Tax Articles

Hedging Against a Trade War

As a small business owner, the words “trade war” and “tariff” can be unsettling. When cost uncertainty is on the horizon, you will want to be prepared as much as possible. Here are some ideas to help you navigate your business through a possible trade war.

Tariffs defined

A tariff is a tax on imports imposed by a governing authority. The tax can be on specific goods and services, countries of origin, or both. The current tariff conversation appears to be centered around reducing the U.S. trade deficit with China and other trading partners. When a tariff is placed, often times the affected country will impose retaliatory tariffs to protect its own businesses and reset the balance of trade to their favor. [Read more…]

Give your Credit Score a Boost

Your credit score is one of the most important aspects of your financial health. It is used by potential lenders, landlords, and even employers to analyze your financial situation in one way or another. Here are some tips that might help you improve your score: [Read more…]

Combat Employee Turnover

With unemployment at historically low rates, retaining employees is harder than ever. Here are some tips to help your business maintain a thriving workforce:

  • Invest in current employees. One of the key opportunities for business success is a continual investment in your current workforce. If you have employees with potential to grow, offer training and continuing education to help them realize that potential. With online courses, this is now easy to do without a major disruption in day-to-day activities. These courses can be as general as teaching supervisory skills or obtaining accreditation in a chosen field. Then when there is a need to be filled, often times it can be filled internally with a committed employee.
  • Convert contractors to employees. Utilizing contractors is a great strategy to handle overflow work. You can then have current employees manage the consultant’s work to develop their supervisory skills. At the same time, you can vet contractors to see if they could take an expanded role as a full-time employee. Many contractors prefer to be independent, but that is not always the case. Circumstances change and the security of being an employee might be intriguing.
  • Review compensation and benefits packages. Conduct an annual review to ensure that your company is offering competitive salaries and benefits. This will help protect your business against current employees seeking greener pastures. Consider giving impromptu pay increases and spot awards to top employees to show your appreciation. Also look at being creative with benefits and vacation packages.
  • Explore the benefits of internships. An internship program can not only help you identify your next employees, it can help develop your current employees. While it can be seen as a hardship by your current workforce, it can be a rewarding way to cement your employee’s knowledge and value to the organization as they are seen as a teacher. Plus you may find your next group of potential hires.
  • Assess your corporate culture. Employees want to enjoy going to work every day. Consider conducting an anonymous survey of your current employees to see what they like and get ideas for possible improvements.

[Read more…]

The Eye-Opening Video Games Phenomena

Over the course of the last 20 years, video games have morphed from an entertainment choice into a lifestyle. According to a 2018 Nielsen study, a whopping 66 percent of Americans 13 and older identify themselves as gamers. Here’s what you need to know:

Major Developments

  • A massive 24/7 online community. Instead of needing friends to be physically present to compete against, gamers play with people from all over the world at all times of the day. By having the community attached to the video game, an online society exists where gamers spend hours and even days immersed in this alternate online reality.
  • Video games as a spectator sport. These online game communities create a platform to give visibility to the top game players. Gamers now watch other gamers for new playing strategies and for entertainment.In May, a League of Legends video game event drew a record 127 million online viewers — 23 million more viewers than the 2018 Super Bowl! The National Basketball Association (NBA) and Federation Internationale de Football Association (FIFA) have taken notice and have their own virtual teams (eSports leagues) as companions to their live-action leagues.
  • Gaming as a career. The top gamers in eSports leagues sign contracts with their teams and have endorsements with outside advertisers. In addition to eSports, skilled gamers can set up accounts on YouTube or Twitch to gain viewers by showing off their abilities. One of the top streamers, who goes by the nickname Ninja, has over 5 million YouTube subscribers and makes more than $500,000 per month playing and commenting on the game Fortnite. Parents can even hire Fortnite tutors for their kids.

