CFP Continuing Education
TRI Seminars, Inc is a registered sponsor of the Certified Financial Planner Board of Standards. “Tax Strategies for Business Professionals” live presentation is approved for 6 hours of CPE for Certified Financial Planners. For more information, please contact the education division at 800-874-0829.
CPA Continuing Education
TRI Seminars, Inc. is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. “Tax Strategies for Business Professionals” live presentation is a basic, entry, level course. There are no pre-requisites or advanced preparation required. Course is recommended for seven (7) hours group-live presentation, of CPE credits for Certified Public Accountants.
Individual states have final authority on acceptance; please contact your state for confirmation. For more information regarding administrative policies, such as complaint and refund, please contact our offices at 800-874-0829.
1. Participants will be able to advise their clients of the exact IRS documentation requirements for entertainment, business travel and for automobile deductions including the types of logs/dairies required by IRS.
2. Participants will be able to differentiate deductible "ordinary and necessary" business expenses from those that don't meet these criteria.
3. Participants will be able to teach their clients the exact IRS requirements for business entertainment deductions, including the required specific documentation required. They will also understand what receipts will be necessary.
4. Participants will be able to understand and explain to clients the requirements for obtaining deductions for business gifts including understanding the limitations imposed by the business gift aspects of the Internal Revenue Code. They will also be able to understand the difference between a business gift and that of a promotional gift, which has different tax results.
5. Participants will understand the IRS requirements for obtaining a deduction for business travel including the specific documentation requirements of the IRS. They will also be taught the type of documentation required in a tax diary or tax organizer.
6. Participants will understand the benefits and IRS requirements for deducting salaries to spouses and children when hiring them in their sole proprietor business.
7. Participants will be able to understand the two methods of deducting vehicle expenses including the IRS standard mileage rates and actual method for deducting these expenses. They will also learn to apply the limitations to these methods and be able to determine which of these methods would be better for their client's situation.
8. Participants will be able to answer questions about the depreciation methods for automobiles including specifics as to which vehicles will be able to use bonus depreciation and which vehicles are eligible for section 179 elective write-offs. They will also learn the rules necessary in order to be able to be able to take advantage of these faster methods to write off vehicle costs.
9. Participants will be able to fully understand when business mileage occurs and when trips become non-deductible. Specifically, they will be able to apply the rules for "temporary business stops" and "regular business stops," as differentiated by the IRS.
10. Participants will be able to understand and explain to clients the required new rules for claiming a home office deduction.
11. Participants will be given specific approaches to IRS documentation requirements for home office including types of logs required and types of pictures that need to be taken. In addition, they will understand and be able to apply the rules for the section 179 expense election for business equipment and learn about the limitations associated with these rules.
12. Participants will understand and be able to explain to clients the steps of the audit process and specifically what to do and not do at an audit.
13. Participants will understand the advantages and disadvantages of being a sole proprietor, S corporation, LLC, or regular corporation.
14. Participants will be able to differentiate between 3 methods for calculating estimated taxes for individuals based on income levels; Guesstimate Approach, Safe Harbor Approach, and Annualization Method.
15. Participants will be able to differentiate between 4 methods for calculating estimated taxes for corporations based on income levels; Guesstimate Approach, Safe Harbor Approach, Annualization Income Method, and Seasonal Income Method.
16. Participants will be able to use IRS regulations to determine if an activity is classed as a “business” or as a “hobby”. This is a crucial area in that being a hobby eliminates losses from being used against other forms of income and prevents any carry back or carry forward of losses.
17. Participants will be able to advise clients of 9 different types of qualified plans and their deduction limits; Simple Savings Plan, Simple 401(k), Simplified Employee Pension, Qualified Profit Sharing Plan, Defined Benefit Plan, Regular Individual Retirement Account, Roth Individual Retirement Account, and Tax Exempt Education Individual Retirement Account.
18. Participants will be able to determine if a charitable contribution is a deductible business expense per IRS code.
19. Participants will be able to advise clients of 3 different Education Tax Credits and their deduction limits; American Opportunity Credit, Lifetime Learning Credit, and Student Loan Interest.
Section 1: Audit-Proof Your Tax Records
Failure to keep good business documentation causes Business Professionals to not only lose tax deductions, but also face potential fraud and other penalties. Having names exposed by the IRS as “tax cheats” in the local newspapers is devastating to any professional. This section helps to make sure that Business Professionals do not “take short cuts” or “cheat” and, therefore, the professional is enhanced.
Section 1 of our seminar, among other things, is designed to:
1. Make customers aware of the consequences if they fail to keep proper tax records;
2. To show the student the kinds of records they will need to maintain for tax related purposes; and
3. To give the student a simple system to audit-proof their records
Tax deductions depend totally on the consumers with who you do business. Good tax records must mirror the professional’s appointment book.
