18 Sep 2023
0

Receive More than $10,000 in Cash at your Business? Here’s What You Must Do

Roger Rossmeisl, CPA
Small Business Tax Briefs
Receive More Than $10,000 in Cash at your Business? Here's What You Must Do

Does your business receive large amounts of cash or cash equivalents? If so, you’re generally required to report these transactions to the IRS — and not just on your tax return. The requirements Each person who, in the course of operating a trade or business, receives more than $10,000 in cash in one transaction (or two or more related transactions), must file Form 8300. Who is a “person”? It can be an individual, company, corporation, partnership, association, trust or estate. What are considered “related transactions”? Any transactions conducted in a 24-hour period. Transactions can also be considered related even if they occur over a period of more than 24 hours if the recipient knows, or has reason to know, that each transaction is one of a series...

14 Sep 2023
0

IRS Orders Immediate Stop to New Employee Retention Tax Credit Processing

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
IRS Orders Immediate Stop to New ERTC Processing

As appearing in IRS IR-2023-169 To protect taxpayers from scams, IRS orders immediate stop to new Employee Retention Tax Credit (ERTC) processing amid surge of questionable claims Concerns from tax pros, aggressive marketing to ineligible applicants highlights unacceptable risk to businesses and the tax system Moratorium on processing of new claims through year’s end will allow IRS to add more safeguards to prevent future abuse, protect businesses from predatory tactics; IRS working with Justice Department to pursue fraud fueled by aggressive marketing WASHINGTON – Amid rising concerns about a flood of improper Employee Retention Credit claims, the Internal Revenue Service today announced an immediate moratorium through at least the end of the year on processing new claims for the pandemic-era relief program to protect honest small business owners from...

04 Sep 2023
0

Cash Payments Over $10,000 Must Be Reported Online Beginning 1/1/2024

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Cash Payments Over $10,000 Must be Reported Online Beginning 1/1/2024

As reported in IRS News Release IR-2023-157 The Internal Revenue Service announced that starting 1/1/2024, businesses are required to electronically file (e-file) Form 8300, Report of Cash Payments Over $10,000, instead of filing a paper return. This new requirement follows final regulations amending e-filing rules for information returns, including Forms 8300. Businesses that receive more than $10,000 in cash must report transactions to the U.S. government. Although many cash transactions are legitimate, information reported on Forms 8300 can help combat those who evade taxes, profit from the drug trade, engage in terrorist financing or conduct other criminal activities. The government can often trace money from these illegal activities through payments reported on Forms 8300 that are timely filed, complete and accurate. The new requirement for e-filing Forms 8300...

04 Sep 2023
0

The Advantages of Using an LLC for your Small Business

Roger Rossmeisl, CPA
Small Business Tax Briefs
The Advantages of Using an LLC for your Small Business

If you operate your small business as a sole proprietorship, you may have thought about forming a limited liability company (LLC) to protect your assets. Or maybe you’re launching a new business and want to know your options for setting it up. Here are the basics of operating as an LLC and why it might be a good choice for your business. An LLC is a bit of a hybrid entity because it can be structured to resemble a corporation for owner liability purposes and a partnership for federal tax purposes. This duality may provide the owners with the best of both worlds. Protecting your personal assets Like the shareholders of a corporation, the owners of an LLC (called “members” rather than shareholders or partners) generally aren’t liable...

06 Aug 2023
0

A Tax-Smart Way to Develop and Sell Appreciated Land

Roger Rossmeisl, CPA
Small Business Tax Briefs
A Tax-Smart Way to Develop and Sell Appreciated Land

Let’s say you own highly appreciated land that’s now ripe for development. If you subdivide it, develop the resulting parcels and sell them off for a hefty profit, it could trigger a large tax bill. In this scenario, the tax rules generally treat you as a real estate dealer. That means your entire profit — including the portion from pre-development appreciation in the value of the land — will be treated as high-taxed ordinary income subject to a federal rate of up to 37%. You may also owe the 3.8% net investment income tax (NIIT) for a combined federal rate of up to 40.8%. And you may owe state income tax too. It would be better if you could arrange to pay lower long-term capital gain (LTCG) tax rates...

