The state’s popular California Competes Tax Credit program continues to be available during the 2019-2020 fiscal year. The state has allocated approximately $237 million to be awarded to both small and large business taxpayers. In June, the final award period of last fiscal year, approximately $55 million of tax credits were granted to twenty taxpayers. (more…)
CPAs Talk Tech Biz
Tax Reform…. Not in California
UPDATED JULY 18, 2019: At Last…Partial Conformity…
In December 2017, Congress passed the Tax Cuts and Jobs Act (TCJA) which was the most significant tax reform legislation enacted since the 1980s. In July 2019, 18 months later, the California legislature acted and the governor signed Assembly Bill 91 that contained a select number of conformity provisions. These provisions will simplify tax compliance for California taxpayers as differing federal and California tax reporting for certain transactions will no longer be required. Unfortunately, California has yet to conform to most of the changes enacted by the TCJA.
The conformity changes included in AB 91 are highlighted below.
However, in an act of “reverse conformity,” the legislature passed Senate Bill 78. Originally, the federal Affordable Care Act imposed a “penalty tax” on taxpayers who did not have qualifying health insurance coverage. Congress repealed this “tax” effective January 1, 2019. But due to an act of reverse conformity, a “penalty tax” will once again be imposed on California taxpayers that do not have qualifying health insurance, effective January 1, 2020. (more…)
Cryptocurrency Tax Update - Still More Questions Than Answers
There have been a few developments since we last looked at cryptocurrency in April, 2017 (Are Bitcoin Users Cheating on Taxes? (Or Are They Just Confounded by the Rules?)). The IRS has increased tax compliance enforcement but unfortunately, guidance from the Internal Revenue Service has not kept up with the advances in the cryptocurrency world continuing tax reporting challenges.
In 2014 the IRS released their position regarding the taxation of cryptocurrency transactions in Notice 2014-21 (https://www.irs.gov/pub/irs-drop/n-14-21.pdf). The IRS notified taxpayers that: (more…)
Don’t Be Surprised By New Tax Filing Due Dates
Beginning next year several tax filing due dates will be changing. The existing filing schedule has been in place since I manually prepared tax returns with pencil and paper before the computer age began so these changes are significant. The new filing dates were established under the Protecting Americans from Tax Hikes (PATH) Act of 2015 without much publicity outside of the tax practitioner community. The new filing dates are effective for tax years beginning January 1, 2016, so taxpayers unaware of the new dates may have an unexpected surprise next year.
Fortunately, the traditional April 15th due date for individual tax returns has not changed but the due dates of business returns have been modified. The changes were implemented to help smooth the tax filing process for taxpayers owning interests in pass-through entities such as partnerships and S-Corporations. (more…)
5 Tips to Control Your Startup's Burn Rate
San Jose, Calif. – July 18, 2013 – “Startup entrepreneurs must constantly control and monitor their cash reserves, and there are several basic steps to make this happen,” says Mark Sheffield, a startup expert at the Silicon Valley accounting firm of Abbott, Stringham & Lynch. “A well-managed burn rate, or negative cash flow, can go a long way to ensure investor confidence and the time necessary to build momentum in the business,” he adds.
To control and monitor your startup’s burn rate, Sheffield offers these tips…
Silicon Valley CPA Firm Adds Three High-Level CPAs to Principal Roster to Position for Growth in 2013
San Jose, Calif. – January 2, 2013 – Managing Principal Ray Scheaffer of Abbott, Stringham & Lynch (ASL), a Silicon Valley accounting and consulting firm, announced that three high-level CPAs, Luis Ramirez, Julie Malekhedayat, and Kay Filler, formerly with the accounting firm of Perisho Tombor Ramirez Filler & Brown (Perisho), have joined ASL. “Luis, Julie and Kay enhance our ability to serve the Silicon Valley domestic and international business community in the areas of tax and audit, as well as to expand services to individuals in the areas of estate, gift and trust planning. We welcome them as part of an overall plan to position for growth in 2013.” The addition of Ramirez, Malekhedayat and Filler brings the firm’s principal count to 12, supported by over 60 professionals, including staff members formerly with the Perisho firm.
Hidden Costs of 1099 Non-Compliance
Watch Video News Release: Hidden Costs of 1099 Non-Compliance
This tax season was marked by increased IRS scrutiny of 1099 compliance, according to Abbott, Stringham & Lynch Tax Manager Jonathan Laddy, and it is “a trend likely to continue.” Laddy says, “The hidden costs of non-compliance can be significant, but there are steps your company can take now to reduce your risk.”
Unreasonable Loan Covenants? Review Key Performance Indicators
“If you feel that your loan covenants are unreasonable, the problem may be that your bank does not understand what drives your business,” says Carol Wagner, a principal at the Silicon Valley accounting firm of Abbott, Stringham & Lynch. Wagner advises, “Review your business’ key performance indicators with your accountant or management consultant in relation to the loan covenants. If there is a disconnect between what the bank is expecting and your key performance indicators, go to the bank and request a review.” Wagner says that loan covenants based on inappropriate key performance indicators can adversely affect a business’ line of credit, constraining cash flows and reducing investments.
ASL Principal Rob Trammell Joins Builders' Exchange BOD
Abbott, Stringham & Lynch Principal of Tax and Construction Rob Trammell, CPA, has been elected to the Builders’ Exchange of Santa Clara County’s board of directors for a three-year term beginning January 2012. The Builders’ Exchange is a member-run, nonprofit association of licensed contractors, suppliers, and construction-related professionals founded in San Jose in 1893. According to the Builders’ Exchange, their goal is to provide a central location to review current construction blueprints and to collect timely construction information.