insights - KSDT CPA

Before You Hire That Contractor: Avoid These IRS Pitfalls

ksdtadmin — Tue, 20 May 2025 14:42:25 +0000

Many businesses turn to independent contractors to help manage costs, especially during times of staffing shortages and inflation. If you’re among them, ensuring these workers are properly classified for federal tax purposes is crucial. Misclassifying employees as independent contractors can result in expensive consequences if the IRS steps in and reclassifies them. It could lead to audits, back taxes, penalties and even lawsuits.

Understanding worker classification

Tax law requirements for businesses differ for employees and independent contractors. And determining whether a worker is an employee or an independent contractor for federal income and employment tax purposes isn’t always straightforward. If a worker is classified as an employee, your business must:

Withhold federal income and payroll taxes,
Pay the employer’s share of FICA taxes,
Pay federal unemployment (FUTA) tax,
Potentially offer fringe benefits available to other employees, and
Comply with additional state tax requirements.

In contrast, if a worker qualifies as an independent contractor, these obligations generally don’t apply. Instead, the business simply issues Form 1099-NEC at year end (for payments of $600 or more). Independent contractors are more likely to have more than one client, use their own tools, invoice customers and receive payment under contract terms, and have an opportunity to earn profits or suffer losses on jobs.

Defining an employee

What defines an “employee”? Unfortunately, there’s no single standard.

Generally, the IRS and courts look at the degree of control an organization has over a worker. If the business has the right to direct and control how the work is done, the individual is more likely to be an employee. Employees generally have tools and equipment provided to them and don’t incur unreimbursed business expenses.

Some businesses that misclassify workers may qualify for relief under Section 530 of the tax code, but only if specific conditions are met. The requirements include treating all similar workers consistently and filing all related tax documents accordingly. Keep in mind, this relief doesn’t apply to all types of workers.

Why you should proceed cautiously with Form SS-8

Businesses can file Form SS-8 to request an IRS determination on a worker’s status. However, this move can backfire. The IRS often leans toward classifying workers as employees, and submitting this form may draw attention to broader classification issues — potentially triggering an employment tax audit.

In many cases, it’s wiser to consult with us to help ensure your contractor relationships are properly structured from the outset, minimizing risk and ensuring compliance. For example, you can use written contracts that clearly define the nature of the relationships. You can maintain documentation that supports the classifications, apply consistent treatment to similar workers and take other steps.

When a worker files Form SS-8

Workers themselves can also submit Form SS-8 if they believe they’re misclassified — often in pursuit of employee benefits or to reduce self-employment tax. If this happens, the IRS will contact the business, provide a blank Form SS-8 and request it be completed. The IRS will then evaluate the situation and issue a classification decision.

Help avoid costly mistakes

Worker classification is a nuanced area of tax law. If you have questions or need guidance, reach out to us. We can help you accurately classify your workforce to avoid costly missteps.

The post Before You Hire That Contractor: Avoid These IRS Pitfalls first appeared on KSDT CPA.

Jeffrey Taraboulos Named to South Florida Business Journal’s 2025 Power Leaders 250

ksdtadmin — Tue, 11 Feb 2025 01:17:51 +0000

KSDT CPA is proud to announce that Jeffrey Taraboulos, Managing Partner, has been recognized as one of the 2025 Power Leaders 250 by the South Florida Business Journal (SFBJ). This prestigious list honors the most influential executives who drive the region’s business growth and innovation.

As Managing Partner of KSDT CPA, one of South Florida’s largest and fastest-growing accounting firms, Taraboulos has been instrumental in the firm’s strategic expansion, client service excellence, and commitment to innovation in accounting, tax, and advisory services. Under his leadership, KSDT CPA continues to push boundaries in business solutions and financial expertise, supporting businesses across various industries.

“I am honored to be included among this distinguished group of leaders who are shaping the future of South Florida’s business landscape,” said Taraboulos. “This recognition is a testament to the hard work and dedication of the entire KSDT team as we continue to provide best-in-class service to our clients and community.”

