Wilson Toellner CPA

The year 2020 has taught businesses many lessons. The sudden onset of the COVID-19 pandemic followed by drastic changes to the economy have forced companies to alter the size of their workforces, restructure work environments and revise sales models — just to name a few challenges. And what this has all meant for employees is change . Even before this year’s public health crisis, many businesses were looking into and setting forth policies regarding change management. In short, this is a formalized approach to providing employees the information, training and ongoing coaching needed to successfully adapt to any modification to their day-to-day jobs. There’s little doubt that one of the enduring lessons of 2020 is that businesses must be able to shepherd employees through difficult transitions, even (or especially) when the company itself didn’t bring about the change in question. Why change is hard Most employees resist change for many reasons. There’s often a perceived loss of, or thr...

IRS audit rates are historically low, according to the latest data, but that’s little consolation if your return is among those selected to be examined. But with proper preparation and planning, you should fare well. In fiscal year 2019, the IRS audited approximately 0.4% of individuals. Businesses, large corporations and high-income individuals are more likely to be audited but, overall, all types of audits are being conducted less frequently than they were a decade ago. There’s no 100% guarantee that you won’t be picked for an audit, because some tax returns are chosen randomly. However, the best way to survive an IRS audit is to prepare for one in advance. On an ongoing basis you should systematically maintain documentation — invoices, bills, cancelled checks, receipts, or other proof — for all items to be reported on your tax returns. Keep all your records in one place. And it helps to know what might catch the attention of the IRS.  Audit hot spots Certain types of tax-return ...

A widely circulated article about the COVID-19 pandemic, written by author Tomas Pueyo in March, described efforts to cope with the crisis as “the hammer and the dance.” The hammer was the abrupt shutdown of most businesses and institutions; the dance is the slow reopening of them — figuratively tiptoeing out to see whether day-to-day life can return to some semblance of normality without a dangerous uptick in infections. Many business owners are now engaged in the dance. “Reopening” a company, even if it was never completely closed, involves grappling with a variety of concepts. This is a new kind of strategic planning that will test your patience and savvy but may also lead to a safer, leaner and better-informed business. When to move forward The first question, of course, is when. That is, what are the circumstances and criteria that will determine when you can safely reopen or further reopen your business? Most experts agree that you should base this decision on scientific data and...

One of the most impactful aspects of our firm's COVID-19 response has been an increased emphasis on customer service. Dating back to March of this year, with changes to the IRS calendar, volumes of legislative rule changes, and anxiety-inducing economic uncertainty all hitting our clients at once, we knew we'd be faced with unique challenges related to meeting the growing needs of our clients during the pandemic. Faced with the challenge of balancing new tasks like PPP (Paycheck Protection Program) consulting and payroll tax credits with normal tax-season obligations and business consulting, we set the goal of raising the bar when it comes to customer service and communication, so our clients would know we had their best interests at heart at all times. We have found that even when the balancing act is difficult, a customer-first mindset eases stress and achieves better outcomes.  You’d be hard-pressed to find a business that doesn’t value its customers, but tough times put man...

The tax filing deadline for 2019 tax returns was extended until July 15 this year, due to the COVID-19 pandemic. Now that your 2019 tax return has been successfully filed with the IRS, there may still be some issues to bear in mind. Here are three considerations: 1. Some tax records can now be thrown away You should keep tax records related to your return for as long as the IRS can audit your return or assess additional taxes. In general, the statute of limitations is three years after you file your return. So you can generally get rid of most records related to tax returns for 2016 and earlier years. (If you filed an extension for your 2016 return, hold on to your records until at least three years from when you filed the extended return.) However, the statute of limitations extends to six years for taxpayers who understate their gross income by more than 25%. You’ll need to hang on to certain tax-related records longer. For example, keep the actual tax returns indefinitely, so you ca...

If you’re updating or creating your estate plan, or if you have inherited assets, "cost basis" is an important topic to understand and consider.  Fair market value rules Under the fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death value. So, for example, if your grandfather bought ABC Corp. stock in 1935 for $500 and it’s worth $5 million at his death, the basis is stepped up to $5 million in the hands of your grandfather’s heirs — and grandpa's heir escape federal income tax on that gain. Had grandpa gifted his shares to his heirs before his death, this would not be the case.  The fair market value basis rules apply to inherited property that’s includible in the deceased’s gross estate, and those rules also apply to property inherited from foreign persons who aren’t subject to U.S. estate tax. It doesn’t matter if a federal estate tax return is filed. The rules apply t...

The IRS has provided guidance to employers regarding the recent presidential action to allow employers to defer the withholding, deposit and payment of certain payroll tax obligations. The three-page guidance in Notice 2020-65 was issued to implement President Trump’s executive memorandum signed on August 8. Private employers still have questions and concerns about whether, and how, to implement the optional deferral. The President’s action only defers the employee’s share of Social Security taxes; it doesn’t forgive them, meaning employees will still have to pay the taxes later unless Congress acts to eliminate the liability. (The payroll services provider for federal employers announced that federal employees will have their taxes deferred.)  Deferral basics President Trump issued the memorandum in light of the COVID-19 crisis. He directed the U.S. Secretary of the Treasury to use his authority under the tax code to defer the withholding, deposit and payment of certain payro...