QuickBooks Certified ProAdvisors are accountants that have gone through a rigorous training process developed by Intuit, the company that developed QuickBooks. And at the end of this training, a series of tests must be passed in order to become certified.
Why Hire a Certified ProAdvisor?
A Certified ProAdvisor can provide accounting and tax assistance well beyond a technical staff person at Intuit. Often, they have extensive experience that can save you precious time and money rather than trying to figure out something yourself.
Second, a Certified ProAdvisor often knows what is currently available on the market today to solve your day-to-day challenges either with a QuickBooks product or another vendor that integrates with QuickBooks software. Surprisingly, there are many apps and software vendors that make QuickBooks operate more effectively and save you time.
And third, a Certified ProAdvisor will attend conferences to learn what changes are around the corner. For example, the cloud accounting changes to QuickBooks are rapidly changing so staying abreast of these changes will be key to better serving your business needs.
At Graber & Associates, we are QuickBooks Certified ProAdvisors and a Baltimore CPA Firm. We have been serving the Baltimore market since 1993. Our overall goal is to minimize your tax obligations legally and QuickBooks is a tool to help us minimize your taxes. To learn more, call 410-466-3779 and ask for Steven Graber, CPA.
If you have a foreign bank account that has not been reported to the IRS, then you could be facing serious civil penalties and even criminal penalties. These penalties fall under the Foreign Bank Account Report, FBAR violations.
To illustrate, the IRS Dirty Dozen tax scam list for 2016 clearly illustrates the emphasis placed upon hiding money or foreign bank accounts (see excerpt below).
The Internal Revenue Service today said avoiding taxes by hiding money or assets in unreported offshore accounts remains on its annual list of tax scams known as the “Dirty Dozen” for the 2015 filing season.
“Our continued enforcement actions should discourage anyone from trying to illegally hide money and income offshore,” said IRS Commissioner John Koskinen. “We have voluntary options to help taxpayers get their taxes and filing obligations in order.”
Since the first Offshore Voluntary Disclosure Program (OVDP) opened in 2009, there have been more than 54,000 disclosures and we have collected more than $8 billion from this initiative alone. The IRS conducted thousands of offshore-related civil audits that have produced tens of millions of dollars. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitutions.
The IRS continues to beat this drum more aggressively each year. If you would like to discuss this situation, simply call 410-466-3779 and ask for Stephen Graber, CPA.
Graber CPA is a full service CPA Accounting Firm with two offices in Baltimore to better serve you, Pikesville and Inner Harbor on International Drive (Legg Mason Tower). Regardless of your situation, our goal is to minimize your tax obligation within the legal guidelines. We have served the Baltimore community since 1993 and we are experts in taxation.
By now, we all know how frustrating Cam Newton was by losing the Super Bowl. To make matters worse, he actually lost money since the Super Bowl was held in California and he is subject to “jock taxes.” Technically, he has to pay the state of California more than his Super Bowl check. Learn the details.
Depreciation deductions can be extremely valuable for a business. For example, in a recent court case, a federal judge ruled a company could begin taking its depreciation deductions for two buildings housing retail stores at a point prior to when they were “open for business.” The ruling allowed the company to show a loss for that tax year, which the company then used to offset income in earlier years and ultimately claim a total tax refund of over $2 million.*
Although this case involved a special 50% depreciation allowance made available by the Gulf Opportunity Zone Act of 2005, the fact remains that even regular depreciation deductions can significantly reduce a company’s tax bill.
If business property has a useful life greater than one year, the owner generally is prohibited from deducting the full cost of the property in the year it is placed in service. Instead, a portion of the cost may be deducted each year as depreciation. The depreciation rules apply to most types of tangible property, with notable exceptions being inventory and unimproved land.
Different schedules specify the proper depreciation calculations for different types of property. The most widely used schedules are set forth under the Modified Accelerated Cost Recovery System (MACRS). MACRS assigns property to a recovery class based on the property’s “class life.”