The Power Leaders 250 list, curated by the South Florida Business Journal, highlights top executives across industries, from finance and healthcare to real estate and technology. The full list of honorees can be found here.

For more information about KSDT CPA and its continued growth in the South Florida market, visit ksdtcpa.com.

About KSDT CPA

KSDT CPA is a full-service accounting and advisory firm based in South Florida, providing tax, assurance, and consulting services to businesses and individuals. Recognized for its entrepreneurial approach and client-focused service, KSDT CPA remains a leader in financial expertise and business advisory solutions.

The post Jeffrey Taraboulos Named to South Florida Business Journal’s 2025 Power Leaders 250 first appeared on KSDT CPA.

Act Fast to Benefit: How to Maximize Your QBI Deduction Before It’s Too Late

ediaz — Wed, 20 Mar 2024 13:26:36 +0000

The qualified business income (QBI) deduction is available to eligible businesses through 2025. After that, it’s scheduled to disappear. So if you’re eligible, you want to make the most of the deduction while it’s still on the books because it can potentially be a big tax saver.

Deduction basics

The QBI deduction is written off at the owner level. It can be up to 20% of:

QBI earned from a sole proprietorship or single-member LLC that’s treated as a sole proprietorship for tax purposes, plus
QBI from a pass-through entity, meaning a partnership, LLC that’s treated as a partnership for tax purposes or S corporation.

How is QBI defined? It’s qualified income and gains from an eligible business, reduced by related deductions. QBI is reduced by: 1) deductible contributions to a self-employed retirement plan, 2) the deduction for 50% of self-employment tax, and 3) the deduction for self-employed health insurance premiums.

Unfortunately, the QBI deduction doesn’t reduce net earnings for purposes of the self-employment tax, nor does it reduce investment income for purposes of the 3.8% net investment income tax (NIIT) imposed on higher-income individuals.

Limitations

At higher income levels, QBI deduction limitations come into play. For 2024, these begin to phase in when taxable income before any QBI deduction exceeds $191,950 ($383,900 for married joint filers). The limitations are fully phased in once taxable income exceeds $241,950 or $483,900, respectively.

If your income exceeds the applicable fully-phased-in number, your QBI deduction is limited to the greater of: 1) your share of 50% of W-2 wages paid to employees during the year and properly allocable to QBI, or 2) the sum of your share of 25% of such W-2 wages plus your share of 2.5% of the unadjusted basis immediately upon acquisition (UBIA) of qualified property.

The limitation based on qualified property is intended to benefit capital-intensive businesses such as hotels and manufacturing operations. Qualified property means depreciable tangible property, including real estate, that’s owned and used to produce QBI. The UBIA of qualified property generally equals its original cost when first put to use in the business.

Finally, your QBI deduction can’t exceed 20% of your taxable income calculated before any QBI deduction and before any net capital gain (net long-term capital gains in excess of net short-term capital losses plus qualified dividends).

Unfavorable rules for certain businesses

For a specified service trade or business (SSTB), the QBI deduction begins to be phased out when your taxable income before any QBI deduction exceeds $191,950 ($383,900 for married joint filers). Phaseout is complete if taxable income exceeds $241,950 or $483,900, respectively. If your taxable income exceeds the applicable phaseout amount, you’re not allowed to claim any QBI deduction based on income from a SSTB.

Other factors

Other rules apply to this tax break. For example, you can elect to aggregate several businesses for purposes of the deduction. It may allow someone with taxable income high enough to be affected by the limitations described above to claim a bigger QBI deduction than if the businesses were considered separately.

There also may be an impact for claiming or forgoing certain deductions. For example, in 2024, you can potentially claim first-year Section 179 depreciation deductions of up to $1.22 million for eligible asset additions (subject to various limitations). For 2024, 60% first-year bonus depreciation is also available. However, first-year depreciation deductions reduce QBI and taxable income, which can reduce your QBI deduction. So, you may have to thread the needle with depreciation write-offs to get the best overall tax result.

