Linkenheimer

Are You Engaged in Internet Sales in California?

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Are you engaged in Internet sales in California? In light of changes to sales and use tax that became effective in April, some retailers may not be certain if they must collect and pay over sales and use tax based on aspects of their businesses. The CA Dept. of Tax and Fee Administration has updated Publication 109 (Internet Sales) to add clarity on many issues. One key change is the addition of details that defines what “engaged in business” in CA means and doesn’t mean. For example, “Offering merchandise for sale over the phone, by mail order, or online will generally not, by itself, cause a retailer to be engaged in business in CA.” Go to https://bit.ly/2OClJka and scroll down. If you have questions or would like more info, please contact your Linkenheimer CPA. 

By |August 22nd, 2019|sales tax|0 Comments

Is It Time to Hire a CFO or Controller?

Businessman holding sign clock. Concept business time is money

Many business owners reach a point where managing the financial side of the enterprise becomes overwhelming. Usually, this is a good thing — the company has grown to a point where simple bookkeeping and basic financial reporting just don’t cut it anymore.

If you can relate to the feeling, it may be time to add a CFO or controller. But you’ve got to first consider whether your payroll can take on this generally high-paying position and exactly what you’d get in return.

The broad role

A CFO or controller looks beyond day-to-day financial management to do more holistic, big-picture planning of financial and operational goals. He or she will take a seat at the executive table and serve as your go-to person for all matters related to your company’s finances and operations.

A CFO or controller goes far beyond merely compiling financial data. […]

By |August 19th, 2019|business|0 Comments

The IRS is Targeting Business Transactions in Bitcoin and Other Virtual Currencies

Cryptocurrency and blockchain. Platform creation of digital currency.

Bitcoin and other forms of virtual currency are gaining popularity. But many businesses, consumers, employees and investors are still confused about how they work and how to report transactions on their federal tax returns. And the IRS just announced that it is targeting virtual currency users in a new “educational letter” campaign.

The nuts and bolts

Unlike cash or credit cards, small businesses generally don’t accept bitcoin payments for routine transactions. However, a growing number of larger retailers — and online businesses — now accept payments. Businesses can also pay employees or independent contractors with virtual currency. The trend is expected to continue, so more small businesses may soon get on board.

Bitcoin has an equivalent value in real currency. It can be digitally traded between users. You can also purchase and exchange bitcoin with real currencies (such as U.S. dollars). The most common ways to obtain bitcoin are through virtual currency ATMs […]

By |August 13th, 2019|business, irs, w2|0 Comments

New Application Period for a Valuable California Business Tax Credit

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Coming up soon is a new application period for a valuable California business tax credit. The CA Governor’s Office of Business and Economic Development has announced that, for fiscal year 2019-2020, a total of $236,808,527 in CA Competes Tax Credits is available.  Learn more about applying here:  https://bit.ly/2nxiNGc.  Applications will be accepted during the following periods: July 29 through August 19, 2019 ($90 million total); January 6 through January 27, 2020 ($75 million total); and March 9 through March 30, 2020 ($71.8 million, plus unallocated amounts from previous periods). This credit is an income or franchise tax credit available to businesses that come, stay or expand in CA. If you have questions or are interested in applying, please contact your Linkenheimer CPA.

By |July 22nd, 2019|business, tax credit|0 Comments

Volunteering for Charity: Do You Get a Tax Break?

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If you’re a volunteer who works for charity, you may be entitled to some tax breaks if you itemize deductions on your tax return. Unfortunately, they may not amount to as much as you think your generosity is worth.

Because donations to charity of cash or property generally are tax deductible for itemizers, it may seem like donations of something more valuable for many people — their time — would also be deductible. However, no tax deduction is allowed for the value of time you spend volunteering or the services you perform for a charitable organization.

It doesn’t matter if the services you provide require significant skills and experience, such as construction, which a charity would have to pay dearly for if it went out and obtained itself. You still don’t get to deduct the value of your time.

However, you potentially can deduct out-of-pocket costs associated with your volunteer work.

The basic […]

By |July 9th, 2019|charity, expensing, New Tax Laws, tax|0 Comments

Bartering: A Taxable Transaction Even if Your Business Exchanges No Cash

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Small businesses may find it beneficial to barter for goods and services instead of paying cash for them. If your business engages in bartering, be aware that the fair market value of goods that you receive in bartering is taxable income. And if you exchange services with another business, the transaction results in taxable income for both parties.

