Category: Accounting
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How to deduct 98% of your cell phone bill
A few months ago during tax season I wrote about how changing wireless phone billing practices are having an impact on income tax preparation practices. But I did not realize the extent of that change – and how it directly applied to me – until now. I concluded that I can legitimately deduct 98% of…
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Bank needs accountant’s verification
Your mortgage lender asks for an accountant’s verification of your income or tax return information or that you are self-employed. Simple right? Not always. CPAs are controlled by strict rules for these “comfort letters”. I do my best to help clients with their loan application and satisfy the lender. To learn more about this topic…
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Uber wins independent contractor case in California
Worker classification has been one of the hottest issues of business management affecting large and small businesses alike. Yesterday one of the high profile cases in this arena was resolved when Uber announced that it negotiated the right to continue to classify workers as independent contractors in the state of California. Uber gave up the…
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A better way to take a home office deduction
IRS and state tax authorities allow taxpayers to deduct expenses for areas of their home used exclusively for a home office. But there are downsides and risks to taking the deduction. Those disadvantages include: Part of the sales price of the home may eventually become taxable (most home sales are otherwise non-taxable) Detailed accounting records…
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Tax deductible employee business expenses
The basics of an often-misunderstood tax topic If you are an employee with expenses related to your job, these expenses are not taxable income. If your employer reimburses these expenses separately from your wages then these amounts are not taxed and you need to take no further action. But if the amounts were included in your…
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CPAs’ role in the political process
Within the next few weeks I expect to be involved in the filming of a video by the New Jersey Society of CPAs about the importance of CPAs’ legislative involvement. Here is the Illinois version of the same topic: https://www.youtube.com/watch?v=lB_eKQlri-o. While I’m not the filmmaker and am not in any position of charge of the…
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PA unreimbursed business expense deduction creates an audit risk
For he past few years the Pennsylvania Department of Revenue aggressively audited the tax returns of individuals who took a deduction for unreimbursed employee expenses on Schedule PA-UE. The topic was covered by the Pittsburg Tribune in June 2014. My quick online poll of professional tax preparers last summer indicated that the audit rate was near 100% of…
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CPAs: “from crisis manager to opportunity director”
The theme of this year’s New Jersey CPA convention is changing our primary roles and focus “from crisis manager to opportunity director”. My mantra over the past few years is that CPAs need to be the agents of change for today’s businesses. I’m looking forward to hearing more about what others are doing in this…
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What is the value of a financial adviser?
One of the surprise lessons of this tax season was learning how many sophisticated and successful clients are paying more than five figures annually for what essentially amount to picking mutual funds. Many of the cases I saw while preparing tax returns were fees paid through Charles Schwab for funds offered in retirement plan accounts…
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Help for last-minute tax filers
These final 20 day of tax season can be stressful on taxpayers and tax preparers. I will work at least 14 hours a day in order to meet my own work deadlines and contribute to the workload of other tax preparers. Yet it makes sense for a young accounting practice to reserve time for new…