Tax & Accounting Insights for Irvine, CA. Expert Guidance from Bharmal CPAs
IRA: Traditional or Roth?
Looking to fund your retirement with an IRA? You should know that there are two types: Traditional and Roth. Which is right for you? Following are some important details to help you decide: Are You Eligible? Any person with income from wages or self-employment can contribute to an IRA – either traditional or Roth. That includes children, as long as [...]
Child and Dependent Care Credit
You may be able to claim the child and dependent care credit if you pay expenses for the care of your under-age-13 child or other qualifying person to enable you (and your spouse, if filing a joint return) to work or look for work. Tax credits are the best because they give you a dollar-for-dollar tax benefit. The credit is [...]
Avoid Filing Separate Partnership Tax Return
As you know, running a business often means filing a separate business tax return. But you may not be aware that for certain partnerships, you can avoid the separate return and report the activity directly on your individual tax return, such as for the three activities below: The qualified joint venture election is available if you and your spouse are [...]
Business Car Use: Keep Adequate Records
If you fail to keep adequate records for business car use, the IRS can disallow deductions. You are required to keep a contemporaneous log or other similar record of your business trips. That doesn’t mean you have to record the information the moment you arrive home, but you can’t wait until months have passed either. In lieu of keeping track [...]
Related Party Transactions: Planning Around the Matching Rule
The related-party matching rule places your business on the cash method for deducting payments to related cash-method payees. You need to know this rule to avoid unexpected tax results. Here’s an example of unexpected results: ABC is a calendar-year accrual-method S corporation. Sam is the sole shareholder and thus related under the matching rule. On December 30, 2017, ABC accrues [...]
Four Ways to Avoid Cash Flow Problem
Cash flow problems in a business don’t just come out of nowhere – there’s always a cause. In many cases, the cause comes down to the business owner’s mistakes. The good news is that mistakes can be avoided when you understand how they are made. Following are four common errors entrepreneurs make that can negatively impact their bottom line. By [...]