Multiples and Ratios
This article will expand on some of the information presented in previous articles, and focus on what types of debt and growth targets you should aim for, and what type of margins or other financial ratios are acceptable for your business. Below are some of the main points covered. Margins and Profitability: How to analyze […]
Reading and Interpreting Financial Statements
The income statement, balance sheet and cash flow statements are three important tools that you can use to analyze your small business, and provide financial information for banks and potential investors. This article will explain the benefits of analyzing each financial statement, and provide examples of how these statements are all connected. Our other article, […]
Inherited Property Tax Treatment
It can be difficult to plan for and navigate the changing legal landscape when you are deciding how to pass on a property or other assets to your family. There are many different federal and state tax laws for you to consider when you write a will. Luckily, there are many incentives at the federal […]
Strategies to Avoid Taxes on Property Sales
If you own a real estate property and plan to sell it soon, there are many strategies that can allow you to either lower your capital gains taxes or even completely eliminate the need to pay capital gains taxes. These benefits are available for anyone who wants to sell their personal property or investment property. […]
C-Corporations: Stock Sales, Tax Laws, and Stock Options for Employees
This article will cover some of the common tax considerations that C-corporations have to make and will also provide information about how corporations can offer employees stock options. 1) An overview of the stock sale process for C-corporations and how investors can avoid paying taxes on stock sales. 2) An overview of how capital gains […]
Ratio Analysis
This article will cover some of the most common financial ratios, which can be found using income statements, cash flow, and balance sheet items, to help analyze your business. Analyzing these ratios can help you analyze many aspects of your business, including the following: Profitability: These ratios can help you measure how profitable your business […]
What Type of Business Entity Should I Start?
This article will address some of the common types of companies that you can form, including a sole proprietorship, limited liability company, C-corporation, or S-corporation. Once you are familiar with the benefits of each entity type, it can become much easier to answer the following questions: Should I file an LLC or S-corp? Should I […]
Opportunity Zones
Investors who want to lower their capital gains taxes should focus on identifying investments in Qualified Opportunity Zones. People who Invest in these areas of the United States can either defer capital gains taxes or avoid paying capital gains taxes if they hold the investment long enough. This article will discuss some of the laws […]
199A Deductions
The Tax Cuts and Jobs Act, known as TCJA, created multiple benefits for all types of small business owners looking for ways to lower their income taxes. One new addition to the TCJA is 199A deductions, which can provide tax benefits for sole proprietors, partnerships, and other pass-through entities. While these new additions can provide […]
The Benefits of Delaware Statutory Trusts
It is challenging for many investors to gain exposure to institutional quality real estate investments. There are not very many options for investors who want to invest a small amount of money into larger projects. Forming a syndicate with other investors can be confusing, so most investors choose to invest alone in REITs or individual […]
Opportunity Zones
Investors who want to lower their capital gains taxes should focus on identifying investments in Qualified Opportunity Zones. People who Invest in these areas of the United States can either defer capital gains taxes or avoid paying capital gains taxes if they hold the investment long enough. This article will discuss some of the laws […]
The tax benefits of municipal bonds
Investors who are interested in lower-yielding investments that carry lower risks should consider municipal bonds over other fixed-income investments due to the tax benefits. Municipal bonds provide investors with state and federal tax exemption in many cases. Moreover, the amount of interest income that you can earn from these products is attractive relative to other […]
Roth 401K and Roth IRA Accounts
This article will discuss some of the benefits of Roth 401K and Roth IRA accounts and determine which type of account is best for your investment objectives. Some high-income investors may not be allowed to open a Roth IRA account, and some companies may not offer their employees Roth 401K accounts. In some cases, both […]
Section 179 depreciation and MACRS Depreciation Categories
Section 179 and MACRS are two very important depreciation categories that can allow businesses to rapidly depreciate assets in the first year to enjoy tax saving benefits. This article will cover some of the benefits of Section 179 and MACRS depreciation, and explain some of the new tax benefits that were created under the Tax […]
Depreciation under the TCJA, including Bonus Depreciation
It is crucial for small business owners to be aware of some of the new changes in the Tax Cut and Jobs Act ( TCJA), as these changes can help small businesses initially pay less in taxes. New changes under the TCJA allow small businesses to enjoy bonus depreciation in the first year, of up […]
When Does the IRS Consider my Money-Making Busines a Hobby?
