As a business owner who handles many aspects of your company's finances on a regular basis, you already have a reasonable idea as to just how much your business is worth. However, there may be times when you will need to know the worth of your business down to the last penny. When you do, this means you will need what is known as a business valuation. Though there is no one standard formula used for doing business valuations, your CPA will know of numerous measures used to give you an accurate assessment of your company's worth.
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Under ordinary circumstances, you would spend several months closing down a business. Unfortunately, the COVID-19 pandemic has made sure these are not ordinary times. As a result, circumstances may have dictated you close your business much faster than normal. While many business owners have done so and let the chips fall where they may, doing so could lead to a number of unexpected financial and legal problems that could last many years, making an already bad situation that much worse.
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When you are facing various types of financial difficulties or are in the midst of undergoing a major financial change in your life, consulting with a CPA you know and trust can make any situation easier. Whether you are facing an IRS audit, have questions regarding your business or investments, or are dealing with the death of a loved one, it is vital you get expert financial advice as quickly as possible. To make sure all goes well, here are 10 reasons to contact your CPA immediately.
Tax Law Changes
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As the COVID-19 pandemic stretches into 2022, companies and employees are facing unprecedented challenges. While some workers, especially those in health care and education, have expressed concerns and filed complaints or lawsuits pertaining to mask and vaccine mandates and other measures, the fact is most employers are trying to put measures in place to keep employees safe. As to how this can be accomplished, here are some methods that have proven to be effective.
Offer Working from Home
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As you look ahead to retirement, one of the most important things is making the maximum contributions to your various retirement plans. In 2022, cost-of-living adjustments have resulted in many popular plans now allowing for increased contributions. To make sure you contribute as much as possible toward your retirement, here are some of the 2022 retirement contribution limits that may apply to your situation.
SIMPLE Retirement Accounts
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Whether you are an individual or perhaps a business owner who used a credit card to get your business up and running, you know how convenient it is to have a card available for making purchases. Unfortunately, that convenience often leads to using the card more than you should, which in turn results in more debt than you can afford. To take full advantage of your credit card while at the same time keeping the debt at manageable levels, here are some tips you can use to control your credit card debt.
Pay Your Credit Card Bill On Time
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As prices on various products and services have risen to levels not been in nearly 40 years, consumers and business owners alike are starting to wonder if inflation will be here to stay. While you can get a different answer to this question from almost any economist, the fact is the current business environment is one that will be difficult for small business owners in many ways.
Purchasing Supplies
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As you know by now, the COVID-19 pandemic has resulted in the world's supply chain going haywire. Along with this, it has altered the ability of manufacturers to produce the all-important computer chips that are used in so many things in today's world. While most of the focus regarding the chip shortage has been primarily on automakers and other large corporations, small business owners have felt the impact in many ways. If you're curious about the impacts to small businesses and what lies ahead, here are some important facts to keep in mind.
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Did you know that you can make charitable contributions as a business as well as donating as an individual? If not, you’ve been missing out on a great opportunity to get a tax deduction. Of course, if you use a professional CPA you’ve likely already been advised about the benefit of donating. But the tax break is only one aspect of donating. The better part of the deal is the feeling of giving to an organization that is dedicated to helping the less fortunate. Unfortunately, not all charitable causes are worthy. Here’s a guide to choosing worthy charitable causes in 2022.
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The current labor shortage is a strange phenomenon. According to the experts, there are millions of jobs available, but not enough workers to fill them. Now, along with supply chain disruptions and chip shortages, businesses of all sizes must deal with an absence of workers to keep their businesses running smoothly. It’s particularly worrisome for smaller businesses, since they typically lack the financial resources to compete with large corporations for salaries.
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In what feels like the blink of an eye, we are now at the end of 2021. As a business owner, that means you've got plenty of work ahead of you to get your financial records ready for tax time. However, with the holiday rush and the headaches that have come along courtesy of the pandemic, you may be wondering how you will ever get your books in order. To help with this, here are some tips you can use to get your business and its books organized.
Create a Year-End Checklist
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Though you may be known as a "baby boomer," you and 10,000 others like you are turning 65 each and every day, meaning retirement benefits like Social Security are becoming an important part of your life. Since it's likely Social Security benefits will play a crucial role in your financial future upon retiring, it's vital you stay aware of any changes and how they may impact you moving forward. To help you do this, here are some changes you can expect with Social Security benefits in 2022.
The Social Security Trust Fund is Eroding
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When it comes to your taxes, you want to save as much as possible. As December 31 gets closer, it's important to turn your attention to maximizing your ability to take advantage of tax breaks. Whether you had a great year financially or found it to be a struggle, here are some great tax strategies you should implement before year's end.
Defer Your Income
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Electric vehicles appear to be here to stay as they continue to grow in popularity with more and more drivers on the road today. And, as more auto manufacturers commit to producing electric vehicles, buyers are still looking for ways to offset the cost of their purchase. Thanks to Congress, one of the best ways to do so is by taking advantage of the Plug-In Electric Drive Motor Vehicle Credit, more simply known as the electric vehicle tax credit. If you're wondering what's the deal with this credit and if it’s something you should check into, here's all you need to know.
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In 2021, more people than ever are considering converting their traditional IRA into a Roth IRA. However, though eager to do so, many hesitate because they are confused about what is known as the "five-year rule." If you are one of the many who needs answers to your five-year rule questions, here is the Roth IRA five-year rule explained in easy to understand terms.
