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April, 2010
Business Startup Costs - As CPAs and business consultants, we
get approached every day it seems by a client or potential client with
a new business idea they are investigating. As we all know, some
of those ideas work out and become viable enterprises and some never
get off the ground.
Factoring Receivables - From time to time, we receive inquiries from clients or potential
clients that are looking to get started on a new venture but perhaps are
not creditworthy enough to borrow the needed money. Occasionally, if
their business is already operating, factoring their customer receivables
can be an attractive fundraising option.
Non-Business Bad Debts - Okay, so two years ago you loaned your spouse's Uncle Charlie $2,000.
After 24 months of Uncle Charlie avoiding you like the plague, you have now
concluded that he's the deadbeat you suspected he was to begin with and you're
calling us to find out if you can deduct this loss.
March, 2010
Paying The
IRS In Installments -
Did you discover this year that you owed more taxes than
you had anticipated? Taxpayers who cannot pay the full tax
due may set up an installment payment plan with the IRS.
IRS Penalties - The
number of penalties available to the IRS to punish wrongdoers is
staggering. This section covers the ones that are most likely to be
imposed on a small business person.
Acquiring
A Business - Whenever one our
clients is looking to sell his or her corporation, we often encourage them to
seek a stock transaction with the potential buyer if at all possible. On
the other hand, when we have a client considering the purchase of a small
business, we almost always advise that they buy only the assets of the company
and not the stock.
Febuary, 2010
Classifying
Employees -
Classifying your
employees as either exempt or non-exempt is neither exact nor easy. The decision cannot be
made arbitrarily, nor should it be made based solely on the job title or the way the
employee is paid, i.e., hourly or salaried.
Executive Compensation -
A recent court decision demonstrates once again that the IRS is
examining executive compensation with a critical eye and companies with potentially
excessive comp packages had better be prepared to defend their position or face disallowed
deductions along with penalty and interest.
Corporate Check Signing - In a court case, a CFO was ordered to pay $45,000 to a company that brought
suit against him personally when the check he signed for his corporation did not clear the
bank.
January, 2010
Getting
Your Tax Records Organized -
Now that we have come upon another tax season (that noise you hear in
the background is the sound of our staff sighing), we typically spend the
first few days getting our office organized for the oncoming rush.
Getting organized is also good advice for most of our clients as well.
Tax Issues During A
Divorce -
To be quite honest, this isn't a topic we enjoy discussing with our
clients, but divorce is a fact of life and it is important that both
parties know and understand the tax ramifications of a divorce during the
"negotiations" for lack of a better word.
Donating
Inventory -
Whenever we are assisting clients with year-end inventories, the question
often comes up about what to do with slow-moving or
excess items. It usually comes as a surprise to many business
owners that they can actually reap a nice tax deduction by donating their
excess inventory to charity.
December, 2009
Tax Benefits of Home Ownership
- Your home may well be the best tax shelter you could
possibly own. In addition to current income tax savings while you own your
home, any gain you realize as the result of an increase in the value of
your home will most likely be excluded from taxes.
Factoring Receivables -
From time to time, we receive inquiries from clients or potential
clients that are looking to get started on a new venture but perhaps are
not creditworthy enough to borrow the needed money. Occasionally, if
their business is already operating, factoring their customer receivables
can be an attractive fundraising option.
Reducing
Your Property Tax Bill -
Many real
estate tax assessments are made erroneously, and many homeowners who challenge their real
estate tax assessments succeed in reducing their property taxes.
November, 2009
Understanding
Your Credit Report -
Almost everyone has faced it. You go into a lending
agency to buy a new car or purchase a home only to have questions arise
about items on your credit report.
Keeping Personal
Records -
Each year as we deliver our clients' tax return copies and filing information
to them, we inevitably get asked the age-old question: "How long do I
need to keep this stuff?"
