01 Jan 2024
0

IRS Continues Dissuading Questionable ERTC Claims

Roger Rossmeisl, CPA
Automotive, Current Events, Small Business Tax Briefs
IRS Continues Dissuading Questionable ERTC Claims

As reported via IR-2023-230 on 12/6/2023 As part of continuing efforts to combat dubious Employee Retention Tax Credit (ERTC) claims, the Internal Revenue Service is sending an initial round of more than 20,000 letters to taxpayers notifying them of disallowed ERTC claims. IRS is disallowing claims to entities that: did not exist, or did not have paid employees during the period of eligibility to prevent improper ERTC payments from being made to ineligible entities. The letters are being sent as the IRS continues increased scrutiny of ERTC claims in response to misleading marketing campaigns that have targeted small businesses and other organizations. The IRS mailing is the latest in an expanded compliance effort that includes a special withdrawal program for those with pending claims who realize they...

01 Jan 2024
0

The Standard Business Mileage Rate Goes Up Slightly in 2024

Roger Rossmeisl, CPA
Small Business Tax Briefs
The Standard Business Mileage Rate Goes Up Slightly in 2024

The optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up by 1.5 cents per mile in 2024. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will be 67 cents (up from 65.5 cents for 2023). The increased tax deduction partly reflects the price of gasoline, which is about the same as it was a year ago. On December 21, 2023, the national average price of a gallon of regular gas was $3.12, compared with $3.10 a year earlier, according to AAA Gas Prices. Standard rate vs. tracking expenses Businesses can generally deduct the actual expenses attributable to business use of vehicles. These include gas, tires, oil, repairs, insurance,...

01 Jan 2024
0

2024 Q1 Tax Calendar: Key Deadlines for Businesses and Other Employers

Roger Rossmeisl, CPA
Small Business Tax Briefs
2024 Q1 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 first quarter of 2024. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. If you have questions about filing requirements, contact us. We can ensure you’re meeting all applicable deadlines. January 16 (The usual deadline of January 15 is a federal holiday) Pay the final installment of 2023 estimated tax. Farmers and fishermen: Pay estimated tax for 2023. If you don’t pay your estimated tax by January 16, you must file your 2023 return and pay all tax due by March 1, 2024, to avoid an estimated tax penalty. January 31 File 2023 Forms W-2, “Wage and Tax Statement,” with the Social Security...

31 Dec 2023
0

Giving Gifts and Throwing Parties Can Help Show Gratitude and Provide Tax Breaks

Roger Rossmeisl, CPA
Small Business Tax Briefs
Giving Gifts and Throwing Parties Can Help Show Gratitude and Provide Tax Breaks

During this holiday seasons, your business may want to show its gratitude to employees and customers by giving them gifts or hosting holiday parties. It’s a good time to review the tax rules associated with these expenses. Are they tax deductible by your business and is the value taxable to the recipients? Employee gifts Many businesses want to show their employees appreciation during the holiday time. In general, anything of value that you transfer to an employee is included in his or her taxable income (and, therefore, subject to income and payroll taxes) and deductible by your business. But there’s an exception for non-cash gifts that constitute a “de minimis” fringe benefit. These are items small in value and given so infrequently that they are administratively impracticable to...

31 Dec 2023
0

A Company Car is a Valuable Perk But Don’t Forget About Taxes

Roger Rossmeisl, CPA
Small Business Tax Briefs
A Company Car is a Valuable Perk But Don't Forget About Taxes

One of the most appreciated fringe benefits for owners and employees of small businesses is the use of a company car. This perk results in tax deductions for the employer as well as tax breaks for the owners and employees driving the cars. (And of course, they enjoy the non-tax benefit of using a company car.) Even better, current federal tax rules make the benefit more valuable than it was in the past. Rolling out the rules Let’s take a look at how the rules work in a typical situation. For example, a corporation decides to supply the owner-employee with a company car. The owner-employee needs the car to visit customers and satellite offices, check on suppliers and meet with vendors. He or she expects to drive...

