Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
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The Corporate Transparency Act (CTA) is a piece of legislation aimed at increasing corporate transparency and preventing money laundering and other illicit financial activities. It was passed as part of the National Defense Authorization Act (NDAA) for Fiscal Year 2021 and signed into law on January 1, 2021. Key provisions of the Corporate Transparency Act include: 1. Beneficial Ownership Reporting: Under the CTA, certain corporations, limited liability companies (LLCs), and other similar...
You may have noticed that the IRS is in a bad way. It has a backlog of millions of unprocessed paper tax returns, and taxpayers can't get through to the agency on the phone. Congress noticed and took action by passing a massive funding of the IRS in the recently enacted Inflation Reduction Act. The IRS will get an additional $80 billion over the next decade. This includes $35 billion for taxpayer services, operations support and business systems. Among other things, the IRS plans to use these fu...
Do you qualify for the Employee Retention Credit (ERC)? Did you claim it? It's not too late. You can still amend your 2020 and 2021 payroll tax returns. Remember, this can be worth up to $5,000 per employee in 2020 and up to $7,000 per employee per quarter for the first three quarters of 2021, for a 2021 total of $21,000 ($26,000 per qualifying employee for 2020 and 2021 combined). Example. Let's say you have 10 employees who fully qualify for the credit. That's a $260,000 tax credit (think...
The president signed the Inflation Reduction Act into law on Aug. 16. It contains some valuable tax credits for homeowners. When it comes to taxes, nothing is better than a tax credit since it is a dollar-for-dollar reduction in the taxes you must pay (unlike a tax deduction that only reduces your taxable income). In other words, a $1,000 credit saves you $1,000 in taxes. The new law extends and expands three tax credits intended to encourage homeowners to make their homes more energy efficient...
Do you own a corporation, limited liability company (LLC), limited partnership, limited liability partnership, limited liability limited partnership, or business trust? Or are you planning to form one of these entities? If so, be alert. There's a new federal filing requirement coming. Back in 2021, Congress passed a new law called the Corporate Transparency Act (CTA) that requires corporations, LLCs, and other business entities to provide information about their owners to the Department of the...
Cryptocurrency, such as Bitcoin, is all the rage these days. Crypto is not legal money. It is property, similar to gold. Like gold, its use can result in taxable income. The IRS is concerned that you and millions of Americans are using crypto without paying tax on the earnings. To clarify, it expects you and other taxpayers to report crypto earnings, the IRS added the following question about cryptocurrency to the top of Form 1040: At any time during 2021, did you receive, sell, exchange, or...
You may not have thought of this, but taking a cruise ship to Mexico for a business meeting is acceptable as a deductible form of transportation. Because Mexico is in the tax law –defined North American area, the law says that you need no stronger business reason to deduct your trip to Mexico than you need to deduct a trip to Chicago, Illinois or Scottsdale, Arizona. Less-than-one-week rule. If your trip is outside the 50 states but inside the North American area and if the trip is for seven o...
As I write this on Friday, May 1, there is lots of talk but still no final written procedure on using your PPP funds and how to make sure the loan is forgiven. Let's say you're one of the fortunate business owners who have received your PPP money. What do you do with it? How do you spend the money, and what do you do with money so that you can make sure you don't have an outstanding loan at the end of the eight-week period? The CARES Act gave us funding for the Paycheck Protection Program,...
Business owners think differently about retirement. To many of them, it's something other people do, not them. Think about it. Most business owners have dedicated a significant portion of their life to their enterprise. It's a part of them. So, talking about retiring can feel like quitting, giving up. Even those who decide to sell are often very discriminating about whom they will let take over their "baby." They want someone who will love and nurture it as much as they have, and this often...
Many Americans help support family members financially. We all think of children as dependents, but what about aging parents? If you provide over half of the support of a parent, that parent could be considered your dependent for federal income tax purposes. Why should you care? Well, it could provide you with some major tax breaks! So how does it work? Your dependent parent may qualify you for a $500 credit. This is part of the Tax Cuts and Jobs Act. This $500 credit is available for...
Do wealthy individuals get "special" treatment when it comes to paying taxes? It can often seem that way. Last month Amazon reported that it will not owe any federal taxes for the second year in a row. This is in spite of earning $11.2 billion last year. And Warren Buffett revealed his 2016 tax returns showing an effective tax rate of just 16% on $11.6 million in gross income. In comparison, I have physician clients earning $1 million in gross income, that without any tax planning would pay an...
What is the vehicle deduction? The vehicle deduction is simply a business-related tax deduction for your vehicle. This deduction includes all of your vehicles that have a business use, including your car, truck or motorcycle when used in your business. The Tax Cuts and Jobs Act (TCJA) changed things and from 2018 through 2023 the vehicle deduction is now unbelievable! Starting with your 2018 tax filing, you can write-off a vehicle at lot faster with bigger deductions. That being said, the...
