Category: Accounting Advisory

Here’s a tax break you might not have considered: Your business could be eligible for a tax credit for money you spend to meet the requirements of the Americans with Disabilities Act. The law requires companies with 15 or more employees to make reasonable accommodations in the workplace for disabled employees. (Reasonable accommodations must be made on a case-by-case basis and are not required when the cost would cause an undue hardship.) Eligible small businesses can claim a credit equal… Read more ›

Councilor, Buchanan and Mitchell (CBM) works closely with clients to protect their financial and data operations from phishing attacks and criminals seeking access to corporate networks to steal or hold private, customer-related information for ransom. Members of CBM’s outsourced accounting and advisory team recently prevented a business from falling prey to a phishing attack and potentially losing a considerable sum of money. The client had reached out to a vendor to obtain ACH information for sending a payment electronically. When… Read more ›

Losses can be used, within certain limits, to offset other highly-taxed income, such as salary from a job. However, in general, losses from “passive” activities can only be used to offset income from other passive activities. Any excess passive loss is suspended and must be carried forward to future years. The tax law generally defines a passive activity as a trade or business in which you don’t “materially participate.” The IRS has established various tests for determining whether someone qualifies… Read more ›

Chances are, your construction business hires independent contractors, rather than employees, to perform some of the work. These arrangements obviously save your company a lot of time, money and headaches. Take a look at some of the recordkeeping and financial differences: With anEmployee: With an IndependentContractor: You must pay the employer’s half of FICA, as well as federal unemployment tax (FUTA). You generally don’t have to withhold taxes from the worker’s pay, you don’t owe the employer’s portion of FICA… Read more ›

Comprehensive financial statements prepared under U.S. Generally Accepted Accounting Principles (GAAP) include three reports: the balance sheet, income statement and statement of cash flows. Together these reports can be powerful diagnostic tools to help evaluate the financial well-being of a business. Moreover, by carefully analyzing them, you may be able to uncover potential money-management problems or even fraudulent activity. Balance Sheets Show Assets vs. Liabilities The balance sheet provides a snapshot of a company’s financial health at a moment in… Read more ›

It’s not uncommon for an incoming partner in a professional firm to take out a personal loan to finance all or part of the cost of acquiring an ownership interest. If some of your firm’s partners have done this, they need to know the proper federal income tax treatment of the resulting interest expense. Such partner-level interest expense is sometimes called “outside interest” because it comes from a personal loan that is outside of the partnership. IRS guidelines say outside… Read more ›

The IRS recently announced many inflation adjustments for the 2023 tax year. IRS Revenue Procedure 2022-38 provides details about these amounts. Because inflation is high, many of the amounts for 2023 will change more than they have in recent years. Here are some of the tax amounts for 2023, as compared with 2022. Tax Item 2023 2022 Highest tax rate of 37% Will affect singles with income exceeding $578,125 ($693,750 for married taxpayers filing jointly). Affects singles with income exceeding $539,900… Read more ›

Medical expenses can be costly — and they’re not always covered by insurance. But there may be a silver lining: You may be able to claim an itemized deduction for the amounts you pay for medical, dental and vision care, if you incur enough costs to exceed the applicable threshold for the tax year. Here are the details about this deduction. Raising the Bar on Medical Expense Deductions You can claim an itemized deduction for medical, dental, and vision care… Read more ›

  Recordkeeping is often essential to business operations and automobile dealerships are no exception. Many auto dealerships use the Last-In, First-Out (LIFO) method of inventory accounting. Although the LIFO method can provide significant tax benefits, you must be careful to meet certain tax law requirements. One such requirement that is often overlooked is the need to maintain comprehensive records. There are different LIFO methods for new and used vehicle inventories. For new vehicle inventories, dealerships electing to use the alternative… Read more ›

Quick References are high-level insights about critical issues and concerns facing your organization. Our outsourced accounting and advisory group is available to help you implement solutions. Click here to view other Quick References and to sign up for email alerts when future Quick References are released. What is the new lease standard? The new lease standard is intended to account for all lease obligations on financial statements, rather than excluding operating leases as has been the standard. This change ensures… Read more ›