Cook CPA Group https://www.cookcpagroup.com Just another WordPress site Tue, 08 Jun 2021 16:21:30 +0000 en-US hourly 1 https://wordpress.org/?v=5.8.1 https://www.cookcpagroup.com/wp-content/uploads/2021/05/cropped-cook-fav-32x32.png Cook CPA Group https://www.cookcpagroup.com 32 32 Building A Vertically Integrated Wine Business https://www.cookcpagroup.com/building-vertically-integrated-wine-business/ Mon, 22 Feb 2021 17:02:52 +0000 http://www.cookcpagroup.com/?p=62058 From growing grapes to selling wine, building a vertically integrated wine business with Peltier winery and vineyards. Learn how Peltier winery and vineyards grew their business into the success that it is today.

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With so much turmoil in the world due to Covid, perhaps one of the hardest sectors was wine and spirits as they had to contend with restaurant closures. Yet despite these challenges, Peltier Winery and Vineyards has been able to maintain consistent steady growth due to great leadership and a well-run operation.

Join Evelyn as she speaks with Peltier owners, Rodney and Gayla Schatz about the trials and tribulations of growing grapes and selling wine!

Duration (26:46)

Podcast topics:

  • 00:00 Intro to Peltier Winery and Vineyard
  • 4:36 Working as a team and wearing many hats
  • 7:00 Finding good people and doing things in house
  • 12:01 Changing how wines sales due to Covid
  • 14:02 Pros and cons of regulations
  • 16:03 Vertical integration in the wine industry
  • 19:30 The Lodi Wine Grape Commision
  • 22:20 Sustainability is good business
  • 24:30 Wine making in Texas

Evelyn Cook, CPA specializes in helping wineries scale their business. Through her Tools to Thrive business planning framework, she can identify financial obstacles to growth as well as to help owners make the best decisions for long term sustainable growth.  To learn more about how Evelyn can help you grow your winery business, please call (916) 724-1665 or email evelyn@cookcpsgroup.com.

 

Cook CPA Group provides the following services tailored for wineries:

  • Business Planning
  • Corporate and Personal Tax
  • Financial and Operational Accounting
  • Strategic Consulting
  • Part-time CFO Services

 

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How Do You Calculate Depreciation on Business Equipment? https://www.cookcpagroup.com/calculate-depreciation-business-equipment/ Wed, 17 Feb 2021 17:15:37 +0000 http://www.cookcpagroup.com/?p=62055 Our qualified tax accountants can help you with the complex process of calculating business equipment depreciation. Contact us today to learn how to calculate depreciation on business equipment.

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Every year, businesses have to take over the challenging task of tracking their assets and calculating their depreciation in preparation for their tax returns. For many businesses, taking care of this complex process can be extremely difficult, especially when other aspects of their business require particular attention. The importance of taking your business equipment depreciation into account cannot be stressed enough. However, there may be situations where business owners don’t understand how to calculate depreciation and formally file their reports to the IRS (Internal Revenue Service). Our Roseville and Sacramento tax accountants from the Cook CPA Group invite you to keep reading as we discuss how you can calculate depreciation of business equipment in California.

What is Depreciation on a Business?

Depreciation refers to the process of deducting the costs of an acquired expensive piece of equipment for your business or corporation. The acquisition of new business equipment can be deducted from your taxes. However, many companies deduct depreciation spread over multiple years instead of deducting any projected depreciation in only one tax year. This can help reduce your tax burden and increase deductions.

How does a business determine depreciation on a piece of equipment? Typically, depreciation is determined by calculating the asset’s useful life. Suppose you are acquiring a high-end computer worth thousands of dollars to use as a workstation. These pieces of equipment can have a useful life of five to six years, depending on your configuration. This means you can depreciate your equipment over your computer’s useful life of five or six years.

This is a simplified example to illustrate how depreciation can be calculated, depending on your business equipment. Typically, the process can be more complicated as every asset in your business is classified separately into different categories, each with its own useful life. You can depreciate your equipment in a shorter time than its expected total useful life. For instance, following the last example, your computer may have a useful life of five years, but if it depreciates faster, you could establish a shorter depreciation rate.

What Are the Different Types of Depreciation on Business Equipment?

There are different types of business equipment depreciation methods available to business owners. However, the IRS will allow only one depreciation method on your business tax returns. Some of the methods you can utilize for your business’ taxes and financial statements include the following:

Double-Declining Balance Depreciation

This depreciation method can be used by businesses that want to recover more of their asset’s value up front rather than over an extended time. During your first depreciation year, you would take two times the amount of your asset’s value. After this, you would use a depreciation rate using the asset’s original cost and subtracting the value taken during its first year of use.

Straight-Line Depreciation

The straight-line depreciation method is the easiest way to calculate depreciation on business equipment. With this method, you can split your asset’s value evenly across its useful life. Typically, the formula used on this approach considers the asset’s cost minus its salvage value over its useful life. This would give you the depreciation value to consider during your tax year. This type of method is preferred by small businesses that don’t have an in-house tax advisor or complex tax systems. However, it is always recommended to hire the services of an Elk Grove, CA small business tax return accountant who can help you solve your asset depreciation every year.

Sum-of-the-Year’s-Digits Depreciation

Sum-of-the-year’s-digit depreciation (SYD) is a method that allows you to depreciate your business’ equipment higher on its first useful life years and lower on its last useful life years. Like a double-declining depreciation, this method allows you to recover more of your asset up front, but the depreciation over your asset’s life cycle is slightly more streamlined. The formula for this type of depreciation method can be complicated, especially if you own multiple pieces of equipment with different life cycles. Our Roseville small business accountants can help you with this matter.

Why Is Depreciating Your Business Equipment Important?

