Many businesses form wholly owned captive insurance companies for legitimate risk management purposes and to take advantage of potential tax savings. Unfortunately, some promoters of so-called “microcaptive” schemes have run afoul of the IRS by helping businesses set up captive insurers solely to evade federal income taxes.
If your business is considering forming a microcaptive insurance company to reduce its tax burden, you should consult with a qualified, objective tax professional before taking any action. The penalties for illegal tax-avoidance schemes can be severe, and the IRS has been quite successful in pursuing such cases in recent years. (more…)
In early August 2022, a reduced version of the Biden Administration’s tax reform, climate change, green energy, and social policy agenda was passed by both the House and Senate. On August 16, 2022, President Biden signed the $750 billion Inflation Reduction Act of 2022 into law. The numerous changes will require significant guidance from multiple federal agencies to implement. With one exception, the Act’s provisions will be effective beginning January 1, 2023. We have summarized some of the key provisions below, and as guidance is released, will continue to keep you updated on how the Inflation Reduction Act may affect you or your business. (more…)
If your company is among the millions of businesses that still file paper versions of tax information returns such as Form W-2 and the various types of Form 1099, proposed new regulations from the IRS could soon affect you. The agency has proposed new regulations that would greatly expand the number of employers who are required to file these documents electronically rather than on paper.
The new rules are still subject to revision and the IRS has not yet officially announced when they will take effect. When they were first unveiled, however, the agency said it wanted to implement them by the end of this year. Companies that are still filing paper W-2s and 1099s should consider transitioning soon. (more…)
The state’s popular California Competes Tax Credit program continues to be available during the 2022-2023 fiscal year. The state has allocated approximately $304 million in California Competes Tax Credits and a total of $120 million in California Competes Grant funding. (more…)
With unemployment at its lowest level in decades, many businesses are struggling to retain employees and fill vacancies. An attractive retirement or profit-sharing plan can help meet this challenge while also reducing a company’s tax liability. It can also help company owners accumulate wealth for their own retirement. (more…)
As businesses adjust to the post-pandemic economy and private equity firms increase their searches for new acquisitions, a growing number of business owners may find themselves facing intriguing but unnerving questions about whether now is the time to sell—and if so, how to structure the deal. Among the many factors to consider is the tax consequences of the transaction. (more…)
Recently enacted California tax legislation included both good news and bad news for business owners. Senate Bill 113 (SB 113) contained a number of key and favorable changes made retro-active for the 2021 tax year. California Senate Bill 114 (SB 114) reinstated a mandatory COVID-19 supplemental sick leave requirement for employers. (more…)
By Charlie Shureen, CPA, Senior Tax Manager
In response to the COVID-19 pandemic as well as to the ongoing staffing shortage in many parts of the country, more companies are allowing their employees to work from home. While initially concerned with the technology and communication challenges that remote work presented, companies now are realizing that remote employees residing in other states may pose increased income tax liabilities. (more…)
ACTION MAY BE REQUIRED ON NOVEMBER 1, 2021
The California legislature authorized another round of funding for the “Main Street Hiring Credit”. Employers that have increased hiring since the base period (April 1, 2020 to June 30, 2020) may qualify for this credit of $1,000 per additional full-time equivalent employee.
Beginning November 1, 2021, qualified small business employers need to apply for a credit reservation through the California Department of Tax and Fee Administration (CDTFA). The credit reservations will be allocated on a first-come, first-served basis until all available funds are allocated, so it’s important to apply as early as possible. The reservation system will be available November 1, 2021 – November 30, 2021. Qualified small businesses will be able to use the credit to offset their 2021 California income taxes or their 2022 sales and use tax deposits. (more…)