For example, office equipment is assigned to the seven-year MACRS class. Assume a business purchased a piece of equipment for $20,000 and placed it in service in 2012. The property would be in its fourth year of service in 2015. Applicable IRS tables indicate that the appropriate deduction percentage is 12.49% of the cost, so the business could deduct $2,498 for that equipment in 2015.**
Placed in Service
As the above-mentioned court decision suggests, the date property is placed in service can be an important consideration. Though the IRS has specific definitions for different types of assets, generally, property is first placed in service on the date the taxpayer first places it “in a condition or state of readiness and availability for a specifically defined function.”
Because the definition is broad, taxpayers sometimes litigate how it should be applied to specific situations. In the decision mentioned above, the key issue was the “placed-in-service” date of two buildings that would eventually be used as building supply stores. The IRS had argued that the “placed-in-service” requirement meant that the buildings had to be open for business for retail customers. The court disagreed, however, holding that the buildings were placed in service when they were substantially complete and limited certificates of occupancy had been issued so that workers could enter the buildings to install necessary racks and shelving.
Businesses may be able to benefit from the tax law’s Section 179 provisions to garner faster write-offs for some of their asset purchases. Currently, businesses will be allowed to expense up to $25,000 of qualifying property placed in service during the 2015 tax year, with that limit subject to further reduction once the amount placed in service exceeds $200,000.*** In addition, a current deduction may be available for certain limited amounts paid for property that the business expenses for financial accounting purposes. We can tell you more about these “de minimis safe harbor” regulations.
If you are tired of overpaying taxes, then call 410-466-3779 and ask for Steve Graber. Lower your overall tax liability using depreciation is right up our alley.
Graber and Associates is a Baltimore CPA Accounting Firm with two convenient office locations, Downtown Baltimore and Pikesville. To better service our small business clients who use QuickBooks, we are Certified QuickBooks ProAdvisors.
* Stine, LLC v. USA (DC LA, 1/27/2015)
** Calculation assumes the half-year depreciation convention.
*** Congress kept the Section 179 limit at $500,000 for 2014 in late-year extender legislation.
If you have a foreign bank account that has not been reported to the IRS, then you could be facing serious civil penalties and even criminal penalties. These penalties fall under the Foreign Bank Account Report, (FBAR) violations.
First, it is important to determine if you are required to report your foreign bank account. It comes down to being able to say yes to the following four questions:
- You are now a US citizen or permanent resident or have been in the last six years.
- You have had a foreign bank account for a year or longer since 2008.
- Your balances in all of your foreign accounts exceed $10K
- You have not reported the account through the FBAR paperwork to the IRS.
The civil penalties for not filing the FBAR will be the greater of 50% of your bank account or $100K. The IRS has also indicated that it is willing to charge these penalties cumulatively for up to four or even six years.
This means that you can be charged these penalties for each year you have had the foreign bank account and not reported it to the IRS regardless of the fact that the penalties may well out pace the actual dollar amount in your account.
In addition to expensive civil penalties, you can also face criminal penalties. If the IRS determines that you willfully knew that you should have filed a FBAR and didn’t, they can charge you under FBAR violation laws as well as normal criminal tax prosecution laws.
A criminal prosecution typically occurs when a person has a large amount of taxable income in their foreign bank account that has not been claimed on their tax return.
A tax accountant or tax attorney can walk you through your options if you find yourself in this situation, as the IRS does offer voluntary disclosure programs, but even with taking advantage of one of these programs, you will still suffer the sting of IRS penalties.
Graber & Associates is a Baltimore CPA Accounting Firm serving businesses since 1993. To better service the Baltimore metro area, we have offices in Downtown Baltimore on International Drive and Park Heights Drive near Pikesville MD.
First, as an employer, you are required to protect employees that are killed on the job, are injured, or become ill. Most employers obtain either state sponsored or private insurance. Others will use self-insurance. Regardless of which option you select, it is the employer who foots the bill.
Secondly, workman’s comp is a state based program as opposed to a federal program. Most states require some form of workman’s comp, and as the employer, you are expected to accept the rules and regulations. For those businesses with under four employees, there is an exemption to carrying the coverage, at least in some states.