As a business entity, you need to depreciate your business equipment for two main reasons. First, it can help you control your business’s finances, and second, you can have control over your business tax returns and deductions. In addition to these, there are other benefits you can get from depreciation.

Depreciation can help your business accurately present the IRS with your incurred expenses on your tax year. The IRS will look at your financial information very closely, following your reports and considering all of your assets. Depreciation can help you file complete, accurate statements that lack any ambiguity or misleading information that can get you into trouble with the IRS.

In addition to helping you with the IRS tax return information, depreciation can help you keep your books in check. As we mentioned, all assets depreciate over time, and depreciation can help you have a clear idea of your equipment’s value on its current life cycle. Additionally, you can recover the cost of your asset when you originally purchased it. Finally, it is essential to understand that depreciation can be tax-deductible. This fact can help businesses like yours to save money on your yearly taxes. It is always recommended to hire experienced tax preparation and planning accountants to make sure you meet all depreciation requirements for your tax return.

Contact Our Experienced California Tax Accountants for Assistance with Your Business Equipment Depreciation

If you require assistance with your business equipment depreciation and your yearly tax returns in California, we can help. Our Roseville and Sacramento, CA accounting firm Cook CPA Group, have years of experience helping thousands of businesses with their tax returns and other needs such as business equipment depreciation reports. Thanks to our many years of experience, we can guide you and help you file accurate and complete IRS forms so you can focus on growing your business. To learn more about all of our services, call our offices today at (916) 269-9281.

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What Are Qualified Research & Development Expenses in CA? https://www.cookcpagroup.com/qualified-research-development-expenses-california/ Wed, 17 Feb 2021 17:03:05 +0000 http://www.cookcpagroup.com/?p=62053 Tax credits from the can help you to recover expenses for research and development in CA. Learn more from our certified tax professionals about qualified research and development expenses in California.

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Every year, many companies dedicate time, resources, and effort to developing new technologies to better their businesses. Depending on the company, the resources put into these projects can carry extra weight for a company. Fortunately, there are ways your company or business can receive a credit from the IRS (Internal Revenue Service) and recover the expenses you engaged in during your product’s research and development. Our Roseville accounting professionals for LLCs from Cook CPA Group invite you to keep reading as we discuss what qualified research and development expenses are in California.

Understanding Qualified Research & Development Expenses in CA?

Qualified research and development expenses are part of the costs of a company’s creation of an innovative product. The IRS is in charge of determining the costs that qualify as research and development. IRC § 41, (b)(1) defines qualified research expenses or “QREs” as the sum of a company’s or business’s in-house and contract research expenses. The definition provided by the IRS statute encompasses a wide range of costs that go into developing a new product or technology. As you may know, research and development are the most essential aspects of product creation and it’s also where most companies burn more cash.

According to IRC § 41(b)(2), in-house research refers to wages paid to an employee for qualified services, money paid for supplies used to conduct research, and any amount paid to a qualified person for the use of computers to conduct qualified research. Qualified businesses may get a credit on their expenses destined to research and development awarded by the IRS. However, it is essential to understand that the IRS is very specific in terms of the expenses that may constitute “qualified research” and can be compensated. It is essential to hire an experienced, skilled Roseville tax accountant or consultant who can help you deal with these critical matters. Our California team of tax consultants can help you with this matter.

What is a Qualified Research Activity?

As we mentioned, the IRS controls the actions that may or may not qualify as research activity. However, the IRS determination on this subject is not something that is arbitrarily decided. Instead, the IRS follows a four-step process to determine whether a particular business entity qualifies for the tax incentives provided to help cover research and development. Any company looking to take advantage of the benefits provided by the IRS must meet and satisfy each of the following criteria:

Qualified Purposes

In order to take advantage of the IRS’s tax incentives for qualified research and development expenses, your company’s goal must be directed towards improving your business. The IRS makes no distinction on the type of improvement, whether it is the creation of a new product, software, service, or any other improvement that may benefit your business. The IRS requires the purpose of your project to be a “new and improved business component of the taxpayer.”

Elimination of Uncertainty

Your project must be transparent and dissipate any sign of ambiguity in terms of its purpose. In other words, your business project must go beyond mere cosmetic changes or “tweaks.” The changes you may expect from your R&D should be supported with information showing any proposed changes that can be implemented in your business.

Suppose you are going through research and development to create better e-mail communication in your company. While this may help increase in-house communication, it may not be enough to meet the IRS criteria. Compare this to the development of a new product to increase production, shipping, and post-delivery analysis. This may serve as a way to justify the assistance of the IRS.

Experimentation

Your company must have explored different ways to develop your innovation. This means you can prove you conducted trials, improved on foreseeable errors, and refined your innovation through trial and error. You should be able to provide the IRS with all the information that helped you throughout your innovation process. This is an essential step in the four-part process because it enables you to paint a clear picture of your innovation to the IRS.

Technology-Driven R&D

Hard science is a critical element in this particular step. The IRS does not rely on conjectures, what’s, or if’s. Instead, they rely on hard facts that can help the IRS understand that you relied on scientific principles to conduct adequate research and development.

What can Research and Development Expenses be Claimed to the IRS?

As a company engaging in research and development expenses, you may wonder what you can claim from the IRS after creating your innovation. The IRS statute IRC § 41(b)(1) gives you a general idea of what may be recoverable. Accordingly, you may claim in-house research expenses used in the development of your innovation. This includes wages, money paid on supplies and qualified services, and other expenses used in-house to create your innovation.

Additionally, you may recover contract research expenses through a tax credit. However, the IRS may conduct several tests to determine whether you can qualify to get credits for this particular expense. One of the most important things to consider is when you should strive to make your request with the IRS. One of the best ways to guarantee all of your research and development expenses is to consider presenting your report during your first research and development year. This can help you make sure the IRS considers your innovation’s research and development from the beginning. Our Sacramento federal corporate tax preparation accountants can help you with this and other tax-related matters.

