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The first page of audited financial statements is the auditor’s report. This is an important part of the financials that shouldn’t be overlooked. It contains the audit opinion, which indicates whether the financial statements are fairly presented in all material respects, compliant with Generally Accepted Accounting Principles (GAAP) and free from material misstatement. In general, there are four types of audit opinions, ranked from most [...]

If you’re an employer with a business where tipping is customary for providing food and beverages, you may qualify for a federal tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. Basics of the credit The FICA credit applies with respect to tips that your employees receive from customers in connection with the provision of food [...]

Spring is the time of year that calendar-year-end businesses issue financial statements and prepare tax returns. This year, take your financial data beyond compliance. Here’s how financial statements can be used to be proactive, not reactive, to changes in the marketplace. Perform a benchmarking study Financial statements can be used to evaluate the company’s current performance vs. past performance or against industry norms. A comprehensive [...]

Spouses who file joint federal tax returns are both generally liable for the tax owed. But joint filers may seek “innocent spouse” relief. One taxpayer requested relief for multiple years of underpaid taxes. A U.S. Court of Appeals found that the U.S. Tax Court properly denied her relief claim. She had tacitly consented to filing a 2010 joint tax return by providing her ex-spouse with [...]

In response to pressure from Congress, 1,200 IRS employees have been dispatched to sort and process millions of outstanding 2020 amended paper tax returns. IRS Commissioner Chuck Rettig says a separate team will tackle 2021 paper returns as they come in. The backlog has been caused, in part, because the IRS suspended approximately 35 million returns due to errors. But will the IRS’s action plan [...]

The IRS reminded those with income from a farming or fishing business that they should file and pay their entire tax due on or before Tues., March 1, if they didn’t make estimated tax payments. Farmers and fishers who decided to forgo making estimated tax payments have the option to pay the entire tax due on or before March 1. Normally, this special rule applies [...]

Footnotes appear at the end of a company’s audited financial statements. These disclosures provide insight into account balances, accounting practices and potential risk factors — knowledge that’s vital to making well-informed lending and investing decisions. Here are examples of key risk factors that you might unearth by reading between the lines in a company’s footnotes. Contingent (or unreported) liabilities A company’s balance sheet might not [...]

At the start of the new tax season, the IRS is reminding taxpayers to be alert for scam phone calls. Criminals make aggressive calls posing as IRS agents in an attempt to steal money or personal information. Here are tips from the IRS on how spot a scam call. IRS agents will never demand a specific payment type (such as prepaid debit card, gift card, [...]

To help you make sure you don’t miss any important 2022 deadlines, we’ve provided this summary of when various tax-related forms, payments and other actions are due. Please review the calendar and let us know if you have any questions about the deadlines or would like assistance in meeting them. © 2022

The Omicron surge of the COVID-19 pandemic continues to interrupt and alter how business gets done. The U.S. Tax Court isn’t immune. It has been announced that several in-person trial sessions in coming weeks will be remote, using the government-customized Zoomgov client. Affected sessions are those set for Atlanta, Cincinnati, New York, Philadelphia, San Francisco, Washington D.C. and Winston-Salem. A session that was to take [...]

Revenue and expenses, as reported on your company’s income statement, have limited usefulness to people inside the organization. Managers often need information presented in a different format in order to make operational and strategic decisions. That’s where activity-based costing comes into play. This costing system is commonly used in the manufacturing and construction sectors to determine which products and customers are profitable, to identify and [...]

The IRS announced that all third-round Economic Impact Payments (EIPs) have been issued. The tax agency is reminding eligible taxpayers how to claim any remaining stimulus payment they’re entitled to on their 2021 income tax returns. Parents of a child born in 2021, or for families who added a new qualifying child in 2021, who didn’t receive a third-round EIP for that child, may be [...]

Your business needs financial statements so management can monitor performance, attract investment capital and borrow money from a bank or other lender. But not all financial statements are created equal. Audited statements are considered the “gold standard” in financial reporting. While public companies are required to issue audited statements, smaller, privately held organizations have options. CPAs provide three other types of financial statements, which, in [...]

Do you want to sell commercial or investment real estate that has appreciated significantly? One way to defer a tax bill on the gain is with a Section 1031 “like-kind” exchange where you exchange the property rather than sell it. With real estate prices up in some markets (and higher resulting tax bills), the like-kind exchange strategy may be attractive. A like-kind exchange is any [...]