There often is a fine line between having a hobby that makes a little money and a business that shows little profit. While it likely doesn’t make much difference to you whether you are pursuing an activity as a hobby or business, it can significantly impact your federal income tax bill.
President Biden’s Tax Plan Could Raise Taxes on Corporations and the Wealthy
It was not the centerpiece of his campaign, but President Joe Biden took office in January touting a tax plan that he says will help the middle-class Americans by shifting some of their tax burden back to corporations and the wealthy. Among other things, Biden has proposed returning the top individual income tax rate to […]
Portability Ensures that Couples Receive Full Benefit of their Estate Tax Exemptions
The term “portability” describes a provision added to the federal estate tax law in 2010 that allows the surviving spouse’s estate to take advantage of any estate tax exemption that the deceased spouse did not use. Until the estate tax exemption was made portable, if the estate of the deceased spouse did not take full […]
Revocable vs. Irrevocable Trusts for Estate Planning
Trusts have long provided an estate planning tool for individuals and couples with significant assets who are seeking benefits beyond those offered by a traditional will. However, once you have decided to place your assets in a trust, you must then decide whether a revocable or irrevocable trust will best suit your needs. In essence, […]
Everything You Need to Know About End-of-Year Taxes
The festive month of December not only marks the season of family gatherings, for entrepreneurs and self-employed professionals all over the country, it also signifies the start of the tax season. If you want to get ahead of these looming deadlines, here are some things you need to keep in mind: What are estimated taxes? How […]
Solo 401Ks Offer Tax-Advantaged Retirement Planning for the Self-Employed
A solo 401K plan is one of the most popular retirement plans for self-employed individuals running a business without other employees. A solo 401K offers participants the option of contributing their pre-tax income to the plan to help fund your retirement and lower your federal income tax. There are no income or age restrictions for […]
LLCs and Sole Proprietorships
Over the past few years, an increasing number of Bay Area workers have embraced the gig economy and begun operating their own businesses as either limited liability companies (LLCs) or sole proprietorships. These businesses must collect and report comprehensive tax information each year. Federal Taxation of LLCs LLCs blend corporate and partnership business structures and […]
12 Tax Deductions That Can Save Construction Businesses Money
The construction industry has proven to be quite erratic, consistently riding the many waves of the economy. According to a 2018 infographic by EHS Today, $10 trillion is spent annually by construction businesses for construction services. Consequently, construction companies in the country spend top dollar on tax. However, this does not have to be the […]
Reasonable Compensation for an S Corp Shareholder
A Subchapter S corporation (S corp) is a pass-through entity where the company’s income and losses flow through to shareholders where it is taxed as personal income. However, when a shareholder also works for the company, the IRS usually requires the payment of reasonable compensation that is subject to payroll taxes. A shareholder who owns […]
Will Filing as an S Corporation Reduce the Tax Bill of a Business Owner?
My business clients often ask me whether they would see a tax benefit if they converted their business to an S corporation. Unfortunately, there is no simple answer to the question because there are numerous pros and cons to operating as an S corporation. It all comes down to whether the advantages outweigh the drawbacks […]
How to Pay Taxes on a Lawsuit Settlement
Many individuals who settle a lawsuit do not stop to consider that they may need to set aside part of their settlement to pay the federal tax that may be due on it.
The Federal Export Incentives Offered IC-DISCs Provide Businesses with Significant Tax Savings
Export incentives are assistance provided by governments to help businesses sell products in foreign markets. The only federal export incentive currently being offered in the U.S. provides tax savings to companies utilizing interest charge domestic international sales corporations (IC-DISCs). An IC-DISC is organized by the shareholders or partners of an exporting business that operates as […]
The Property Tax Government Foreclosure Process
Late Payment of Property Tax Bill Results in an Immediate Lien, but Owners have Five Years to Pay Before it is Sold at a Tax Sale When California property owners do not pay their property taxes–or fail to pay them on time–the overdue taxes are converted into a tax lien. Owners who fail to pay […]
The Tax Implications of Receiving a Windfall
If you had the opportunity to receive free money, what would you say? ‘Yes’ would be the rational answer. But an even smarter person would ask: What’s the catch? When it comes to windfalls, it’s important to know that there are always strings attached. And most of the time, they’re in the form of taxes. […]
New Subchapter 5 Bankruptcy Proceeding Makes It Easier For Small Businesses to Reorganize While Continuing Operations
They have received little publicity, but recent changes to the U.S. Bankruptcy Code have made it easier for small businesses to restructure under Chapter 11 and discharge their debts while continuing their operations. The first change was made by the Small Business Reorganization Act of 2019, which took effect on February 19, 2020, and added […]
The Insurance Mandate Isn’t Just About Penalties, California is also Helping Low- to Middle-Income Residents Buy Coverage
California’s new individual health insurance mandate went into effect in January 2020. Under the mandate, Californians who do not maintain the minimum essential coverage (MEC) for themselves and their dependents will be subject to a tax penalty unless they qualify for an exemption under the new law.
