April, 2016

Catch Up Contributions - If you're fast approaching retirement age and becoming concerned about the amount of retirement funds you have set aside, the 2001 Tax Relief Act held some good news for you.  If you are over age 50, you are allowed to make "catch-up" contributions to your defined contribution retirement accounts.

Alternative Minimum Tax - Every year during tax preparation time, we accountants get the opportunity to hear that old musical refrain..."alternative minimum what?"  Ah, the alternative minimum tax (AMT).  Just when our well-heeled clients think they have the tax bogeyman subdued, they find out that the IRS has a vicious left-hook that can come out of nowhere.

S Corporation Employment Taxes - We get a number of questions regarding salaries and S corporations. The issue is the payment of FICA. If you take a distribution from the S corporation, no taxes are payable since all the income is already taxed to the shareholders. Take a salary and the income tax consequences are the same. The salary is taxable to you, but it reduces the income of the S corporation, so the net result is a wash.

 

February, 2016

Employee Tax Issues - In reviewing our newsletter articles over the past year or so, we realized that the vast majority of them are focused on business owners and the self-employed. However, we also have quite a few clients who earn most of their income as employees and this article is geared toward assisting you in understanding and taking advantage of the tax saving opportunities available to you.

Property Taxes - Many real estate tax assessments are made erroneously or were made prior to the recent decline in real estate values, and many homeowners and business owners who challenge their real estate tax assessments do succeed in reducing their property taxes.

Donating Inventory - Whenever we are assisting clients with year-end inventories, the question often comes up about what to do with slow-moving or excess items.  It usually comes as a surprise to many business owners that they can actually reap a nice tax deduction by donating their excess inventory to charity.

January, 2016

Leasing vs Buying - Okay, so you opened the newspaper this morning and there splashed on the back page is an ad for a brand new Mercedes.  It's red.  It has leather seats.  The dream car you never thought you could afford now has a lease payment of "only" $699!  Should you bite?

Life Insurance in Your Estate - If you're like most people, the proceeds collected from your life insurance will make up a large portion of your estate and, if you're not careful, the proceeds can end up being taxed twice when your spouse passes on.

Business Owners Insurance - Like a comprehensive homeowner's policy, a business owner's policy protects against economic losses caused by damage to the owner's property and by legal liability to others for bodily injury and property damage involving the business.

December, 2015

Year End Tax Planning - Now that the close of another year is coming up, it is time to consider year-end strategies that can potentially reduce your tax bill.  However, in order to make effective use of the strategies we are about to discuss, it will help significantly to have your prior year return in front of you along with your latest pay stubs or income reports from your business.

Claiming Dependents - If your mother-in-law comes to visit and stays for weeks on end, does that mean you can claim her as a dependent?  Well, as much as you would probably like to, the short answer is "not-likely" unless you provide more than one-half of her support during the year.

Breakeven Analysis - It is absolutely essential that each business owner do a breakeven analysis of his current or proposed business. A breakeven analysis examines the interaction among fixed costs, variable costs, prices, and unit volume to determine that combination of elements in which revenues and total costs are equal.

November, 2015

Year End Tax Planning - Now that the close of another year is coming up, it is time to consider year-end strategies that can potentially reduce your tax bill.  However, in order to make effective use of the strategies we are about to discuss, it will help significantly to have your prior year return in front of you along with your latest pay stubs or income reports from your business.

Claiming Dependents - If your mother-in-law comes to visit and stays for weeks on end, does that mean you can claim her as a dependent?  Well, as much as you would probably like to, the short answer is "not-likely" unless you provide more than one-half of her support during the year.

Breakeven Analysis - It is absolutely essential that each business owner do a breakeven analysis of his current or proposed business. A breakeven analysis examines the interaction among fixed costs, variable costs, prices, and unit volume to determine that combination of elements in which revenues and total costs are equal.

October, 2015

IRA FAQs - There are a number of rules and regulations surrounding IRA investments, and the amount of information can often be overwhelming. This list of questions and answers has been assembled to make it easier to find the answers you are looking for.

Understanding the Gift Tax - One of the most common misconceptions many of our clients come to us with is the gifting of property to their children.  Not only are they surprised that they can't deduct the gift, but they're often stunned to realize it may be taxable to them!  

Limited Liability Companies - Over the past several years, we have been receiving more and more inquiries from clients about the procedures involved in setting up a limited liability company (LLC).  LLC's became more popular in the 1990s and are now the preferred type of business organization in the twenty-first century for small businesses.

September, 2015

Reviewing Your Homeowners Policy - If you have recently made a major addition or renovation to your home, you may want to take a moment and review your homeowners insurance.  The reason?  Many of the largest home insurers (including State Farm and Allstate) place caps on their replacement policies.

