21 Jul 2024
0

Business Owners: Understanding Value is Key to Updating Your Estate Plan

Roger Rossmeisl, CPA
Valuation Briefs
Business Owners: Understanding Value is Key to Updating Your Estate Plan

Summer is a great time for business owners to review their estate plans. Maybe your kids are home for summer break, so they’re top of mind. Or perhaps you’re vacationing with relatives or getting together for a backyard BBQ. Whatever the reason you’re spending time with your family, consider having an open discussion with them about your estate planning goals — and how your business fits in your overall plan. Before you have a family meeting, however, you’ll need to get a handle on how much your business is worth today. In uncertain markets, the value of your business may differ from your expectations. One more reason There’s another important reason to have your discussion soon: Today’s generous federal gift and estate tax exemption is set to expire...

21 Jul 2024
0

Be Aware of the Tax Consequences of Selling Business Property

Roger Rossmeisl, CPA
Small Business Tax Briefs
Be Aware of the Tax Consequences of Selling Business Property

If you’re selling property used in your trade or business, you should understand the tax implications. There are many complex rules that can potentially apply. To simplify this discussion, let’s assume that the property you want to sell is land or depreciable property used in your business, and has been held by you for more than a year. Note: There are different rules for property held primarily for sale to customers in the ordinary course of business, intellectual property, low-income housing, property that involves farming or livestock, and other types of property. Basic rules Under tax law, your gains and losses from sales of business property are netted against each other. The tax treatment is as follows: If the netting of gains and losses results in a net...

21 Jul 2024
0

Certain Charitable Donations Allow You to Avoid Taxable IRA Withdrawals

Roger Rossmeisl, CPA
Individual Tax Briefs
Certain Charitable Donations Allow You to Avoid Taxable IRA Withdrawals

If you’re a philanthropic individual who is also obligated to take required minimum distributions (RMDs) from a traditional IRA, you may want to consider a tax-saving strategy. It involves making a qualified charitable distribution (QCD). How it works To reap the possible tax advantages of a QCD, you make a cash donation to an IRS-approved charity out of your IRA. This method of transferring IRA assets to charity leverages the QCD provision that allows IRA owners who are age 70½ or older to direct up to $105,000 of their IRA distributions to charity in 2024. (For married couples, each spouse can make QCDs for a possible total of $210,000.) When making QCDs, the money given to charity counts toward your RMDs but doesn’t increase your adjusted gross...

17 Jul 2024
0

Protecting Your Business from Real Estate Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Protecting Your Business from Real Estate Fraud

Whether your company acquires businesses that own real estate or you invest in real estate directly, fraud poses an ever-present threat. Buying and selling real estate is complicated, and it’s relatively easy for crooks to manipulate the process. To help mitigate real estate fraud threats, thorough due diligence is essential. Staying current on common schemes and red flags also may enable you to identify risky transactions before you put down any money. 5 schemes First, be aware of these five common real estate fraud schemes: Fake documents. Every real estate transaction requires extensive documentation. To make an acquisition more enticing, sellers could fake rent rolls, financial statements or other documents that indicate an asset’s profitability. Additionally, sellers might doctor environmental impact reports to, for example, hide the...

17 Jul 2024
0

Consider Borrowing From your Corporation but Structure the Deal Carefully

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Considering Borrowing from your Corporation But Structure the Deal Carefully

If you own a closely held corporation, you can borrow funds from your business at rates that are lower than those charged by a bank. But it’s important to avoid certain risks and charge an adequate interest rate. Basics of this strategy Interest rates have increased over the last couple years. As a result, shareholders may decide to take loans from their corporations rather than pay higher interest rates on bank loans. In general, the IRS expects closely held corporations to charge interest on related-party loans, including loans to shareholders, at rates that at least equal applicable federal rates (AFRs). Otherwise, adverse tax results can be triggered. Fortunately, the AFRs are lower than the rates charged by commercial lenders. It can be advantageous to borrow money from your...

17 Jul 2024
0

What Might Be Ahead as Many Tax Provisions are Scheduled to Expire?

