Goodwill impairment: Is your company at risk?

Goodwill impairment is often a negative indicator. It potentially signals that a business combination failed to meet management’s expectations due to internal or external factors. In recent years, uncertain markets, lingering inflation and high interest rates have caused goodwill impairments to spike. Evaluating impairment trends In 2022, 400 U.S. public companies reported $136.2 billion of […]

What if I donate a car?

Donating a car to your favorite charity helps the organization and may give you a nice tax deduction. But you must itemize deductions and meet strict requirements. You need a written acknowledgment letter from the charity with specific details for a vehicle worth at least $250 but not more than $500. You must have this […]

Tax breaks may help offset business holiday expenses

IRS cracks down on deferred legal fee arrangements

Attorneys and law firms with deferred legal fee arrangements, take note: The IRS is watching. According to the tax agency, some taxpayers have delayed recognizing contingency fees as taxable income by transferring up to 40% of individual case settlements to third parties. In such arrangements, third parties generally hold the transferred fees for at least […]

The IRS direct file program may shut down in new administration

The IRS’s Direct File program, which was rolled out to taxpayers in 12 states during the 2024 tax season, enables eligible individuals to file returns with the IRS. In May 2024, the IRS announced it would expand Direct File. However, in a recent letter, 29 U.S. House Republicans asked President-Elect Trump to use an executive […]

SALT deduction set to expire after 2025

The Tax Cuts and Jobs Act capped the state and local tax (SALT) deduction at $10,000. This “SALT cap” is scheduled to expire after 2025. The future of the cap is sure to play a key role in tax policy negotiations on Capitol Hill next year. Some Democratic and Republican lawmakers, mainly from high-tax states, […]

Premium Tax Credit continues through 2025

The Inflation Reduction Act extended the premium tax credit (PTC) through the end of 2025. The credit helps eligible individuals cover their premiums for health insurance purchased through the Health Insurance Marketplace. The Congressional Budget Office recently estimated if the expiring credit isn’t renewed, 3.8 million more people will go uninsured each year over a […]

How do auditors verify account balances and transactions?

Audit season is just around the corner for calendar-year entities. Understanding the types of source documents your audit team might request can minimize disruptions during audit fieldwork and maximize your audit’s effectiveness. Here are some common sources of “substantive evidence” that auditors gather to help them form an opinion regarding your financial statements. Original source […]

Tax avoidance or tax evasion?

Do you know the difference between tax avoidance and tax evasion? Tax avoidance is taking legitimate actions to reduce your tax bill, such as funding an IRA or appropriately claiming a tax credit. Tax evasion is a deliberate failure to comply with the tax law. It includes actions such as falsifying tax records, inflating expenses […]

Act fast if you want to expense equipment in 2024

Businesses must act fast if they plan to take the valuable Sec. 179 expense deduction this year. In 2024, you can expense up to $1.22 million in qualified assets. The deduction begins to phase out when 2024 qualified asset additions exceed $3.05 million. (In 2025, these limits rise to $1.25 million and $3.13 million, respectively.) […]