Tax season is here and the IRS is now accepting both personal and business returns. If you didn't get a chance to do some planning last year to reduce your income tax liability there are still a few things you can do to minimize the amount you'll owe. There are a lot of changes for 2018 since the passing of the Tax Cuts and Jobs Act. The TCJA is the most comprehensive revision of the tax code in decades and one of the main changes that most people are aware of is the new higher standard...
Have you ever reached in your pocket and found unexpected cash? Recently, while getting ready for a trip to Massachusetts, I thought I'd better send my winter coat to the dry cleaners before going. I hadn't worn it since our trip back east last year, and it was getting dusty sitting in the closet. I reached into one of the pockets before dropping it off and what do you know? There was $300 in cash just waiting for me to find it. Now $300 isn't going to change our lifestyle any but it was a nice...
Recently, I hosted a small business roundtable at my office in Bakersfield for Kern County Entrepreneurs. One thing is certain, and the consensus was clear, taxes are taking too much time and money away from business operations and these owners would much rather be investing those dollars in their businesses. One entrepreneur said, "If I can pay less taxes I can expand and grow my business. This will allow me to create more jobs!" Another said, "Trying to figure out how to pay all of these...
Last time we talked about writing a business plan and if you have done that, now what? You don't want to just stick it in a drawer and forget about it. It's time to get busy and get started. Your business plan is only part of the first step to getting started. There are several other things you need to consider. Once you have considered them you will need to create an action plan to get you started. Legal Structure Most small businesses start off as a sole proprietorship. This is the simplest...
If you ever share a small business idea, everyone will tell you that you need to write a business plan. Creating a plan for a business that's still just an idea in your head can be difficult at best. We talked before about a tool called "The Business Model Canvas Template," and that's a great place to start. If you remember, the canvas is used to get what's in your head down on a piece of paper so that you can create a business model before writing a formal business plan. Once this is done, and...
Today, there are over 50 million small business owners in America. With the advent of new companies such as Uber and Airbnb, having your own business seems easier than ever. New business start-ups are exploding whether the plan is to go full-time or just to have a little something on the side to make some extra cash. This phenomenon is reshaping the American economy creating more and more self-employed entrepreneurs. It is easy to start a new business, and you want to make sure you don't overloo...
It's not tax season yet, but it is time to start thinking about your 2017 taxes. I always encourage my clients to sit down with their Tax Pro during the 4th quarter of the year. It's good time to see how you are doing and what adjustments need to be made. There are a lot of things you can do to minimize your tax liability, but you need to take action before the bell tolls at midnight on December 31st. (If you are on a calendar year) Also, take a look to see what changes have been made to the...
Today is one of the best moments in history for small businesses. They not only make up the overwhelming number of businesses in the United States, and account for over half of all employment, but they are the source of the greatest job growth in the United States. While most businesses usually start out small, some of them grow very fast and become quite large in a relatively short period of time. Some grow so fast they create enormous economic growth and create an incredible amount of jobs,...
It seems like almost every month the CSU Bakersfield SBDC gets calls from individuals who have lost money by going into business with family, friends, or neighbors that they have trusted, but who have no business acumen. Usually, they have not properly documented their relationship as a partnership either. Often, these individuals have given someone a short-term, high-interest loan to help their family or friends get started in business under the pretense that they will provide the cash and thei...
I want to share with you something that is amazing to me. I overheard a conversation in a coffee shop the other day between three teenage girls. They were talking about the parents of one of their friends who had just bought an expensive Range Rover. One of the teenage girls said to the others, “Wow, they are so rich!” Well, I couldn’t just sit there and not say anything, so I chimed in saying, “You know, what you drive doesn’t have anything to do with whether you’re rich or poor.” The...
If you’re like most Americans you’ve just passed two milestones this year, Tax Freedom Day, which is recognized on April 12, and Income Tax Filing Day, which is usually recognized as April 15 but for 2017 was Tuesday, April 18. Tax Freedom Day is the day of the year when the country as a whole has earned enough income to pay its taxes for the year. No explanation is needed for Tax Filing Day! The average American pays approximately 20% of their income towards their federal income taxes. To som...
Are you a woman in business or someone who has always thought about having her own business? If so, there’s an event coming up, and it is designed just for you. The event, happening on Saturday, April 1, is called Wine, Women, and Wealth, and it’s going to be great. There will be great wine from two of Kern County’s local award winning vineyards, Great women who are going to tell their stories about owning and operating a small business and what it took for them to achieve their success, and i...
Most small business owners are hard-working individuals that are so busy trying to make a living that they don’t have time for the seemingly unnecessary peripheral issues. They often leave issues of great financial importance up to others, and this could prove to be a grave mistake. One of those issues is investment and retirement account advice. For years there has been a lack of transparency in the financial services industry, and if the Department of Labor has its way, this is all going to ch...