Use it or potentially lose it

The QBI deduction is scheduled to disappear after 2025. Congress could extend it, but don’t count on it. So, maximizing the deduction for 2024 and 2025 is a worthy goal. We can help.

The post Act Fast to Benefit: How to Maximize Your QBI Deduction Before It’s Too Late first appeared on KSDT CPA.

Managing Global Risks in Self-Funded Plans for Large Companies

ediaz — Fri, 11 Aug 2023 14:17:53 +0000

Large companies often face unique challenges when it comes to managing their employee benefit plans, particularly self-funded plans. These companies, operating on a global scale, must navigate a complex landscape of risks associated with their self-funded healthcare plans. In this article, we will explore the intricacies of managing global risks in self-funded plans for large companies and discuss strategies to mitigate these risks effectively.

Understanding Self-Funded Plans

Self-funded plans, also known as self-insured plans, are healthcare benefit programs where the employer assumes the financial risk of providing healthcare coverage for its employees. Unlike traditional fully insured plans, self-funded plans give employers greater control over plan design, cost management, and claim data. However, with this control comes the responsibility of managing the inherent risks involved.

Global Risks in Self-Funded Plans

Regulatory Compliance

One of the primary challenges for large companies with global self-funded plans is ensuring compliance with various international regulations. Each country may have its own set of rules and requirements regarding healthcare coverage, claims processing, privacy laws, and reporting obligations. Employers must navigate this complex regulatory landscape to avoid penalties, fines, or legal issues.

Currency Fluctuations

Operating in multiple countries exposes companies to currency risks. Fluctuations in exchange rates can impact the financial stability of self-funded plans. For example, if a company’s home currency strengthens against the local currency of a subsidiary, it may result in higher claim costs when converted back to the home currency. Effective risk management strategies need to be in place to mitigate the adverse effects of currency fluctuations.

Varied Healthcare Systems

Global self-funded plans must accommodate diverse healthcare systems across different countries. The structure, quality, and cost of healthcare services can vary significantly, leading to disparities in claim expenses. Understanding these variations is crucial for assessing the financial risks associated with each location and developing appropriate benefit designs and cost-sharing mechanisms.

Employee Mobility

Large multinational companies often have employees who frequently travel or relocate across different countries. Employee mobility introduces additional risks in managing self-funded plans, as healthcare

needs and costs may differ based on the country of residence or travel. Ensuring seamless coverage and managing claims for mobile employees can be complex and require robust administrative systems.

Cultural and Language Barriers

Operating in a global environment means dealing with diverse cultures, languages, and communication styles. Effective communication is vital to ensure employees understand their benefits, how to access healthcare services, and submit claims correctly. Language barriers and cultural differences can hinder effective plan management, leading to misunderstandings, claim denials, or inefficient processes.

Mitigating Global Risks in Self-Funded Plans

Partnering with Global Insurance Carriers

Large companies can collaborate with global insurance carriers with expertise in managing international self-funded plans. These carriers have in-depth knowledge of local regulations, healthcare systems, and risk management strategies. By leveraging their expertise, employers can ensure compliance, gain insights into regional risks, and implement effective risk mitigation strategies.

Robust Data Analytics and Reporting

Implementing robust data analytics and reporting systems is critical for managing global risks. By consolidating claim data from various locations, employers can gain insights into cost drivers, identify trends, and evaluate plan performance. These insights enable proactive risk management, such as adjusting benefit designs, negotiating contracts with healthcare providers, and implementing cost containment measures.

Global Compliance Teams

Establishing dedicated global compliance teams is essential for navigating international regulatory complexities. These teams should have expertise in local regulations, privacy laws, and reporting requirements. They can provide guidance on plan design, manage compliance audits, and ensure adherence to all legal obligations. Collaborating with legal and regulatory experts in each country can help mitigate compliance risks effectively.

Employee Education and Support

To overcome cultural and language barriers, companies should invest in employee education and support programs. Clear communication materials, translated into local languages, should be provided to employees to help them understand their benefits, claim procedures, and healthcare network access. Utilizing technology solutions, such as mobile applications or online portals, can facilitate easy access to information and streamline claim submission processes.

