29 Sep 2024
0

Treasury, IRS Issue Additional Guidance on the Alternative Fuel Vehicle Refueling Property Credit

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
Treasury, IRS Issue Additional Guidance on the Alternative Vehicle Refueling Property Credit

As reported via IR-2024-240 on 9/18/2024 The Department of Treasury and Internal Revenue Service issued proposed regulations to provide guidance for the Alternative Fuel Vehicle Refueling Property Credit (the tax credit related to the installation of EV chargers). The Inflation Reduction Act amended the credit for qualified alternative fuel vehicle refueling property. The changes apply to qualified alternative fuel vehicle refueling property placed in service after 12/31/2022, and before 01/01/2033. Business vs Non-Business Property Property Subject to Depreciation The credit amount for property not subject to depreciation is 30% of the cost of the qualified property placed in service during the tax year.  The credit is limited to $1,000 per item of non-depreciable property Property Not Subject to Depreciation The credit amount for depreciable property is 6% of the cost of the...

29 Sep 2024
0

2024 Q4 Tax Calendar: Key Deadlines for Businesses and Other Employers

Roger Rossmeisl, CPA
Small Business Tax Briefs
2024 Q4 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 fourth quarter of 2024. 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. Note: Certain tax-filing and tax-payment deadlines may be postponed for taxpayers who reside in or have a business in a federally declared disaster area. Tuesday, October 1 The last day you can initially set up a SIMPLE IRA plan, provided you (or any predecessor employer) didn’t previously maintain a SIMPLE IRA plan. If you’re a new employer that comes into existence after October 1 of the year, you can establish a SIMPLE IRA plan...

29 Sep 2024
0

Help Ensure Your Partnership or LLC Complies with Tax Law

Roger Rossmeisl, CPA
Small Business Tax Briefs
Help Ensure Your Partnership or LLC Complies with Tax Law

When drafting partnership and LLC operating agreements, various tax issues must be addressed. This is also true of multi-member LLCs that are treated as partnerships for tax purposes. Here are some critical issues to include in your agreement so your business remains in compliance with federal tax law. Identify and describe guaranteed payments to partners For income tax purposes, a guaranteed payment is one made by a partnership that’s: 1) to the partner acting in the capacity of a partner, 2) in exchange for services performed for the partnership or for the use of capital by the partnership, and 3) not dependent on partnership income. Because special income tax rules apply to guaranteed payments, they should be identified and described in a partnership agreement. For instance: The partnership generally deducts guaranteed...

09 Sep 2024
0

It’s Time for Your Small Business to Think About Year-End Tax Planning

Roger Rossmeisl, CPA
Small Business Tax Briefs
It's Time for your Small Business to Think About Year-End Tax Planning

With Labor Day in the rearview mirror, it’s time to take proactive steps that may help lower your small business’s taxes for this year and next. The strategy of deferring income and accelerating deductions to minimize taxes can be effective for most businesses, as is the approach of bunching deductible expenses into this year or next to maximize their tax value. Do you expect to be in a higher tax bracket next year? If so, then opposite strategies may produce better results. For example, you could pull income into 2024 to be taxed at lower rates, and defer deductible expenses until 2025, when they can be claimed to offset higher-taxed income. Here are some other ideas that may help you save tax dollars if you act soon. Estimated...

09 Sep 2024
0

Reasons an LLC Might Be the Ideal Choice for your Small to Medium-Size Business

Roger Rossmeisl, CPA
Small Business Tax Briefs
Reasons an LLC Might be the Ideal Choice for your Small to Medium-Size Business

Choosing the right business entity is a key decision for any business. The entity you pick can affect your tax bill, your personal liability and other issues. For many businesses, a limited liability company (LLC) is an attractive choice. 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 several benefits. Like the shareholders of a corporation, the owners of an LLC (called members rather than shareholders or partners) generally aren’t liable for business debts except to the extent of their investment. Therefore, an owner can operate a business with the security of knowing that personal assets (such as a home or individual investment account) are protected from the entity’s...