03 Dec 2023
0

There May Still Be Time to Reduce your Small Business 2023 Tax Bill

Roger Rossmeisl, CPA
Small Business Tax Briefs
There May Still Be Time to Reduce Your Small Business 2023 Tax Bill

In the midst of holiday parties and shopping for gifts, don’t forget to consider steps to cut the 2023 tax liability for your business. You still have time to take advantage of a few opportunities. Time deductions and income If your business operates on a cash basis, you can significantly affect your amount of taxable income by accelerating your deductions into 2023 and deferring income into 2024 (assuming you expect to be taxed at the same or a lower rate next year). For example, you could put recurring expenses normally paid early in the year on your credit card before January 1 — that way, you can claim the deduction for 2023 even though you don’t pay the credit card bill until 2024. In certain circumstances, you also can...

26 Nov 2023
0

Unclaimed Property Voluntary Compliance Program Now Available in California

Roger Rossmeisl, CPA
Automotive, Small Business Tax Briefs
Unclaimed Property Voluntary Compliance Program Now Available in California

California AB 2280 established a new Unclaimed Property Voluntary Compliance Program that waives interest for taxpayers who voluntarily come into compliance with unclaimed property reporting requirements. The State Controller’s Office (SCO) has now opened the sign up process for businesses to apply for the program. Unclaimed Property Reporting Explained California businesses holding property belonging to others must file with the SCO to report unclaimed financial assets held by the entity for longer than the dormancy period applicable to the property in question (see “Unclaimed Property Explained” below). Failure to comply without reasonable cause Businesses that fail to comply with the unclaimed property reporting requirements, and do not have reasonable cause, are subject to interest assessed at the rate of 12% on the value of the unclaimed property. There exists...

26 Nov 2023
0

Tax Basics for Setting up a Businesses

Roger Rossmeisl, CPA
Small Business Tax Briefs
Tax Basics for Setting up a Business

As reported via IRS Tax Tip 2023-103 9/5/2023 Starting a new business can seem overwhelming for new entrepreneurs or even seasoned professionals. The IRS has resources to help new business owners understand the tax responsibilities of running a business. Here are a few things any entrepreneur needs to do when starting their business. Choose a business structure The form of business determines which income tax return a business needs to file. The most common business structures are: Sole proprietorship: An unincorporated business owned by an individual. There's no distinction between the taxpayer and their business. Partnership: An unincorporated business with ownership shared between two or more members. Corporation: Also known as a C corporation. It's a separate entity owned by shareholders. S Corporation: A corporation that elects to pass corporate income,...

26 Nov 2023
0

Employment Tax Considerations When Hiring Parents or Children

Roger Rossmeisl, CPA
Small Business Tax Briefs
Employment Tax Considerations When Hiring Parents or Children

As reported via IRS Fact Sheet 2019-14  in October 2019 One of the advantages of someone running their own business is hiring family members. But when including family members in business operations, certain tax treatments and employment tax rules apply. Here are some facts to know when working with a spouse, parent or child. Both spouses carrying on the trade or business If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a formal partnership agreement. If so, they should report income or loss from the business on Form 1065. They should not report the income on a Schedule C (Form 1040) in the name of one spouse as a sole proprietor. But, the spouses...

25 Nov 2023
0

An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt

Roger Rossmeisl, CPA
Individual Tax Briefs, Small Business Tax Briefs
An Offer in Compromise Can Help Certain Taxpayers Resolve Tax Debt

As reported via IRS Tax Tip 2023-58  on 4/27/2023 When a taxpayer can't pay their full tax liability or if paying would cause financial hardship, they may want to consider applying for an Offer in Compromise. This agreement between a taxpayer and the IRS settles a tax debt for less than the full amount owed. The goal is a compromise that's in the best interest of both the taxpayer and the agency. The application fee for an offer in compromise is $205. Low-income taxpayers don't have to pay this fee, and they should check if they meet the definition of low-income in the instructions for Form 656, Offer in Compromise. When reviewing applications, the IRS considers the taxpayer's unique set of facts and special circumstances affecting their...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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