Atlanta Certified Public Accountant

Are Your Vacation Expenses Deductible?

Wouldn’t it be great to be able to take a tax deduction for your vacation? Combine vacation with a business trip and maybe you can. But, for expenses to be tax deductible, they must meet certain requirements. It’s a good idea to know what those requirements are before you plan your travel.

Add It on

If the primary purpose of your trip is business, you can deduct the cost of your transportation to and from your destination, even when you’ve tacked on a few vacation days. However, with certain exceptions, you’ll be able to deduct food and lodging costs only for days you actually spend on business.

Bring the Crew

While you can’t deduct food, lodging, or airfare for your family, you’re still entitled to your own write-offs for a trip that combines business and pleasure. That includes the single-occupancy rate for lodging on days when you’re conducting business. And, if you travel by car, you can deduct the full cost of transportation, just as you would if you were traveling alone.

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What to do Before You Start Your Business

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Are you interested in starting a new business?
Make sure you do plenty of research and have a firm
business plan ready before you take the plunge.

 

 

 

 

Making the Transition

 

If you have signed a noncompete or confidentiality agreement with your current employer, review it carefully to make sure it won’t hamper your startup efforts. If your new venture is in the same industry, be careful not to burn any bridges when you leave your current job. Scout out your opportunities. Buying a franchise or an existing business is much different than building a new business from the ground up.

 

Growing Your Business

 

Where will your customers come from? You may have one or two great prospects, but that may not be enough. Can you count on referrals from current business associates? Take a good hard look at opportunities for expansion that exist.

 

Figure Out Financing

 

Even with great prospects, it may take some time until cash starts coming in on a regular basis. Do you have enough of a financial cushion to get you through? If your spouse has an outside job, your spouse’s earnings and benefits may help provide stability during the startup period. If you need funding, where will it come from? Have you considered looking for a partner or investor?

 

Getting the Word Out

 

How much marketing and advertising will be required? Put together a comprehensive plan along with cost estimates. And, unless you’re familiar with the less traditional marketing and communication opportunities that today’s new media offer, you may want to enlist the help of someone who is.

 

Make a Budget

 

List every expense you can think of: rent, payroll (if any), phone and Internet service, computer equipment, website design, insurance, transportation costs, self-employment tax, etc. Then draw up a budget. Once your venture is up and running, you can use the budget as a guide in managing your finances.

 

Call us today for more tips on how to ensure you’re following business best practices, and let us help you keep your company in the black.

ARE YOU PROTECTING YOURSELF FROM TAX IDENTITY THEFT?

The IRS has thwarted some identity theft attempts, but thieves are still stealing billions of dollars every year from taxpayers.

Another annual income tax deadline has come and gone. Maybe you had to pay in, but perhaps you were owed a refund. If the latter is true, did you receive it?

A lot of taxpayers didn’t because hackers swooped in and stole their sensitive tax-related information. Tax identity theft is a serious problem, despite the IRS’s efforts to stop it.

But there are steps you can take to keep from being a victim, some of which are simply a matter of common sense. For example, consider the security of any wireless network you use when you’re working on your taxes. Don’t ever do so on a public network, and make sure your home or office wireless is password protected.

 

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Understanding the Home Office Deduction

The home office deduction has the potential to be a wonderful money-saving option for business owners operating from an office in their house, apartment, or other residence, but you have to first make certain you qualify for it. The IRS is quite specific about which businesses meet the requirements, so it pays to fully understand the ins and outs of this deduction. If you do qualify, you will want to organize your receipts and follow the IRS rules to maximize your savings. As with all tax matters, consult with your tax adviser to make your final decisions.

 

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TRACK YOUR INCOME USING QUICK BOOKS TODAY

Here are some tips for using QuickBooks’ Income Tracker

QuickBooks’ provides numerous ways to learn about your company’s health. Income Tracker is one of the most effective.

You can get an enormous amount of useful information from QuickBooks’ reports – especially if you customize them to isolate the precise data you want. Reports included with the software range from the very simple, like Open Invoices, to output that’s exceptionally complex, like Trial Balance and Profit & Loss.

Warning: Standard financial reports like Trial Balance are easy to run in QuickBooks, but very difficult to understand and analyze. You should, though, be aware of what they’re telling you at least once a quarter – even once a month in some cases. We can help with this.

