Tax Updates

Businesses Targeted for Identity TheftThe IRS is warning businesses that they may be prime targets for identity theft. How do you know if your company’s identity has been stolen? According to the IRS, you should investigate if you receive a: rejection notice for an electronically, filed tax return because a return is already on file notice about…

We’ve all heard the phrase that the “whole is greater than the sum of its parts.” But you might not know this theory can apply when valuing business interests.  Control Is ValuableWhen a publicly traded business is acquired in the whole by an outside buyer, it’s often purchased for a greater value on a per share…

Even at the best of times, the future is unpredictable. As anyone who has run a business for any length of time understands, there will often be challenges, many of which are unexpected — such as a global pandemic — coming straight out of left field. Here are four strategies your small company can use to…

Thanks to today’s favorable federal gift and estate tax rules, most people haven’t amassed enough wealth to worry about federal estate taxes. However, even if you haven’t had the good fortune to win the lotto or inherit millions from a wealthy relative, you still need an estate plan to protect your assets and your loved ones.…

Location, location, location.You know how important it is for your business. As a result, when choosing a location, you probably research foot traffic, car traffic, and occupancy rates Don’t rely on a previous use for the property in determining whether you can use a location for your business. Previous owners may have obtained a variance from the designated…

If you want the truth about your company, ask people on the way out. Exit interviews can deliver important inside information. The way departing employees view your organization might be the way things really are. Below is an exit interview questionnaire you can print and give to staff members who are leaving. But first, a few points:…

Most closely held business owners want to know the value of their investments, especially if they are going to sell or gift shares to family members or charities. Valuing a private business is a complex undertaking, however. The only sure way to appraise a business interest is to hire a valuation professional who understands the current marketplace and the…

Different states have different rules for determining whether a trust is a “resident” for income tax purposes. State tax liability can depend on the location of settlors, trustees, or beneficiaries. In some situations, a trust could be liable for taxes in multiple states. Fortunately, you may be able to take certain steps to reduce the taxation…

Merger and acquisition (M&A) activity is widely expected to pick up this year, after a lull in 2022. Amid economic uncertainty, earnouts are likely to play a big role in many deals. The structuring of such transactions could have significant tax implications that affect the ultimate value for both parties. The BasicsEarnout provisions generally arise when…

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…