Changes to the Tax Law Have Encouraged the Use of the Section 1202 Small Business Stock Gain Exclusion
The U.S. has allowed small business stockholders to exclude profits from stock sales from their income since 1993. However, the exclusion under Section 1202 of the Tax Code has taken on greater importance after the 2017 Tax Cuts and Jobs Act (TCJA) encouraged small business owners to form as C corporations. The TCJA cut the […]
Bay Area Homebuyers Have State and Federal Options for Low Downpayment Mortgages
California and the federal government have programs that can reduce, and even eliminate, the down payment requirement for middle-to-low-income homebuyers
Federal, State, and Local Programs Offer Assistance to First-Time Homebuyers in the Bay Area
We will break down the programs available to Bay Area homebuyers by looking at such factors as which homebuyers qualify the amount of money available.
Bay Area Small Businesses Have A Variety Of Options For Financial Assistance To Weather The COVID-19 Crisis
With much of the media coverage focusing on the funding shortfalls faced by the federal Paycheck Protection Program (PPP), it is understandable how Bay Area small business owners could believe that program is the only available option to help them stay solvent during the COVID-19 pandemic. In fact, there are a number of other federal, […]
Opportunity Zones Offer Tax Deferrals to Real Estate Investors, But Benefits Should Be Weighed Against Like-Kind Exchanges
Real estate investors looking to shield their capital gains from tax are often curious about the Opportunity Zones that were created in the Bay Area following the adoption of the 2017 Tax Cut and Jobs Act to spur economic development in economically depressed areas. While these zones provide real estate investors with a wonderful opportunity […]
Despite Recent Changes to Federal Tax Law, Bay Area Homeowners Often Benefit From Itemizing Their Deductions
The 2017 federal Tax Cuts and Jobs Act (TCJA) increased the standard deduction for federal taxpayers to the point that most U.S. homeowners benefited more from claiming that deduction than claiming the traditional itemized deductions designed to encourage homeownership. But the Bay Area housing market is anything but typical and its high home prices mean […]
What are the Tax Consequences of Your Business’s Succession Plan?
When it comes to succession planning, small business owners usually try to address everything from maintaining day-to-day operations to ensuring that their families retain whatever equity they have in the company. But the tax implications of the plan are often an afterthought, if the issue is considered at all. While taxes should never be the […]
How to Boost Your Credit Score Using Your Rent and Utility Payment History
If you have bad credit or own a business attempting to establish credit you have probably been advised that paying your rent and utilities on time will help you establish a good credit history. While that is sound advice, it also leads to more questions. The most logical being: How do I know if the […]
Pursuing Out-of-State Business Opportunities May Lead to Tax Complications
Whether you have invested in a partnership that is looking to invest in rental properties in another state or a software consultant thinking about taking on out-of-state clients, expanding operations beyond your home state is likely to raise complex tax issues. Those issues usually stem from the need to divide your earnings between states for […]
The Reporting and Tax Implications of Accepting Foreign Funding for Your Business
When it comes to raising money to grow their business an increasing number of Bay Area entrepreneurs are considering bringing in foreign stakeholders to help meet their funding needs. Foreign investors can be a great source of ready cash, but before accepting their help businesses need to recognize that doing so usually means additional reporting […]
Governor Eases California’s 60-Day Notice Requirement for Layoffs Under State’s WARN Act Due to COVID-19 Outbreak
California Governor Gavin Newsom has aided Bay Area businesses struggling to cope with the novel coronavirus (COVID-19) pandemic by easing the notice requirements for layoffs and terminations under the state’s WARN Act. Employers are no longer required to give 60 days’ notice prior to layoffs ore terminations of 50 or more employees under the March […]
California Businesses Need to Review Classification of Independent Contractors to Ensure Compliance with New Gig Worker Law
Beginning January 1 of this year, California businesses must comply with new legislation making it significantly more difficult for them to use the independent contractor designation to avoid the expenses involved in providing employee benefits. The law, California Assembly Bill 5 (AB 5), will require many businesses to reclassify their California-based independent contractors as employees. […]
California’s WARN Act is Unclear on Whether Bay Area Employers Must Give 60 Days Notice of Layoffs Related to COVID-19 Outbreak
The recently issued shelter-in-place orders issued by most Bay Area counties as part of their efforts to stem the spread of the novel coronavirus (COVID-19) has left numerous local businesses without access to either employees or customers. Unfortunately for those businesses, it is unclear as to whether they can lay off employees without giving 60 […]
How Should Bay Area Property Owners Shield Parent-Child Real Estate Transfers from Increased Tax Assessments?