California Tax Accountants Handling Qualified Research and Development Expense Cases

If you are looking for assistance with your business financial statement, audit, or tax return in California, we can help. Our Roseville and Sacramento accounting firm can help you handle the intricacies and challenges associated with your business tax and financial matters. For many years, Cook CPA Group has dealt with countless cases and has assisted thousands of satisfied customers. To learn more about our services, call our offices today (916) 259-5496.

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Who is Eligible for the FICA Tip Credit in California? https://www.cookcpagroup.com/fica-tip-credit-california-eligibility/ Wed, 17 Feb 2021 16:17:06 +0000 http://www.cookcpagroup.com/?p=62045 Who is eligible for the FICA Tip Credit in California? Understanding and utilizing the federal FICA Tip Credit can save your business thousands of dollars a year. Call our qualified CPAs for assistance.

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Restaurant owners or entrepreneurs working in the food and beverage industry can have an opportunity to save money on their taxes by filing for a FICA tip credit. Filing for this specific federal program can help restauranteurs receive different tax benefits. However, it is essential to have an in-depth understanding of how FICA tip credit works. You may wonder if you are eligible to file for this credit in California. Our California accounting professionals from Cook CPA Group invite you to keep reading as we explain who is eligible for the FICA tip credit in California.

What is the FICA Tip Tax Credit?

The FICA (Federal Insurance Contribution Act) tip credit is a benefit that employers in the food, drink, and service business can take advantage of. For instance, restaurant employers are required to report the tips patrons give their employees every year because they are considered income under FICA. However, employers can take advantage of the incentives provided by accurately reporting all their employees’ tips. This incentive is what is known as a FICA tip credit. Depending on your business, the number of employees, and tip amounts, you can potentially save thousands of dollars a year.

To take advantage of the FICA tip credits, an employer must request the appropriate forms for their tax returns with the IRS (Internal Revenue Service). This means you will be required to request and accurately complete IRS Form 8846 (Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips). For many employees, getting all this information and successfully taking advantage of the FICA tip credit can be challenging. For this reason, it is always in your best interest to hire an experienced Roseville tax accountant who can guide you and help you with this important matter.

Eligibility for FICA Tip Credit in CA

The IRS is strict regarding who can be eligible for FICA tip credits in CA and the U.S. There are two main criteria to consider when determining eligibility for this credit. First, your employees must receive tips from patrons. Typically, the IRS considers tips acquired in return for services such as delivering, providing, or serving food and beverages. Second, you must have paid employer Social Security or Medicare taxes on the tips they received.

Additionally, you must be an employer paying minimum wage to your employees and must be part of the food and beverage business community. According to FICA, the tip credits business owners can receive only apply to food and beverage business entities. Other businesses where employees receive tips won’t be able to apply for a FICA tip credit. If you need assistance with this matter, our Roseville accountants for restaurants can help you.

How Do I Calculate the FICA Tip Credit in CA?

According to the Fair Labor Standards Act (FLSA), restaurant employers are allowed to include their employee’s tips to meet their minimum wage requirements. If the sum of an employee’s tips exceeds the minimum wage, their employer can get a tax credit. To calculate the amount of credit you may get under FICA, you would need to multiply your employee’s tips in excess of their federal minimum wage by 7.65%.

Suppose you have an employee working for your restaurant at $5.00 an hour for 30 hours a week. Your employee reports $300 in tips every week. For the purposes of FICA tip credits, in this case, you must base your minimum wage based on the previously established $5.15 per hour.

The first thing that’d be best to do is take your employee’s weekly wages and multiply it by their number of working hours. You will need to multiply $5.00 by 30 hours per week, which totals $150.00. You would then need to add the reported weekly tips, which would total $450. The next step is to calculate the paid minimum wage ($5.15) and multiply it by your employee’s worked hours (30). This will give you a second value of $154.50. Next, you will subtract the first value ($450) minus the second value ($154.50) to calculate the tips in excess of your employee’s minimum wage, which is $295.50. Now, multiply $295.50 by 7.65% to determine your FICA tip.

Your FICA tip credit following this example would be $22.60. Keep in mind that this amount of money is based on one week. If you multiply this amount by 52 weeks, you would be looking at $1175.20 in FICA tip credits for a given tax year. The amount you can expect can also rise depending on the number of employees you currently have and their consistency throughout the entire year.

Why You Should Consider Filing for a FICA Tip Credit in CA

If you are a restaurant owner, you should consider filing for a FICA tip credit, especially if you are paying FICA taxes on tip income to your employees. One of the main reasons to file for this credit is to save money on your yearly tax liability. Following the last example, you may save thousands of dollars in tip credits for only one employee. However, it is essential to understand that you need to act quickly, especially if you have many employees under your command. It is always in your best interest to hire an experienced tax planning accountant for small business owners who can help you understand how this process works and can help you take advantage of the FICA tips credits.

We Can Help You Handle Your FICA Tip Credits in California

If you are in need of assistance with your FICA tip credits in California, we can help. At Cook CPA Group, we can help you with this critical process. Our Roseville and Sacramento accounting firm has decades of combined experience handling a wide range of tax-related matters. We work tirelessly and strategically to provide you with the quality accounting services your business needs. Let our knowledge, skill, and dedication help you handle your taxes while you focus on your business. To learn more about all of our Roseville small business tax accounting services, schedule your consultation by dialing (916) 432-2218.

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What Are the Standard Tax Deductions in California for 2021? https://www.cookcpagroup.com/what-are-standard-tax-deductions/ Wed, 17 Feb 2021 11:35:24 +0000 https://www.cookcpagroup.com/?p=60062 Identify the standard tax deductions in California for 2021. With Tax Day coming up, the California tax preparers of Cook CPA Group discuss the standard deduction vs. itemized deductions.

