31 Jul 2019
0

Which Entity is Most Suitable for your Business?

Roger Rossmeisl, CPA
Small Business Tax Briefs
Which Entity is Most Suitable for you Business?

The Tax Cuts and Jobs Act (TCJA) has changed the landscape for business taxpayers.  These changes have caused many business owners to ask: Which entity is most suitable for me? TCJA introduced a flat 21% federal income tax rate for C corporations. Under prior law, profitable C corporations paid up to 35%. TCJA also cut individual income tax rates, which apply to sole proprietorships and pass-through entities, including partnerships, S corporations, and LLCs (treated as partnerships for tax purposes). However, the top rate dropped from 39.6% to only 37%. Which entity is most suitable: Entity tax basics Before the TCJA, conventional wisdom was that most small businesses should be set up as sole proprietorships or pass-through entities to avoid the double taxation of C corporations. A C corporation pays...

30 Jul 2019
0

Divorce Necessitates an Estate Plan Review

Roger Rossmeisl, CPA
Estate Planning Briefs
Divorce Necessitates an Estate Plan Review

Divorce necessitates an estate plan review.  It’s important to review your estate plan as early as possible, for two reasons: You may wish to revise your plan immediately to prevent your spouse from inheriting or gaining control over your assets if you die or become incapacitated before the divorce is final. Although a divorce judgment or settlement automatically extinguishes certain of your former spouse’s rights, some documents must be modified to ensure that he or she doesn’t receive unintended benefits. Consider revising your will and any revocable trusts to exclude your spouse. Note that, in many states, your spouse will retain elective share or community property rights to a portion of your estate until the marriage ends. But revising your will or trust will limit your spouse...

29 Jul 2019
0

Using Data Analysis to Detect Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Using Data Analysis to Detect Fraud

Using data analysis to detect fraud is changing the way many businesses operate. It’s also changing how forensic accountants do their jobs, providing fraud experts with the means to mine massive mounds of data like never before. USING DATA ANALYSIS TO DETECT FRAUD: 3 TECHNIQUES These analytical techniques are among the most efficient and effective at detecting occupational fraud: (1) Association analysis This method can help identify suspicious relationships by quantifying the odds of a combination of data points occurring together. In other words, it calculates the likelihood that, if one data point occurs, another will, too. If the combination occurs at an atypical rate, a red flag goes up. For example, association analysis might find that a certain supervisor tends to be on duty when inventory theft occurs. (2)...

25 Jul 2019
0

Donating Your Vehicle to Charity May Not Yield A Big Tax Deduction

Roger Rossmeisl, CPA
Individual Tax Briefs
Donating Your Vehicle to Charity

You’ve probably seen or heard ads urging you to donate your car to charity. “Make a difference and receive tax savings,” one organization states. But donating a vehicle may not result in a big tax deduction — or any deduction at all. Donating your vehicle, trading it in, or selling it? Let’s say you’re buying a new car and want to get rid of your old one. Among your options are trading in the vehicle to the dealer, selling it yourself or donating it to charity. If you donate, the tax deduction depends on whether you itemize and what the charity does with the vehicle. For cars worth more than $500, the deduction is the amount for which the charity actually sells the car, if it sells without...

24 Jul 2019
0

Don’t Mistake Kickbacks for Gifts

Roger Rossmeisl, CPA
Fraud Briefs
Dont Mistake Kickbacks for Gifts

Kickbacks return a portion of the money exchanged in a business transaction as compensation for favorable treatment. They’re illegal in the United States and many other countries. Don't mistake kickbacks for gifts.  Because kickbacks are often disguised as gifts, travel and entertainment, they can be hard to identify. Don't mistake kickbacks for gifts: intention of the gift-giver Gifts, gratuities or courtesies of modest value associated with ordinary business practices are usually acceptable. The key consideration is the intention of the giver. Your employees shouldn’t accept any gift offered with the intent to improperly influence business decisions — or that would give the impression of compromising the employee’s ability to act in the best interests of the company. The same integrity test should be applied in deciding whether to...

