Posts by Alegria Network Administrator

The excess earnings method was originally created to compensate wineries and distilleries during Prohibition. Business valuation experts often criticize this method, calling it ambiguous, over-simplified or outdated. But it’s still used in some jurisdictions as a way to value small businesses and professional practices, especially in a divorce setting. IRS DefinitionThe excess earnings method is the subject of IRS Revenue…

The U.S. Department of Labor’s Wage and Hour Division (WHD) recently issued news releases announcing actions taken against five companies that were investigated for various violations of laws and regulations. The cases involve violations of wages, overtime, tip, meal break, recordkeeping, temporary visa, and other rules. Case 1: Specialty Grocery Store Must Pay Workers OvertimeAn investigation…

If you rent out a second home — or part of your main residence — you may be unclear about whether you need to pay self-employment (SE) tax on your net rental income. In fact, the federal tax rules on this topic are somewhat confusing. The IRS recently published guidance on this issue that may apply…

The Tax Cuts and Jobs Act (TCJA) limits itemized deductions for state and local tax (SALT) payments for 2018 through 2025. This unfavorable tax law change is especially unpopular in states with high income or property taxes (or both). The limitation remains in effect, despite repeated calls to repeal it. (See “How Will the SALT Rules…

Buy-sell agreements protect businesses with two or more owners in the event that an owner dies, becomes disabled, or voluntarily decides to leave the company. They should dictate who can buy the departing owner’s interest, when, how, and for how much. Ideally, these contracts are drawn up when a business is launched, but they can always be entered…

If rising healthcare costs have sent your company searching for ways to reduce expenses, you should know there are alternatives to standard medical insurance plans. Your choices are not limited to either paying the higher costs yourself or transferring the burden to your employees. Tax-advantaged strategies are available which can mitigate the effect of rising costs…

Employers and employees are often at odds over the issue of overtime pay. Naturally, employers are inclined to argue that an employee isn’t entitled to overtime pay when it would boost the overall compensation that must be paid to the employee. The employer’s position may be bolstered by applicable regulations from the U.S. Department of Labor…

Every tax season, business owners must familiarize themselves with tax law changes that went into effect for that tax year. Fortunately, businesses don’t have to contend with sweeping changes for 2022. But there are three major ones that could affect business taxpayers as they file federal income tax returns this year for 2022. 1. Reduced Cap…

In a statement posted to its website on February 3, 2023, the IRS asked certain taxpayers to temporarily hold off on filing their 2022 returns until it could issue guidance on how to treat special tax refunds and payments made by approximately 20 states in 2022. The IRS published additional guidance to resolve this issue a…