03 May 2020
0

Availability of Home Office Deductions

Roger Rossmeisl, CPA
Small Business Tax Briefs
Availability of Home Office Deductions

If you’re self-employed and work out of an office in your home, don't forget the availability of home office deductions. However, you must satisfy strict rules. If you qualify, you can deduct the “direct expenses” of the home office. This includes the costs of painting or repairing the home office and depreciation deductions for furniture and fixtures used there. You can also deduct the “indirect” expenses of maintaining the office. This includes the allocable share of utility costs, depreciation and insurance for your home, as well as the allocable share of mortgage interest, real estate taxes and casualty losses. In addition, if your home office is your “principal place of business,” the costs of traveling between your home office and other work locations are deductible transportation expenses,...

03 May 2020
0

When the Fraud Suspect is an Executive

Roger Rossmeisl, CPA
Fraud Briefs
When the Fraud Suspect is an Executive

Businesses and fraud experts often face a long, arduous process when investigating any occupational fraud incident. When the fraud suspect is an executive . . . a member of upper management . . . it’s exponentially harder. In theory, investigating executives shouldn’t differ from the process of investigating rank-and-file employees. In reality, the authority and influence of an executive can slow — even shut down — a fraud investigation. You need a plan to prevent interference and facilitate the collection of evidence that can be used in court, if necessary. Human element The first step is to brief the executive’s chain of command. As soon as allegations surface, work with your company’s human resources and legal departments to make the suspect’s superiors aware of the situation. If you...

03 May 2020
0

Beneish Model Helps Detect Earnings Manipulation

Roger Rossmeisl, CPA
Fraud Briefs
Beneish Model Helps Detect Earnings Manipulation

Financial statement manipulation is the costliest type of occupational fraud. The latest Report to the Nations published by the Association of Certified Fraud Examiners found that the median loss from financial statement fraud was $800,000, compared to median losses of $114,000 for asset misappropriation and $250,000 for corruption.  With any type of fraud, the sooner it’s detected, the more likely losses can be mitigated. The Beneish model helps detect earnings manipulation.  As such, this is one tool management and fraud experts might use to assess the likelihood of earnings manipulation. M score The Beneish model measures the probability that a company’s revenue has been inflated and its expenses have been understated. The model generally computes an “M score” from comparisons between consecutive financial reporting periods of various...

03 May 2020
0

Reduce Tax with an S Corporation

Roger Rossmeisl, CPA
Small Business Tax Briefs
Reduce Tax with an S Corporation

Do you conduct your business as a sole proprietorship or as a wholly owned limited liability company (LLC)? If so, you’re subject to both income tax and self-employment tax. There may be a way to reduce tax with an S corporation. Self-employment tax basics The self-employment tax is imposed on 92.35% of self-employment income at a 12.4% rate for Social Security up to a certain maximum ($137,700 for 2020) and at a 2.9% rate for Medicare. No maximum tax limit applies to the Medicare tax. An additional 0.9% Medicare tax is imposed on income exceeding $250,000 for married couples ($125,000 for married persons filing separately) and $200,000 in all other cases. Similarly, if you conduct your business as a partnership in which you’re a general partner, in addition...

03 May 2020
0

When is Married Filing Separate Better?

Roger Rossmeisl, CPA
Uncategorized
When is Married Filing Separate Better

Married couples often wonder whether they should file joint or separate tax returns. When is married filing separate betrter?  The answer depends on your individual tax situation. It generally depends on which filing status results in the lowest tax. But keep in mind that, if you and your spouse file a joint return, each of you is “jointly and severally” liable for the tax on your combined income. And you’re both equally liable for any additional tax the IRS assesses, plus interest and most penalties. This means that the IRS can come after either of you to collect the full amount. Although there are provisions in the law that offer relief, they have limitations. Therefore, even if a joint return results in less tax, you may want...

03 May 2020
0

Tax Aspects of Selling Mutual Fund Shares

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Aspects of Selling Mutual Fund Shares

Perhaps you’re an investor in mutual funds or you’re interested in putting some money into them. You’re not alone. The Investment Company Institute estimates that 56.2 million households owned mutual funds in mid-2017. But despite their popularity, the tax rules involved in selling mutual fund shares can be complex. Selling mutual fund shares: tax basics If you sell appreciated mutual fund shares that you’ve owned for more than one year, the resulting profit will be a long-term capital gain. As such, the maximum federal income tax rate will be 20%, and you may also owe the 3.8% net investment income tax. When a mutual fund investor sells shares, gain or loss is measured by the difference between the amount realized from the sale and the investor’s basis in...

30 Apr 2020
0

Going Into Business for Yourself

Roger Rossmeisl, CPA
Small Business Tax Briefs
Going Into Business for Yourself

When you make the decision of going into business for yourself, you'll find that many people who launch small businesses start out as sole proprietors. Here are nine tax rules and considerations involved in operating as that entity. 1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, you are eligible to claim the 20% pass-through deduction, subject to limitations. The deduction is taken “below the line,” meaning it reduces taxable income, rather than being taken “above the line” against your gross income. However, you can take the deduction even if you don’t itemize deductions and instead claim the standard deduction. 2. Report income and expenses on Schedule C of Form 1040. The net income will be taxable to...

28 Apr 2020
0

Don’t Approve That Office Supply Invoice Yet

Roger Rossmeisl, CPA
Fraud Briefs
Dont Approve That Office Supply Invoice Yet

When Dan received a large shipment of highlighter markers, he was confused. He didn’t remember ordering them — and he was the company’s sole office supplies buyer. Yet when he received an invoice for the markers a week later, he approved it for payment. After all, employees were already using the highlighters. Dan fell for a typical office supply scam — and his company paid for the mistake. Here’s how to protect your business from this type of fraud. Common features Office supply scams typically begin as telemarketing fraud, with someone calling your business to obtain your street address and the name of an employee. Callers may ask for the person in charge, claim to need information to complete an order or pretend to verify an office machine’s...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

RECENT BLOG ENTRIES

JOIN OUR E-NEWS

LET’S GET SOCIAL

Twitter
Facebook
LinkedIn
logo ©2019 Roger Rossmeisl | Effusion