Linkenheimer LLP CPAs & Advisors

Haven’t Filed Your 2019 Business Tax Return Yet? There May Be Ways To Chip Away At Your Bill

The extended federal income tax deadline is coming up fast. As you know, the IRS postponed until July 15 the payment and filing deadlines that otherwise would have fallen on or after April 1, 2020, and before July 15.

Retroactive COVID-19 business relief

The Coronavirus Aid, Relief and Economic Security (CARES) Act, which passed earlier in 2020, includes some retroactive tax relief for business taxpayers. The following four provisions may affect a still-unfiled tax return — or you may be able to take advantage of them on an amended return if you already filed.

Liberalized net operating losses (NOLs). The CARES Act allows a five-year carryback for a business NOL that arises in a tax year beginning in 2018 through 2020. Claiming 100% first-year bonus depreciation on an affected year’s return can potentially create or increase an NOL for that year. If so, the NOL can be carried back, and you can recover some […]

By Linkenheimer LLP|June 30th, 2020|business, deduction, deductions, New Tax Laws, qualified small business|0 Comments

California Tax Updates for June 25

Update 1:

Many California businesses are downsizing or have closed permanently due to COVID-19. The California Franchise Tax Board (FTB) has released a detailed set of steps needed to fully close a CA business entity, including links to resources from the CA Secretary of State and other state departments. The FTB highlights the need to close out tax accounts by filing delinquent returns and paying all balances due on taxes, filing a current annual or quarterly return as final, filing the appropriate closure forms with different state agencies, notifying employees and other stakeholders of the intent to close and dissolving all accounts associate with the business. For more: https://bit.ly/37e3cjI

Update 2:

Businesses that hold unclaimed property in California get extra time to file reports. Due to COVID-19, the CA State Controller (SCO) has postponed the due date for holders of such property, including unclaimed wages, to submit their Remit Reports and Remittances for properties reported on their […]

By Linkenheimer LLP|June 25th, 2020|business, ca, CA tax, ftb, New Tax Laws|0 Comments

Launching A Business? How To Treat Start-Up Expenses On Your Tax Return

While the COVID-19 crisis has devastated many existing businesses, the pandemic has also created opportunities for entrepreneurs to launch new businesses. For example, some businesses are being launched online to provide products and services to people staying at home.

Entrepreneurs often don’t know that many expenses incurred by start-ups can’t be currently deducted. You should be aware that the way you handle some of your initial expenses can make a large difference in your tax bill.

How expenses must be handled

If you’re starting or planning a new enterprise, keep these key points in mind:

Start-up costs include those incurred or paid while creating an active trade or business — or investigating the creation or acquisition of one.
Under the Internal Revenue Code, taxpayers can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs in the year the business begins. As you know, $5,000 doesn’t get you very far today! And the $5,000 deduction is reduced dollar-for-dollar by the amount by which your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized over 180 months on a straight-line basis.
No deductions or amortization deductions are allowed until the […]

By Linkenheimer LLP|June 22nd, 2020|business, expensing|0 Comments

Re-Evaluate Your Company’s Competitiveness In A Changed Economy

Just about every business owner’s strategic plans for 2020 look far different now than they did heading into the year. The COVID-19 pandemic has changed the economy in profound ways, forcing many companies to recalibrate suddenly and severely.

As your business moves forward in this uncertain environment, it’s important to re-evaluate competitiveness. You may have lost an edge that previously existed, or you may have the opportunity to gain one. Here are some critical elements to consider.

Objectively assess leadership

More than likely, you and your management team have had to make some difficult decisions over the last few months. Even if you feel confident that you’ve done most everything right, objectively examine and discuss your successes, failures, strengths and weaknesses.

For instance, maybe you’ve had some contentious interactions with employees while adjusting to remote work environments or increased safety protocols. Ask your managers whether underlying tensions exist and, if so, how you […]

By Linkenheimer LLP|June 18th, 2020|business, strategy|0 Comments

California Tax Updates for June 18

Post 1:

Have you wondered what the California Taxpayers’ Rights Advocate actually does? The CA Dept. of Tax and Fee Administration just released a report highlighting the accomplishments of the Taxpayers’ Rights Advocate’s Office (TRAO). The annual report for 2018 through 2019 gives examples of the services it provides, and information about the tax appeals assistance programs. Also listed are the goals of the Advocate, including a primary goal of ensuring that taxpayers contacting the office with issues that haven’t been resolved through normal channels have their concerns promptly and fairly addressed. Here’s the TRAO report: https://bit.ly/37cwSxS

Post 2:

California sales and use tax deadlines are coming up soon. The CA Dept. of Tax and Fee Administration (CDTFA) reminds sales and use taxpayers that June 24, 2020, is the filing due date for the May 1 through June 15, 2020 prepayment; and June 30, 2020, is the […]

By Linkenheimer LLP|June 18th, 2020|business, ca, CA tax, california, sales tax|0 Comments

Good Records Are The Key To Tax Deductions And Trouble-Free IRS Audits

If you operate a small business, or you’re starting a new one, you probably know you need to keep records of your income and expenses. In particular, you should carefully record your expenses in order to claim the full amount of the tax deductions to which you’re entitled. And you want to make sure you can defend the amounts reported on your tax returns if you’re ever audited by the IRS or state tax agencies.

