Archives for Industry News

Importance of Keeping Track of Adjusted Basis of Your Home

Thomas Kim, CPA Tax Director   As a homeowner, understanding the concept of “adjusted basis” and keeping track of it is crucial for when it comes to reducing or even eliminating taxes related to the sale or disposition of your property. What is Adjusted Basis? The adjusted basis of your home is the original cost of the property adjusted for various factors. It serves as a reference point for calculating capital gains or losses when you sell or dispose of your home. The adjusted basis is not a static value; it changes over time based on certain events and adjustments.
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Categories: Industry News and Newsletter and Updates.

Tax Considerations for Expanding Operations Into Foreign Markets

Manny Trelles, CPA Tax Director   United States persons (defined as any US citizen, permanent resident alien, entity organized under US laws, or any person in the US) who continue to seek and expand into foreign markets to maintain a competitive edge in their business should carefully consider the tax impact of foreign investment. A few of the considerations to keep in mind for international tax purposes are as follows: Foreign Entity Structure US persons who have established foreign legal structures or operations should consider both local (foreign) and US tax implications. Our firm can connect you with a qualified
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Categories: Industry News and Newsletter and Updates.

Prepare for the Estate and Gift Tax Sunset Now

Greg Lambourne, Esq Senior Planning Consultant Nancy Van Lanen, CTFA, EA Estate & Trust Tax Director   Every taxpayer in the United States is subject to certain transfer taxes for gifting away wealth during their life or at their death. However, each taxpayer is granted a “lifetime exemption amount” so they can make limited tax-free gifts. The 2017 Tax Cuts and Jobs Act increased this lifetime exemption amount to an unprecedented $12.92 million for 2023, but this large exemption amount will expire and be reduced by half at the end of 2025. The IRS says this is a “use it
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Categories: Industry News and Newsletter and Updates.

Tax Guidance on Crypto and Virtual Currency

Manny Trelles, CPA Tax Manager   Recently, the IRS issued additional guidance on crypto and virtual currency. The guidance addressed concerns regarding the timing of income recognition, tax basis, and clarification on terms in cryptocurrency transactions. Cryptocurrency is a type of virtual currency that uses cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. Virtual currency is a digital representation of value only available in electronic form. Cryptocurrency and income recognition A taxpayer who provides goods or services and receives an airdrop or payment in virtual currency has taxable income equal to the
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Categories: Industry News and Newsletter and Updates.

Should My Business Be Filing Income/Franchise Taxes in Other States?

By Ryan Working, CPA, MST Tax Director   As a small to midsize business navigating the world of state income/franchise taxes can be difficult.  Every state has different rules, tax rates, and requirements for filing.  In this article, I will provide some basic concepts we use to help decide if an income/franchise tax return may be required in another state. Economic Presence: Historically, in order to be subject to taxes in a state you would need to have a physical presence in the state.  In recent years due to the development of significant court cases and e-commerce, the vast majority
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Categories: Industry News and Newsletter and Updates.

Defined Contribution Plan Revisions Issued for 2023 Plan Years and More

Dean Smith, CPA Audit & Accounting Partner   Revisions affecting defined contribution plans (including 401(k), money purchase and ESOP plans) subject to independent audits have been issued for 2023 plan years and beyond. On February 24, 2023, The Department of Labor and Internal Revenue Service issued final forms and related revised instructions for the 2023 Form 5500 filing series. The release includes what could be a significant change in the definition of a participant for purposes of determining whether the plan has exceeded the threshold to be considered a large plan, where an independent audit is required to be included
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Categories: Industry News and Newsletter and Updates.

Update on Report of Foreign Bank and Financial Accounts (FBAR)

Manny Trelles, CPA Tax Manager   Recently, the US Supreme Court held that the $10,000 penalty for a non-willful failure to file a Report of Foreign Bank and Financial Accounts (FBAR) for foreign accounts accrued per report, not per account. (Bittner, No. 21-1195 [U.S. 2/28/23]). In the past, you may have been assessed a $10,000 penalty per account. For example, if a taxpayer failed to disclose 5 foreign bank accounts on the FBAR report, the penalty assessed may have been $50,000 ($10,000 per account). With the US Supreme Court ruling, a taxpayer may only be assessed a $10,000 penalty per
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Categories: Industry News and Newsletter and Updates.

IRS and CA Extend Payment and Filing Deadlines to October 16 for CA Disaster-Area Taxpayers

Richard A. Huffman, CPA, MST Tax Partner   The IRS and California recently announced that disaster-area taxpayers who reside in or have a business in the following California counties will now have until October 16, 2023 to file and remit payment for federal and California individual and business tax returns.  Previously the deadline had been postponed to May 15 for these areas: Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo,
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Categories: Industry News and Newsletter and Updates.

SDI Wage Base Cap Eliminated Starting in 2024

Manny Trelles, CPA Tax Manager   Governor Newsom signed SB 951 on September 30, 2022 repealing the wage ceiling for contributions into California’s State Disability Insurance (SDI) fund beginning January 1, 2024. This means all wages paid will be subject to California’s SDI tax. The purpose is to increase the SDI benefits paid and short-term disability insurance to three categories of employees: Employees on parental leave Employees taking time off to care for injured and ill family members Employees unable to work due to injury or health condition To pay for these increased benefits, SB 951 will eliminate the taxable
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Categories: Industry News and Newsletter and Updates.

IRS Extends Payments and Filing Deadlines to May 15 for CA Storm Victims

Richard A. Huffman, CPA, MST Tax Partner   Victims of the most recent California storm now have until May 15, 2023 to file various federal individual and business tax returns and make tax payments. The IRS announced January 10, 2023 that Californian’s who reside in or have a business in the following counties will have until May 15, 2023 to file various federal individual and business tax returns and make tax payments: Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo,
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Categories: Industry News and Newsletter and Updates.