ARTICLES/ NEWS

Here’s what you should know about an IRS audit: The IRS generally has three years from the date taxpayers file their returns to assess any additional tax for that tax year. Thus, if the IRS audits you, the audit would likely occur within 3 years from the date your tax return was filed. There are...

Normally, the IRS is required to pay interest on a refund if the refund is issued after a statutory period. By law, the interest rate on both overpayment and underpayment of tax is adjusted quarterly. The IRS announced this week that interest rates will increase for the calendar quarter beginning April 1, 2022. The rates...

In the event you need to work with the IRS on a personal tax matter including, but not limited to, filing a return, paying taxes, responding to a letter, going through an audit or appealing an IRS decision, you can expect the following rights: 1. The Right to Be Informed 2. The Right to Quality...

What is an earn-out? An earn-out is a contingent portion of the purchase price of an acquisition determined post-closing based on the target company’s performance against certain contractually defined criteria or benchmarks. Typically, payments to the seller would be structured so that part of the purchase price will be paid at closing, followed by a...

A few weeks ago, Forbes published an article highlighting the fundamental misunderstandings about the Employee Retention Credit (ERC) and the reason why small and mid-sized businesses are missing out on billions of dollars. The latest guidance that the IRS issued last week illustrates how confusing this tax credit is and why many CPAs and business...

Any private company that issues equity-based compensation to U.S. employees (and advisors) would need to comply with Section 409A of the U.S. Internal Revenue Code, which essentially requires, among other things, that stock options and other equity incentives issues are not priced below fair market value when issued. How often do companies need to update...

Per a recent survey conducted by AICPA, 12% of respondents planned to take advantage of Employee Retention Credit (ERC) while 24% planned to apply for a PPP loan in 2021. Why has ERC become so popular? There are many rules associated with the ERC. Because of its complexity and broad coverage, we do not cover...

***UPDATE*** The Consolidated Appropriations Act, 2021 (Act) was signed into law on Sunday December 27, 2020.  The American Rescue Plan Act was enacted on March 11, 2021. These two bills contain many changes and updates to the previous relief bill for COVID-19, and it would be impossible to cover all of them in one article....

***Update*** Expenses paid with forgiven Paycheck Protection Program (PPP) loan proceeds are tax deductible per the Consolidated Appropriations Act, 2021 that was signed into law on December 27, 2020 . This Act reverses previous guidance from the Treasury and IRS. We will post another article to provide more details. Compiled by Dao CPA PC Staff...

The federal government announced yesterday major changes to the current PPP loan forgiveness process for those who borrowed $50,000 or less in PPP loans. The borrowers can now use a simpler application, Form 3508S. The changes include: The new application doesn’t require borrowers to show how they calculated their loan forgiveness amount. It appears not...

**UPDATE** The Consolidated Appropriations Act, 2021, H.R. 133 was signed into law on December 27th. Among many tax provisions, the bill also extends the refundable payroll tax credits for paid sick and family leave voluntarily provided by employers through the end of March 2021. (It was previously set to end 12/31/2020). However, the Act did...

This year, COVID-19 has caused tremendous disruptions to our lives and businesses. Companies have to pivot their operations and put more efforts in planning, not only for short-term but also long-term perspectives. Family businesses start to think hard about their intended transition from the founder generation to their children. At Aspen Valuations, during the last...

The much anticipated bill, Paycheck Protection Program Flexibility Act of 2020 was signed into law on Friday, June 5th, 2020. The new law provides for greatly expanded flexibility for PPP debt forgiveness by 1) extending the period during which eligible costs will be forgiven, 2) relaxing restrictions with respect to non-payroll costs, 3) extending the...

Millions of Americans have already received their stimulus payments authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The IRS continues to calculate and automatically send the payments to most eligible individuals, however some may have to provide additional information to the IRS to get their payments. You may be eligible to...

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 as part of a $2.2 trillion aid package. Some parts of the bill do not require you to take any action such as the ‘stimulus check’ for eligible individuals ($2,400 for joint filers, $500 per qualifying child). However,...

The IRS today issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance also allows corporate taxpayers a similar deferment of up to $10 million of...

There is no one best software for all contractors. Although QuickBooks is known as the most popular software among the smaller-sized businesses, many contractors are still searching for alternatives. QuickBooks users find the software easy to use and affordable. However mid-size self-perform contractors opt for more expensive software because the software gives them detailed job...

Years ago when accounting software for small businesses was not as popular, the roles of a bookkeeper and an accountant were distinctively different. A bookkeeper typically handles and records daily transactions such as paying bills, creating invoices, collecting payments, making deposits, managing timesheets for payroll, reconciling bank accounts etc. Records kept by a bookkeeper reflect...

In general, the IRS has three years from the due date of the return or the date on which the return was filed, whichever is later, to audit and adjust the return. However, the IRS has six years to audit a return if a person fails to report over 25% of gross income. If a...