When you employ your children to work in your business, make sure that you comply with both the IRS and the Department of Labor. Labor Law Here’s what the Department of Labor has to say in its plain English explanation about a parent hiring his or her child: The Fair Labor Standards Act provides for certain exemptions. Youth younger than 16 years of age working in nonagricultural employment in a business solely owned by their parents or by persons standing in place of their parents,...

As you likely know, the Tax Cuts and Jobs Act increased bonus depreciation to 100 percent. Unlike most tax provisions that involve a tax election, this one requires you to elect out if you don’t want it. For example, you (or your corporation) buy two $50,000 trucks, each with a gross vehicle weight rating of 6,500 pounds and a bed length of 6.5 feet. You use the trucks 100 percent for business. Because of the weight and bed size, the trucks are exempt from the luxury passenger vehicle depreciation...

As we get closer and closer to Tax Day next month, the team and I have heard some version of the same thing more than a few times:  “I just don’t get paid what I’m worth.” Now, I’m not going to touch that one, because there are WAY too many variables in it.  But even if you work for someone else and have no desire to open your own business, are there ways out there that could allow you to make some money using that experience? The reason I ask is, today, with the digital technology...

Tax season is in full swing here and, just like we do every year, the team and I have been explaining why a lot of “tax breaks” simply aren’t legal.  No matter what, you cannot claim your cat as a dependent – but keep reading, because, under the right circumstances, you can write off the cat food…  On the other hand, we HAVE found some interesting (and legal) tax breaks that are legit… Any compensation you receive from being wrongly incarcerated.  Think about it – every...

If you have employees who travel for your business, would the IRS travel per diem method simplify your recordkeeping and reduce your risk of audit disallowance? The per diem travel reimbursement meets the proof of expense requirements for an accountable plan. This removes audit-disallowance risk and also makes travel reimbursement policies clear to your employees. What’s the Per Diem? The travel per diem rates fall into three categories. Here are the current rates that apply for tax...

For the last few weeks, I’ve been sharing a lot of financial “stuff” based on how so many people find themselves in hot water when it comes to money and spending.  This week, though, as tax season is definitely heating up, I wanted to get back to some basics when it comes to everybody’s favorite problem – tax fraud. Just like clockwork, my team and I have been getting all sorts of notices from the IRS about the latest schemes to take advantage of taxpayers and while some of 2020’s scams...

This late in the month, you’ve probably become firmly convinced that I’ve gone crazy.  Why is a CPA giving business lessons?  Where’d they get all these ideas, anyway? Well, a lot of it is simply experience.  I work with all types and sizes of companies and entrepreneurs, so I’ve seen a lot of neat ideas that have paid off handsomely for my clients. Besides, I’m supposed to ask questions, right?  I do, and I’m trying to share some of the many “small” lessons...

With incentive stock options (ISOs), you could be on your way to a very nice payout. But you must consider both the regular federal income tax results and the alternative minimum tax (AMT) results. In addition, you must pay attention to special rules that apply to so-called disqualifying dispositions of shares acquired by exercising ISOs. This sounds complicated, and it is a little, but we can help. You will eventually sell shares acquired by exercising ISOs, hopefully for a healthy...

The Setting Every Community Up for Retirement Enhancement (SECURE) Act changed the landscape for retirement and savings planning. Here are eight important reminders about this new law: You can’t use contributions made in 2020 but applied to 2019 for any SECURE Act provisions that apply to contributions made after December 31, 2019.If you inherit an IRA, you now have to empty it within 10 years. But there are many exceptions to this rule, including one for the surviving spouse.You determine...

Everybody jokes about “keeping up with the Jones’” when it comes to the call of buying things for the sake of buying them – and going into deep debt for the sake of appearance – but why? We’ve all got somebody we look up to and try to emulate, but does it really pay off?  No.  Not ever.  What it does do is to create a situation where we all start to look the same, sound the same, dress the same, and drive the same thing – all financed at low interest rates that will...