Roger Rossmeisl, CPA
Individual Tax Briefs
What Might Be Ahead as Many Tax Provisions are Scheduled to Expire?

Buckle up, America: Major tax changes are on the horizon. The reason has to do with tax law and the upcoming elections. Our current situation The Tax Cuts and Jobs Act (TCJA), which generally took effect in 2018, made sweeping changes. Many of its provisions are set to expire on December 31, 2025. With this date getting closer each day, you may wonder how your federal tax bill will be affected in 2026. The answer isn’t clear because the outcome of this November’s presidential and congressional elections is expected to affect the fate of many expiring provisions. A new political landscape in Washington could also mean other tax law changes. Corporate vs. individual taxes The TCJA cut the maximum corporate tax rate from 35% to 21%. It also lowered rates...

17 Jul 2024
0

Valuing Donations of Private Business Stock

Roger Rossmeisl, CPA
Valuation Briefs
Valuing Donations of Private Business Stock

Some business owners may be considering donating corporate stock to charities in 2024. Donations of public stocks are generally easy to value because their prices are listed on public stock exchanges. But valuations of private business interests are typically more complicated. Here’s some guidance on how valuators determine the fair market value (FMV) of closely held business shares and why a formal valuation may be needed to support charitable contribution deductions for these gifts. Tax deductions Qualified charitable donations can help lower your taxable income as well as support worthwhile causes. However, not all donations are tax deductible. Individuals can deduct them only if they itemize. In addition, charitable contributions must be made to qualified organizations. Depending on the amount of your private stock donation, to claim the...

17 Jul 2024
0

2024 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers

Roger Rossmeisl, CPA
Small Business Tax Briefs
2024 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers

July 15 Employers should deposit Social Security, Medicare and withheld income taxes for June if the monthly deposit rule applies. They should also deposit non-payroll withheld income tax for June if the monthly deposit rule applies. July 31 Report income tax withholding and FICA taxes for second quarter 2024 (Form 941) and pay any tax due. (See the exception below, under “August 12.”) File a 2023 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or request an extension. August 12 Report income tax withholding and FICA taxes for second quarter 2024 (Form 941), if you deposited on time and in full all the associated taxes due. September 16 If a calendar-year C corporation, pay the third installment of 2024 estimated income taxes. If a calendar-year S corporation or partnership that...

15 Jul 2024
0

Social Security Tax Update: How High Can it Go?

Roger Rossmeisl, CPA
Individual Tax Briefs
Social Security Tax Update: How High Can it Go?

Employees, self-employed individuals and employers all pay Social Security tax, and the amounts can get bigger every year. And yet, many people don’t fully understand the Social Security tax they pay. If you’re an employee If you’re an employee, your wages are hit with the 12.4% Social Security tax up to the annual wage ceiling. Half of the Social Security tax bill (6.2%) is withheld from your paychecks. The other half (also 6.2%) is paid by your employer, so you never actually see it. Unless you understand how the Social Security tax works and closely examine your pay statements, you may be blissfully unaware of the size of the tax. It’s potentially a lot! The Social Security tax wage ceiling for 2024 is $168,600 (up from $160,200 for...

15 Jul 2024
0

Hiring Your Child to Work at Your Business This Summer

Roger Rossmeisl, CPA
Small Business Tax Briefs
Hiring Your Child to Work at Your Business This Summer

With school out, you might be hiring your child to work at your company. In addition to giving your son or daughter some business knowledge, you and your child could reap some tax advantages. Benefits for your child There are special tax breaks for hiring your offspring if you operate your business as one of the following: A sole proprietorship, A partnership owned by both spouses, A single-member LLC that’s treated as a sole proprietorship for tax purposes, or An LLC that’s treated as a partnership owned by both spouses. These entities can hire an owner’s under-age-18 children as full- or part-time employees. The children’s wages then will be exempt from the following federal payroll taxes: Social Security tax, Medicare tax, and Federal unemployment (FUTA) tax (until an...

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