Accounting Tips for Law Firms

Alabama Business Privilege Tax Changes for 2024 

Alabama House Bill 391 reduced the minimum state business privilege tax in 2023 from $100 to $50.   Beginning in 2024, businesses that are subject to the minimum tax ($100 or less) are completely exempt from paying the tax and filing a Business Privilege Tax Return (BPTIN/CPT/PPT). This means many single-member entities will no longer be…
Read More

Interpreting Financial Statements: The Story Behind the Numbers

Financial statements serve as a window into the health and performance of a business, offering valuable insights for investors, analysts, and stakeholders. The statements, including the income statement, balance sheet, and cash flow statement, provide a comprehensive view of a company’s financial position (and health). Let’s dive into what these statements can reveal: Income Statement:…
Read More

Update on the CPA Profession

When talking with clients, I always like to know how their business is going. I love to hear about everything: their team, sales, challenges, etc. When asked the same question, I usually respond, “Business is great, and we’re looking for more.” However, one of the accounting profession’s biggest challenges is the need for more people…
Read More

Stepped Up Basis – What is it and Why it’s Important

The stepped-up basis applies to assets inherited at someone’s death. The IRS resets the asset’s original cost basis to its value at the decedent’s date of death. If the asset is later sold, the heir pays capital gains on the gain (if any) on the sale proceeds less the stepped-up basis. So, if sold immediately…
Read More

Employee Fraud, Internal Control and Segregation of Duties

Employee Fraud, Internal Control and Segregation of Duties Unfortunately, employee theft is rising at the rate of 15% annually. The US Department of Commerce reports that $50 billion annually is lost to employee theft. While the average theft is small and relatively short-lived, it isn’t uncommon for theft to last multiple years and cost millions…
Read More

Beneficial Ownership Reporting in 2024

The Corporate Transparency Act (“CTA”) was a significant piece of U.S. legislation signed into law in January 2021. The CTA was created to address issues related to money laundering, fraud, and other financial crimes, including those committed by anonymous shell companies. Shell companies are set up without revealing their true owners and can be exploited…
Read More

IRS Increases Enforcement on Aggressive Employee Retention Credit Claims

The IRS announced enforcement action against dubious Employee Retention Credit (ERC) claims by sending over 20,000 letters to taxpayers notifying the recipients of disallowed ERC claims. This compliance effort results from a review revealing many taxpayers didn’t meet the ERC criteria. Recipients not eligible for the credit will receive Letter 105 C, “Claim Disallowed.” The…
Read More

IRS Dramatically Expands Electronic Filing Mandate in 2024

The Internal Revenue Service (IRS) released final regulations on February 21, 2023, requiring organizations to electronically file specified returns and other documents. TD 9972 affects virtually all organizations that are required to file returns to the IRS, including filers of employment tax returns and information returns, such as Forms 1099-series, Forms W-2, and Affordable Care Act Forms…
Read More

New Options for Leftover 529 Plan Funds – Convert to Roth IRA

The SECURE 2.0 Act of 2022 introduces a noteworthy change: a special rule allowing transfers from 529 plans to Roth IRAs. Effective in 2024, this rule enables unused college savings to shift to tax and penalty-free retirement accounts. Why This Matters Before this change, if a 529 plan wasn’t fully used for education, options were…
Read More

IRS Scams – What to Know

As we move into the holiday season, it is crucial to continue to be vigilant. Unfortunately, taxpayers are a prime target of con artists claiming to be the IRS to try and solicit sensitive information. There are some essential things to know to stay safe from scams. The IRS does not contact taxpayers via phone,…
Read More