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Estate planning for non-U.S. citizens requires extra care
Traditional estate planning strategies generally are based on the assumption that all family members involved are U.S. citizens. However, if you or your spouse is a noncitizen, special rules apply that require additional planning. Avoid costly tax traps by understanding how the U.S. gift and estate tax laws apply to noncitizens. Defining “domicile” Noncitizens can…
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Enhance financial reporting by forging a partnership between internal and external auditors
Many calendar-year entities are currently preparing for the start of audit fieldwork. One proactive way to facilitate your financial statement audit is to encourage teamwork between your internal audit department and external auditors. Consider the following four tips to foster a more collaborative relationship. 1. Reach out regularly By scheduling meetings between internal and external…
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How do external auditors evaluate audit risks?
As calendar-year entities wrap up financial reporting for the year, their external auditors work behind the scenes to prepare for audit season. Here’s what you can do to help facilitate the audit planning process. The audit risk assessment During fieldwork, auditors can’t test every transaction, recalculate every estimate or examine every external document. Instead, they…
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5 reasons to outsource your bookkeeping
Running a closely held business is challenging. Owners usually prioritize core business operations — such as managing employees, serving customers and bringing in new sales — over tedious bookkeeping tasks. Plus, the accounting rules can be overwhelming. However, access to timely, accurate financial data is critical to your business’s success. Could outsourcing bookkeeping tasks to…
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How to report contingent liabilities in your company’s financial statements
It’s critical for business owners and managers to understand how to present contingent liabilities accurately in the financial statements. Under U.S. Generally Accepted Accounting Principles (GAAP), some contingent losses may be reported on the balance sheet and income statement, while others are only disclosed in the footnotes. Here’s an overview of the rules for properly…
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Beyond the numbers: 5 red flags that may indicate financial distress
Financial statements help managers, lenders and investors evaluate a company’s financial performance. But they tell only part of the story — and they might not reveal financial distress until it’s too late, especially for companies that issue only annual reports. So it’s critical to watch for these five common warning signs indicating a company may…
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Get a handle on how accounting and tax profitability metrics differ
The pretax (accounting) profit that’s reported on your company’s income statement is an important metric. Lenders, investors and other stakeholders rely on pretax profits to evaluate a company’s financial performance. However, business owners also need to keep their eyes on taxable income to optimize tax outcomes and manage cash flow effectively. Here’s an overview of…
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Navigating tax complexities: Craft partnership agreements and LLC operating agreements with precision
Partnerships are often used for business and investment activities. So are multi-member LLCs that are treated as partnerships for tax purposes. A major reason is that these entities offer federal income tax advantages, the most important of which is pass-through taxation. They also must follow some special and sometimes complicated federal income tax rules. Governing…
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Reasons an LLC might be the ideal choice for your small to medium-size business
Choosing the right business entity is a key decision for any business. The entity you pick can affect your tax bill, your personal liability and other issues. For many businesses, a limited liability company (LLC) is an attractive choice. It can be structured to resemble a corporation for owner liability purposes and a partnership for…
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It’s time for your small business to think about year-end tax planning
With Labor Day in the rearview mirror, it’s time to take proactive steps that may help lower your small business’s taxes for this year and next. The strategy of deferring income and accelerating deductions to minimize taxes can be effective for most businesses, as is the approach of bunching deductible expenses into this year or…