Income is also realized if services are exchanged for property. For example, if a construction firm does work for a retail business in exchange for unsold inventory, it will have income equal to the fair market value of the inventory.

Barter clubs

Many business owners join barter clubs that facilitate barter exchanges. In general, these clubs use a system of “credit units” that are awarded to members who provide goods and services. The credits can be redeemed for goods and services from other members.

Bartering is generally taxable in the year it occurs. But if […]

Which Entity is Most Suitable for Your New or Existing Business?

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The Tax Cuts and Jobs Act (TCJA) has changed the landscape for business taxpayers. That’s because the law introduced a flat 21% federal income tax rate for C corporations. Under prior law, profitable C corporations paid up to 35%.

The TCJA also cut individual income tax rates, which apply to sole proprietorships and pass-through entities, including partnerships, S corporations, and LLCs (treated as partnerships for tax purposes). However, the top rate dropped from 39.6% to only 37%.

These changes have caused many business owners to ask: What’s the optimal entity choice for me?

Entity tax basics

Before the TCJA, conventional wisdom was that most small businesses should be set up as sole proprietorships or pass-through entities to avoid the double taxation of C corporations. A C corporation pays entity-level income tax and then shareholders pay tax on dividends — and on capital gains when they sell the stock. For pass-through entities, there’s no federal income tax at the entity level.

Although C corporations are still potentially subject to double taxation, their current 21% tax rate helps make up for it. This issue is further complicated, however, by another tax provision that allows noncorporate owners of pass-through […]

By |June 28th, 2019|business, New Tax Laws, tax planning|0 Comments

If Your Kids Are Off to Day Camp, You May be Eligible for a Tax Break

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Now that most schools are out for the summer, you might be sending your children to day camp. It’s often a significant expense. The good news: You might be eligible for a tax break for the cost.

The value of a credit

Day camp is a qualified expense under the child and dependent care credit, which is worth 20% to 35% of qualifying expenses, subject to a cap. Note: Sleep-away camp does not qualify.

For 2019, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more. Other expenses eligible for the credit include payments to a daycare center, nanny, or nursery school.

Keep in mind that tax credits are especially valuable because they reduce your tax liability dollar-for-dollar — $1 of tax credit saves you $1 of taxes. This differs from deductions, which simply reduce the amount of income subject to tax.

By |June 26th, 2019|child, credit, expensing, tax credit|0 Comments

Your Succession Plan May Benefit from a Separation of Business and Real Estate

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Like most businesses, yours probably has a variety of physical assets, such as production equipment, office furnishings and a plethora of technological devices. But the largest physical asset in your portfolio may be your real estate holdings — that is, the building and the land it sits on.

Under such circumstances, many business owners choose to separate ownership of the real estate from the company itself. A typical purpose of this strategy is to shield these assets from claims by creditors if the business ever files for bankruptcy (assuming the property isn’t pledged as loan collateral). In addition, the property is better protected against claims that may arise if a customer is injured on the property and sues the business.

But there’s another reason to consider separating your business interests from your real estate holdings: to benefit your succession plan.

Ownership transition

A common and generally effective way to […]

By |June 17th, 2019|business, succession planning|0 Comments

We’re Hiring- Staff Accountant and Controller!

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Interested in joining a fun, vibrant work culture that puts people first? Want to make an impact on the community, work together as a team to solve client’s financial needs, drink copious amounts of really good, local, organic coffee? Looking to join a company that has won Best Place to Work for 10 years in a row?

We are always looking to add the right folks to our team. If you are interested in a career in accounting, have your CPA license, enjoy a team approach, we might be your match made in heaven.

It’s not all work here either. We serve the community together, build bonds on our annual team retreats and celebrate our successes with our families on annual, company wide vacations. Recent firm trips have included Spain, Croatia, Disneyland and Alaska. We don’t strive for work life balance, we live it and champion for it. We appreciate everyone’s contributions- big or small. Sound enticing? Interested in working at a not-so-typical CPA firm? Let us know if our creative accounting culture might be right for you.

For more info on the open positions we have, visit www.linkcpa.com/join-our-team/

By |May 22nd, 2019|best place to work, cpa firm, employer, firm|0 Comments