In 2018, the California Supreme Court rendered its decision in the Dynamex case that significantly altered the rules used to classify workers as employees or independent contractors. In an attempt to “simplify the rules” and “help” workers in the gig economy the California legislature passed, and the Governor signed, Assembly Bill 5 (AB 5) in 2019. The bill codified the worker classification tests used by the California Supreme Court. Prior to the passage of AB 5 many industry lobbyists were busy in Sacramento getting exceptions and special rules included in AB 5. As a result, the worker classification rules are now very complex, have many exceptions and come with significant penalties for noncompliance. (more…)
Limits on Business Interest Expense Deductions
One provision of the 2017 Tax Cuts and Jobs Act (TCJA) that has generated considerable concern among business owners is the new limitation on deductions for business interest expenses.
Prior to the provision, interest paid on business loans or credit lines could be deducted as an ordinary business expense. One section of the Internal Revenue Code—Section 163(j)—limited the deductions for certain types of interest expense that some C corporations paid, but most businesses were able to fully deduct business interest expense in the year it was accrued or paid. (more…)
Demystifying the QBI Deduction
For many businesses, one of the most attractive features of the 2017 Tax Cuts and Jobs Act (TCJA) was the new Section 199A deduction for qualified business income (QBI). In practice, however, the QBI deduction has proven to be one of the TCJA’s more confusing provisions.
With one complete tax cycle behind us and some additional IRS guidance now available, this is a good time to review the law’s basic provisions and re-evaluate strategies for maximizing the QBI deduction for 2019. (more…)
Have You Implemented ASC 606?
By Becky Watson, CPA, Audit Manager
ASL Construction Group
The end of the year is coming fast and with it comes the requirement to adopt FASB ASC Topic 606 Revenue from Contracts with Customers by all calendar year-end private companies (this standard was applicable to public companies for calendar year 2018). If you have not yet implemented the new accounting standard, here are a few items to consider. (more…)
Accounting Method Changes - Small Business Exceptions Can Make a Big Difference
While many changes in the Tax Cuts and Jobs Act (TCJA) involved rewriting entire sections of the tax code, some of the most consequential changes resulted from a simple change in definition. By expanding the definition of a “small business,” the law enabled many companies to simplify their tax preparation—and often improve their cash flow as well. (more…)
Impact of Artificial Intelligence on Renewable Energy
By Steve Carter, CPA, Audit Partner
ASL Renewable Energy Group
The focus on transitioning the nation’s energy needs from existing to renewable sources is the shared mission and passion of most renewable energy companies. The process of transforming natural resources into usable energy is a confluence of science, technology, and even user behavior. However, many challenges remain to achieving the objective. One issue which has been preventing broader adoption of this energy source is the inconsistency of weather. While technology allows for very accurate forecasting, it’s not always correct, and this can create “spikes” in the availability of energy. That’s why companies are turning to artificial intelligence (AI) to help facilitate solutions. AI can help with better micro-grid management, improved reliability, and optimized energy storage. To help clients, prospects and others understand the impact of AI, ASL has provided a summary of key solutions below. (more…)
Top Three Considerations for Better Reporting – Are You Doing These?
By Deepa Bhat, CPA, Audit Principal
ASL Construction Group
As we were wrapping up the reviewed financials for my General Contractor client, I asked the Controller, “what are some of the issues often overlooked by contractors as it relates to accounting?” And she was happy to oblige me with her top three issues for contractors to consider for better reporting: (more…)
Recent IRS Pushback on Valuation Discounts for Estates
By Jeff Faust, CVA, Director of Valuation Services
ASL Business Valuation Services
Recently, the IRS began pushing back on discounts used within estate and gift valuations, specifically the discount for lack of control (DLOC) and the discount for lack of marketability (DLOM), calling for lower discounts to be applied. Valuation discounts have always been critical in estate and gift valuations because they measure the restrictions on the ownership interest being valued. These discounts also can be used as a planning tool to help lower overall estate and gift taxes. As a result, the IRS reviews these discounts carefully and can push back on them. The DLOC is typically applied when the non-controlling interest is being valued and the DLOM is applied to account for the limited liquidity of the ownership interest. (more…)
Local Construction Industry Resources
By Jerry Quintos, CPA, Director
ASL Construction Group
Are you a construction industry company utilizing all your local resources here in Silicon Valley? Most of you probably are, but some of you… perhaps not. I’m thinking about the Construction Financial Management Association of Silicon Valley (CFMA), Builders’ Exchange of Santa Clara County (Builders’ Exchange), and the Construction Group here at Abbott, Stringham & Lynch (ASL). (more…)