09 Sep 2024
0

Craft Partnership Agreements and LLC Operating Agreements with Precision

Roger Rossmeisl, CPA
Small Business Tax Briefs
Craft Partnership Agreements and LLC Operating Agreements with Precision

Partnerships are often used for business and investment activities. So are multi-member LLCs that are treated as partnerships for tax purposes. A major reason is that these entities offer federal income tax advantages, the most important of which is pass-through taxation. They also must follow some special and sometimes complicated federal income tax rules. Governing documents A partnership is governed by a partnership agreement, which specifies the rights and obligations of the entity and its partners. Similarly, an LLC is governed by an operating agreement, which specifies the rights and obligations of the entity and its members. These governing documents should address certain tax-related issues. Here are some key points when creating partnership and LLC governing documents. Partnership tax basics The tax numbers of a partnership are allocated to...

09 Sep 2024
0

Cash or Accrual Accounting: What’s Best for Tax Purposes?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Cash or Accrual Accounting: What's Best for Tax Purposes

Your businesses may have a choice between using the cash or accrual method of accounting for tax purposes. The cash method often provides significant tax benefits for those that qualify. However, some businesses may be better off using the accrual method. Therefore, you need to evaluate the tax accounting method for your business to ensure that it’s the most beneficial approach. The current situation “Small businesses,” as defined by the tax code, are generally eligible to use either cash or accrual accounting for tax purposes. (Some businesses may also be eligible to use various hybrid approaches.) Before the Tax Cuts and Jobs Act (TCJA) took effect, the gross receipts threshold for classification as a small business varied from $1 million to $10 million depending on how a business was...

09 Sep 2024
0

Understanding Taxes on Real Estate Gains

Roger Rossmeisl, CPA
Small Business Tax Briefs
Understanding Taxes on Real Estate Gains

Let’s say you own real estate that has been held for more than one year and is sold for a taxable gain. Perhaps this gain comes from indirect ownership of real estate via a pass-through entity such as an LLC, partnership or S corporation. You may expect to pay Uncle Sam the standard 15% or 20% federal income tax rate that usually applies to long-term capital gains from assets held for more than one year. However, some real estate gains can be taxed at higher rates due to depreciation deductions. Here’s a rundown of the federal income tax issues that might be involved in real estate gains. Vacant land The current maximum federal long-term capital gain tax rate for a sale of vacant land is 20%. The 20% rate...

11 Aug 2024
0

IRS Shares Additional Warning Signs of Incorrect Claims for ERTC

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
IRS Shares Additional Warning Signs of Incorrect Claims for ERTC

As appearing in IR-2024-198 Businesses urged to proactively resolve erroneous claims to avoid penalties, interest, audits As the Internal Revenue Service intensifies work on the Employee Retention Tax Credit (ERTC), the agency today shared five new warning signs being seen on incorrect claims by businesses.   The new list comes from common issues the IRS compliance teams have seen while analyzing and processing ERTC claims. The new items are in addition to seven problem areas the IRS previously highlighted.  The IRS urged businesses with pending claims to carefully review their filings to confirm their eligibility and ensure credits claimed don’t include any of these 12 warning signs or other mistakes. Businesses with these indicators should talk to a trusted tax professional and consider using special ERTC Withdrawal Program that remains available. Business considering...

11 Aug 2024
0

IRS Resumes Processing of ERTC Claims

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

As appearing in IR-2024-203 Agency accelerates work on complex credit as more payments move into processing.  Vigilance, monitoring continues on potentially improper claims On 8/8/24, the Internal Revenue Service announced additional actions to help small businesses and prevent improper payments in the Employee Retention Tax Credit (ERTC) program, including accelerating more payments and continuing compliance work on the complex pandemic-era credit that was flooded with claims following misleading marketing.  The IRS is continuing to work denials of improper ERTC claims, intensifying audits and pursuing civil and criminal investigations of potential fraud and abuse. The findings of the IRS review, announced in June, confirmed concerns raised by tax professionals and others that there was an extremely high rate of improper ERTC claims in the current inventory of ERTC claims.  In...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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