[Read more…]

Education: Tax Changes You Need to Know

As students gear up to head back to school, there are some changes to education deductions that could save or cost you more in taxes and even raise college tuition costs. Here is what you need to know to get up to speed:

What is gone

Continuing Education as an itemized deduction: In previous years, you could deduct expenses paid for job-related continuing education as a miscellaneous itemized deduction. This deduction has been eliminated. However, if your employer will pay for the education, they can cover up to $5,250 tax-free.

Home equity line of credit (HELOC) interest for education expenses: A popular method of generating cash to pay for school expenses is taking out a HELOC. Beginning in 2018, you can only deduct HELOC interest if you use the loan proceeds to buy, build or substantially improve your home. This means that if you plan to obtain HELOC for purposes of paying for education expenses, the interest will not be deductible. [Read more…]

Is a Tax Surprise Waiting for You?

Often lost in the excitement of large-scale tax change is how they can negatively impact some individual situations. Check out the questions below to see if you might be in for a tax surprise this year. [Read more…]

Upcoming Dates

September 3: Labor Day

September 17:

  • 3rd quarter estimated tax due
  • Filing deadline for 2017 S corp and partnership returns that received extension

October 1: SIMPLE IRA plan establishment due

Manage Capital Gains Tax Tips

If not tracked and managed properly, capital gains tax can come as a large surprise at tax-filing time. In fact, many taxpayers don’t realize they have a capital gain until they get their 1099 form in January and see a capital gain distribution. Here’s what you need to know.

Understand capital gains and their taxability

Capital gains are recognized when you sell a capital asset for more than your basis in that asset. Capital assets are typically something of value like your home, a car and other investments. The basis is typically the original cost of the asset being sold. The difference between the sales price of the asset and your basis is the amount of the taxable capital gain. [Read more…]

Setting up Your Business Accounting System

You’ve done the hard work. You have a new business idea or you’ve found an existing business to purchase. Want to help ensure your business success? Pay attention to correctly set up your business’ accounting system. Here’s how: [Read more…]

Are you Sharing Too Much Information Online?

In today’s digital age, it is impossible to avoid the internet. Even if you don’t have a computer and actively avoid social media, there is information about you in some corner of the web. Here are some tips to help you manage your digital footprint: [Read more…]

Dramatic Sales Tax Change

The U.S. Supreme Court issued a ruling in the South Dakota vs Wayfair case that opens the door for states to impose the sales tax on sellers outside their borders. The case highlights a new standard of business presence called “economic nexus” that may have major implications for businesses and consumers alike.

Economic nexus explained

The exact definition varies, but in general, economic nexus makes a connection between a taxing authority (usually a state) and a seller based on certain sales or transaction levels. The Supreme Court agrees with South Dakota that having an economic presence is enough to require an out-of-state retailer to register with the state to collect and remit sales tax. For example, the state of South Dakota mandates that if a retailer has $100,000 in annual in-state sales or has 200 separate in-state sales transactions over the previous 12 months, they must collect sales tax on all sales in South Dakota. [Read more…]

Ideas to Improve Your Financial Health

No-one likes to be blindsided by financial hardship. Listed here are 10 ideas to help ensure your financial situation stays healthy. [Read more…]

Student Loan Forgiveness Creates New Tax Trap

There’s a new student loan repayment program that forgives some student loan debt if other payments are made. This new debt forgiveness is creating a tax surprise for the unsuspecting student. Here is what you need to know.

The debt forgiveness program dilemma

To combat the hardship of high student loan debt, a popular new repayment option is the income-based repayment plan. These plans limit monthly payment amounts to a percentage of discretionary income. They also limit the number of repayment years. If your loan is not paid by a pre-determined future date and you’ve been making the payments as agreed, the balance of the loan is forgiven. [Read more…]

Useful Online Productivity and Security Tools

Here are several popular free or inexpensive online tools that can help manage and protect your online activities. They range from password management tools to security protection services.

Password Managers

A decade-old study by Microsoft estimates that the average person memorizes about six passwords and reuses them over and over. Today most people use dozens if not hundreds of online sites that require passwords. You put your security at risk if you are still using a few of the same old passwords. [Read more…]

Elements of a Good Business Partnership

Like a bundle of sticks, good business partners support each other and are less likely to crack under strain together than on their own. In fact, companies with multiple owners have a stronger chance of surviving their first five years than sole proprietorships, according to U.S. Small Business Administration data.