23 Jul 2019
0

Consider Taxes When Retiring in Another State

Roger Rossmeisl, CPA
Individual Tax Briefs
Consider Other State Taxes

When you retire, you may consider moving to another state — say, for the weather or to be closer to your loved ones. That said, don’t forget to consider taxes when retiring in another state as part of the equation. Establishing residency for state tax purposes may be more complicated than it initially appears to be. Consider taxes when retiring in another state: Step 1, identify all applicable taxes It may seem like a no-brainer to simply move to a state with no personal income tax. But, to make a good decision, you must consider all taxes that can potentially apply to a state resident. In addition to income taxes, these may include property taxes, sales taxes and estate taxes. If the states you’re considering have an income...

22 Jul 2019
0

Summer Hire Tax Credits May Be Available

Roger Rossmeisl, CPA
Small Business Tax Briefs
Summer Hires May Qualify for Tax Credits

Is your business hiring this summer? If so, there may be some summer hire tax credits available to you.  If the employees come from certain “targeted groups,” you may be eligible for the Work Opportunity Tax Credit (WOTC). This includes youth whom you bring in this summer for two or three months. The maximum credit employers can claim is $2,400 to $9,600 for each eligible employee. Summer hire tax credits: WOTC 10 targeted groups An employer is generally eligible for the credit only for qualified wages paid to members of 10 targeted groups: Qualified members of families receiving assistance under the Temporary Assistance for Needy Families program, Qualified veterans, Designated community residents who live in Empowerment Zones or rural renewal counties, Qualified ex-felons, Vocational rehabilitation referrals, Qualified...

28 Jun 2019
0

Social Security Phone Scams

Roger Rossmeisl, CPA
Fraud Briefs
Social Security Phone Scams

Despite the National Do Not Call registry and features such as caller ID, phone fraud is thriving in the mobile phone era. Using spoofed numbers — which appear to be connected to legitimate government offices and businesses or that resemble your own number — fraud perpetrators say anything and everything to try to steal your money. Recently, scammers have posed as Social Security officials to steal from unsuspecting consumers. Since January 2018, the Federal Trade Commission has received more than 63,000 reports about this scam. Only 3% of reporting call recipients lost money, but the losses total $16.6 million. Social Security phone scams: anatomy of a crime Here’s how the Social Security scheme works: Criminals call from spoofed phone numbers and tell consumers that their Social Security number has been...

28 Jun 2019
0

Beware the 100% Payroll Tax Penalty

Roger Rossmeisl, CPA
Small Business Tax Briefs
Beware the 100% Payroll Tax Penalty

If federal income tax and employment taxes (including Social Security) are withheld from employees’ paychecks and not handed over to the IRS, the so-called 100% Payroll Tax Penalty can be imposed. To make matters worse, the penalty can be assessed personally against a “responsible individual.” If a business makes payroll tax payments late, there are escalating penalties. And if an employer fails to make them, the IRS will crack down hard. With the “Trust Fund Recovery Penalty,” also known as the “100% Payroll Tax Penalty,” the IRS can assess the entire unpaid amount against a responsible person who willfully fails to comply with the law. Some business owners and executives facing a cash flow crunch may be tempted to dip into the payroll taxes withheld from employees....

28 Jun 2019
0

Dynasty Trusts Provide a Legacy

Roger Rossmeisl, CPA
Estate Planning Briefs
Dynasty Trusts Provide a Legacy

If a prime objective of your estate plan is to leave your mark, dynasty trusts provide a legacy.  That means it might be the right estate planning vehicle for you. The Tax Cuts and Jobs Act substantially increased the generation-skipping transfer (GST) tax exemption.  That makes a dynasty trust more appealing than ever. GST tax and dynasty trusts Dynasty trusts provide a legacy in that they allow substantial amounts of wealth to grow and compound free of federal gift, estate and GST taxes.  In so doing, tax-free benefits are provided for your grandchildren and future generations. The longevity of a dynasty trust varies from state to state.  It’s becoming more common for states to allow these trusts to last for hundreds of years or even in perpetuity. Avoiding...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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