Tax identity theft may seem like a problem only for individual taxpayers. But, according to the IRS, increasingly businesses are also becoming victims. And identity thieves have become more sophisticated, knowing filing practices, the tax code and the best ways to get valuable data. How it works In tax identity theft, a taxpayer’s identifying information (such as Social Security number) is used to fraudulently obtain a refund or commit other crimes. Business tax identity theft occurs when a criminal uses the identifying information of a business to obtain tax benefits or to enable individual tax identity theft schemes. For example, a thief could use an Employer Identification Number (EIN) to file a fraudulent business tax return and claim a refund. Or a fraudster may report income and withholding for fake employees on false W-2 forms. Then, he or she can file fraudulent individual tax returns for these “employees” to claim refunds. The consequences can include significant dollar amounts, lost time sorting out the mess and damage to your reputation. Red flags There are some red flags that indicate possible tax identity theft. For example, your business’s identity may have been compromised if: Your business doesn’t receive expected or routine mailings […] Details
For investors, fall is a good time to review year-to-date gains and losses. Not only can it help you assess your financial health, but it also can help you determine whether to buy or sell investments before year-end to save taxes. This year, you also need to keep in mind the impact of the Tax Cuts and Jobs Act (TCJA). While the TCJA didn’t change long-term capital gains rates, it did change the tax brackets for long-term capital gains and qualified dividends. For 2018 through 2025, these brackets are no longer linked to the ordinary-income tax brackets for individuals. So, for example, you could be subject to the top long-term capital gains rate even if you aren’t subject to the top ordinary income tax rate. Old rules For the last several years, individual taxpayers faced three federal income tax rates on long-term capital gains and qualified dividends: 0%, 15% and 20%. The rate brackets were tied to the ordinary-income rate brackets. Specifically, if the long-term capital gains and/or dividends fell within the 10% or 15% ordinary-income brackets, no federal income tax was owed. If they fell within the 25%, 28%, 33% or 35% ordinary-income brackets, they were taxed at 15%. […] Details
A shortage of skilled workers is a real concern in some of the nation’s largest industries. If you fear your business could find itself struggling to fill positions, one way to lay the groundwork for a solution is to create an apprenticeship program. Apprenticeships are paid positions that focus on gradual, step-by-step training aimed at creating fully realized, often certified workers. By creating such a program, you can “stock the waters” with quality employees who are not only proficient in their professions but also invested in their industries. Here are four tips for getting started: 1. Think it through. Discuss your apprenticeship strategy with both your business’s leadership and your rank-and-file employees. Address questions such as: • What are our biggest hiring challenges for technical jobs that don’t require a college degree? • Do we already have employees who could participate in an apprenticeship program? • How will our business change in the future and which skill sets will we most likely lack? Ideally, your program will focus on the specific types of skilled workers who will be in shortest supply in the years to come. 2. Look for partners. Successful apprenticeship programs often involve collaboration among various partners. These […] Details
Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. October 15 If a calendar-year C corporation that filed an automatic six-month extension: File a 2017 income tax return (Form 1120) and pay any tax, interest, and penalties due. Make contributions for 2017 to certain employer-sponsored retirement plans. October 31 Report income tax withholding and FICA taxes for third quarter 2018 (Form 941) and pay any tax due. (See exception below under “November 13.”) November 13 Report income tax withholding and FICA taxes for third quarter 2018 (Form 941), if you deposited on time and in full all of the associated taxes due. December 17 If a calendar-year C corporation, pay the fourth installment of 2018 estimated income taxes. © 2018 Details
Inventory is expensive, and therefore, it needs to be as lean as possible. Here are some smart ways to cut back inventory without compromising revenue and customer service. Objective inventory counts Effective inventory management starts with a physical inventory count. Accuracy is essential to know your cost of goods sold — and to identify and remedy discrepancies between your physical count and perpetual inventory records. A CPA can introduce an element of objectivity to the counting process and help minimize errors. Inventory ratios The next step is to compare your inventory costs to those of other companies in your industry. Trade associations often publish benchmarks for: Gross margin [(revenue – cost of sales) / revenue], Net profit margin (net income / revenue), and Days in inventory (annual revenue / average inventory × 365 days). Your company should strive to meet — or beat — industry standards. For a retailer or wholesaler, inventory is simply purchased from the manufacturer. But the inventory account is more complicated for manufacturers and construction firms; it’s a function of raw materials, labor, and overhead costs. The composition of your company’s cost of goods will guide you on where to cut. In a tight labor market, it’s […] Details
Tyler, Simms & St. Sauveur, CPAs, P.C.
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