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Every year, millions of taxpayers have the opportunity to apply what is known as the “standard deduction” to their taxes. This deduction allows many households with specific income thresholds to lower their taxes paid to the IRS. Many people have the opportunity to use this deduction instead of complicated, itemized deductions, but they might not understand how to take advantage of this standard deduction.

It is important for taxpayers to learn some financial basics about standard and itemized deductions – especially with taxes due April 15, 2021. If you need help with itemized deductions or other aspects of your federal personal income tax return, ask about the Roseville tax preparation services offered by Cook CPA Group. We provide trustworthy tax guidance backed by more than 20 years of experience. Call our offices today at (916) 432-2218.

What is the Standard Tax Deduction?

In short, tax deductions are good news for taxpayers. Of course, the full explanation is more complicated. However, to keep it simple, a tax deduction allows you to deduct certain expenses from your taxable income. As a result, you have less taxable income, which means you also have lower tax liabilities – in other words, a smaller tax bill.

There are several different types of tax deductions. However, many taxpayers choose an option called the “standard deduction,” which is a flat amount adjusted annually for inflation by the Internal Revenue Service (IRS). The standard deduction is popular because it is much simpler to use than itemized deductions, which require more calculation.

In contrast to the standard deduction, itemized deductions allow taxpayers to deduct individual expenses in specific categories – for example, property taxes or charitable contributions. While this approach is more complex and challenging, it can equate to considerable savings for some taxpayers. Ask an experienced CPA about tax services for individuals if you need help determining whether the standard deduction or itemized deductions are the better financial option for you.

Changes to the Standard Deduction Under the New Tax Laws

The Tax Cuts and Jobs Act made several dramatic changes to sections of the U.S. Tax Code. One change that could have especially significant financial impacts is the adjustment to the standard deduction.

Like most aspects of your tax return, the standard deduction is affected by your filing status. For example, the 2020 standard deduction was $12,400 for a single filer, $18,650 for heads of households, and $24,800 for a married couple filing jointly. For 2021, the standard deduction is higher for a single filer, heads of households, and a married couple filing jointly. (To get an idea of how much inflation has impacted the standard deduction, just compare those figures to their corresponding amounts in 1970: $1,100 across all three categories.)

Under the new tax plan, the standard deduction will be significantly larger, roughly doubling in size for single filers. Standard deductions under the TCJA are listed below by filing status and include the following:

  • Single– $12,400
  • Married Filing Jointly– $24,800
  • Married Filing Separately – $12,400
  • Head of Household– $18,650

Blind and elderly taxpayers may qualify for an additional standard deduction, which is $1,650. As the IRS notes, “These amounts will be adjusted for inflation for taxable years beginning after the end of the year.”

For more information about changes to the standard deduction, taxpayers might be interested in reading Internal Revenue Bulletin 2018-10, available here. However, while IRS publications can help you identify issues to consider in your tax planning strategy, personalized tax guidance is essential for getting the most out of credits and deductions while keeping your tax liabilities to a minimum.

Why You Need an Experienced Tax Accountant for Your Tax Returns in 2021

As you know, filing taxes is a duty every American citizen must meet every year. If you miss filing your taxes, you can face severe problems with the IRS. Filing taxes is never an easy task, but that should not prevent you from doing it. An experienced Roseville and Sacramento, CA tax accountant, can help you with all of these matters. With your attorney’s assistance, you can make sure all of your documents are complete with accurate information. Furthermore, you can save time, money, and unnecessary stress, especially if you are a business owner. Business tax returns are often complicated, and their owners may need assistance from an experienced tax accountant.

If you failed to pay your taxes at any point, it is essential you contact an experienced Roseville and Sacramento tax accountant. The IRS will frown upon filers who don’t meet their tax filing deadlines. Furthermore, the IRS will not go easy on you if you failed to file your taxes. Typically, the IRS will impose penalties, including fines and jail time, depending on the particular circumstances of your case.

Having a skilled, experienced tax accountant by your side means you can make sure you are filing your taxes correctly while avoiding any complications or mistakes that may get you in trouble with the IRS. Any significant life changes you may experience can influence your ability to file your taxes. It is always in your best interest to hire an experienced Roseville and Sacramento tax accountant.

Get Help Filing Your Federal Tax Return from Cook CPA Group

Unless you obtain a deadline extension, you’re almost out of time to file your federal income tax return. If you file your tax return or pay your taxes late, you could receive failure-to-pay or failure-to-file penalties. If there are errors or missing information on your tax return, you could be audited by the IRS or even placed under investigation for suspected tax evasion.

Make sure your taxes are prepared with care, precision, and skill by hiring an experienced tax accountant qualified to handle California and federal tax returns. You can count on tax guidance, contact Cook CPA Group online, or call our Roseville tax firm at (916) 259-8471 today.

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Does California Have a Late Tax Filing Deadline in 2021? https://www.cookcpagroup.com/does-california-have-late-tax-filing-deadline/ Tue, 16 Feb 2021 19:00:29 +0000 https://www.cookcpagroup.com/?p=60103 Does California Have a late tax filing deadline in 2021? Sacramento CPAs discuss time extensions to file a state tax return in CA. For help with late or unfiled taxes, contact Cook CPA Group today.

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Tax Day 2020 has come and gone. However, California offers taxpayers an automatic tax-filing extension, which grants additional time to file a state tax return. Read on to learn more about due dates to file California taxes, due dates to pay California taxes, extended tax deadlines in California, and other need-to-know information from the Franchise Tax Board. If you need state or federal tax filing services in Roseville, Sacramento, or the surrounding region, ask the experienced tax accountants at Cook CPA Group how we can assist.

Can I File a Late CA Tax Return in 2021?

