Do you have a savings account in case of emergencies? Doing a small automatic monthly transfer into an account helps increase this value systematically.

Do you know what programs and companies you are subscribed to or a monthly member of? Do you need/want all of them? These include multiple gym memberships, cable/satellite, magazines, or monthly product boxes that arrive on your doorstep so it feels like Christmas throughout the year.

Can you pay down a high interest debt? With so much uncertainty happening in the financial markets in the new year, it’s ideal to make sure we check our positions to be better prepared for our future.

About the Author

Nirali Chokshi is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.

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Nirali Chokshi

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Posted on: 02-1-2019 by: Deshvidesh

You’ve heard a lot of these words in the news, articles, or amongst friends, but is this something you should get into? Should you buy/invest in them? That’s really for you to decide, but first you should understand the basics.

Cryptocurrency is a digital asset that is used as an exchange, similar to a dollar. It is not backed by a bank or government, but is encrypted and transferred peer-to-peer and recorded on a public ledger called blockchain. No single entity or person is in charge of the blockchain. In order for a transaction to be confirmed, mining (securing/adding/verifying transactions to a blockchain) must occur. As explained on the cryptocurrencyfacts.com website, “in order to add transactions to the blockchain, all of the miners collect the transactions recently broadcasted by other currency users, verify that the transactions are valid (according to the current blockchain), and compile them down into a transaction block.” These blockchain records cannot be edited or adjusted, and are publicly shared and verified.

So how is this anonymous then if it’s public? The cryptocurrency itself is not tied to your real name. A digital wallet stores your currency and a set of unique keys and a digital address is assigned to it. The transaction itself is public but it is possible to keep the identity of the transactors private.

The value of the cryptocurrency depends on the market, which means it can be very volatile. Therefore, enter at your own risk. More businesses need to come on board, and more usage brings more demand.

So how does this impact taxes?

Currently, cryptocurrency is treated as a property for tax purposes as described in the IRS Notice 2014-21. This means it is treated similar to a stock. If you receive revenue from investing in cryptocurrency, the costs of acquiring virtual currency through mining or similar activities should be expensed as they are incurred. Additionally, under the Tax Cuts and Jobs Act cryptocurrency transactions cannot be claimed under Section 1031.

If any of this has piqued your interest, there are many articles and books about cryptocurrency you should read (such as Blockchain Revolution and The Bitcoin Standard). Just like any good investor, do your research and understand your financial position. The answer to whether this is a good investment is still up in the air.

About the Author

Nirali Chokshi is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.

Posted on: 11-2-2018 by: Deshvidesh

Happy Diwali! Diwali is one of the most auspicious celebrations for Hindus, Jains, Sikhs, and Newar Buddhists, and has many different meanings to people in addition to celebrating the triumph of light over darkness and good over evil. From an accounting standpoint, many also take time to reflect, give thanks to their clients/customers/partners, give donations to various charities, and may even close their business accounting books.

I’m a big proponent of donating to charities and helping your community. However, it is important to note that the tax implications are a little different for 2018. Please donate freely and generously, but do know that you may not get the tax benefit you are expecting. For 2018, the Tax Cut and Jobs Act has increased the limit of charitable deduction to 60% of your adjusted gross income BUT this only goes into effect if you itemize on your personal tax return. How do you itemize? Itemization takes place on your Schedule A of your Form 1040 personal tax return. Itemizing consists of charitable deductions, property tax, mortgage interest, and medical expenses to name a few. For the deductions to apply, the total deduction of Schedule A should be more than the standard deduction. The standard deduction for 2018 is $12,000 if you’re single or $24,000 if you’re married and filing jointly.

Dhanteras, the first day of Diwali, is a day dedicated to celebrate the Goddess Lakshmi, the Goddess of Wealth. Many people have pujas praying for prosperity, health and well-being of their loved ones, buy something extra special, or mark it as a beginning of a new business venture. As the majority of businesses in the United States have a December 31st year end, it is still a valuable time to take a close look at your accounting records. Are you on track with your revenues? Have expenses been appropriate for your business? Is your accounting up to date? Have you considered how the new tax laws will affect your business? This is a great time to still make a few changes in your business before the end of the calendar year. If you wish your year had gone better, consider what you could do differently. If you had a great year, take the time to recognize what you did right so that you can continue to have success.