Sometimes, especially first thing in the morning as you’re planning your day, you just want to cut to the chase and get a quick overview of your company’s finances. That’s where

QuickBooks’ Income Tracker comes in. It not only provides that overview, but it also contains links to related screens where you can do the work that’s needed there.

A simple Layout

Click the Income Tracker link in the toolbar to open the tool’s main screen. If you’ve been using QuickBooks for a while, you’ll see a framework like this with your own company’s data already filled in.

 

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QuickBooks Income Tracker displays both summaries of income types and the specific transactions that contribute to those totals.

Look first at the top of the screen. You’ll see six horizontal bars, each of which represents groups of transactions that either require immediate attention or will at some point in the future. Besides identifying the type of transaction, each block displays the number of transactions involved and their total dollar amount. They are:

  • Estimates – estimates that have been created and shared with customers, but haven’t yet turned into sales
  • Sales Orders – orders that have been entered but have been neither fulfilled nor converted to invoices
  • Time & Expenses – hours that have been recorded for customers but not yet invoiced
  • Open Invoices – invoices that have been created and sent to customers, but no payments have been received
  • Overdue – open invoices that have passed their due dates
  • Paid Last 30 Days – payments that have been received within the last 30 days

Donating to Charitable Organizations

Good afternoon everyone, today we’re going to talk about donating to charitable organizations. I know what you’re thinking, “How is this going to help me financially?” So there is a benefit to donating to a charitable organization. There are a few ways that this may help you:

How much can I deduct?

 

  • Your total charitable deduction cannot exceed 50% of your adjusted gross income (AGI)
  • You can deduct the actual cost of gas and oil or $0.14/mile if you drove to do volunteer work, and you can even add parking and tolls to this amount. (This deduction has a limit of $249, unless you get a statement proving that you made a contribution of $250 or more.)
  • If donating capital assets, such as property or securities, you have the benefit of not paying for the capital gains tax on those and taking the whole donation amount as a deduction. This is as long as you don’t exceed your AGI.
    • There are some charitable contributions that limits your deduction to 30% of your AGI, rather than 50%. (veterans’ organizations, non-profit cemeteries, fraternal societies, and certain private foundations.)

*Note: If you donate an amount, and the organization provides a benefit in return (i.e. Food, Entertainment, Merchandise, Etc.), then you can only deduct the difference between the donated amount and the cost of the benefit.

What Organizations Qualify for this to apply?

  • Churches, synagogues, mosques, temples, etc.
  • Boy Scouts, Girl Scouts, Salvation Army, Red Cross, Goodwill, etc.
  • Non-profit hospitals, or any organizations, trying to find a cure/help people with arthritis, cancer, cerebral palsy, heart disease, diabetes, etc.
  • Most non-profit educational organizations, like colleges, as long as your contributions are taking place of tuition or enrollment fees.
  • Veterans’ groups
  • Federal, state, and local governments, as long as the contributions are for public purposes only.
    • Political contributions do not qualify for a deduction.

Focus points: Donating to charity is a benefit towards both you and the charitable organization. This being said, it is important that you keep a record of these donations. If your gifts’ value is $250 or more, you will also need to have a statement from the organization with proof of the donation and whether or not this organization provided any goods or services in return for your donation (if they did, they need to give a description of this good/service along with an estimate on its value). Lastly, keep in mind that there is a limit on your deductions of 50% your AGI.

If you are a business owner looking to increase their contributions, consider donating to a charitable organization. “Generosity can not only have moral benefits but also have financial benefits” This could be very beneficial. Here at Delerme CPA, we strive to help our clients see benefits like this one and help them get the most out of their hard work. Give us a call if you guys are having any concerns or if you have any questions. Have a nice day.

Setting Up Your Business in the United States

DelermeInternational businesses that want to do business in Atlanta Georgia face a mountain of issues.  To make this process simpler, Delerme CPA  is doing something about this.

Delerme CPA has created a unique concept designed around making the process for helping international companies to smoothly and quickly establish a United States entity for doing business in Georgia.

Delerme Intl Tax Cons

With this program, our team of experts is available to assist with business aspects of this transition.  And for the legal aspects, we will provide you with recommendations on the best immigration law firm for your particular circumstances.

