25 Jun 2024
0

IRS Resumes Processing of Employee Retention Tax Credit Claims

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
IRS Resumes Processing of Employee Retention Tax Credit Claims

As reported in IR-2024-169 IRS enters next stage of Employee Retention Tax Credit work; review indicates vast majority show risk of being improper Highest-risk claims being denied, additional processing to begin on low-risk claims; heightened scrutiny and review continues as compliance work tops $2 billion; IRS will consult with Congress on potential legislative action before making decision on future of moratorium Following a detailed review to protect taxpayers and small businesses, the Internal Revenue Service on June 20, 2024 announced plans to deny tens of thousands of improper high-risk Employee Retention Tax Credit claims while starting a new round of processing lower-risk claims to help eligible taxpayers.  “The completion of this review provided the IRS with new insight into risky Employee Retention Tax Credit activity and confirmed widespread concerns...

24 Jun 2024
0

Shoring Up Protections Against Expense Reimbursement Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Shoring Up Protections Against Expense Reimbursement Fraud

One of the types of occupational fraud schemes that became more costly for employers since the beginning of the COVID-19 pandemic in 2020 is expense reimbursement fraud. According to the Association of Certified Fraud Examiners’ (ACFE’s) latest report, this type of employee scheme now ranks fourth after corruption, billing schemes and noncash fraud. Although the $50,000 median loss of expense reimbursement scams is less than that of some other frauds, it’s also very commonly perpetrated. According to software company Emburse, nearly 25% of 1,000 workers surveyed admitted to passing off personal purchases as work-related buys. If you let internal controls slip a bit during the pandemic and you’re seeing more exaggerated or falsified expense reports, it’s time to reinforce your fraud deterrents. How they do it Employees often...

24 Jun 2024
0

Inflation Enhances the 2025 Amounts for Health Savings Accounts

Roger Rossmeisl, CPA
Small Business Tax Briefs
Inflation Enhances the 2025 Amounts for Health Savings Accounts

The IRS recently released guidance providing the 2025 inflation-adjusted amounts for Health Savings Accounts (HSAs). These amounts are adjusted each year, based on inflation, and the adjustments are announced earlier in the year than other inflation-adjusted amounts, which allows employers to get ready for the next year. Fundamentals of HSAs An HSA is a trust created or organized exclusively for the purpose of paying the qualified medical expenses of an account beneficiary. An HSA can only be established for the benefit of an eligible individual who is covered under a high-deductible health plan (HDHP). In addition, a participant can’t be enrolled in Medicare or have other health coverage (exceptions include dental, vision, long-term care, accident and specific disease insurance). Within specified dollar limits, an above-the-line tax deduction is...

24 Jun 2024
0

You May Be Entitled to Tax Breaks if Caring for an Elderly Relative

Roger Rossmeisl, CPA
Individual Tax Briefs
You May be Entitled to Tax Breaks if Caring for an Elderly Relative

There are many rewards for taking care of an elderly relative. They may include feeling needed, making a difference in the person’s life and allowing the person to receive quality care. In addition, you could also be eligible for tax breaks. Here’s a rundown of four of them: Medical expenses. If the individual qualifies as your “medical dependent” and you itemize deductions on your tax return, you can include any medical expenses you incur for the person along with your own when determining your medical deduction. The test for determining whether an individual qualifies as your “medical dependent” is less stringent than that used to determine whether an individual is your “dependent,” which is discussed below. In general, an individual qualifies as a medical...

24 Jun 2024
0

Consider Alternative Indicators of Business Value

Roger Rossmeisl, CPA
Valuation Briefs
Consider Alternative Indicators of Business Value

When valuing a business, experts often look beyond the company’s financial statements. Management interviews and document requests may provide additional objective insight into how much the owners believe the business is worth. This information shouldn’t be used as a substitute for a comprehensive valuation analysis, but it may identify discrepancies that need to be reconciled. Here are five common alternative indicators of value that experts may consider: 1. Buy-sell agreements. Owners often protect their business interests with buy-sell agreements. These agreements may provide a specific value for the business or contain valuation formulas to be used on an owner’s death or termination. Some detailed buy-sell agreements may even specify whether valuation discounts apply and, if so, how much. But if a buy-sell agreement has been superseded...