The Internal Revenue Service (IRS) processes federal income tax returns. A state agency called the Franchise Tax Board (FTB) processes state income tax returns in California. In its own words, the role of the FTB, which operates under the California Government Operations Agency, is to “provide the services and information to help taxpayers file accurate and timely tax returns and pay the proper amount owed.”

The FTB is a comprehensive source of information for California taxpayers. As the FTB notes, the due date to file a tax return and pay estimated California taxes is April 15, 2021. (Additionally, some taxpayers may have made a payment without filing a return by using Form FTB 3519, Payment for Automatic Extension for Individuals.)

Fortunately, missing the April deadline does not mean that all hope is lost, for two reasons:

  1. California grants taxpayers an automatic six-month filing extension. You do not need to file any forms to claim this extension, unlike the federal filing extension, which taxpayers apply for using Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return).
  2. Additionally, the FTB makes an exception for taxpayers who were traveling or residing outside the U.S., extending their tax due date to October 2021.

Does Filing for a Tax Extension Give You More Time to Pay?

While obtaining a tax extension can give you some much-needed breathing room to gather and evaluate your financial records, there’s a critical caveat for taxpayers to keep in mind: as the FTB cautions, “[T]he extension to file your tax return is not an extension to pay your tax. You must pay your tax in full no later than the April 15 deadline, regardless of when you file your return, or a late payment penalty may be imposed.”

This language could not be more precise: the filing extension is not a payment extension. A time extension will not prevent penalties from being imposed, nor will it stop costly interest from accruing. If you wish to avoid being charged interest and being ordered to pay expensive civil penalties, you must make a payment by the regular deadline (which is the purpose of Form FTB 3519, as noted above).

If you missed the payment deadline, you can be charged a failure-to-pay penalty per month of delinquency, generally capped at 0.5% of the unpaid amount. The failure-to-file penalty, or late filing penalty, is even more costly: typically up to 5% of the unpaid amount, imposed per month, if the taxpayer does not file the return in question. Note that this also includes partial months.

If the FTB believes you committed tax fraud – in other words, that you intentionally failed to file a return to avoid paying income tax – you may be audited and even criminally investigated. If you are convicted, you could be facing months or possibly years in prison, plus other penalties.

It’s important to take corrective action as soon as possible if you are out of compliance with state (or federal) tax filing requirements. However, before you file, be sure to choose the appropriate version of the California tax return. An experienced Roseville tax preparation professional from Cook CPA Group can help you make the right decision. Different versions of the personal income tax return for California taxpayers include:

  • Form 540 (California Resident Income Tax Return)
  • Form 540 2EZ (California Resident Income Tax Return)
  • Form 540NR (California Nonresident or Part-Year Resident Income Tax Return)

COVID-19 and Your Tax Returns in 2021

During 2020, the IRS granted a 90-day extension to file your taxes due to coronavirus (COVID-19). This benefit extended your filing date, allowing California residents – and residents around the country – a much-needed time to evaluate their finances and work a strategy to file their taxes. As of today, there are no mentions about a second extension to file your taxes. It is critical to adhere to April 15, 2021, due date. This way, you ensure you avoid running into problems with the IRS. Our Roseville tax accountants can help you with your tax returns in 2021.

CA Tax and Accounting Firm Serving Sacramento and Roseville

Cook CPA Group is a California tax and accounting firm serving businesses and individual taxpayers throughout the Sacramento and Roseville regions. Featuring skilled tax accountants and consultants, our accomplished team of financial professionals brings more than 20 years of combined experience to the clients we serve. If you or your business owes taxes to the state of California, has unfiled returns to catch up on, needs help resolving a tax controversy, or simply has questions about effective tax planning or FTB procedures, Cook CPA Group can provide detailed, step-by-step guidance for all your California and federal tax needs. To arrange a free consultation about our tax services in California, contact Cook CPA Group online, or call us today at (916) 269-9282.

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What is the 2021 Tax Filing Deadline for U.S. Citizens Abroad? https://www.cookcpagroup.com/what-is-the-tax-filing-deadline-for-u-s-citizens-abroad/ Tue, 16 Feb 2021 18:00:06 +0000 https://www.cookcpagroup.com/?p=6738 What is the 2021 tax filing deadline for US citizens abroad? Sacramento CPAs explain the deadline to file a US income tax return for citizens living abroad, plus additional income reporting requirements.

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Every taxpayer is already aware that U.S. citizens are required to file an annual income tax return with the Internal Revenue Service (IRS). What fewer people realize is that there are also income reporting and tax requirements for U.S. citizens living abroad. If you’re a U.S. citizen who lives in a foreign country – or if you’re planning on becoming one anytime soon – it’s important that you understand some basic information about your responsibilities and obligations as a taxpayer overseas. Our Sacramento CPA firm explains whether citizens living abroad are required to file U.S. taxes, with information about the 2021 tax filing deadlines for U.S. citizens residing outside the United States.

tax accountant sacramento

Are U.S. Citizens Living Abroad Required to File an Income Tax Return with the IRS?

Unlike most other nations, which typically tax individuals based on residency, the United States is unique in taxing all U.S. citizens – including those who reside overseas. It doesn’t matter if you live in Germany, France, Thailand, Canada, Sweden, South Korea, or anywhere else around the globe. If you are a U.S. citizen, you generally must report your global income to the IRS. Most people abroad need to file. An income tax filing requirement generally applies even if a taxpayer qualifies for tax benefits, such as the Foreign Earned Income exclusion or the Foreign Tax credit, which substantially reduces or eliminates U.S. tax liability. Indeed, these benefits are available exclusively to citizens who have filed tax returns as directed by the IRS. Failure to file a tax return or report foreign income when you are a U.S. citizen abroad can result in the imposition of substantial civil penalties, which could cost you many thousands of dollars. Depending on the circumstances, failing to submit an income tax return could even lead to criminal prosecution. Our California tax accountants from Cook CPA Group explain more about the tax requirements for U.S. citizens living abroad.