Next, workman’s comp pays four different types of benefits. These are survivor’s benefits, disability benefits, rehabilitation benefits, and medical benefits. The injured employee or their heirs receive a lump sum payment which then relieves the business of any further liability.
Also, employees are covered with a few exceptions. These exceptions include business owners, independent contractors, unpaid volunteers and domestic employees in private homes.
In addition, workers’ comp is paid on the no-fault basis. This means that regardless of who is at fault for the injury, the employee receives the benefits, and the business does not have to admit liability.
Finally, even when an employee is outside of the workplace, they may be covered. This can include traveling for business purposes, running work related errands, or attending a required business social event.
The state rules and regulations for workman’s comp insurance can be tricky, but they do protect both the employee and employer. When purchasing this insurance, it is always best to work with a professional that can ensure your business’s needs are met.
Cost segregation is the process of identifying your assets and classifying those assets correctly for the purpose of paying federal taxes. In this process, personal assets that are mixed with real property assets are separated out, so all assets can be depreciated properly and potentially increase your bottom line.
Cost Segregation Studies
A cost segregation study is performed to determine which assets can be claimed as personal property instead of real property. These items usually include indirect construction costs, non-structural elements of buildings, and exterior land improvements.
By separating these assets, they can be depreciated over a shorter term which will reduce your current income tax liabilities and increase cash flow. This decreased depreciation period is typically between five and fifteen years instead of the twenty-seven and a half to thirty-nine years for non-residential real property.
For example, items such as carpeting, wall paper, parts of the electrical system, and even sidewalks and landscaping all qualify for the shorter depreciation periods.
Eligibility and Advantages of Cost Segregation
To be eligible for cost segregation, a building must have been purchased, remodeled, or constructed since 1987. This method of tax reduction is best used on new construction, but it can be used retroactively on older buildings as well.
Beyond the benefits of reduced tax liability and increased cash flow, a cost segregation study will provide your business with an audit trail of all costs and asset classifications. This will help put to rest any unwanted inquiry from the IRS in its early stages. Finally, during this process, you may identify possible ways to reduce your real estate tax liabilities as well.
While there are some costs associated with performing a cost segregation study, as long as the assets in question are valued over $200K, it’s worth the time and expense to complete the study and categorize these assets correctly.
If you are tired of overpaying taxes, then call 410-466-3779 and ask for Steven Graber.
Graber & Associates is a Certified Public Accounting firm in Baltimore. We have been operating since 1993 and have offices in Downtown Baltimore – Inner Harbor and Pikesville. Learn more about our real estate accounting services.
If you have ever considered renting out your vacation home, before you do there are several tax rules you will need to keep in mind to help you stay on the right side of the IRS. Luckily, they aren’t too complex, but they will guide you in determining how you want to use your vacation home.
Number of Rental Day’s Per Year
It is important to understand that the number of days you rent your vacation home has a direct impact on how the IRS views the property. For example, if you rent your vacation home for 14 or fewer days, you will not need to report the income on your taxes.
If, however, you decide to rent your home for more than 14 days, you become a landlord, and all rental income will need to be reported. You can also deduct rental expenses, but keep in mind, the expenses will need to be allocated between when the home is used as a rental property and when the home is used for personal vacations.
Finally, if you use the home more than 10% of the number of days it is rented, or more than 14 days for personal use, it is still considered personal property, but you are allowed to take a deduction for rental expenses up to the amount of rental income received; although, losses cannot be taken as a deduction.
The Definition of Personal Use Days
What becomes most important, besides the number of days you rent the home, is the number of personal use days. Even when a family member is occupying the home, instead of yourself, the IRS considers those days personal use, regardless of whether or not the family member is paying rent. This is also true of days you donate the home to a charity auction.
The advantage to keeping your personal days to 14 days or less or 10% of the rental days is that the home is then considered a business. As such, you can deduct expenses and take up to a $25,000 loss each year you rent the property depending on your income. It’s important to know that the days you spend maintaining the property are not included in personal use days.