Avoiding An Audit - Uh oh!  What starts out as a normal day suddenly becomes dark and foreboding when you open your mailbox and receive a special invitation from your friends at the local IRS office.  

Business Startup Costs - As CPAs and business consultants, we get approached every day it seems by a client or potential client with a new business idea they are investigating.  As we all know, some of those ideas work out and become viable enterprises and some never get off the ground.

August, 2015

Putting Your Spouse On The Payroll - If you own a small business and have a spouse who does not have full-time employment elsewhere, you may want to consider placing him or her on your company payroll.  (Keep in mind that your spouse must do legitimate work for the company and the compensation for that work can be challenged by the IRS if it is considered unreasonable).

IRS Notices  - You have just opened your mailbox and discovered to your horror that you have greetings from the IRS!  If you're like many people, it may be difficult to read the notice because of the hand tremors you have suddenly developed.  What should you do?  First of all, relax.  Don't panic and read the notice carefully. 

Loans or Dividends - Making loans to or taking a loan from a corporation where you're a stockholder can lead to tax trouble. In one particular tax case, the taxpayer 'borrowed' money from his regular corporation to finance his investment in a nearby ski area.

July, 2015

Family Limited Partnerships - If you have a family business that you would like to pass on to your children, it may be time to consider the formation of a family limited partnership (FLP).  An FLP is an entity that is set up not only to help conduct a family business, but also to pass that business on to the next generation with a potentially substantial savings in estate or gift taxes.

Keeping Personal Records  - Each year as we deliver our clients' tax return copies and filing information to them, we inevitably get asked the age-old question:  "How long do I need to keep this stuff?"

Classifying Employees - Classifying your employees as either exempt or non-exempt is neither exact nor easy. The decision cannot be made arbitrarily, nor should it be made based solely on the job title or the way the employee is paid, i.e., hourly or salaried.

June, 2015

Overwithholding - If you have a family business that you would like to pass on to your children, it may be time to consider the formation of a family limited partnership (FLP).  An FLP is an entity that is set up not only to help conduct a family business, but also to pass that business on to the next generation with a potentially substantial savings in estate or gift taxes.

The Kiddie Tax  - For our clients that have children under the age of 18 (or 24 for full-time students) earning interest and dividends, we often are faced with a choice of how to report that investment income. 

Employee Stock Options - For many years now, we have all been reading about the two most prized words in Silicon Valley:  stock options.  When a labor market gets as tight as it was in the internet industry during the good years, many companies will begin offering stock options to attract and retain top employees.

May, 2015

Reverse Mortgages - Looking for a way to improve your lifestyle during retirement?  If you're "house rich," but "cash poor," a reverse mortgage may be the answer.  They are similar to traditional mortgages, except that the lender pays you each month.  Reverse mortgages became extremely popular during the 90's, but they are not without some risk. 

Deducting Auto Expenses  - If you use your car or truck for business-related trips, to deliver food to your favorite charity, or even to drive the kids to the doctor’s office, you can deduct at least some of the costs. 

PTO Strategy - Have you been noticing a gradual increase in your accounts receivable (A/R) over the last couple of years that isn't the result of increased business?   Does it seem odd that in these relatively good economic times that many of your customers seem to be taking longer to pay your invoices?

April, 2015

Filing For A Tax Extension - Well, we can probably assume that if you have come to this link in our website, you probably aren't going to make the April deadline, huh?  Fortunately for you, Uncle Sam has provided for that "larger than we like to admit" procrastinating segment of our society

Deferred Contributions  - As baby boomers move toward retirement years and begin inheriting the accumulated wealth of their parents, we are seeing more and more charities approach our clients about "deferred giving."  A deferred or "planned" gift represents a present commitment to make a gift at some point in the future - usually at a later stage in life or pursuant to your will.

Acquiring A Business - Whenever one our clients is looking to sell his or her corporation, we often encourage them to seek a stock transaction with the potential buyer if at all possible.  On the other hand, when we have a client considering the purchase of a small business, we almost always advise that they buy only the assets of the company and not the stock.

March, 2015

Placing Your Spouse on the Payroll  - If you own a small business and have a spouse who does not have full-time employment elsewhere, you may want to consider placing him or her on your company payroll.  (Keep in mind that your spouse must do legitimate work for the company and the compensation for that work can be challenged by the IRS if it is considered unreasonable).

Deductions For Charitable Contributions  - Contributions made to qualified charitable organizations include nonprofit groups qualified by the IRS as religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals.

Executive Compensation - A recent court decision demonstrates once again that the IRS is examining executive compensation with a critical eye and companies with potentially excessive comp packages had better be prepared to defend their position or face disallowed deductions along with penalty and interest.

 

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