Risk Hedging Strategies

Companies can employ risk hedging strategies to mitigate the impact of currency fluctuations. These strategies may involve using financial instruments, such as currency forwards or options, to hedge against adverse exchange rate movements. Collaborating with financial advisors or risk management consultants can help develop customized hedging strategies aligned with the company’s risk appetite and financial goals.

Large companies with global self-funded plans face a myriad of risks that require careful consideration and proactive management. By understanding the unique challenges associated with global self-funded plans, employers can implement strategies to mitigate these risks effectively. Partnering with global insurance carriers, leveraging data analytics, ensuring compliance, providing employee support, and implementing risk hedging strategies are essential components of a comprehensive risk management approach. With diligent risk management practices in place, large companies can safeguard the financial stability of their self-funded plans and ensure quality healthcare coverage for their global workforce.

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Kevin N. Fine, MHA, MSM leads the KSDT-CPA Advisory team. He advises companies, investment firms and executive leadership on operations, strategy, and business process improvements. Any questions, do not hesitate to contact him at: kfine@ksdt-cpa.com.

The post Managing Global Risks in Self-Funded Plans for Large Companies first appeared on KSDT CPA.

Data-Driven Decision Making: Empowering Healthcare Executives

ediaz — Thu, 10 Aug 2023 16:06:39 +0000

In today’s rapidly evolving healthcare landscape, data has emerged as a powerful tool for executives to make informed decisions that drive better patient outcomes, operational efficiency, and financial success. Data-driven decision making (DDDM) enables healthcare executives to navigate complex challenges, identify patterns and trends, and optimize their strategies. However, for DDDM to be truly effective, it requires a careful approach to ensure data accuracy, implement risk controls, and leverage the full potential of data.

The Power of Data-Driven Decision Making

DDDM empowers healthcare executives by enabling them to base their decisions on objective insights derived from large volumes of data. Traditionally, decision making relied on gut instincts and intuition, and outdated spreadsheets, which often resulted in suboptimal outcomes. With DDDM, executives can leverage the following advantages:

1. Evidence-based decision making: By analyzing vast amounts of data, executives gain a comprehensive understanding of the healthcare landscape, allowing them to make evidence-based decisions rooted in empirical insights rather than subjective opinions.

2. Enhanced operational efficiency: Data-driven decision making enables executives to identify inefficiencies and bottlenecks within healthcare processes. By optimizing workflows and resource allocation, executives can improve operational efficiency, reduce costs, and enhance the quality of patient care.

3. Improved patient outcomes: By leveraging data, executives can identify patterns and trends that impact patient outcomes. DDDM allows for the implementation of targeted interventions, personalized treatment plans, and proactive measures that lead to better health outcomes for patients.

4. Strategic planning and forecasting: Data-driven insights facilitate strategic planning by providing executives with the ability to forecast future trends, anticipate patient needs, and adapt their healthcare services accordingly. This foresight allows executives to stay ahead of the competition and respond effectively to industry changes.

Ensuring Data Accuracy

Accurate and reliable data is the foundation of effective DDDM. To ensure data accuracy, healthcare executives must implement robust processes and methodologies:

Data Collection and Integration

· Standardization: Establish standardized data collection methods across the organization to ensure consistency and eliminate discrepancies. This includes defining data elements, formats, and data collection protocols.

· Interoperability: Promote interoperability among disparate systems and data sources. Implementing health information exchange (HIE) initiatives and utilizing standardized healthcare data formats (e.g., HL7, FHIR) enable seamless data integration, enhancing accuracy and completeness.

Data Validation and Cleansing

· Data quality checks: Regularly validate data for completeness, accuracy, consistency, and integrity. Implement automated validation routines and error detection mechanisms to identify and rectify anomalies.

· Data cleansing: Employ data cleansing techniques to remove duplicates, resolve inconsistencies, and address missing or inaccurate data. Data cleaning processes such as data profiling, entity resolution, and outlier detection contribute to improved data accuracy.

