Mimi Lee

About Mimi Lee

Mimi Lee is a Manager in our Novato office.

California Supreme Court Ruling Significantly Limits Independent Contractor Classification

The California Supreme Court has established new criteria for classifying workers as Independent contractors.   In Dynamex Operations West, Inc. v. Superior Court, the Court rejected the previous multi-factor test and instead issued a rigid 3-factor test, called the “ABC” test.

Under the ABC test, each of the following three factors must be met in order to classify a worker as an independent contractor:

  1. The worker must be free from the control and direction of the hiring company in performing the work.
  2. The work must take place outside the usual course of the business of the hiring company’s business.
  3. The worker is customarily engaged in an independent established trade, occupation or business.

This ruling will no doubt have a significant impact on gig companies in the Bay Area (Uber, Lyft, and DoorDash, etc.), […]

By |June 6th, 2018|Categories: Accounting & Bookkeeping, Announcements, Business Operations, Business Tax, Individual Tax, IRS, Real Estate, Retirement Planning|Comments Off on California Supreme Court Ruling Significantly Limits Independent Contractor Classification

Home Equity Loan Interest can still be Deducted (in certain instances)

The IRS clarified in its News Release on February 21, 2018 that taxpayers can continue to deduct the interest on home equity loans, if the home equity loans are used to buy, build or substantially improve the taxpayer’s home that secures the loan.

Under prior tax law (pre-2018), the interest on a home equity loan secured by the taxpayer’s qualified residence was deductible (on a loan balance of up to $100,000) even if the loan was used to pay personal living expenses, i.e., paying off credit card debts, student loans or buying a car.

Starting in 2018, the new tax law does not allow taxpayers to deduct the interest on a home equity loan if the loan was used for personal living expenses.

In order for home equity loan interest to be deductible, […]

By |February 25th, 2018|Categories: Individual Tax, IRS, Real Estate|Comments Off on Home Equity Loan Interest can still be Deducted (in certain instances)

2018 Tax Reform-Individual Tax Changes

The President signed the biggest tax reform law in over 30 years. When you file your 2018 tax returns — about a year from now — your tax return may look very different. And because most changes don’t happen until then, we have some time to learn about the changes and plan for next year. Here are a few of the biggest changes that may affect you.

  • Tax rate changes: The maximum individual rate is reduced to 37%.
  • Standard deduction increases: The standard deduction is almost double.
  • Personal exemption eliminated: You will have no personal exemption deduction for yourself, your spouse, or your dependents.
  • Increased Child Tax Credit and new Dependent Credit: The credit is increased for each child to $2,000 (up to $1,400 of which is refundable for each […]
By |February 5th, 2018|Categories: Announcements, BCo Community News, Individual Tax, IRS|Comments Off on 2018 Tax Reform-Individual Tax Changes

Significant Increase on Penalty for Information Return Failures, effective for 2015 Forms

As a result of new legislation (the “Trade Preferences Extension Act of 2015,” passed by congress and signed by President Obama into law on June 29, 2015), penalties for failure to file information returns or to provide payee statements have been increased significantly.   The new penalties are effective for 2015 forms that are due in early 2016.

Under Internal Revenue Code (IRC) Sections 6721 and 6722, the penalty applies to both failing to timely file a correct information return with the IRS (IRC Section 6721), and failing to furnish the payee a statement (IRC Section 6722).  A penalty can be abated, however, if such failure is due to reasonable cause and not to willful neglect under the IRC Section 6724.

The most commonly used information returns […]

By |August 7th, 2015|Categories: Accounting & Bookkeeping, Business Operations, Business Tax, Individual Tax, IRS|Tags: , , , , , , , , , , , , |Comments Off on Significant Increase on Penalty for Information Return Failures, effective for 2015 Forms

The Dangers of Treating Partners as Employees

In recent years many companies have found it very difficult to retain key employees.  In order to mitigate this issue, many companies that are organized as partnerships are offering their essential employees an equity interest in the partnership, commonly called “profits only interests”.  There are many risks, however, that companies organized as partnerships need to take into consideration before offering equity to their employees.  They may be unaware that even a small equity interest can cause unwanted tax consequences such as over/underpaid FICA taxes, and can also change the treatment of compensation and company paid benefits.   These are just a few of the risks that need to be assessed.  If you’d like to know more please click here.

By |April 21st, 2015|Categories: Accounting & Bookkeeping, Business Operations, Business Tax|Tags: , , , , , |Comments Off on The Dangers of Treating Partners as Employees