Yet sole proprietorships are more common than partnerships, making up more than 70 percent of all businesses. That’s because while good partnerships are strong, they can be hard to make. Here are some elements that good business partnerships require: [Read more…]

Is It Worth It to Amend Your Return?

Whether it makes sense to amend your return depends on which of these situations you’re in:

If you owe the IRS

If you discover an omission on your tax return that results in you owing additional tax, you need to correct it with an amendment and provide the tax due.

Don’t delay if this is your situation. If the IRS discovers the omission before you do, they may add interest and penalties to your bill. [Read more…]

Become Debt-Free

The average household carries $137,063 in debt, while the median household income is less than $60,000, according to data from the Federal Reserve and U.S. Labor Department. While it’s easy to get into debt, it can be hard to get out. Here are five tips personal finance experts recommend to lower your debt burden: [Read more…]

How Long Will It Last?

Planning to replace common items

Part of financial planning is having a good sense of how much it will cost to replace your possessions when they break down or wear out. But many of the big-ticket consumer products may cost more to replace and wear out sooner than you think.

An essential part of financial planning is to budget replacing some of these items each year. To help you do this, here are some common big-ticket items, how long they tend to last, and how much it may cost to replace them. [Read more…]

Five Tax Breaks for New Parents

New parents have their work cut out for them. Not only are they dealing with lost sleep, they also face the extra cost of raising a child. At least there are a lot of potential tax breaks available to them. Check out this list and share it with any new parents you know. [Read more…]

This month:

July 4: Independence Day

July 31: Quarterly federal excise tax returns (Form 720) due

July 31: Employer quarterly federal tax returns (Form 941) due

July 31: Calendar-year employee retirement and benefit plan returns (5500 series) due [Read more…]

6 tax benefits of owning a home

If you own or are considering owning a home, you can take advantage of many tax benefits. Here are six of the most commonly used homeowner’s tax breaks:

Mortgage interest deduction. You can deduct the interest you pay on your monthly mortgage bill when you itemize deductions on your tax return. This can be a huge benefit, especially in the early years of a mortgage. That’s because typically about 80 percent of your mortgage bill in your first year of home ownership on a 30-year mortgage goes toward interest. Principal payments don’t exceed interest until year 18 of your mortgage. [Read more…]

The new small business family medical leave credit

There’s a new business tax credit that partially reimburses employers for providing paid family and medical leave for select employees. But small businesses should be informed before they try to use this new Family and Medical Leave Act (FMLA) tax break.

Basics of the new credit

Employers who provide at least two weeks of paid family and medical leave to employees who earn $72,000 a year or less can claim the FMLA credit to offset some of the cost of that paid leave. Some details:

  • The credit ranges between 12.5 percent to 25 percent of the cost of the leave, depending on whether it pays 50 percent salary to a full salary.
  • At least 50 percent of salary must be paid during the leave for employers to claim the credit.
  • Employees must have worked for at least a year.
  • Up to 12 weeks of leave are eligible for the credit.
  • The $72,000 salary cap in 2018 will rise with inflation every year.

[Read more…]

It’s tax-planning time

Now is the ideal time to schedule a tax-planning session. Your tax return outcome is still fresh, and it’s early enough in the year to make corrective action to take advantage of the numerous new tax law changes taking place in 2018. Here’s a brief overview of some of the new tax issues that you need to plan for now.

#1 Income

Tax rates for both individuals and small businesses have changed substantially. Income tax deductions have also changed drastically, including a near doubling of the standard deduction and the elimination of most personal exemptions and miscellaneous itemized deductions.

  • You need to review your income tax withholding schedule and see where you fall in the new income tax bracket structure. Small adjustments here could save you hundreds.

[Read more…]

Tax filing reminders

June 15 – The second installment of 2018 individual estimated tax is due.