Data Governance

· Data governance framework: Establish a robust data governance framework that outlines policies, responsibilities, and accountability for data accuracy. Assign data stewards to ensure compliance and adherence to data quality standards.

· Data documentation: Maintain comprehensive documentation of data sources, definitions, and transformations. This documentation enables transparency, facilitates data lineage, and enhances data accuracy and reliability.

Implementing Risk Controls

While data-driven decision making offers immense benefits, it is crucial to implement risk controls to mitigate potential pitfalls. Leadership must consider the following factors to ensure effective risk management:

Data Security and Privacy

· Data encryption: Utilize encryption techniques to protect sensitive patient information. Implement secure protocols and access controls to ensure data confidentiality.

· Compliance with regulations: Comply with relevant data protection regulations such as the Health Insurance Portability and Accountability Act (HIPAA) to safeguard patient data. Ensure that data handling practices adhere to legal and ethical standards.

Data Bias and Fairness

· Algorithmic transparency: Scrutinize the algorithms and models used for analysis to identify potential biases. Implement fairness checks and conduct regular audits to ensure equitable outcomes and minimize bias.

· Diverse representation: Ensure that data used for analysis is representative of the diverse patient population to avoid skewed insights. Consider demographic factors to avoid perpetuating existing healthcare disparities.

Data Governance and Ethics

· Ethical guidelines: Establish ethical guidelines for data collection, analysis, and usage. Incorporate principles of beneficence, non-maleficence, autonomy, and justice to guide decision making and ensure ethical data practices.

· Ongoing monitoring: Continuously monitor data usage and decision outcomes to identify and address any ethical or governance concerns. Regularly review and update policies to reflect evolving best practices and ethical standards.

Leveraging the Full Potential of Data

To harness the full potential of data-driven decision making, executives should adopt the following strategies:

1. Invest in data infrastructure: Establish robust data management systems, including data warehouses, data lakes, and advanced analytics platforms. These infrastructure investments provide a solid foundation for effective data-driven decision making.

2. Develop data analytics capabilities: Build a team of skilled data analysts and data scientists who can extract insights from complex healthcare data. Encourage a data-driven culture within the organization by providing training and resources to enhance data literacy among staff.

3. Leverage advanced analytics techniques: Embrace advanced analytics techniques such as machine learning, predictive modeling, and natural language processing. These techniques can uncover hidden patterns, enable real-time analytics, and provide actionable insights.

4. Promote collaboration: Foster cross-functional collaboration between data analysts, clinicians, and operational teams. By integrating expertise from different domains, executives can gain comprehensive insights and drive innovation across the organization.

Data-driven decision making has the potential to transform healthcare organizations by enabling executives to make informed decisions that drive improved patient outcomes, operational efficiency, and strategic success. By ensuring data accuracy, implementing risk controls, and leveraging the full potential of data, executives can unlock the power of DDDM and navigate the complex challenges of the healthcare industry with confidence. Embracing DDDM is not only a strategic imperative but also a crucial step towards delivering better care and shaping the future of healthcare.

The post Data-Driven Decision Making: Empowering Healthcare Executives first appeared on KSDT CPA.

The Risks of Not Utilizing AI in Your Go-Forward Business Model

ediaz — Thu, 10 Aug 2023 15:44:13 +0000

In today’s rapidly evolving business landscape, staying ahead of the competition requires constant innovation and adaptation. One of the most transformative technologies of our time is artificial intelligence (AI). Companies that fail to leverage the power of AI in their go-forward business models face significant risks and could be left behind in an increasingly competitive marketplace. Let’s explore the risks associated with not utilizing AI and highlights the benefits it can bring to businesses.

The Growing Importance of AI

AI has become a driving force behind digital transformation across industries. It empowers organizations to analyze vast amounts of data, automate processes, enhance decision-making, and create personalized customer experiences. As AI technology continues to advance, it presents new opportunities for businesses to streamline operations, optimize resource allocation, and gain valuable insights for strategic decision-making.