The Delerme CPA team will help you with the following issues:

  • Determining the type of entity most suitable for your business
  • Establishing a business entity
  • Obtaining all tax ID numbers and business licenses
  • United States tax expertise
  • Relocating employees to United States
  • Transfer pricing consulting and establishing United States payroll

Delerme Int Tax Cons - ImmigOur team is fluent in English and Spanish. We are licensed to operate in Georgia and Puerto Rico.

Delerme CPA is a United States CPA Accounting firm specializing in tax consulting for foreign businesses seeking to establish operations in the United States.

Call 404-445-8095 and ask for Victor Delerme.

Foreign Bank Account Reporting – IRS Priority List

IRSIf 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 404-445-8095 and ask for Victor Delerme.

 

Delerme CPA is a highly respected CPA Firm with two offices in Atlanta, Midtown Atlanta and Perimeter.  We work with all types of businesses throughout Atlanta helping them minimize their tax obligations legally.  For additional expertise, we provide International Taxation, Expatriate and Inpatriate Tax Services, and help foreign business owners establish businesses in the United States.  Our staff is fluent in English and Spanish.  Our International Tax specialty has enabled us to work with clients in South America, Central America and throughout the Carribean.

Domestic Production Activities Deduction (DPAD)

Did you know that you could get a tax deduction for manufacturing goods in the United States? As incentive to get manufacturers to produce goods in the United States, taxpayers have the luxury of getting a tax deduction.

How much of a deduction? manufacture

  • As of 2010, a taxpayer can have a deduction of up to 9% on either their taxable income, or of their qualified production activities income (QPAI), whichever of the two is lesser.
  • Keep in mind, the amount of your deduction cannot exceed 50% of the W-2 wages of the employer, for that taxable year.

What is QPAI? 

  • Qualified production activities income is an income from domestic productions.
  • In order to calculate your QPAI, it’s your Domestic Production Gross Receipts(DPGR) minus, the sum of:

– Cost of goods sold allocable to the DPGR, and

– Other expenses, losses, or deductions allocable to DPGR

What is DPGR?

  • It’s the sum of the gross receipts from:

– The construction of real property done in the U.S. under your construction                                                                              trade or business.

– Engineering or architectural services done in the U.S. under your engineering                                                                         or architectural services trade or business for construction of real property in                                                                         the U.S.

– Any lease, license, rental, exchange, or sale of qualifying production property                                                                         you manufacture, any qualified film you produce, or natural gas, electricity,                                                                             or potable water you produce in the U.S.

Alright so let’s recap: Domestic production activities deduction (DPAD) can be up to 9% of either your qualified production activities income (QPAI) or your taxable income. To find (QPAI), you need to know your domestic production gross receipts (DPGR).

*Keep in mind your (DPAD) cannot exceed more than 50% of W-2 wages the employer paid for that taxable year.

If you are a business owner that manufactures goods in the United States, you may want to look into this deduction. Delerme CPA is always willing to help anyone looking to expand and grow your business financially. We’ve helped people use DPAD to help them save money to help expand their business(s). If you have any questions or concerns give us a call. Have a nice day.

Net Operating Losses Provide Tax Benefits

NOL2For many businesses, profits vary from year to year. However, with proper planning, even a bad year can be helpful from a tax perspective. Where business deductions exceed gross income, a taxpayer may have a net operating loss (NOL) that can be used to offset income in another tax year, potentially generating a refund of previously paid taxes.

Who May Use an NOL?

NOLs are available to individual business owners, corporations, estates, and trusts. Partnerships and S corporations do not take NOL deductions, though their partners and shareholders may use “passed through” losses on their own returns.

How Is an NOL Applied?

The general rule is that a taxpayer may carry an NOL back two years and forward 20 years, though certain limited exceptions may apply. For example, an individual with an NOL that was caused by a casualty, theft, or disaster may use a three-year carryback period.

In general, the taxpayer will carry back an NOL to the earliest year it can be used and then carry it forward, year by year, until it is used up. The taxpayer may also elect to forego the two-year carryback and carry the loss forward for the 20-year period. However, the general preference is to use an NOL sooner rather than later because a dollar of tax saved today is generally worth more than a dollar saved in the future.

How Is an NOL Calculated?

Calculations of NOLs can be complicated. For example, a noncorporate taxpayer’s NOL is calculated without regard to any personal exemptions or NOLs from other years, and certain deductions for capital losses and nonbusiness items are limited.

If you are tired of overpaying taxes and would like a tax partner, call 404-445-8095 and ask for Victor Delerme.