In October, our firm welcomed three new hires to our WFY team. Isaac Torres joined our tax department, and Samantha Smith and Amy Lee joined our audit department. WFY is pleased to have these three new hires join our firm. Isaac Torres At the end of October, Isaac Torres joined WFY’s tax department as our newest Tax Supervisor. He received his Bachelor’s degree in Business Administration and received his Master’s degree in Accounting from California Baptist University. Isaac has been in the accounting industry for over 5 years. His accounting expertise includes real estate and food & beverage. Outside of
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Archives for Industry News
California’s Unique, Little-Known Nest Egg Protection Statute
By Gregory Lambourne, Esq. Senior Planning Consultant Most Californians don’t realize they have access to one of the greatest protections for their retirement nest egg; Greater than protections available for 401(k)s, IRAs, and other pension plans. California Civil Procedure Code section 704.115(b) provides unlimited statutory exemption from lawsuits and creditor claims for assets held in trust pursuant to a “private retirement plan”. Understanding the intricacies of this statute, case law, and best practices is crucial to maximizing benefits and avoiding potential planning pitfalls. A California resident may have a company they own or work for sponsor a retirement plan
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Best Practices for 401(k) Plans Self-Certified Hardship Distributions
By Jennifer Haddad, CPA Audit Partner The Secure 2.0 Act of 2022 changed the rules for hardship withdrawals for employee benefit plans by allowing Plan Sponsors to rely on self-certification by an employee for a hardship withdrawal in lieu of requiring documentation. An employee must certify that they a) have an immediate and heavy financial need, b) the distribution is not greater than the financial need, c) the employee has no other means to meet the need, and c) the financial need is permitted by IRS regulations. This change has allowed Plan Sponsors to streamline the hardship distribution process,
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Take Advantage of The Augusta Rule: A Tax-Free Business Rental Income Opportunity
The IRS Section 280A, often referred to as the “Augusta Rule,” presents a unique tax-saving opportunity for homeowners who run businesses. Named after the city of Augusta, Georgia, where homeowners rent out their properties during the Masters Golf Tournament, this provision allows homeowners to rent out their homes to their businesses for short periods without having to report the rental income. Here’s a closer look at this tax loophole and how it can benefit you. What is IRS Section 280A? IRS Section 280A deals with the tax treatment of home office expenses and rental use of a taxpayer’s residence. The
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Supreme Court Decision Impacts Many Business Owners Entity Redemption Buy-Sell Agreement
Cheryl Shelton Estate & Trust Director Do you have a buy-sell agreement with your business partner(s) and the company owns life insurance on each of you so the remaining partner(s) will have the cash to purchase your share from your estate? If so, you will want to know about a recent Supreme Court decision that sides with the IRS stating that the life insurance payout could increase your estate. Here’s what happened: Connelly v. United States No. 23-146 (June 6, 2024) Two brothers who ran a family business entered into a buy-sell arrangement that gave the surviving brother the
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Current Tax Scams to be Aware of in 2024
Tax scams are increasingly sophisticated in 2024, with scammers continually evolving their tactics to deceive taxpayers and tax professionals. Here are some of the most prevalent tax scams this year to be cautious of: Phishing and Smishing: Fraudsters send emails or text messages that appear to be from the IRS, asking recipients to click on a link or provide personal information to claim a refund or resolve an issue. These messages often contain malicious links that can steal personal data or install malware on devices (IRS.gov) (CPA Practice Advisor). AI-Driven Scams: With the rise of AI tools, scammers are creating
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Save On Taxes By Hiring Your Child as an Employee
As a parent and business owner, you’re always looking for ways to optimize your finances while providing opportunities for your family. One savvy tax-saving strategy to consider is hiring your child as an employee in your business. You can pay each child you hire up to $14,600 in 2024 without them owing any federal income tax plus your business can deduct those wages as a business expense. Not only does this arrangement provide valuable work experience for your child, but it also offers significant tax benefits for your family. In this article, we’ll explore the advantages of hiring your child
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Understanding Section 163(j): A Brief Overview of Business Interest Deductions
Nicole Wiriadi, CPA, MST Tax Director The Tax Cuts and Jobs Act of 2017 (TCJA) introduced a provision that directly impacted businesses’ ability to deduct interest expenses from their taxable income under Section 163(j) of the Internal Revenue Code. This provision applies to all types of taxpayers, including corporations, partnerships, and individuals, with exceptions. Some of the key provisions of Section 163(j) are as follows: Interest Deductibility Limitation The deduction for business interest expense is generally limited to the sum of 30% of adjusted taxable income (ATI), business interest income, and floor plan financing interest expense. Carryforward of Disallowed
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Warning Signs of Aggressive ERC Marketing: A Cautionary Guide for Businesses
As businesses navigate the complexities of economic recovery, government programs like the Employee Retention Credit (ERC) serve as lifelines for financial support. However, with the surge in popularity of these programs, some unscrupulous entities may engage in aggressive marketing practices to exploit businesses seeking assistance. In this article, we will explore the warning signs of aggressive ERC marketing and provide guidance on how businesses can protect themselves from potential pitfalls. Unrealistic Promises: One of the first warning signs of aggressive ERC marketing is the promise of unrealistic benefits. Businesses should be wary of providers claiming to guarantee substantial ERC benefits
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The Corporate Transparency Act: New Reporting Requirements
Manny Trelles, CPA Tax Director In an effort to combat financial crimes, money laundering, and corruption, the Corporate Transparency Act (CTA) was enacted by Congress. This significant piece of legislation brings a new level of transparency to businesses across all industries, especially those that are privately owned. As of January 1, 2024, millions of small businesses must file a Beneficial Ownership Information Report (BOI Report) with the United States Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The required BOI Report includes information about their beneficial owners or those with “substantial control” over the company. Companies created or registered
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