Quick Look at the Tax Requirements for U.S. Citizens Living Abroad

As we mentioned, most people abroad need to file their taxes. As a U.S. citizen living abroad, you need to meet the IRS filing requirements for your taxable year. These requirements are not limited to just filing a timely tax return. In addition, you must also comply with other tax requirements that affect citizens abroad. For example, you must file an FBAR (Report of Foreign Bank and Financial Accounts, FinCEN Report 114) if both of the following statements are true:

  1. You are a U.S. person (including citizens, corporations, partnerships, trusts, and estates) with signature authority over, or financial interest in, one or more bank accounts or financial accounts located outside the U.S. – for example, a checking account you maintain at a foreign bank.
  2. The value of your account or accounts was higher than $10,000, for any duration of time, at any point during the year.

What is the 2021 U.S. Tax Filing Deadline Abroad?

This year’s deadline to file taxes is April 15, 2021, with various extensions available, the latest being October 15, 2021. If you will be residing overseas on April 15, 2021, or if you will be on military duty, you will receive an automatic two-month extension on the deadline.

However, it is critical to keep in mind that the extension applies only to filing taxes – not to paying taxes. Even if you obtain an extension on the filing deadline, you will still be required to pay interest on unpaid taxes by the tax return’s normal due date.

What Happens If I Live Abroad and Don’t Pay My Taxes on Time?

As we mentioned, no matter where you live in the world, if you are an American citizen, you must file and pay your taxes. There are no exceptions for American citizens living abroad. Moreover, like any American citizen, failure to file or paying your taxes in 2021 can lead to severe penalties. For instance, you can face thousands of dollars in penalties, disqualification from any tax benefits, or jail – if you are caught evading your tax obligations.

It is essential to understand that the IRS pursues taxes worldwide. The U.S. has treaties with many countries around the world, allowing them to collect taxes. If you owe a substantial debt to the IRS and live abroad, the IRS can deny your U.S. passport. This is clearly a problem you’d want to avoid.

Additionally, it would be best to keep in mind that just because you don’t have to pay back taxes to the IRS doesn’t mean you don’t have to file. Filing your tax returns is an obligation every American citizen has. As we mentioned, it is best to keep your tax filing in check to avoid problems with the IRS.

You may feel overwhelmed and nervous, especially if this is your first time filing your taxes while living abroad. However, it is essential to keep yourself informed about your tax filing’s essential details during 2021. If you need assistance preparing and filing your taxes on April 15, 2021, our Roseville tax accountants can help you. We bring decades of experience to every case we handle. We can make sure you file your taxes on time and avoid costly penalties with the IRS.

Roseville CPAs Providing Tax Preparation Services for Expats

The U.S. Tax Code is notorious for its complexity, and IRS regulations are very difficult for most taxpayers to navigate with ease and confidence. For U.S. citizens abroad, to whom special financial regulations apply, making it through the upcoming tax season may be even more of a challenge. Don’t miss out on tax deductions, tax credits, or other opportunities to utilize the U.S. Tax Code strategically – or worse, find yourself at the center of a criminal investigation. Instead, get an early start on preparing for this year’s tax season, and hire a trusted, experienced California CPA to handle all of your tax preparation needs for you. At Cook CPA Group, our knowledgeable team of tax consultants and Certified Public Accountants approaches every matter with over 20 years of experience, giving you total peace of mind that your tax return will be prepared correctly and efficiently. We can review your records for errors, look for ways to minimize your tax liability, represent you before the IRS, help you comply with the Foreign Account Tax Compliance Act (FATCA), and assist with other tax-related issues commonly affecting expats and citizens abroad. Filing your taxes doesn’t have to be stressful. To learn more about how a CPA, tax consultant, or professional tax preparer in Roseville can assist you with Roseville tax services for individuals, contact Cook CPA Group at (916) 250-3893 for a free tax consultation. From our offices in California, we serve clients in Australia, Brazil, China, Colombia, Israel, Italy, Japan, Luxembourg, Mexico, the Netherlands, Singapore, Spain, the United Kingdom, and dozens of other nations around the world.

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What Business Expenses Must be Depreciated in CA? https://www.cookcpagroup.com/business-expenses-are-depreciated/ Thu, 07 Jan 2021 21:18:21 +0000 http://www.cookcpagroup.com/?p=62041 What business expenses must be depreciated in CA? If you need help determining which business expenses are depreciable, our experienced California accountants can help Contact us today.

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When operating a business, it is vital for a business owner to thoroughly document their business expenses. Keeping thorough records of your business expenses will make it easier for you to deduct your business expenses. However, it could be difficult to determine your available business expenses if you are unfamiliar with federal, state, and local tax regulations. If you need assistance determining business expenses for your company, you should consult with an experienced California business services accountant as soon as possible. The Cook CPA Group recognizes that operating a company while keeping up with tax regulations could be challenging, and we are here to help resolve your concerns. We are here to explain what business expenses should be depreciated in California.

How Depreciation Works for Business Expenses in CA

Depreciation is a type of accounting method used to assess the loss of value for assets owned by a person or entity. Specifically, a taxpayer could spread out the cost of an asset over the period of time it is expected to be used. As a result, the taxpayer could deduct a small portion of the cost of the asset each year instead of taking the full tax deduction when the asset was purchased.

The ultimate goal for depreciation of business expenses is that the taxpayer lowers their tax bill by matching the cost of an asset to the income earned by using the asset. Note, however, that a business cannot depreciate all the assets it owns.

Certain assets are depreciable because they are often expensive purchases for a business that will eventually become useless as they age. Offering tax incentives for a depreciable asset will assist a taxpayer and make it easier for the taxpayer to replace the asset at the end of its life.