Certain types of expenses, such as automobile, travel, meals and office-at-home expenses, require special attention because they’re subject to special recordkeeping requirements or limitations on deductibility.

It’s interesting to note that there’s not one way to keep business records. In its publication “Starting a Business and Keeping Records,” the IRS states: “Except in a few cases, the law does not require any specific kind of records. You can choose any recordkeeping system suited to your business that clearly shows your income and expenses.”

That being […]

By Linkenheimer LLP|June 16th, 2020|audit, business, irs|0 Comments

PPP Flexibility Act Eases Rules For Borrowers Coping With COVID-19

As you may recall, the Small Business Administration (SBA) launched the Paycheck Protection Program (PPP) back in April to help companies reeling from the economic impact of the COVID-19 pandemic. Created under a provision of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP is available to U.S. businesses with fewer than 500 employees.

In its initial incarnation, the PPP offered eligible participants loans determined by eight weeks of previously established average payroll. If the recipient maintained its workforce, up to 100% of the loan was forgivable if the loan proceeds were used to cover payroll expenses, certain employee health care benefits, mortgage interest, rent, utilities and interest on any other existing debt during the “covered period” — that is, for eight weeks after loan origination.

On June 5, the president signed into law the PPP Flexibility Act. The new law makes a variety of important adjustments that ease the rules for borrowers. Highlights include:

Extension of covered period.

By Linkenheimer LLP|June 10th, 2020|business, New Tax Laws|0 Comments

Rioting Damage At Your Business? You May Be Able To Claim Casualty Loss Deductions

The recent riots around the country have resulted in many storefronts, office buildings and business properties being destroyed. In the case of stores or other businesses with inventory, some of these businesses lost products after looters ransacked their property. Windows were smashed, property was vandalized, and some buildings were burned to the ground. This damage was especially devastating because businesses were reopening after the COVID-19 pandemic eased.

A commercial insurance property policy should generally cover some, or all, of the losses. (You may also have a business interruption policy that covers losses for the time you need to close or limit hours due to rioting and vandalism.) But a business may also be able to claim casualty property loss or theft deductions on its tax return. Here’s how a loss is figured for tax purposes:

Your adjusted basis in the property
MINUS
Any salvage value
MINUS
Any insurance or other reimbursement you receive (or expect to receive).

Losses that qualify

A casualty is the damage, destruction or loss of property resulting from an identifiable event that is sudden, unexpected or unusual. It includes natural disasters, such as hurricanes and earthquakes, and man-made events, such as vandalism and terrorist attacks. […]

By Linkenheimer LLP|June 8th, 2020|business, liability|0 Comments

Business Meal Deductions: The Current Rules Amid Proposed Changes

Restaurants and entertainment venues have been hard hit by the novel coronavirus (COVID-19) pandemic. One of the tax breaks that President Trump has proposed to help them is an increase in the amount that can be deducted for business meals and entertainment.

It’s unclear whether Congress would go along with enhanced business meal and entertainment deductions. But in the meantime, let’s review the current rules.

Before the pandemic hit, many businesses spent money “wining and dining” current or potential customers, vendors and employees. The rules for deducting these expenses changed under the Tax Cuts and Jobs Act (TCJA), but you can still claim some valuable write-offs. And keep in mind that deductions are available for business meal takeout and delivery.

One of the biggest changes is that you can no longer deduct most business-related entertainment expenses. Beginning in 2018, the TCJA disallows deductions for entertainment expenses, including those for sports events, theater productions, golf outings and fishing trips.

50% meal deductions

Currently, you can deduct 50% of the cost of food and beverages for meals conducted with business associates. However, you need to follow three basic rules in order to prove that your expenses are business […]

By Linkenheimer LLP|June 1st, 2020|business, deduction, deductions, irs|0 Comments

Paycheck Protection Program Loan Forgiveness Calculators

Many small businesses are struggling navigating the complexity of the Paycheck Protection Program (PPP) and loan forgiveness aspect of it. While legislation, regulations and info regarding loan forgiveness is changing and revised often, it’s important to be proactive and keep a close eye on your record keeping. The AICPA has released an excel file that serves as a calculator, based on the current parameters of the loan forgiveness program. If you have questions, please reach out to your Linkenheimer CPA.

You can access the calculator by clicking here. It will download a copy of excel file once you click on it. You can also find the calculator on the AICPA website here.

By Linkenheimer LLP|May 26th, 2020|business|0 Comments

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