 

Audit rates decline for 6th year in a row

IRS audit rates declined last year for the sixth year in a row and are at their lowest level since 2002, the agency reported. That’s good news for people who don’t like to be audited (which is everybody)!

Low statistics for audit examinations obscure the reality that you may still have to deal with issues caught by the IRS’s automated computer systems. These could be math errors, typos or missing forms. While not as daunting as a full audit, you need to keep your records handy to address any problems. [Read more…]

How to handle a gap in health care coverage

Health care coverage gaps happen. Whether because of job loss or an extended sabbatical between gigs, you may find yourself without health care for a period. Here are some tax consequences you should know about, as well as tips to fix a coverage gap.

Coverage gap tax issues

You will have to pay a penalty in 2018 if you don’t have health care coverage for three consecutive months or more. Last year the annual penalty was equal to 2.5 percent of your household income, or $695 per adult (and $347.50 per child), whichever was higher. The 2018 amounts will be slightly higher to adjust for inflation. [Read more…]

Update on the Tax Cuts and Jobs Act (TCJA)

The Tax Cuts and Jobs Act (TCJA) was passed by Congress in a hurry late last year, and the IRS and tax preparers have been working to digest some of the more thorny issues created by the tax overhaul. Here are the latest answers to some of the most common questions:

1. Is home equity interest still deductible?

The short answer is: Not unless you’ve used the money to buy, build or substantially improve your home. [Read more…]

Stay prepared to sell your business

If you enjoy running your own business, selling it may be the furthest thing from your mind. But the reality is that eventually an opportunity to sell will come, whether due to your own life changes or a perfect buyer walking in the door. Planning, often years in advance of the sale date, is necessary to get the most value for the love, sweat and tears you’ve invested. Here are some tips to stay prepared:

  • Assemble a great team. Selling a business is a complex process, especially as you grow larger. You’re likely to need three kinds of professionals to help: an accountant, to help review and produce clean and easy-to-understand financial statements; a lawyer, to create the necessary legal documents and help you negotiate terms; and a trusted business broker, to evaluate the worth of your business and find buyers.
  • Develop your exit strategy. With the help of your advisory team, create a clear picture of what selling your business might look like. Outline the risks and opportunities that could affect the valuation of your business. Planning out an ideal scenario as well as a plan B will help you avoid getting backed into a corner and selling at a discount. [Read more…]

Great uses for your tax refund

Most Americans get a refund every year, with the average check weighing in at $2,895 last year. Even though it’s really money that they earned, many people are tempted to treat it like a windfall and splurge. If you can resist that temptation, here are some of the best ways to put your refund to good use:

  • Pay off debt. If you have debt, part of your refund could be used to reduce or eliminate it. Paying off high-interest credit card or auto loan debt means freeing up the money you had been paying in interest for other uses. And making extra payments on your mortgage can put more money in your pocket over the long haul.
  • Save for retirement. Saving for retirement allows the power of compound interest to work for you. Consider depositing some of your refund check into a traditional or Roth IRA. You can contribute a total of $5,500 every year, plus an extra $1,000 if you are at least 50 years old. [Read more…]

When an extension makes sense

While most people should file a tax return by April 17, you have the option of delaying your filing date until Oct. 15 with a tax extension.

When to file an extension

  • Missing or incorrect information. If one of the forms you need to file your return has an error on it, it is often better to receive a corrected form before filing.
  • Recharacterizing Roth IRA rollover amounts. If you’ve rolled funds from a traditional IRA into a Roth IRA, you may want to reverse it later if the investments lose value. This so-called recharacterization process can be done up to the extended tax-filing date of Oct. 15, and in many cases it makes sense to wait until then. Note that 2017 is the last tax year you can use the recharacterization process, which was eliminated for future years by the Tax Cuts and Jobs Act. [Read more…]

Tax filing reminders

April 17 –

  • Individual income tax returns for 2017 are due.
  • 2017 calendar-year C corporation income tax returns are due.
  • 2017 annual gift tax returns are due.
  • Deadline for making 2017 IRA contributions.
  • First installment of 2018 individual estimated tax is due.