Section 2: Get The Most Out Of Your Tax Deductible Entertainment Expenses
When a Business Professional is meeting a customer, it is likely that they will stop with their customer for refreshments and/or food. The informal settings give the customer a comfortable atmosphere to discuss business with their sales professional, thus allowing the business professional to effectively uncover the customer’s needs, affordability and desires. Done properly, this is a tax deductible expense.
Under the new rules, Business Professionals are allowed to deduct only 80% of the amount spent for most types of entertainment. Moreover, the new law requires them to discuss business while dining with customers. Further, the law requires that such business meals take place in surroundings conducive to business discussions and be arranged for the purpose of discussing specific business.
Often a Business Professional will give a customer a thank-you gift. Gifts of less than $25 are not taxable income to customers. Professionals can deduct up to $25 only if the professional documents all five elements of support required by the tax law – and then the cost is deductible only to the extent that is less than $25.
Section 3: Combine Personal Pleasure and Vacations with Business Travel
The travel section of the seminar contains a detailed discussion of how personal pleasure can be combined with a legitimate business trip. The Business Professional will learn the difference between “travel expenses” and “on-the-road expenses”. A deductible trip depends on the number of hours spent on business each day and the number of days spent on business for the trip. The combination impacts the deductions for daily expenses and determines the deduction for trip expenses. Emphasis is given, as it is in every section, to proper documentation that meets the toughest IRS standards. In addition, IRS has specific questions that must be answered in writing for each and every deductible travel day. Our flow-charts help Business Professionals determine their travel expenses deductibility.
Individuals who own real estate, collect rent, and actively participate in day-to-day operations of rental property will obviously have to make some trips to insure that their property is in good condition. They could check on rents in the area, make repairs, and speak with vendors.
Section 4: Benefits from Hiring, Leasing From. And Going Into Business with Relatives
As an independent contractor, the Business Professional gains numerous tax advantages over an employee. This section will cover who the Business Professional can hire to help him or her in his or her capacity as an independent contractor. We will cover how to hire your spouse and/or children in your business, how payment benefits are handles and quarterly tax payments.
Section 5: Get Your Maximum Business Automobile Deductions
We discuss all the record keeping requirements for the automobile, including how to deduct more that one car at a time. We also delve into the commuting miles and discuss how to determine which miles are for business, investment, commuting, or personal.
Section 6: Produce Tax-Free Income with an Office in Your Home
Over 20 million taxpayers meet the criteria for the home-office deduction, but only 4 million actually claim the deduction. The home-office deduction is intertwined with the personal residence tax law rules for the new $250,000/$500,000 Universal Exclusion. Proper attention must be paid to the rules or the portion of the home devoted to the office will be lost with respect to tax benefits.
We discuss how the home must be divided between business and personal use to arrive at an allocable square footage for purposes of allocating deductible mortgage interest, real estate taxes, utilities, homeowners insurance, general repairs, and pest control. We discuss how depreciation is calculated on the home office (as commercial property) over 31.5 years under the new law.
There are new rules on renting home -office space to corporations; therefore, corporate owners/shareholders will not want to purchase homes with the exception of receiving a tax benefit from the corporate rental or home-office space.
There are complications in the area of depreciation. First, the home office is commercial property even though most people think of it as residential property. Accordingly, it must be depreciated for regular tax purposes over 31.5 years. For alternative minimum tax purposes, it must be depreciated over 40 years. Both the 31.5 and the 40-year depreciation amounts must be calculated under the straight-line method.
It is important to know that if you qualify for the home-office deduction by converting a portion of your existing home to an office in a year subsequent to the year of purchase, which you are subject to the lower-of-cost-or-market rule. Under this rule, your depreciation is computed using either the original cost of the home plus improvements, or the fair market value at the date of conversion, whichever is lower.
Vital for a home-office deduction is that an allocation be made between the cost of land and building. Failure to make the allocation has resulted in loss of deductions. Documentation for this land and building allocation can be supported with the tax assessor’s statement or an independent appraisal.
The Tax Reform Act of 1986 says that no home-office deduction can produce tax benefits in excess of income derived from the home office activity. Thus, unlike any commercial office, the home office is subject to special rules that prohibit loss deduction in loss years, but allow deductions in years where there is taxable income derived because of the home-office activity.
To document a home office, twelve separate and distinct steps should be taken. Each is interrelated, but separate, and all twelve are carefully covered in the seminar.
Section 7: IRS Audits
Any discussion of taxes is incomplete without a discussion of how the IRS audits tax returns.
Perhaps the most important thing from the consumer standpoint is how to audit proof a tax return. Say, for example, that you have a rather unusual rental property that produces exceptional rental losses in one tax year. We show what questions the IRS would ask from the Internal Revenue Audit Manual and discuss how these should be answered and intertwined in the tax return.
A casualty loss deduction, for example, should be supported by verbal comments in a supporting statement attached to the tax return. How the fire started and a copy of the fire department’s report add crucial data to the return. Detailed computations in a supporting schedule that look exactly like the audit manual examples help reduce the chances of audit and increase compliance with income tax laws as they relate to the taxation of real estate transactions.
TRI Seminars, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.