Risk #1: Inefficiency and Operational Ineffectiveness

Without AI, businesses often rely on manual processes, which are prone to errors, time-consuming, and limited in scalability. These inefficiencies can hinder productivity, increase costs, and prevent organizations from delivering products and services at optimal levels. In contrast, AI-powered automation can streamline operations, improve efficiency, and reduce human error, allowing businesses to achieve higher productivity and deliver superior customer experiences.

Risk #2: Incomplete and Inaccurate Insights

In the digital age, data is a critical asset. However, without AI, organizations may struggle to extract valuable insights from vast amounts of unstructured data. Traditional data analysis methods are often limited in their ability to identify patterns, trends, and correlations efficiently. By leveraging AI techniques such as machine learning and natural language processing, businesses can gain deeper insights, identify hidden opportunities, and make data-driven decisions with greater accuracy and speed.

Risk #3: Missed Opportunities for Innovation

Innovation is key to staying relevant in a dynamic business environment. AI plays a crucial role in driving innovation by enabling organizations to identify emerging trends, predict customer preferences, and

develop cutting-edge products and services. By neglecting AI, businesses risk missing out on opportunities to create competitive advantages, disrupt markets, and differentiate themselves from competitors who have embraced AI technology.

Risk #4: Suboptimal Customer Experiences

Customer expectations are continually evolving, and personalized experiences have become the norm. Without AI, businesses may struggle to deliver tailored interactions, recommendations, and services to their customers. AI-powered technologies such as chatbots, virtual assistants, and recommendation engines enable businesses to understand customer needs better, anticipate their preferences, and provide personalized experiences at scale. Failing to utilize AI in customer engagement can result in decreased customer satisfaction, reduced loyalty, and ultimately, loss of market share.

Risk #5: Vulnerability to Cybersecurity Threats

As businesses become more reliant on digital systems and interconnected devices, the risk of cybersecurity threats increases. AI can be a powerful tool in defending against cyber-attacks by analyzing large volumes of data in real-time, detecting anomalies, and identifying potential security breaches. Without AI-powered cybersecurity solutions, businesses may be more susceptible to attacks, data breaches, and reputational damage, resulting in financial losses and loss of customer trust.

In the era of digital transformation, AI has emerged as a critical enabler for businesses to thrive and succeed. Failing to incorporate AI into your go-forward business model can expose your organization to significant risks, including inefficiency, missed opportunities, incomplete insights, suboptimal customer experiences, and cybersecurity vulnerabilities. Embracing AI empowers businesses to unlock new levels of productivity, innovation, and customer satisfaction, providing a solid foundation for long-term growth and competitive advantage.

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4 ways corporate business owners can help ensure their compensation is “reasonable”

ediaz — Thu, 27 Jul 2023 13:40:07 +0000

If you’re the owner of an incorporated business, you know there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Therefore, if funds are paid as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as compensation is only taxed once — to the employee who receives it.

However, there are limits to how much money you can take out of the corporation this way. Under tax law, compensation can be deducted only to the extent that it’s reasonable. Any unreasonable portion isn’t deductible and, if paid to a shareholder, may be taxed as if it were a dividend. Keep in mind that the IRS is generally more interested in unreasonable compensation payments made to someone “related” to a corporation, such as a shareholder-employee or a member of a shareholder’s family.

Steps to help protect yourself

There’s no simple way to determine what’s reasonable. If the IRS audits your tax return, it will examine the amount that similar companies would pay for comparable services under similar circumstances. Factors that are taken into account include the employee’s duties and the amount of time spent on those duties, as well as the employee’s skills, expertise and compensation history. Other factors that may be reviewed are the complexities of the business and its gross and net income.

There are four steps you can take to make it more likely that the compensation you earn will be considered “reasonable,” and therefore deductible by your corporation:

Keep compensation in line with what similar businesses are paying their executives (and keep whatever evidence you can get of what others are paying to support what you pay).
In the minutes of your corporation’s board of directors’ meetings, contemporaneously document the reasons for compensation paid. For example, if compensation is being increased in the current year to make up for earlier years in which it was low, be sure that the minutes reflect this. (Ideally, the minutes for the earlier years should reflect that the compensation paid then was at a reduced rate.) Cite any executive compensation or industry studies that back up your compensation amounts.
Avoid paying compensation in direct proportion to the stock owned by the corporation’s shareholders. This looks too much like a disguised dividend and will probably be treated as such by the IRS.
If the business is profitable, pay at least some dividends. This avoids giving the impression that the corporation is trying to pay out all of its profits as compensation.