Buy-Sell
Agreements -
Many small business owners often ignore the
critical importance of a well-designed and updated buy-sell
agreement. In the event of a buyout or death, a properly written
buy-sell document can address major issues such as payment terms, funding
and tax impact.
October, 2009
IRS Penalties - The
number of penalties available to the IRS to punish wrongdoers is
staggering. This section covers the ones that are most likely to be
imposed on a small business person.
Tax Abatements - At some
point in almost everyone's life, it seems, we will receive greetings from
the IRS which includes a penalty. The penalty could result from
filing or paying your taxes late or misstating your income or deductions
on your return.
September, 2009
Sales Tax Audits - If
your company has not had the unpleasurable experience of a state sales tax
audit within the last two or three years, it may be time to batten down
the hatches!
Renting Out Your
Second Home -
If you have a second home or vacation home that you
would like to rent out for part of the year, it can actually be an
excellent way to earn additional income and get a nice tax break at the
same time.
Generation Skipping Transfer
Trusts - As we have pointed out in past articles, estate taxes represent the
single largest threat to a family's wealth over the course of several generations.
August, 2009
Business Owner's
Insurance - Like a comprehensive homeowner's
policy, a business owner's policy protects against economic losses caused by damage to the
owner's property and by legal liability to others for bodily injury and property damage
involving the business.
Related
Party Sales -
Over the years, we have had the difficult task of bringing many clients down
to earth after they had "developed" the perfect plan to rid themselves
of a piece of property by selling it at a loss to a relative and thereby gaining
a tax deduction. It certainly sounds like a grand plan. There is,
however one small catch - Code Sec. 267 specifically disallows losses on sales
to related parties.
Determining State Residency
-
Over the years, many people across the country have been able to lower their
tax bill by performing a seemingly simple maneuver - moving.
July, 2009
Establishing Reasonable
Compensation - We've seen it before. A successful
entrepreneur (let's call him Dave) starts his own company and after a few
years of blood, sweat, toil and tears, he begins to reap the rewards in
the form of a million dollar salary and vacations in Bermuda.
Placing
Your Spouse On The Payroll -
If you own a small business and have a spouse
who does not have full-time employment elsewhere, you may want to consider
placing him or her on your company payroll.
Breakeven Analysis - It is
absolutely essential that each business owner do a breakeven analysis of his current or
proposed business. A breakeven analysis examines the interaction among fixed costs,
variable costs, prices, and unit volume to determine that combination of elements in which
revenues and total costs are equal.
June, 2009
Deducting Your
Vehicle Expenses - If you use your car or truck for
business-related trips, to deliver food to your favorite charity, or even to drive the
kids to the doctor’s office, you can deduct at least some of the costs.
Homeowners
Review -
If you have recently made a major addition or renovation to your
home, you may want to take a moment and review your homeowners insurance. The
reason? Many of the largest home insurers (including State Farm and Allstate) are
now placing caps on their replacement policies.
Is Your Sideline Business A
Hobby? That is a serious question for many individuals who are moonlighting from
their "day job" with a sideline business. We have all
heard the stories over the years of people deducting 20 straight years of
losses on their horse farm business, but what about the guy who races
stock cars or buys and sells rare coins?
May, 2009
Estimated
Tax FAQs -
Whenever one of our clients makes the big leap
from "contented employee" to "stress-filled business
owner," one of the first tax-related discussions we typically
have with them concerns the rules for paying estimated taxes.
This article should help to clear up some common misconceptions many
people may have.
The "Kiddie" Tax
-
For our clients that have children
under the age of 19 (or 24 for full-time students) earning interest and dividends, we often are faced
with a choice of how to report that investment income.
Loans
or Dividends -
Making loans to or taking a loan from a corporation where you're a
stockholder can lead to tax trouble. In one highly referenced legal case
from the 1990s, the taxpayer 'borrowed' money from his regular corporation.
Disclaimer
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Boyum & Barenscheer,
PLLP