Future Distributions
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While your CPA may seem as if they are a superhero at tax time, that doesn't mean they look forward to having to wade through a complex mess of receipts and other documents. Remember, the harder you make the job of your CPA, the less efficient the entire process will be. To keep things running smoothly, here are some ways you can make your CPA's job easier.
Be Honest
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When you go to your mailbox and find you have received an IRS letter or notice, you may be stricken with panic and fear. However, the IRS sends out millions of letters and notices to taxpayers annually due to various reasons and situations. While it's possible you could be facing a serious financial situation, most letters and notices can be handled without you ever having to visit an IRS office in person. Should you receive an IRS notification letter, here's what you need to know.
Why You Might Receive a Notification Letter
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If you are a person who has assets of significant value, you want to pass this wealth on to your heirs. To do so while minimizing estate taxes and providing the assets to your heirs tax-free, it is vital you understand tax strategies that work best in these situations. Along with common strategies such as gifting and making direct payments to colleges, universities, and other educational institutions, other possibilities may exist based on low interest rates and the volatility of the stock market.
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If like many business owners across the U.S. you relied on a loan from the Paycheck Protection Program to keep your business afloat during the COVID-19 pandemic, you were certainly glad to have this financial assistance. However, when the time comes for you to file your taxes, you may have many questions as to your tax obligation regarding your loan. Since most tax issues are quite complex, the PPP loan only makes things a bit more muddled and confusing. To make sure you have a good understanding of your state and federal tax obligation for your PPP loan, here's what you need to know.
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With tuition rates and fees going up every year, seeing your child graduate with their college degree may sometimes feel like an impossible dream. However, it doesn't have to be like this. In fact, if you start planning early on and explore various options, you may find that paying for your child's education may be easier than you expected. To make sure the money is there when it's time for your child to start college, here are a few savvy money moves for your consideration.
Whole Life Insurance Policy
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When the golden years approach, many soon-to-be retirees start looking for better horizons. A higher quality of life often means relocating to a new state. When it comes time for you to retire, you may get the relocation bug, like many other retirees before you. While a considerable number of retirees stay right where they are, thousands of retirees decide to up stakes and move. There are many reasons why retirees move. They include:
Wanting to Downsize
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You may have noticed a lot of talk lately about something called, “universal basic income.” The increase in online chatter about universal basic income, or UBI, is likely connected to the government handing out stimulus money during the pandemic.
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In case you haven't noticed over the years, the federal government tends to move at a very slow pace. This is particularly true of the IRS, where speed is something that rarely, if ever happens. Unfortunately, this is very frustrating when it involves your tax refund. As the COVID-19 pandemic has taken hold across the United States, it has slowed the IRS down even more. Thus, you may be wondering why your tax refund is taking so long to process.
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The pandemic has wreaked havoc with many family’s finances. To help with this, the federal government has made it much easier for many parents to take advantage of the child tax credit and advance child tax credit. But, as with anything concerning your taxes and the IRS, there are various guidelines you must follow to ensure your information is correct, and so that you get the tax credit you expect. To help guide you through this process, we have compiled some of the most common questions and answers pertaining to this important topic.
What are Advance Child Tax Credit Payments?
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When the COVD-19 pandemic hit, thousands of small businesses were shutting their doors, laying off workers, and wondering if they would ever open up again. However, once Congress passed the CARES Act, businesses could take out loans that would prop them up and survive the pandemic. Best of all, these Paycheck Protection Program (PPP) loans were set up to be forgivable. However, forgiveness is not set in stone with these loans, meaning business owners who perhaps let deadlines lapse may be on the hook for whatever amount of money they borrowed.
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Financial fraud is rampant around the world, but citizens of the U.S. have arguably experienced more than their fair share due to our reputation as a wealthy country. Simply by being a U.S. resident, your odds of being targeted for financial fraud may be higher than if you lived in a second or third world country. And, while technology has added much to our lives, it’s also opened doors to hackers and other nefarious criminals whose sole mission is to come up with devious plans to part you from your money.
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Are you thinking of selling your small business? Whether you’re selling it to raise cash for something else, because you want to get out of the business world or because it’s the right time to sell due its overwhelming success, it pays to consider the tax ramifications. Handling tax issues correctly when selling your small business will save you money and keep you secure from any potential problems with the tax man.
Negotiate Sales of Assets Independently
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As you know, most income you earn or receive over the course of a year is subject to being taxed. While in many situations the taxes are paid through withholding, other situations may require you to make estimated tax payments. Most often, this occurs when an insufficient amount of taxes are withheld from your salary, you receive other forms of income, or you own a business. When you don't pay your fair share of taxes, the IRS can subject you to penalties that may quickly accumulate.
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One of the best ways to put away money for your retirement is with a Roth IRA. A Roth IRA differs from a traditional IRA in that a Roth IRA lets your money grow tax-free, plus allows for tax-free withdrawals. Knowing that, it’s easy to understand why this is such a popular savings option for so many people. But, as with any type of retirement plan where contributions and distributions are part of the mix, the IRS has a complex set of rules that can be ever-changing from year to year.
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Many ambitious entrepreneurs launch an online business using their own funds. They use personal savings or max out credit cards. Tactics like these are even lauded. You can find many articles on the internet that encourage entrepreneurs to do whatever it takes to launch their business online. Entrepreneurs who “risk it all” are called brave and “hungry.” But don’t rush to take advice that puts your own financial security on the line. Instead, run through the ideas outlined below for launching an online business.
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