Although there are many financial aspects to consider during this time, Diwali is a time to celebrate with your family and friends and be thankful for all that you have.

Wishing you, your family and your businesses a very happy Diwali and prosperous New Year!

About the Author

Nirali Chokshi is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.

The Earth is such a beautiful planet. We only have one to live on. If you’re paying attention to the news, you will see the government has deregulated environmental protection standards on companies. So what does this mean? It gives companies more rights to abuse the environment and not think of the future consequences to our children or others. And not only that, the US has signed out of the Paris Agreement for climate change, installed fewer standards for car companies which can allow for increased emissions, and removed protection for endangered species and national parks to name a few changes. This all has happened in about a year.

For now, at least the new tax bill is on Mother Earth’s side. The Internal Revenue Service (IRS) has welcomed and granted tax credits to those businesses and individuals who use resources that are less damaging to the earth.

As a Business what Tax Incentives do I get?

As a business, the IRS grants Energy Investment Tax Credits (ITC) to those that fulfill the requirements of 1) owning or build the equipment 2) placed into service the year you take the tax credit 3) the technology on the equipment satisfies the minimum guidelines. Below is a table provided from Energy.gov on the tax credit for the different types to technology.

TECHNOLOGY – Business Tax Credit 12/31/18 PV, Solar Water Heating, Solar Space Heating/Cooling, Solar Process Heat 30% Hybrid Solar Lighting, Fuel Cells, Small Wind 30% Geothermal Heat Pumps, Microtubines, Combine Heat and Power Systems 10% Geothermal Electric 10% Large Wind 18% (Table from Energy.gov)

Now you may be asking, but I don’t pay taxes at the business level? If you’re not a C Corporation, that’s correct! So these Credits will be passed down to you through the K-1 into your personal. But what if you don’t own a business? Don’t worry, the IRS has incentives for you too! Energy efficient products for the home are eligible for tax credits if they meet the technical standards for a $500 tax credit – these can apply to items such as heating and cooling equipment, appliances, and lighting. Solar, wind and geothermal equipment has up to a 30% of cost tax credit. And most electric cars can help alleviate your tax burden with a $7,500 tax credit. Ask you tax accountant what kind of tax savings it can have for you as everyone’s situation is different. Go Green, not only for the environment but to have more money in your pocket.

About Nirali Chokshi, CPA

Nirali is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.

Healthy habits usually have an automatic relation to food and exercise, but it can also apply to your finances and taxes. Developing adequate preventative health habits is comparable to developing proper financial habits to make that inevitable rainy day just a little bit less stressful. As I’m a huge believer in preventative health, the same goes for finances.  We all get sick from time to time, but we strive to develop healthy habits so that these occasional unavoidable periods of sickness will not be as severe. Finances are no different. The better prepared you can be, the higher possibility of less stress and burden for your future. Issues in finance can bring stress, and we all know there are harmful effects that stress can have on one’s health! As daily exercise and proper hydration are key to healthy habits, documentation and organization of documents are key to good financial habits. Whether you are a business owner or for your own personal finances, it is imperative to keep an electronic record (preferably in PDF given the universality of the PDF file format) of important assets.  Keep your HUD statements in electronic format as well. If you do online banking, download your bank statements and keep them in a digital folder. Since banks only show your statements online for a certain period of time, retrieving old statements can become tedious and costly. A healthy diet is necessary in maintaining a healthy weight. Similarly, consistent and on time payments are necessary for debt management and avoidance.  It is best to prioritize high interest debt to ease the financial burden of the high rates associated. Remember, your debt is like your weight – the less you owe, the less weight to carry.

Many people participate in extracurricular activities such as yoga and swimming due to the increased benefits these activities have not only on the body, but on the mind as well. And there are also financial activities you can take part in that will help you maintain your financial portfolio and add in some sense of security and peace of mind as well. These financial activities can range from opening an IRA or 401k, establishing a Will or Estate Plan, starting a 529 Savings Plan for college, putting money in a Health Savings Account (HSA) or investing in an account with compound interest. Everybody is different, and so are financial needs. Know what is important for you, distinguish items that are a want versus a need. Have a budget that pushes you to your goal or to help you build a solid foundation. Forget what others have and live within your means. Just like you consult a doctor before you take medication, consult an accountant and lawyer before you open a business or invest. KNOW the due dates and deadlines for different tax elections and tax filings. Live Healthy, Play Healthy, and Finance Healthy.

