Workers’ Compensation: Trends and Challenges for Employers and Workers

As 2024 comes to a close, businesses must understand the updates to depreciation expenses, particularly bonus depreciation and Section 179 limits. These tax provisions play a crucial role in financial planning and can significantly impact your tax liabilities. Here's what you need to know to prepare for the upcoming tax season. What Is Depreciation Expense? Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. This approach allows businesses to spread the expense of assets, such as machinery or equipment, across several years rather than taking a single large deduction in the year of purchase. By matching the expense of using an asset with the revenue it generates, depreciation offers a more accurate picture of a company’s financial performance. Bonus Depreciation for 2024 Bonus depreciation allows businesses to take an additional first-year deduction on the purchase of qualifying assets. 2024 Bonus Depreciation Rate: The bonus depreciation rate has been reduced to 60%, down from 80% in 2023 . How It Works: Businesses can immediately deduct 60% of the cost of eligible assets in the year they are placed in service, with the remaining cost depreciated over the asset's useful life. Section 179 Deduction The Section 179 deduction provides another way for businesses to maximize their tax savings by deducting the full purchase price of qualifying equipment and software in the year of purchase. 2024 Deduction Limit: The maximum Section 179 deduction limit for 2024 is $1,220,000 . Phase-Out Threshold: This limit is reduced dollar-for-dollar for amounts exceeding $3,050,000 in total Section 179 property placed in service. Key Points to Consider 1. Eligibility Bonus depreciation and Section 179 apply to both new and used equipment if used for business purposes more than 50% of the time. Certain assets, such as buildings and land, are excluded. 2. Timing Assets must be purchased and placed in service within the tax year to qualify for deductions. Proper timing is essential to maximize these benefits. 3. Combination of Benefits Businesses can use both bonus depreciation and Section 179 deductions in the same tax year. Example: A company could apply the Section 179 deduction to the maximum limit and use bonus depreciation on the remaining cost of the asset. 4. Tax Planning Strategic tax planning ensures businesses maximize deductions while remaining compliant with IRS regulations. Consulting with a tax professional is highly recommended to navigate these complexities effectively. The Bottom Line Understanding the nuances of depreciation expenses, bonus depreciation, and Section 179 limits is essential for effective financial planning. These tax provisions allow businesses to: Reduce taxable income Improve cash flow Reinvest in their operations Make sure to consult with a tax professional to ensure compliance and to fully leverage these valuable deductions for your business.

Estate planning is often easy to overlook, but it's essential for small business owners who want to ensure the longevity and success of their business. While estate attorneys play a central role in this process, we at Integrity Squared CPAs frequently see the financial impact that inadequate planning has on our clients. That’s why we’re here to help you understand the financial side of estate and succession planning and how we can support you along the way. 1. Beneficiary Designations Matter One of the simplest yet most effective steps in estate planning is keeping your beneficiary designations up to date. This applies to your brokerage accounts, IRAs, life insurance policies, and more. Consult with your attorney on how to structure your accounts so that your assets transfer smoothly to the right people. This is especially important for business assets, where clarity about ownership can prevent disputes and ensure your business continues to run smoothly after you’re no longer involved. 2. Financial Power of Attorney A financial power of attorney ensures that someone you trust can handle your business's financial matters if you’re ever incapacitated. Establishing this is crucial, as it guarantees that the business can continue to operate smoothly without any legal delays. Make sure this person is familiar with the day-to-day operations and financial structure of your business to avoid unnecessary complications. 3. Take Inventory of Your Assets It’s a common misconception that taking an inventory of assets is only for large businesses. However, this exercise can provide clarity, even for small businesses, about their true value. Start by assessing both tangible assets, like property, vehicles, and equipment, and intangible assets, like intellectual property, retirement accounts, and investments. Once you've done this, it’s important to put a value on these assets. We can help you appraise items like real estate or other valuable assets to ensure that you have an accurate assessment of your business’s worth. 4. Develop a Succession Plan Having a succession plan is vital for the future of your small business. We often see that businesses without a solid plan lose value or face operational issues during an ownership transition. A well-thought-out succession plan ensures your business is positioned to thrive, even after you step away. At Integrity Squared CPAs, we help our clients place a value on their business and, more importantly, work to increase that value over time. With proper planning, when the time comes to sell or transition ownership, you’ll be in the best position to get maximum value for your hard-earned efforts. Taking the time to organize your assets, develop a succession plan, and consult with experts ensures that your business will continue to thrive, providing you with peace of mind. Ready to take the next step? Schedule a consultation with us today, and we’ll help you navigate the complexities of succession planning while increasing the value of your business.

Beneficial ownership reporting requirements are crucial for promoting transparency in corporate structures and preventing illicit activities such as money laundering and tax evasion. For businesses and individuals involved in financial and corporate operations, comprehending these requirements is essential for compliance and avoiding significant penalties. What is Beneficial Ownership? Beneficial ownership refers to the individuals who ultimately own or control a company, even if the ownership or control is exercised indirectly through a chain of ownership or through other means. Identifying these individuals is important for regulatory authorities to monitor and prevent illegal activities. The Corporate Transparency Act (CTA) The Corporate Transparency Act (CTA), enacted as part of the Anti-Money Laundering Act of 2020, mandates that certain entities disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This information helps authorities combat financial crimes and enhance corporate transparency. Key Requirements of the CTA 1. Who Must Report: The CTA applies to most corporations, limited liability companies (LLCs), and other similar entities formed or registered in the United States. Certain entities, such as large operating companies, regulated entities (like banks), and inactive entities are exempt. 2. Information to be Reported: Entities must provide information on each beneficial owner, including: • Full legal name • Date of birth • Residential or business street address • Unique identifying number from an acceptable identification document (e.g., passport or driver’s license) 3. Definition of Beneficial Owner: Under the CTA, a beneficial owner is any individual who, directly or indirectly, exercises substantial control over the entity or owns or controls at least 25% of the ownership interests in the entity. 4. Reporting Timeline: Entities formed or registered before the enactment of the CTA have a specific timeframe to comply with the reporting requirements, while newly formed or registered entities must report their beneficial owners at the time of formation or registration. 5. Updates and Changes: Entities must update their beneficial ownership information within a specified period if there are changes to the reported information. Penalties for Non-Compliance Failure to comply with the CTA’s beneficial ownership reporting requirements can result in severe penalties, including: • Civil Penalties: Fines up to $500 per day of non-compliance. • Criminal Penalties: Fines up to $10,000 and/or imprisonment for up to two years for willful violations. Steps for Compliance 1. Identify Beneficial Owners: Determine who meets the definition of a beneficial owner within your entity. 2. Gather Required Information: Collect the necessary information for each beneficial owner. 3. Submit Reports to FinCEN: Use the designated electronic system to file the beneficial ownership report with FinCEN. 4. Monitor for Changes: Implement a system to track any changes in beneficial ownership and update the reports accordingly. 5. Consult Professionals: Work with legal and financial advisors to ensure full compliance with the CTA and other relevant regulations. Conclusion Understanding and adhering to beneficial ownership reporting requirements is vital for maintaining regulatory compliance and contributing to the global effort to combat financial crimes. By accurately reporting and updating beneficial ownership information, entities can avoid penalties and support transparency in the corporate world.