05 Jun 2024
0

Should You Convert Your Business from a C to an S Corporation?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Should Your Convert Your Business from a C to an S Corporation?

Choosing the right business entity has many implications, including the amount of your tax bill. The most common business structures are sole proprietorships, partnerships, limited liability companies, C corporations and S corporations. In some cases, a business may decide to switch from one entity type to another. Although S corporations can provide substantial tax benefits over C corporations in some circumstances, there are potentially costly tax issues that you should assess before making the decision to convert from a C corporation to an S corporation. Here are four considerations: 1. LIFO inventories. C corporations that use last-in, first-out (LIFO) inventories must pay tax on the benefits they derived by using LIFO if they convert to S corporations. The tax can be spread over four years. This cost must be weighed against the potential tax gains from...

05 Jun 2024
0

A Three-Step Strategy to Save Tax When Selling Appreciated Vacant Land

Roger Rossmeisl, CPA
Individual Tax Briefs
A Three-Step Strategy to Save Tax When Selling Appreciated Vacant Land

Let’s say you own one or more vacant lots. The property has appreciated greatly and you’re ready to sell. Or maybe you have a parcel of appreciated land that you want to subdivide into lots, develop them and sell them off for a big profit. Either way, you’ll incur a tax bill. For purposes of these examples, let’s assume that you own the vacant land directly as an individual or indirectly through a single-member LLC (SMLLC), a partnership or a multi-member LLC that’s treated as a partnership for federal income tax purposes. Here are a couple of scenarios and a strategy to consider. Scenario 1: You simply sell vacant land that you’ve held for investment If you’ve owned the land for more than one year and you’re not classified...

05 Jun 2024
0

Tax Tips When Buying the Assets of a Business

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Tips When Buying the Assets of a Business

After experiencing a downturn in 2023, merger and acquisition activity in several sectors is rebounding in 2024. If you’re buying a business, you want the best results possible after taxes. You can potentially structure the purchase in two ways: Buy the assets of the business, or Buy the seller’s entity ownership interest if the target business is operated as a corporation, partnership or LLC. In this post, we’re going to focus on buying assets. Asset purchase tax basics You must allocate the total purchase price to the specific assets acquired. The amount allocated to each asset becomes the initial tax basis of that asset. For depreciable and amortizable assets (such as furniture, fixtures, equipment, buildings, software and intangibles such as customer lists and goodwill), the initial tax basis determines...

05 Jun 2024
0

What to Do if your Business is Defrauded

Roger Rossmeisl, CPA
Fraud Briefs
What to do if your business is defrauded

Occupational fraud isn’t just a financial threat. It can potentially change a business’s reputation, culture and relationships. But before dealing with any larger ramifications of fraud, defrauded companies must first “clean up” the mess. This may include potentially terminating the perpetrator, taking civil action or referring the perpetrator to the police. Whatever a business chooses to do in the aftermath of a fraud incident, swift action is paramount and internal controls must be addressed. How do victims react? In its Occupational Fraud 2024: A Report to the Nations, the Association of Certified Fraud Examiners (ACFE) reveals that when organizations uncover fraud, 67% choose to terminate the individuals involved. In 57% of cases, companies refer fraud perpetrators to law enforcement. Of those, 45% result in the perpetrator pleading...

17 May 2024
0

California Short-Term Rentals Now Require a Business Personal Property Filing

Roger Rossmeisl, CPA
Small Business Tax Briefs
California Short-Term Rentals Now Require a Business Personal Property Filing

Commencing in 2024, individuals who possess short-term rentals (such as rentals facilitated by platforms like Airbnb) will be required to fill out the newly introduced Form BOE-571-STR, known as the Short Term Rental Property Statement, in order to disclose their business personal property. Business personal property is typically subject to annual reappraisal, unlike real property. Every year, business owners are required to provide a business property statement that provides a comprehensive breakdown of the expenses associated with supplies, equipment, and fixtures at each of their locations. Form BOE-571-STR can be found here: www.boe.ca.gov/proptaxes/pdf/sample-boe571str.pdf When a property owner rents out all or part of their property, such as a residential unit, they are required to pay business property tax on the items used for the rental, such as furniture,...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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