About Nirali Chokshi, CPA

Nirali is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.

Healthy habits usually have an automatic relation to food and exercise, but it can also apply to your finances and taxes. Developing adequate preventative health habits is comparable to developing proper financial habits to make that inevitable rainy day just a little bit less stressful. As I’m a huge believer in preventative health, the same goes for finances. We all get sick from time to time, but we strive to develop healthy habits so that these occasional unavoidable periods of sickness will not be as severe. Finances are no different. The better prepared you can be, the higher possibility of less stress and burden for your future. Issues in finance can bring stress, and we all know there are harmful effects that stress can have on one’s health! As daily exercise and proper hydration are key to healthy habits, documentation and organization of documents are key to good financial habits. Whether you are a business owner or for your own personal finances, it is imperative to keep an electronic record (preferably in PDF given the universality of the PDF file format) of important assets. Keep your HUD statements in electronic format as well. If you do online banking, download your bank statements and keep them in a digital folder. Since banks only show your statements online for a certain period of time, retrieving old statements can become tedious and costly. A healthy diet is necessary in maintaining a healthy weight. Similarly, consistent and on time payments are necessary for debt management and avoidance. It is best to prioritize high interest debt to ease the financial burden of the high rates associated. Remember, your debt is like your weight – the less you owe, the less weight to carry.

Many people participate in extracurricular activities such as yoga and swimming due to the increased benefits these activities have not only on the body, but on the mind as well. And there are also financial activities you can take part in that will help you maintain your financial portfolio and add in some sense of security and peace of mind as well. These financial activities can range from opening an IRA or 401k, establishing a Will or Estate Plan, starting a 529 Savings Plan for college, putting money in a Health Savings Account (HSA) or investing in an account with compound interest. Everybody is different, and so are financial needs. Know what is important for you, distinguish items that are a want versus a need. Have a budget that pushes you to your goal or to help you build a solid foundation. Forget what others have and live within your means. Just like you consult a doctor before you take medication, consult an accountant and lawyer before you open a business or invest. KNOW the due dates and deadlines for different tax elections and tax filings. Live Healthy, Play Healthy, and Finance Healthy.

About Nirali Chokshi, CPA

Nirali is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.

*Ring Ring*
You: Hello?

Pretend IRS: Yes, this is the IRS. You have $5,000 due for your 2014 taxes. Either pay by end of business day or I’ll have the cops arrest you.

You: Get lost.

That is what I hope your response would be if you ever get one of these calls.
Internal Revenue Service (IRS) scammers are on the rise and they are getting more aggressive.  Please be aware that 99.99% of the time the IRS DOES NOT initiate contact by emails, phone calls, text messages or social media tools.

Typical ways scammers try to take your money (but not limited to): Threatening phone calls that mention police arrest or deportation. Pretending to be from your company’s human resource department, requesting your personal information such as social security information and address. Emails that look similar to official communication saying you need to update your e-file immediately or requesting to confirm private information by going on a fake/“look-a-like” website link. Do not click on the link!! In-person visit demanding money with a fake IRS identification. If you get any of the above, mention your accountant will contact them and get a call back number. The main point to understand is that the IRS will not demand money without a chance to question or appeal the decision. In the case you do think you owe money, first contact your accountant and inform them of the situation. The IRS specifies the taxpayers to make a payment to the “United States Treasury” by following the directions on your real notice or the instructions on this website: https://www.irs.gov/payments (Please note in https, the S must be written there (stands for ‘secure’); and it is .gov not .com.  Very important distinctions!) In conclusion, don’t get scared and never give out your personal information right away.  Validate the person first, ask for a call back number, their identification badge and don’t trust the caller ID name displayed on the phone.
About Nirali Chokshi, CPA Nirali is a CPA working at her family’s accounting firm Chokshi Accounting & Tax Services in Orlando, FL. She graduated with her Masters from University of Central Florida in 2009.