When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can come after either spouse to collect the entire tax — not just the part that’s attributed to one spouse or the other. This includes…Read More
The pandemic has presented numerous challenges for businesses, but it also taught us how to be resilient, cost-conscious and adaptable. Over the last few years, we’ve learned that remote working arrangements offer many benefits, including reducing the time and cost of performing many tasks. Here’s how these lessons translate to the work auditors do to…Read More
Maintaining the status quo in today’s volatile marketplace can be risky. To succeed, businesses need to “level up” by being proactive and adaptable. But some managers may be unsure where to start or they’re simply out of new ideas. Fortunately, when audited financial statements are delivered, they’re accompanied by a management letter that suggests ways…Read More
Footnotes appear at the end of a company’s audited financial statements. These disclosures provide insight into account balances, accounting practices and potential risk factors — knowledge that’s vital to making well-informed lending and investing decisions. Here are examples of key risk factors that you might unearth by reading between the lines in a company’s footnotes.…Read More
An external audit is less stressful and less intrusive if you anticipate your auditor’s document requests. Auditors typically ask clients to provide similar documents year after year. They’ll accept copies or client-prepared schedules for certain items, such as bank reconciliations and fixed asset ledgers. To verify other items, such as leases, invoices and bank statements,…Read More
Auditors of public companies started reporting critical audit matters (CAMs) in their audit opinions in 2019. This represents a major change to the pass-fail auditors’ reports that had been in place for decades. Now, accounting rule makers are assessing how this project has fared over the last two years — and whether changes are needed…Read More
If you have a parent entering a nursing home, you may not be thinking about taxes. But there are a number of possible tax implications. Here are five. 1. Long-term medical care The costs of qualified long-term care, including nursing home care, are deductible as medical expenses to the extent they, along with other medical…Read More
Auditors typically deliver financial statements to calendar-year businesses in the spring. A useful tool that accompanies the annual report is the management letter. It may provide suggestions — based on industry best practices — on how to fortify internal control systems, streamline operations and reduce expenses. Managers generally appreciate the suggestions found in management letters.…Read More
President Biden is seeking to bolster the IRS and enforcement of the tax laws over the next decade. In the last 10 years, the Internal Revenue Service’s funding has been cut by 20% causing the department to lose more than a fifth of its staff. With this lack of funding and staffing, the compliance department…Read More
The IRS just released its audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audits these days, that will be little consolation if yours is one of them. Latest statistics Overall, just 0.5%…Read More
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