Tax checklist for business startups

Starting your own business can be equal parts thrilling and intimidating. Complying with regulations and tax requirements definitely falls into the latter category. But, with some professional help, it doesn’t have to be that way. You can get started with this checklist of things you’ll need to consider.

  • Are you a hobby or a business? This may seem basic to some people, but the first thing you’ll have to consider when starting out is whether you really are operating a business, or pursuing a hobby. A hobby can look like a business, but essentially it’s something you do for its own sake that may or may not turn a profit. A true business is generally run for the purpose of making money and has a reasonable expectation of turning a profit. The benefit of operating as a business is that you have more tax tools available to you, such as being able to deduct your losses.
  • Pick your business structure. If you operate as a business, you’ll have to choose whether it will be taxed as a sole proprietorship, partnership, S corporation or C corporation. All entities except C corporations “pass through” their business income onto your personal tax return. The decision gets more complicated if you legally organize your business as a limited liability corporation (LLC). In this case you will need to choose your tax status as either a partnership or an S corporation. Each tax structure has its benefits and downsides – it’s best to discuss what is best for you. [Read more…]

Answers to commonly asked tax questions

With all of the headlines about the changes to tax law, you probably have lots of questions. Here are answers to some of the most common questions taxpayers have this year.

Q. I’m hearing about a lot of changes to 2018 taxes. What should I do?

A. You’re right, there are a lot of changes in 2018 due to the passage of the Tax Cuts and Jobs Act (TCJA), including to the income tax brackets. The simple answer to the question, “What should I do?” is to not make any major changes until you finish filing your 2017 taxes. Once you understand your 2017 tax obligation, you are in a better position to plan for 2018.

However, there are a few things you can start thinking about now. Depending on where you fall in the new income tax brackets, you may want to consider ways to lower your taxable income. This could include increasing your contributions to 401(k) retirement accounts or health savings accounts (HSAs). You’ll also want to make sure your employer has adjusted your federal tax withholding so that you don’t have to wait to receive a large refund (or tax bill) next year. You can review the IRS withholding calculator using your latest pay stub data to make sure the changes are accurate. [Read more…]

Alert: Expired home and education tax breaks revived

Congress passed a federal budget bill in early February that revived dozens of expired tax breaks for the 2017 tax year. They include a deduction for education expenses as well as several tax breaks for homeowners.

If you have not yet filed your 2017 tax return, please be aware these late changes are retroactive to the beginning of 2017. Check out this list of the most useful tax breaks to see if they apply to your situation:

Tuition and fees deduction. If you paid qualified tuition and related higher education expenses, you may be able to deduct as much as $4,000 of those costs. This can be done on a regular return (without itemizing). The deduction is capped at $4,000 for single filers with adjusted gross income (AGI) of $65,000 or less ($130,000 joint) and at $2,000 for single filers with AGI of $80,000 or less ($160,000 joint). [Read more…]

Tax filing reminders

March 1 – Farmers and fishermen who did not make 2017 estimated tax payments must file 2017 tax returns and pay taxes in full.

March 2 – Automatic extension deadline for employers and health care providers to provide Forms 1095-B and 1095-C to individuals.

March 15

  • 2017 calendar-year S corporation income tax returns are due.
  • 2017 partnership returns are due.
  • Deadline for calendar-year corporations to elect S corporation status for 2018.

Taxes and virtual currencies: What you need to know

Virtual currencies are all the rage lately. Here are some tax consequences you must know if you decide to dip your toe into that world.

The IRS is paying close attention
The first thing to know is that the IRS is scrutinizing virtual currency transactions, so if you live in the U.S. you’ll have to report your transactions in Bitcoins and the like to the IRS. Despite some early misconceptions, virtual currency transactions can be traced back to their owners by governments and other cyber sleuths.

