News & Resources

Tax Planning for Small Business Owners

Tax planning is the process of looking at various tax options to determine when, whether, and how to conduct business transactions to reduce or eliminate tax liability.

Many small business owners ignore tax planning. They don’t even think about their taxes until it’s time to meet with their accountants, but tax planning is an ongoing process and good tax advice is a valuable commodity. It is to your benefit to review your income and expenses monthly and meet with your CPA or tax advisor quarterly to analyze how you can take full advantage of the provisions, credits and deductions that are legally available to you.

Although tax avoidance planning is legal, tax evasion – the reduction of tax through deceit, subterfuge, or concealment – is not. Frequently what sets tax evasion apart from tax avoidance is the IRS’s finding that there was fraudulent intent on the part of the business owner. The following are four of the areas the IRS examiners commonly focus on as pointing to possible fraud:

1. Failure to report substantial amounts of income such as a shareholder’s failure to report dividends or a store owner’s failure to report a portion of the daily business receipts.
2. Claims for fictitious or improper deductions on a return such as a sales representative’s substantial overstatement of travel expenses or a taxpayer’s claim of a large deduction for charitable contributions when no verification exists.
3. Accounting irregularities such as a business’s failure to keep adequate records or a discrepancy between amounts reported on a corporation’s return and amounts reported on its financial statements.
4. Improper allocation of income to a related taxpayer who is in a lower tax bracket such as where a corporation makes distributions to the controlling shareholder’s children. Read more

Deducting Business-Related Car Expenses

Whether you’re self-employed or an employee, if you use a car for business, you get the benefit of tax deductions.

There are two choices for claiming deductions:

1. Deduct the actual business-related costs of gas, oil, lubrication, repairs, tires, supplies, parking, tolls, drivers’ salaries, and depreciation.
2. Use the standard mileage deduction in 2016 and simply multiply 54 cents by the number of business miles traveled during the year. Your actual parking fees and tolls are deducted separately under this method.

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LMGW Seeks Experienced Staff

Advancement and opportunity await at LMGW Certified Public Accountants! LMGW is seeking experienced staff to join our team of growing professionals during this exciting growth phase in our company. Potential candidates must be dedicated to a rewarding and successful long-term career in public accounting and be focused on personal and professional growth.

Applicants will:

• Have a passion for public accounting
• Be focused on career growth and a firm to call home
• Possess a high degree of technical competence and a strong sense of confidence in one’s own abilities
• Be eager to put in the hours it takes to achieve rapid professional growth
• Recognize the opportunity to be part of the growth and transition of a firm moving to the next level
• Keep the “big picture” view in mind at all times

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Statement of Information Filing Requirement with California Secretary of State

Just as a reminder for all of our corporate clients, the California Secretary of State requires you to update your records by filing a Statement of Information every year based on your original registration date with the state. Limited Liability Company entities have the same reporting requirement, but need to do so every other year.

Corporate filings can be filed electronically at https://businessfilings.sos.ca.gov/.

LLC filings are required to be paper filed on form LLC-12. That form can be downloaded at http://bpd.cdn.sos.ca.gov/llc/forms/llc-12.pdf.

Please don’t hesitate to call us if you have any questions or need assistance filing these forms. Additional information is available on the California Secretary of State website — http://www.sos.ca.gov/business-programs/business-entities/statements.

Jacquelyn Rysz, Manager

Jacquelyn Rysz, CPA, joins LMGW this month as Manager in our Individual and Small Business Taxation Department. Jacquelyn has four years of public accounting experience and is knowledgeable in the areas of audit, individual taxation, and small business.

Jacquelyn holds a Bachelor’s degree in Business Administration from the University of Toledo, Ohio and a Master of Accountancy from the Bowling Green State University, Ohio.

Jacquelyn will be specializing with individuals and closely held businesses. In addition to individual and business tax services, Jacquelyn will assist clients with monthly accounting and a variety of tax and consulting services.