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In addition to the difficult personal issues that divorce entails, several tax concerns need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are four issues to understand if you are in the process of getting a divorce. Alimony or support payments. For […]

Many not-for-profits increase their occupational theft risk by devoting too little of their budget to internal controls, placing excessive trust in staffers and volunteers and failing to punish fraud perpetrators appropriately. Board members who lack the financial knowledge to spot irregularities are another risk. Because your organization likely can’t afford any fraud losses, you need […]

If philanthropy is an important part of your estate planning legacy, consider taking steps to ensure that your donations are used to fulfill your intended charitable purposes. One way to help preserve your charitable legacy is to place restrictions on the use of your gifts. For example, you might limit the use of your funds […]

If you’re a small business owner or you’re involved in a start-up, you may want to set up a tax-favored retirement plan for yourself and any employees. Several types of plans are eligible for tax advantages. 401(k) plan One of the best-known retirement plan options is the 401(k) plan. It provides for employer contributions made […]

Fraud experts have long suggested that the presence of three conditions (pressure, rationalization and opportunity) greatly increases the likelihood that an employee will commit fraud. This is known as the “fraud triangle.” Over the years, the original triangle framework has been expanded to add capability (generally fraud-prone personality characteristics) to define a “fraud diamond.” Other […]

If you’re lucky enough to be a winner at gambling or the lottery, congratulations! But be aware there are tax consequences. You must report 100% of your winnings as taxable income. If you itemize deductions, you can deduct losses but only up to the amount of winnings. You report lottery winnings as income in the […]

According to the Association of Certified Fraud Examiners, active detection methods (such as surprise audits or data monitoring) are far more effective than passive methods (such as confessions or notification by police). To reduce the duration of any fraud scheme and lower overall financial losses, companies should use such active detection methods as IT controls, […]

As teachers head back to school, they often pay expenses for which they don’t receive reimbursement. Fortunately, they may be able to deduct some of them on their tax returns. You don’t have to itemize your deductions to claim this “above-the-line” tax break. For 2019, educators can deduct up to $250 of eligible expenses that […]

The use of a company car is a valuable fringe benefit for business owners and key employees. This perk results in tax deductions for the employer and tax breaks for the owners and employees using the cars. (And of course, they get the nontax benefits of driving the cars!) For tax deduction purposes, a business […]

Although “pump-and-dump” fraud perpetrators mostly target inexperienced investors, anyone can fall for this scheme. Typically, a scammer buys shares in a relatively illiquid stock, then hypes it with false or misleading claims to potential investors (usually via phone or email). This drives up the price. When the stock hits a certain level, the fraudster sells, […]

529 plans are unique among estate planning vehicles. Ordinarily, to shield assets from estate taxes, you must permanently relinquish control over them. But contributions to a 529 plan are considered “completed gifts.” This means that the assets are removed from your taxable estate, together with all future earnings on those assets, even though you retain […]

If you’re like many people, you’ve worked hard to accumulate a large nest egg in your traditional IRA (or a SEP-IRA). It’s critical to carefully plan for withdrawals. For example, if you need to take money out of your traditional IRA before age 59-1/2, the distribution will generally be taxable. In addition, distributions before age […]

Improper revenue recognition has long accounted for a substantial portion of financial statement fraud. By recording revenue early, a dishonest business seller or an employee under pressure to meet financial benchmarks can significantly distort profits. Fortunately, such manipulation leaves traces for fraud experts to find. Probably the most obvious marker is when a company records […]

Operating a business as an S corporation may provide many advantages, including limited liability for owners and no double taxation (at least at the federal level). Self-employed people may also be able to lower their exposure to Social Security and Medicare taxes if they structure their businesses as S corps for federal tax purposes. But […]

If your not-for-profit doesn’t have an accountable plan, you generally must submit employee reimbursement payments on W-2 forms, withhold applicable taxes and pay the employer portion of employment taxes. Why not avoid these steps and save taxes for both staffers and your organization? Accountable plans can be informal. However, expenses covered must have a business […]

In recent months, many businesses and employers have received “no-match” letters from the Social Security Administration (SSA). These letters alert employers if employees’ names and Social Security numbers (SSNs) don’t match the data reported on W-2 forms, which are given to employees and filed with the IRS. If you receive a no-match letter, check to […]

  As more people use mobile phones, more fraud perpetrators target these devices. According to Javelin Strategy & Research, between 2017 and 2018 the number of fraudulent mobile-phone accounts opened grew by 78%. Schemes in which thieves open a phone account in your name and use it to access your bank account, sign up for […]

Working from home has its perks. You can skip the commute and you might be eligible to deduct home office expenses on your tax return. But you must meet the tax law qualifications. Under current Federal law, employees can no longer claim home office deductions. But if you’re self-employed and run a business from your […]

One of the major decisions you’ll need to make when establishing a trust is who will act as your trustee. As the name implies, this individual or financial institution must be above reproach. But that’s just one quality of many that your trustee requires. Other qualities include an understanding of tax and trust law, integrity […]

As in the for-profit world, sometimes not-for-profits need to spend money to make money. This is particularly true when it comes to fundraisers. At the same time, it’s critical that you make a budget and stick to it. Estimate expenses for such items as facility rental, food and drinks and entertainment, and then scrutinize the […]

Privately held businesses aren’t required to conduct fraud risk assessments, but you should do so anyway. In general, there are four ways employees might exploit your system: Fraudulent financial reporting, misappropriation of assets, improper expenditures and illicitly obtained revenue and assets. To prevent these schemes, interview executives and managers to ensure they’re setting the right […]

You may have heard of the “nanny tax.” But even if you don’t employ a nanny, it may apply to you. Hiring a housekeeper or other household employee (who isn’t an independent contractor) may make you liable for federal income tax, Social Security and Medicare (FICA) tax and federal unemployment tax. You may also have […]

Background checks don’t inoculate companies against occupational fraud. After all, many thieves have never been caught. Yet these procedures remain critical to fraud prevention. Before conducting checks, obtain written authorization from the job applicant. Depending on the position, you might contact former employers, verify education and professional certifications, and review criminal, credit and driving records. […]