If you decide to use or hold virtual currencies, carefully report and pay tax on your transactions. Act as if you are going to be audited, because if you don’t, you just might be! [Read more…]

Tips for when your employees are family members

Working with family can be a pleasure. It can also be a pain, especially if you have to terminate a family member’s employment. Here are tips to help you ease the strain of mixing your family and employee relationships.

Hire for the right reasons. Make your hiring and firing decisions based on the skill sets needed to keep your business operating effectively. Hiring your son because he’s struggling to find a job is not a good business reason for bringing staff on board.

Set clear expectations. Communicate the job’s performance requirements to your family member right from the start. Clearly define company policies for promotion, compensation and termination. Make it plain that unethical conduct will not be tolerated. [Read more…]

New 2018 capital expense rules

There are many provisions in the tax reform bill passed in late 2017 designed to benefit small business owners. There are also a variety of new tax tools affecting how small businesses account for deducting the cost of capital purchases under the new tax law. Here’s what you need to know:

Tool #1: Section 179 deduction
The new law increases the amount of business property purchases that you can expense each year under Section 179 to $1 million (from $500,000 previously). Normally, spending on business property (machines, computers, vehicles, software, office equipment, etc.) is capitalized and depreciated so that the tax benefit is spread out slowly over several years. Section 179 allows you to get the tax break immediately in the year the property is placed into service.

Tips:

  • There is an eligibility phaseout for Section 179 that ensures it’s only used by small businesses, but that was also raised to $2.5 million (from $2 million) by the new law. If you spend more than $2.5 million on business property in total during the year, your ability to use the $1 million Section 179 deduction is reduced dollar-for-dollar above that amount. [Read more…]

Tax filing reminders

February 28 – Payers must file most other Forms 1099 (except certain Forms 1099-MISC due Jan. 31) with the IRS. (April 2 if filing electronically.)

March 1 – Farmers and fishermen who did not make 2017 estimated tax payments must file 2017 tax returns and pay taxes in full.

March 2 – Automatic extension deadline for employers and health care providers to provide Forms 1095-B and 1095-C to individuals. [Read more…]

New Pass-Through Entity Rules

One of the most important – and complicated – changes in the new tax reform act is to tax rules affecting small businesses that are treated as “pass-through entities.”

The good news is that if you own one of these businesses you may get as much as a 20 percent reduction to the taxation of business net income under the new rules. However, calculating the actual deduction can become very complex. It depends upon several factors, including your level of income, your profession, the amount your business spends on wages and property acquired during the year.

Tax reform background

Most small businesses in the U.S. use pass-through business structures, which pass their profits on to their individual owners. Owners pay tax on those profits at their individual tax rates, in conjunction with other income. The new tax rates range from 10 percent to 37 percent in the 2018 tax year. Pass-through business structures include S corporations, partnerships and LLCs. Sole proprietorships handle business income in a similar way using Form 1040 Schedule C and are also covered by the new rules. [Read more…]

The best way to avoid an audit: Preparation

Getting audited by the IRS is no fun. Some taxpayers are selected for random audits every year, but the chances of that happening to you are very small. You are much more likely to fall under the IRS’s gaze if you make one of several common mistakes.

That means your best chance of avoiding an audit is by doing things right before you file your return this year. Here are some suggestions:

Don’t leave anything out. Missing or incomplete information on your return will trigger an audit letter automatically, since the IRS gets copies of the same tax forms (such as W-2s and 1099s) that you do. [Read more…]

Mileage rates for 2018

The IRS recently announced mileage rates to be used for travel in 2018. The standard business mileage rate increased by 1 cent to 54.5 cents per mile. The medical and moving mileage rates also increased by 1 cent, to 18 cents per mile. Charitable mileage rates remained unchanged at 14 cents per mile.

Remember to properly document your mileage to receive full credit for your miles driven.

Looking ahead: Tax reform in 2018

Congress has passed tax reform that will take effect in 2018, ushering in some of the most significant tax changes in three decades. Here are some major items in the new bill that impact individual taxpayers.