In 1986 California amended its constitution to allow parents to pass real estate on to their children without subjecting their children to the spike in property taxes that accompanies changes in ownership in areas where real estate values have increased. This is often a significant issue for Bay Area residents who are seeking to pass […]
Payments for Attorneys and Non-Employee Services Must be Reported on New Form 1099-NEC Beginning in 2020
For the 2020 tax year, the IRS has implemented a new rule requiring that nonemployee compensation of more than $600 paid by a business, including payments to attorneys, over the course of a year must be made on a Form 1099-NEC. Those payments had previously been reported on the Form 1099-MISC. The payments that must […]
How Do You Avoid the Capital Gains Tax on the Profits from a Home Sale?
If you live in the Bay Area and sold your home in the last year there is a good chance you sold it for considerably more than you paid for it. Traditionally, you would need to pay the capital gains tax on those profits. Luckily, the federal government provides a home sale exclusion allowing you […]
Answers to Employer Questions about CalSavers Compliance
After numerous studies showed that workers weren’t saving enough for retirement, California was one of 10 states to have implemented a mandatory state retirement plan. The California plan, known as CalSavers, requires that employers with no retirement plan and five or more employees register by the time it is fully phased-in on June 30, 2022. […]
The Tax Implications of Foreign Income if You Are a U.S. Green Card Holder
If you have been issued a U.S. green card you are currently a tax resident of the U.S. beginning the year you were issued the card. That means you are required to report all of your income to the IRS, regardless of whether it was earned in the U.S. or abroad. The good news for […]
Nine Steps Small Businesses Should Take to Build Business Credit
Most small businesses get their initial funding either through a cash infusion from the savings of an owner, or through a personal loan taken out by an owner, but once the business is up and running it should establish a separate credit history. A separate credit history will allow a business to secure a loan […]
A Case Study On Functionize
About Functionize Functionize was founded in 2015 by Tamas Cser as the first truly intelligent, cloud-based software testing solution. Now testers and developers can experience the true value of a cloud-first approach, expediting testing and speeding up the entire development cycle. Quality assurance has long been in need of a smarter solution that can keep […]
Amazon’s Use of Common Federal Tax Breaks to Eliminate its Federal Tax Bill
The fact that Amazon paid no federal tax in 2018 made national news last year, but one aspect of the story that has been little noticed here in the Bay Area is how the federal tax breaks the company used to wipe out its federal tax bill likely benefited our local economy. The company has […]
How are Capital Gains Recognized and Taxed?
The Federal long-term capital gains tax is a tax imposed on a taxpayer’s profits from the sale of assets that were purchased as an investment or for personal use and have been held for more than one year. A taxpayer only becomes liable for paying the capital gains tax when an asset is sold, therefore […]
What Businesses Qualify for the R&D Tax Credit and Which Expenses are Eligible?
The federal research and development tax credit (R&D credit) is one of the U.S. government’s primary means for rewarding businesses that invest money in research. It was initially implemented as a temporary measure in 1981, but was made permanent and expanded in 2015 through the Tax Cuts and Jobs Act. In addition to the federal […]
How Are Bitcoin and Other Virtual Currencies Taxed?