If you are tired of overpaying taxes and worrying about tax rules, call 410-466-3779 and ask for Steven Graber. We have two convenient office locations and have been serving the Baltimore metro since 1993.
Graber & Associates is a Baltimore CPA Accounting firm with offices on International Drive in the Legg Mason Building and Pikesville. Our practice offers additional expertise in real estate accounting for commercial property owners, investor groups, property management companies and investor groups.
If you’ve paid attention to the news the last few years, you will have heard of Bitcoins. In fact, you may even have considered accepting them as payment for services or product sales. Before you do, you’ll want to make sure you have an understanding of how the IRS treats Bitcoin payments.
First, it’s important to be aware of the fact that the IRS does not consider Bitcoins, which are virtual currency, as a legitimate state-backed currency. Instead, they see Bitcoins as property.
This means that the tax rules that apply to property transactions will also apply to payments received in Bitcoins. When a person, or business acquires property, they are required to record the fair market value of the property. This will become the owner’s basis for the property.
Once the property is sold or exchanged, if the fair market value of the property has increased, then the owner will have a taxable gain. On the other hand, if it has decreased in value, the owner will have a loss.
This means that if a business owner sells a product today and receives Bitcoins worth $100 but then converts them to dollars next week and the value has increased to $120, they will have a gain of $20 that will be taxed as capital gains.
This becomes even more complicated when multiple Bitcoin transactions take place. Each transaction needs to be tracked separately and each will have its own gain or loss depending on the current valuation of Bitcoins when they are converted to dollars. The amount of paperwork and record-keeping becomes significant.
There are a couple of workarounds for this. First, each transaction can be converted to dollars immediately. Secondly, there are now Bitcoin merchant service providers that will deal with all of the backend record-keeping that is necessary. This allows businesses to accept Bitcoins without ever actually dealing with them.
The IRS ruling treating Bitcoins as property turned the Bitcoin world and those who want to accept them on their heads, but technology and even the IRS will eventually catch up to the new reality of virtual currencies, but it may take awhile.
Keeping a restaurant up and running and profitable is no easy task. It is estimated that one in five restaurants will close within two years time, so it’s no wonder that tax issues can be pushed to the side when you’re working hard just to keep the doors open. Unfortunately, these five top tax mistakes can cause even more damage if not correctly quickly.
Tips may keep your wait staff happy, but the IRS still wants their cut. There are specific rules and requirements that both your employees and you have to follow. For example, the total tip income reported for a pay period must equal at least 8% of sales. In addition, it is your responsibility to collect and report social security, Medicare, and income tax on tips.
Because many restaurants deal in cash, it can be tempting to deposit less than $10k at a time to avoid having to fill out a Currency Transaction Report, (CTR). Too often, business owners feel that filing a CTR will raise a red flag, but the opposite is actually true.
If you structure your deposits, so they are less than $10K, you will quickly gain the attention of the IRS and possibly other government agencies. In addition, avoiding the CTR is a felony.
It can be tempting to classify your employees as independent contractors to avoid taxes, but this will catch up to you. A business owner can’t make this type of classification on their own. The IRS rule comes down to whether or not your employee is under your control and direction. If so, they are an employee and not an independent contractor. To classify them incorrectly can lead to heavy penalties.
Not Paying Employment Taxes
If you’re having trouble paying vendors or your lease payments, it may seem like a good option to put off paying employment taxes. This is always a mistake. You will be liable for IRS penalties not only as a business but also as an individual. This debt cannot be discharged in a bankruptcy.
Unorganized Record Keeping
This is one area where the pain comes from losing possible deductions instead of being penalized by the government. By keeping good records, you can take full advantage of business tax deductions. This can be the difference between being in the black or falling back into the red.
If you are tired of overpaying taxes and worrying about tax compliance, call 410-466-3779 and ask for Steven Graber. Our initial consultation is free for business owners.
Graber & Associates is a Baltimore CPA Accounting firm operating for over twenty years. We have two office locations to better service the entire Baltimore marketplace, Inner Harbor Baltimore – International Drive and Pikesville.