When determining what assets are depreciable, a taxpayer should understand that all depreciable assets are considered fixed assets. However, every fixed asset is not subject to depreciation. In order for an asset to be considered depreciable, the asset must lose value as time goes on. The following is a list of assets that are not depreciable:

  • Land
  • Leased property
  • Cash and receivables
  • Collectibles like baseball cards or art

You should also be aware that personal property and assets that will be used for investment cannot be claimed as depreciable assets.

To learn more about what qualifies as a depreciable asset and how to calculate depreciation, you should continue reading and contact an experienced Roseville tax preparation and planning accountant today.

What Business Expenses Qualify as Depreciable Assets in CA?

There are a few factors that must be considered in order to classify a business asset as depreciable. The Internal Revenue Service examines the following factors:

  • Whether the taxpayer seeking the depreciation is the owner of the asset
  • Whether the taxpayer uses the asset for their business or uses it to generate income
  • The asset has a useful life of at least one year

When using this criterion, the following business expenses could be considered depreciable:

  • Vehicles used for business purposes
  • Office buildings
  • Manufacturing machinery
  • Buildings rented out by a company
  • Equipment needed to operate the business, such as laptops

This is not an exhaustive list. There are other business expenses not listed here that could be considered for small business accounting.

How to Depreciate Business Expenses in CA

There are multiple accounting methods that could be used to depreciate an asset. For example, a taxpayer could use the straight-line method of depreciation. Under this method, the taxpayer would depreciate their business asset evenly across multiple years. To determine how much the asset could be depreciated, the taxpayer must subtract the business asset’s salvage value from the cost of the asset and divide that number by the number of useful years of the asset.

A taxpayer could also choose to use the accelerated method of depreciation. This method permits a business owner to take a large chunk of the depreciation value in the first few years of the asset’s useful life and a smaller amount in the future. This is a popular form of depreciation for owners of small businesses.

Business expenses could also be depreciated using the Section 179 deduction. Under this method, the total cost of the asset could be deducted in the same year the asset was purchased. This could only be used for a maximum of $25,000 in deductions.

Depreciating business expenses is often a tedious task for business owners as they are concerned about claiming the wrong deductions. Claiming an inaccurate deduction could result in a number of issues that a taxpayer would seek to avoid. Fortunately, the Cook CPA Group is here to help determine which of your business assets could be depreciated. Our firm has extensive experience providing accounting services to businesses in California, and we would be pleased to offer you our services.

Consult with Our Experienced California Accountants for Depreciable Business Expenses

If you are unsure of the business expenses that are depreciable for your company, you should work with an experienced Sacramento business consulting accountant today. The Cook CPA Group has years of experience helping our clients manage depreciable business expenses, and we are here to help you explore your options for depreciable assets. Not only could we help manage depreciable assets, but we also have experience in many other areas concerning tax regulations. If you would like to schedule a free consultation to discuss your tax liability, you should call the Cook CPA Group at (916) 432-2218. You may also schedule a free consultation using our online submission form.

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Tax Incentives that are Available to Wineries in California https://www.cookcpagroup.com/tax-incentives-for-wineries-california/ Thu, 17 Dec 2020 18:29:37 +0000 http://www.cookcpagroup.com/?p=62029 Our CPAs can help you find any Tax incentives that are available to wineries in California to save you time and money so you can focus on running your business.

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Owners of wineries in California have to face competition from a number of other winery companies, so it is important to take advantage of tax incentives that could help the business thrive. However, the operator of a winery may find it challenging to understand and claim complex tax benefits while also ensuring that their business is successful. If you are the owner of a winery in California and you need help claiming tax incentives for your company, you should consult with an experienced California accountant for wineries as soon as possible. The Cook CPA Group recognizes that winery owners may not have a lot of time for deciphering complex tax regulations, and we are here to handle your tax and accounting needs. Our firm is here to discuss the tax incentives that are available to wineries in California.

Common Tax Incentives Available for Wineries in California

Every business owner should be aware of tax incentives that could lower their tax liability. However, as the tax law frequently changes, California winery owners and many other taxpayers may have difficulty keeping up with new laws. Fortunately, the experienced California winery CPAs could help you handle your tax needs. The following is a list of common tax incentives that are available for wineries in California that our firm could help you obtain.

Cash Method of Accounting

The cash method of accounting is a form of accounting where payments are recorded when they are received, and expenses are recorded when they are paid. As a result, using this accounting method for a winery could provide a winery owner with increased flexibility and may even permit the owner to defer some of their tax liability.

One benefit of using the cash accounting method is that wineries that earn under $1 million in revenue could make deductions for the wine when it is sold. For instance, wines sold from a barrel would permit the winery owner to make deductions earlier than they normally would be able.

Accelerate Deductions

Buying a winery presents an option for an individual to create an opening to decrease their tax liability by claiming tax deductions that may apply to their unique situation. For example, separating depreciating assets on the property of your winery will allow a taxpayer to recover tax savings. Assets like bridges, roads, equipment sheds, and many other items could be used as a depreciable asset.

Selecting a Business Structure

Tax savings could also be found by changing the business structure used for your winery. For example, if you did not establish your winery as a C corporation, you should now be aware that the C corporation tax rate has decreased to 21% from a maximum of 35%. However, establishing your winery as a C corporation will also make it subject to double taxation and many other tax regulations. We could work with you to determine whether it makes sense to change your business structure to a C corporation to claim a tax credit.

Alternatively, if your winery is structured as a sole proprietorship or a tax flow-through entity, you may be eligible to claim the qualified business income deduction. This deduction could provide the owner of a winery with a 20% tax deduction under certain circumstances.

There are a few other tax incentives for operating a winery or vineyard in California. For example, you may be able to claim incentives for developing your vineyard or even by replacing diseased vines that are affected by Pierce’s Disease.