Bitcoin and other virtual currencies are no longer a novelty, but many individuals and companies are unaware of the federal and state tax ramifications of using them in transactions. It might seem hard to believe, but bitcoin has been around for a decade and the IRS laid out the rules for reporting and taxing the […]
The Future is CODEaccounting
The ability to crunch numbers in a variety of approaches and attain valuable information to better understand the current position and move accordingly in an attempt to gain a better stance can now happen in a blink of an eye. Accounting that is now paired with continuous auditing and reporting has been around for a […]
Surviving an Audit
Bookkeeping – This will be advice from our firm on how to pass an IRS audit. It should go over your options for setting up payment plans, exactly what documents the IRS will Request, and how businesses can prepare themselves for each of those requests. It should then offer Code Accounting’s services as a solution […]
REPORTING PAYMENTS TO VENDORS
You’ll need to do it, so make sure to do it right. All businesses make payments to vendors. But are you required to report these payments to the IRS? It depends on who you are making payments to and the amount being paid during the year. Various types of Forms 1099 must be provided to […]
Recent Changes in Tax Law: Restructuring of the Board of Equalization, New Tax Laws of 2017 Filing Seasons, and What to be Aware of in 2018
Introduction This guide will: Update you on the recent change in the State Board of Equalization Let you know how you or your business will be affected Outline some key changes to tax law during the 2017 filing season Make you aware of upcoming changes in the 2018 filing season Code Accounting Business Solutions If […]
Keeping your Gains
In the financial world, capital refers to the things you own that have value. When you sell those things, you either make more than the original cost, sell for less than the original cost, and in rare instances, break even. This is a painfully simple explanation of the concept of a “capital gain” and a […]
DIY DISASTER
How doing your taxes can become a complete nightmare… In the age of Amazon, YouTube tutorials and ubiquitous internet access, it feels like you can do anything. When was the last time you hopped on WebMD to try and diagnose yourself? Or the last time you googled how to solve a plumbing issue? If the […]
Commander Moving, Inc. Moved by CODEaccounting
Commander Moving at a Glance “Commander Moving Inc. is a local based moving company providing moving services and movers in Oakland, CA. If you are looking for experienced, professional and affordable movers in Oakland East Bay, California, Commander Moving and Storage is your best choice for a local move. Commander Moving Inc. is a fully […]
10 Tax Deductions You Never Knew About
Finding deductions like these is why you need CODEaccounting! Tax deductions are money that you deserve. It’s that simple. And while the IRS is judicious in making sure you pay what is owed, they aren’t quite as dedicated to deducting what you shouldn’t be paying. They put that on you, which means there may be […]
4 Ways to Avoid Audits
Here are a few tips to keep the likelihood of an IRS audit as low as possible. Getting audited is never a good experience. Even if you keep thorough records, having some review your business with a microscope can be uncomfortable. That’s why we’re sharing 4 ways to avoid an IRS audit. Now this won’t […]
Three Tasks You Should Be Automating
Technology has rapidly changed the way we do business and manage our tasks. Advancements happen so fast, that we often miss some of the innovations that we could be utilizing in our workflow. The old saying, time is money, hold especially true in business. Automation can save time on repetitive task that could be better […]
Four Habits of Successful Startups
Running a startup business is full of risk and reward. A lot of factors can contribute to its failure or success. Building up the right habits early on can not only ensure a startup’s viability, but set all of the right boundaries and habits for years to come. Here are some habits to implement early […]
Five Accounting Figures You Should Be Tracking
Making financial decisions for your business should never be a shot in the dark. Accounting entails collecting, tracking and compiling metrics that inform decisions from an educated and calculated standpoint. Accounting metrics can be powerful predictors for your business’s viability several months, or years, down the line. Investors are also in constant need of numbers […]
Uses of Financial Reports
Financial statements may be used by different stakeholders for a multitude of purposes. Owners and managers require financial statements to make important business decisions affecting its continued operations. Financial analysis is then performed on these statements, providing management with a more detailed understanding of the figures. Employees need these reports in making collective bargaining agreements with […]
Save on Taxes
Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the National Government. It was introduced in 1973 and is the third largest source of government revenue after Income Tax and National Insurance. It is administered and collected by HM revenue and customs, primarily through the Value Added Tax Act […]
Fundamental Accounting
Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that In order to prepare the […]
Accounting 1 on 1
Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that: In order to prepare the […]
Proper Invoice Info
Financial statements are prepared according to agreed upon guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting. The objectives of financial reporting, as discussed in the Financial Accounting standards Board (FASB) Statement of Financial Accounting Concepts No. 1, are to provide information that In order to prepare the […]