06 Aug 2023
0

Corporate Officers or Shareholders: How Should You Treat Expenses Paid Personally?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Corporate Officers or Shareholders: How Should you Treat Expenses Paid Personally?

If you play a major role in a closely held corporation, you may sometimes spend money on corporate expenses personally. These costs may end up being nondeductible both by an officer and the corporation unless the correct steps are taken. This issue is more likely to happen with a financially troubled corporation. What can’t you deduct? In general, you can’t deduct an expense you incur on behalf of your corporation, even if it’s a legitimate “trade or business” expense and even if the corporation is financially troubled. This is because a taxpayer can only deduct expenses that are his own. And since your corporation’s legal existence as a separate entity must be respected, the corporation’s costs aren’t yours and thus can’t be deducted even if you pay them. To...

06 Aug 2023
0

Use an S Corporation to Mitigate Federal Employment Tax Bills

Roger Rossmeisl, CPA
Small Business Tax Briefs
Use an S Corporation to Mitigate Federal Employment Tax Bills

If you own an unincorporated small business, you probably don’t like the size of your self-employment (SE) tax bills. No wonder! For 2023, the SE tax is imposed at the painfully high rate of 15.3% on the first $160,200 of net SE income. This includes 12.4% for Social Security tax and 2.9% for Medicare tax. The $160,200 Social Security tax ceiling is up from the $147,000 ceiling for 2022, and it’s only going to get worse in future years, thanks to inflation. Above the Social Security tax ceiling, the Medicare tax component of the SE tax continues at a 2.9% rate before increasing to 3.8% at higher levels of net SE income thanks to the 0.9% additional Medicare tax, on all income. The S corp advantage For wages...

06 Aug 2023
0

Starting a Business? How Expenses will be Treated on your Tax Return

Roger Rossmeisl, CPA
Small Business Tax Briefs
Starting a Business? How Expenses Will be Treated on your Tax Return.

Government officials saw a large increase in the number of new businesses launched during the COVID-19 pandemic. And the U.S. Census Bureau reports that business applications are still increasing slightly (up 0.4% from April 2023 to May 2023). The Bureau measures this by tracking the number of businesses applying for Employer Identification Numbers. If you’re one of the entrepreneurs, you may not know that many of the expenses incurred by start-ups can’t be currently deducted on your tax return. You should be aware that the way you handle some of your initial expenses can make a large difference in your federal tax bill. Handling expenses If you’re starting or planning to launch a new business, here are three rules to keep in mind: Start-up costs include those incurred...

06 Aug 2023
0

The Trust Fund Recovery Penalty: Who Can it be Personally Assessed Against?

Roger Rossmeisl, CPA
Small Business Tax Briefs
The Trust Fund Recovery Penalty: Who Can it be Personally Assessed Against?

If you own or manage a business with employees, there’s a harsh tax penalty that you could be at risk for paying personally. The Trust Fund Recovery Penalty (TFRP) applies to Social Security and income taxes that are withheld by a business from its employees’ wages. Sweeping penalty The TFRP is dangerous because it applies to a broad range of actions and to a wide range of people involved in a business. Here are some answers to questions about the penalty: What actions are penalized? The TFRP applies to any willful failure to collect, or truthfully account for, and pay over taxes required to be withheld from employees’ wages. Why is it so harsh? Taxes are considered the government’s property. The IRS explains that Social Security and income taxes “are...

06 Aug 2023
0

2023 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers

Roger Rossmeisl, CPA
Small Business Tax Briefs
2023 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers

Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2023. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. July 31  Report income tax withholding and FICA taxes for second quarter 2023 (Form 941) and pay any tax due. (See the exception below, under “August 10.”) File a 2022 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or request an extension. August 10  Report income tax withholding and FICA taxes for second quarter 2023 (Form 941), if you deposited on time and in full all of the associated taxes due. September 15 If a...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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