To learn more about tax services the Cook CPA Group could provide for your winery, you should consult with an experienced California CPA for wineries as soon as possible.

Tax Services for California Wineries

The Cook CPA Group offers a wide range of tax services for winery owners. Our firm would be pleased to work with you to determine the best option for managing your tax liability.

Tax planning is one service we offer that is vital for handling your tax liability. Thorough tax planning will help you claim tax deductions or credits that may apply to your business. Additionally, if you failed to file taxes in a previous year, we could help you file your back taxes and claim your tax refund.

Additionally, if you are facing a tax audit from the Internal Revenue Service or the California Franchise Tax Board, we could also help you resolve this matter. Many tax audits begin because a taxpayer made one or multiple errors while filing tax returns. Our team of committed California accountants for wineries will be able to provide you with tax audit services to avoid a large tax bill or other possible consequences that may arise.

Consult with Our Experienced California Accountants for Wineries to Discuss Your Potential Tax Incentives

If you operate a winery and need help with claiming tax incentives that apply to your business, you should consult with an experienced California CPAss. The skilled accounting team at the Cook CPA Group has years of experience managing tax liabilities for a wide range of clients in California, and we are ready to work with you. We are committed to helping California winery owners claim their tax incentives. To schedule a free consultation to discuss the details of your potential case, call the Sacramento CPAs at (916) 432-2218. You could also contact our accounting team online to schedule your free consultation today.

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Tax Incentives that are Available to Distilleries in California https://www.cookcpagroup.com/tax-incentives-for-distilleries-california/ Thu, 17 Dec 2020 18:08:34 +0000 http://www.cookcpagroup.com/?p=62027 Our accountants can help you find all tax incentives that are available to distilleries in California so you can save money and focus on running your business.

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When operating a distillery, you should seek every tax incentive that is available for your business. However, it could be difficult to determine for the owner of a distillery to determine all the tax incentives that apply to their company. Fortunately, distillery owners could seek help to claim their tax incentives. If you operate a distillery and you need assistance claiming tax credits for your company, you should consult with an experienced California accountant for distilleries as soon as possible. The Cook CPA Group is committed to providing our clients with the accounting services they need to manage their tax liability. Our firm is here to discuss the tax incentives that are available to distilleries in California.

Common Tax Incentives for Distilleries in California

Tax incentives for distilleries and many other industries are implemented for the purpose of promoting growth within an industry. Unfortunately, while many tax incentives could be claimed for the operators of a distillery, it is normal for taxpayers to be unaware of incentives that apply to their business. Making sense of the tax code to determine tax credits for your business could be a tedious task while you are trying to successfully operate your business. For this reason, the Cook CPA Group could help you manage your taxes to ensure that you claim all available tax incentives.

The following is a list of common tax incentives our California CPAs for distilleries could help you claim for your distillery company.

FICA Tip Tax and California Sales Tax Incentive

The Federal Insurance Contributions Act (FICA) tip credit provides some relief for distillery owners from federal taxes and even Social Security and Medicare taxes. Owners of a distillery may be able to claim a tax credit if they employ workers that earn tips as employers are required to pay taxes on tips. Specifically, if a distillery employee receives tips that exceed the applicable minimum wage rate, this would permit the taxpayer to claim the FICA tip credit.

Note, however, if a tip only raises the employee’s wages to minimum wage, this will not be enough to be eligible for a FICA tip credit.

A distillery owner in California may also be able to claim a state tax credit for a variety of materials that are used in the production of items needed for the distillery. Additionally, if the owner of a distillery needs to purchase machinery and other costly equipment to operate their business, these items may be used to claim a sales tax exemption.

Fuel Tax Incentive

As you are undoubtedly aware, the purchase of fuel is taxed by the federal government. When operating a distillery, it is common for owners to require fuel to operate machinery needed to create their products. Fortunately, using fuel in this manner may allow the distillery owner to claim a tax credit.

It is important to note that there may be different requirements depending on the type of fuel used by a distillery. For instance, if you would like a tax credit for propane, you would have to register as a company that uses propane for your business. However, ordinary fuel may not require this specific step to claim a tax credit.

R&D Tax Incentive for California Distilleries

A research and development tax credit (R&D) is utilized to encourage business owners to produce new products or to improve processes for traditional methods used in their industry. There are a number of ways that a distillery owner could claim an R&D tax credit. For example, the distillery may be able to use R&D credits to offset tax liability for payroll taxes. Specifically, if a distillery qualifies as a small business, the owner could offset up to $250,000 of payroll taxes.

Additionally, if a distillery does not completely utilize their tax credit in the year it was earned, the tax credit could be rolled over into another year for 20 years. Our California CPAs for distilleries could help you determine whether your business activities qualify you to claim an R&D tax credit.

There are many other tax incentives that a distillery owner could claim, such as utility exemptions or work opportunity tax credits. The Cook CPA Group knows that it could seem impossible to claim all tax credits that apply to your distillery, and we are here to address your concerns.

In some circumstances, our firm could help the owner of a distillery correct a previous tax return in order to claim a tax incentive that applied to their business. However, this process must be done within three years before the statute of limitations lapses on the tax return. Our firm could also help you resolve unfiled tax returns and other common tax matters.

Consult with Our California Accountants for Distilleries to Discuss How to Claim Your Tax Incentives

If you are the owner of a distillery in California, and you need accounting services to claim your tax incentives, you should work with an experienced California CPA for distilleries. At the Cook CPA Group, our skilled Sacramento accounting team has years of experience providing a variety of tax services for our clients, and we would be pleased to offer accounting services for California distilleries. You do not have to manage the taxes for your distillery without any help. To schedule a free consultation to discuss tax liability for your distillery, you should call the Cook CPA Group at (916) 432-2218. You may also use our website to schedule a free consultation with one of our experienced California accountants for distilleries.

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