low. That said, are your independent contractors properly classified for federal tax purposes? If the IRS reclassifies them as employees, it can be an expensive mistake. The question of whether a worker is an independent contractor or an employee for federal income and employment tax purposes is a complex one. If a worker is an employee, your company must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on the wages, plus FUTA tax. Often, a business must also provide the worker with the fringe benefits that it makes available to other employees. And there may be state tax obligations as well. These obligations don’t...

18 Jun 2020
0

Protecting Remote Workers From Cyberattacks

Roger Rossmeisl, CPA
Fraud Briefs
Protecting Remote Workers from Cyberattacks

Many businesses were unprepared when the novel coronavirus (COVID-19) pandemic required them to close their physical offices and shift to remote operations. Your company, for example, may have had to scramble to set up a virtual private network (VPN) or move files to the cloud. And while adapting to working from home, employees may have let your usual security procedures slide.  From a cybercrime perspective, working from home generally isn’t as safe as working in the office. So you need to look for ways for protecting remote workers from cyberattacks, and prevent criminals from gaining access to your digital assets. Here are five ideas: Invest in education. Require remote employees to participate in security-related training that covers “old-school” phishing scams as well as new COVID-19 variations. As...

16 Jun 2020
0

Residency Audits on Departing Californians

Roger Rossmeisl, CPA
Individual Tax Briefs
Residency Audits on Departing Californians

                In the attached audio clip (click on photo above to listen), Spidell Publishing's "California Minute" discusses a subject that is gaining traction with the California Franchise Tax Board.  With California’s increasing taxes and regulations, many people are leaving the Golden state for greener pastures. When a new nonresident taxpayer, especially one with high income, comes into the FTB’s sights, even before the taxpayer knows an audit is happening, the auditor will have pulled documents from other government databases and built the residency case. (This is Blog Post #829) Spidell Publishing, Inc. has been a critical source of California tax information for tax professionals since 1975, promoting ideas, references, solutions, and guidance, plus news and commentary covering all aspects of tax and its administration....

15 Jun 2020
0

Paying Workers Under the Table is a Lose-Lose

Roger Rossmeisl, CPA
Fraud Briefs
Paying Workers Under the Table is a Lose-Lose

Paying workers under the table or with cash can save businesses a bundle in taxes. But the potential consequences are grave. Not only is this practice illegal and could result in severe financial penalties, but it also shortchanges employees. The novel coronavirus (COVID-19) pandemic has made this abundantly clear. As many laid-off workers who were paid under the table have learned, they don’t qualify for unemployment benefits if their state has no record of their employer contributing to the insurance pool. They may have trouble getting other financial assistance as well. You should protect your business and its workers by following the rules. Paying the piper In general, compensation is subject to federal income and employment taxes, as well as taxes that may be assessed on state and...

11 Jun 2020
0

Favorable Tax Changes to “Qualified Improvement Property”

Roger Rossmeisl, CPA
Small Business Tax Briefs
Favorable Tax Changes to Qualified Improvement Property

The law providing relief due to the coronavirus (COVID-19) pandemic contains a beneficial change in the tax rules for many improvements to interior parts of nonresidential buildings. This is referred to as qualified improvement property (QIP). You may recall that under the Tax Cuts and Jobs Act (TCJA), any QIP placed in service after December 31, 2017 wasn’t considered to be eligible for 100% bonus depreciation. Therefore, the cost of QIP had to be deducted over a 39-year period rather than entirely in the year the QIP was placed in service. This was due to an inadvertent drafting mistake made by Congress. But the error is now fixed. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020...

11 Jun 2020
0

Rioting Damage at Your Business?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Rioting Damage at your Business?

Rioting damage at your business?  The recent riots around the country have resulted in many storefronts, office buildings and business properties being destroyed. In the case of stores or other businesses with inventory, some of these businesses lost products after looters ransacked their property. Windows were smashed, property was vandalized, and some buildings were burned to the ground. This damage was especially devastating because businesses were reopening after the COVID-19 pandemic eased. A commercial insurance property policy should generally cover some, or all, of the losses. (You may also have a business interruption policy that covers losses for the time you need to close or limit hours due to rioting and vandalism.) But a business may also be able to claim casualty property loss or theft...

07 Jun 2020
0

New Employer Tax Credits Flowchart

Roger Rossmeisl, CPA
Small Business Tax Briefs
New Employer Tax Credits Flowchart

Many businesses that have been severaly impacted by the coronavirus (COVID-19) will qualify for two new employer tax credits - the Credit for Sick and Family Leave and the Employee Retention Credit. Sick and Family Leave Credit for Sick and Family Leave An employee who is unable to work (including telework) because of coronavirus quarantine or self-quarantine or has coronavirus symptoms and is seeking a medical diagnosis, is entitled to paid sick leave for up to ten days (up to 80 hours) at the employee’s regular rate of pay, or, if higher, the Federal minimum wage or any applicable State or local minimum wage, up to $511 per day, but no more than $5,110 in total. Caring for someone with Coronavirus An employee who is unable to work due to...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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