The IRS issued new guidance on April 16, 2024 in Notice 2024-35, providing relief for taxpayers facing the “10-year rule” for required minimum distributions (RMDs) from inherited IRAs or inherited defined contribution plans. This marks the third consecutive year the IRS has offered such relief. However, Notice 2024-35 also indicates that final regulations concerning the rule are forthcoming and will be applied in determining RMDs for accounts in 2025 and beyond. There are two main categories of people who inherit retirement accounts: Eligible Designated Beneficiaries (EDBs): If you’re the spo ..read more

When it comes to making an acquisition, stock and asset purchases have their advantages and disadvantages but there might be a way to combine the best of both worlds. Buying a target corporation’s stock is a relatively simple legal step. The buyer gains control of the target’s assets with no hassle because it will own the other corporation’s stock. A taxable asset purchase, on the other hand, requires transferring the legal title to each asset the buyer acquires. If the target has a multitude of assets, the time and money spent can quickly mount up. In addition, with a direct asset purchase, y ..read more

Audits have become more important due to increased public and government scrutiny of not-for-profit organizations, their management, and their boards. Audits provide you with a fair assessment of your organization’s financial health and can reveal vulnerabilities such as weak internal controls, insufficient cash reserves, and poor investment policies. Most importantly, regular audits reassure your donors, members, and other stakeholders that you run a fit organization. Ins and Outs of Financial Audits Audits come in two forms, serving different purposes: 1. Internal audit. This type of audit i ..read more

Monthly recurring revenue (“MRR”) is a fundamental metric for the valuation of SaaS-based businesses. While SaaS-based businesses generate MRR through their subscription products, some companies also generate transactional (or “re-occurring”) revenue by earning a transaction fee via payment processing platforms (e.g., Stripe Connect, PayPal, Card Connect, or proprietary systems).  For SaaS-based businesses that process end-user payments, monthly payment processing revenue (“payment revenue”) trends and volume (“payment volume”) can play a key role in the investment theses of investors. T ..read more

In the context of mergers and acquisitions, potential investors often feel a level of comfort when their investment target is audited.  However, relying solely on a target’s audited financial statements when making an investment decision may be shortsighted.[1]  An audit’s purpose is to provide assurance that management has presented a true and fair view of a company’s financial performance and position [2], but audited financials often do not identify significant issues likely to be of interest to a buyer or seller. The financial due diligence process typica ..read more

Does your business file 10 or more information returns with the IRS? If so, you must now file them electronically. This is a significant rule change that went into effect on January 1, 2024, for 2023 tax year information returns. The threshold for electronically filing most information returns has dropped from 250 to 10. Before the new rule, only businesses filing 250 or more information returns were required to do so electronically. Notably, the 250-return threshold was applied separately to each type of information return. Now, businesses must e-file returns if the combined total o ..read more

Audits have become more important due to increased public and government scrutiny of not-for-profit organizations, their management, and their boards. Audits provide you with a fair assessment of your organization’s financial health and can reveal vulnerabilities such as weak internal controls, insufficient cash reserves, and poor investment policies. Most importantly, regular audits reassure your donors, members, and other stakeholders that you run a fit organization. Ins and Outs of Financial Audits Audits come in two forms, serving different purposes: 1. Internal audit. This type of audit i ..read more

For the second consecutive year, the IRS has postponed implementation of a new rule that would have led to an estimated 44 million taxpayers receiving tax forms from payment apps and online marketplaces such as Venmo and eBay. While the delay should spare such taxpayers some confusion, it won’t affect their tax liability or income reporting responsibilities. And the IRS indicated that it intends to begin phasing in the rule in 2024. The new reporting rule The rule concerns IRS Form 1099-K, Payment Card and Third Party Network Transactions, an information retu ..read more

Maxwell Locke & Ritter has outlined a few 2023 year-end tax planning ideas for business owners. Depreciation-Based Deductions As the year draws to a close, a business may benefit from one or more of three depreciation-based tax breaks: (1) the Section 179 deduction; (2) first-year “bonus” depreciation; and (3) regular depreciation. YEAR-END MOVE: Place qualified property in service before the end of the year. If your business does not start using the property before 2024, it is not eligible for these tax breaks. Section 179 deduction: Under Section 179 of the tax code, a business may curr ..read more

Maxwell Locke & Ritter has outlined a few 2023 year-end tax planning ideas for investors and individuals with estate and gift planning needs. Capital Gains and Losses Frequently, investors “time” sales of assets like securities at year-end to produce optimal tax results. It is important to understand the basic tax rules. For starters, capital gains and losses offset each other. If you show an excess loss for the year, it offsets up to $3,000 of ordinary income before being carried over to the next year. Long-term capital gains from sales of securities owned longer than one year are taxed a ..read more