Reduces income tax brackets. The bill retains seven brackets, but at reduced rates, with the highest tax bracket dropping to 37 percent from 39.6 percent.

Double standard deductions. The standard deduction nearly doubles to $12,000 for single filers and $24,000 for married filing jointly. To help cover the cost, personal exemptions and most additional standard deductions are suspended.

[Read more…]

Tax filing reminders

January 16 – Due date for the fourth installment of 2017 individual estimated tax.

January 31 –

  • Due date for employers to furnish W-2 statements to employees, and to file Forms W-2 with the Social Security Administration (both paper and electronic forms).
  • Due date for payers to provide most Forms 1099-MISC with non-employee compensation in box 7 to recipients and to the IRS.
  • Employers must file 2017 federal unemployment tax returns and pay any tax due.
  • Due date for providers to send Forms 1095 to recipients and the IRS.

Revised: Tax Cuts and Jobs Act: What the Tax Reform Bill Means for You

Revised: 12/28/2017

Congress has passed a tax reform act that will take effect in 2018, ushering in some of the most significant tax changes in three decades. There are a lot of changes in the new act, which was signed into law on Dec. 22, 2017.

You can use this memo as a high-level overview of some of the most significant items in the new act. Because major tax reform like this happens so seldom, it may be worthwhile for you to schedule a tax-planning consultation early in the year to ensure you reap the most tax savings possible during 2018. [Read more…]

Tax Cuts and Jobs Act: What the Tax Reform Bill Means for You

Congress has passed tax reform that will take effect in 2018, ushering in some of the most significant tax changes in three decades. There are a lot of changes in the new bill, which is expected to be signed into law soon.

You can use this memo as a high-level overview of some of the most significant items in the new bill. Because major tax reform like this happens so seldom, it may be worthwhile for you to schedule a tax-planning consultation early in the year to ensure you reap the most tax savings possible during 2018. [Read more…]

New year, new job

5 tax tips for job changers

There are a lot of new things to get used to when you change jobs, from new responsibilities to adjusting to a new company culture. You may not have considered the tax issues created when you change jobs. Here are tips to reduce any potential tax problems related to making a job change this coming year.

  • Don’t forget about in-between pay. It is easy to forget to account for pay received while you’re between jobs. This includes severance and accrued vacation or sick pay from your former employer. It also includes unemployment benefits. All are taxable but may not have had taxes withheld, causing a surprise at tax time.
  • Adjust your withholdings. A new job requires you to fill out a new Form W-4, which directs your employer how much to withhold from each paycheck. It may not be best to go with the default withholding schedule, which assumes you have been making the salary of your new job all year. You may need to make special adjustments to avoid having too much or too little taken from your paycheck. This is especially true if there is a significant salary change or you have a period of low-or-no income. Keep in mind you’ll have to fill out a new W-4 in the next year to rebalance your withholding for a full year of your new salary. [Read more…]

4 business year-end tax moves

Even though the end of 2017 is near, it is not too late to get your business into the best possible tax position for the new year.

Here are some year-end tax moves to consider:

  • Update the office. A fresh coat of paint and new office furnishings not only make your place of business more comfortable, they also provide another tax deduction. How you handle deducting these expenses will vary depending upon whether you own or lease your office space, so reach out for assistance if you have questions. [Read more…]

Get ready to save more in 2018

You can save more for retirement next year using tax-advantaged accounts, thanks to a boost in the maximum 401(k) contribution rate by the IRS. The maximum rate increases by $500 to $18,500, which is the first increase in three years. Those aged 50 or older can still contribute an additional $6,000 on top of that amount.

This is good news, because a 401(k) is one of most potent tools in your retirement arsenal. It offers many benefits over other forms of saving, including: [Read more…]

Tax filing reminders

  • December 15 Due date for calendar-year corporations to pay the fourth installment of 2017 estimated income tax.
  • December 31 –
    • Deadline to complete 2017 tax-free gifts of up to $14,000 per recipient.
    • Deadline for paying expenses you want to be able to deduct on your 2017 income tax return.