You can avoid problems and challenges by planning ahead. Contact us if you have questions or concerns about your situation.

The post 4 ways corporate business owners can help ensure their compensation is “reasonable” first appeared on KSDT CPA.

Starting a business? How expenses will be treated on your tax return

ediaz — Fri, 21 Jul 2023 13:33:51 +0000

Government officials saw a large increase in the number of new businesses launched during the COVID-19 pandemic. And the U.S. Census Bureau reports that business applications are still increasing slightly (up 0.4% from April 2023 to May 2023). The Bureau measures this by tracking the number of businesses applying for Employer Identification Numbers.

If you’re one of the entrepreneurs, you may not know that many of the expenses incurred by start-ups can’t be currently deducted on your tax return. You should be aware that the way you handle some of your initial expenses can make a large difference in your federal tax bill.

Handling expenses

If you’re starting or planning to launch a new business, here are three rules to keep in mind:

Start-up costs include those incurred or paid while creating an active trade or business — or investigating the creation or acquisition of one.
Under the tax code, taxpayers can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs in the year the business begins. As you know, $5,000 doesn’t go very far these days! And the $5,000 deduction is reduced dollar-for-dollar by the amount by which your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized over 180 months on a straight-line basis.
No deductions or amortization deductions are allowed until the year when “active conduct” of your new business begins. Generally, that means the year when the business has all the pieces in place to start earning revenue. To determine if a taxpayer meets this test, the IRS and courts generally ask questions such as: Did the taxpayer undertake the activity intending to earn a profit? Was the taxpayer regularly and actively involved? Did the activity actually begin?

Rules to qualify

In general, start-up expenses are those you incur to:

Investigate the creation or acquisition of a business,
Create a business, or
Engage in a for-profit activity in anticipation of that activity becoming an active business.

To qualify for the election, an expense also must be one that would be deductible if it were incurred after a business began. One example is money you spend analyzing potential markets for a new product or service.

To be eligible as an “organization expense,” an expense must be related to establishing a corporation or partnership. Some examples of organization expenses are legal and accounting fees for services related to organizing a new business and filing fees paid to the state of incorporation.

Decision to be made

If you have start-up expenses that you’d like to deduct this year, you need to decide whether to take the election described above. Recordkeeping is critical. Contact us about your start-up plans. We can help with the tax and other aspects of your new business.

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Digital Twins in Healthcare: Revolutionizing Patient Care

ediaz — Thu, 22 Jun 2023 21:49:16 +0000

In recent years, the healthcare industry has witnessed a remarkable advancement in technology, leading to significant improvements in patient care. One such groundbreaking technology is the concept of “digital twins.” Digital twins have gained prominence across various sectors, including manufacturing, aerospace, and now, healthcare. In this article, we will explore the immense potential of digital twins in revolutionizing patient care and the opportunities they present for healthcare organizations.

Understanding Digital Twins
Enhancing Diagnosis and Treatment
Personalized Medicine and Continuous Monitoring
Advancing Medical Research and Development
Ethical Considerations and Challenges
Embracing the Future of Healthcare

Click Here to Read More

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Understanding Lease Standard ASC 842

ediaz — Mon, 22 May 2023 18:41:05 +0000

Stay compliant with The Standard ASC 842

Increase transparency and comparability in financial reporting
Requires lessees to recognize most leases on their balance sheets
Recognize operating leases and finance leases
Record right-of-use (ROU) assets and lease liabilities
Lease term and present value of lease payments determine recognition and measurement
Different treatment for operating leases and finance leases in income statements
Additional disclosures to provide users with more information

Get the Roadmap and Connect with an Expert.

Click here

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