2020-06-18T17:06:42-04:00

June 2020

This month’s newsletter details several reasons why you should look for other sources of cash instead of tapping into your retirement funds, along with identifying potential tax surprises if you are using any of the pandemic-related relief programs, including unemployment benefits. Think Before Tapping 401(k) as Emergency Fund Do you need a quick infusion of cash? Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you may be able to take money out of a qualified plan, like a 401(k), or an IRA, with favorable tax consequences. But should you do it? You might view withdrawing money from a retirement account as a last resort. Background Among other changes in the CARES Act relating to qualified plans and IRAs, a participant can withdraw up to $100,000 of funds without paying the usual 10% tax penalty on distributions before age 59½. Plus, you can take as long as three years to pay the [...]

2020-05-04T13:56:39-04:00

May 2020

COVID-19 uncertainty abounds for everyone. This month’s newsletter provides a round-up of tax-related laws to help with tax planning for 2020 as we all navigate the coronavirus pandemic. Also in this edition are ways to track your stimulus payment and tips to find cash. Key 2020 Coronavirus Tax Changes Coronavirus uncertainty abounds. Thankfully, by monitoring tax changes on your behalf, we can work together to navigate the right path for you and your family. Here is a round-up of tax-related laws and information to help with tax planning for 2020. Early distribution penalty waived The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New tax rules allow tax liabilities on these distributions to be paid over a three-year period. So if you need the funds, you won't see your tax bill skyrocket in one year. Even better, you can return these distributions back [...]

2020-03-02T15:13:22-05:00

March 2020

This month: March 16 Due date for partnership and S corporation tax returns (Forms 1065, 1120S) The IRS Data Theft Problem Here's how to minimize your risk What better place for online thieves to target than a database that contains 300 million+ Social Security numbers and a treasure trove of financial information? The IRS has 52 Internet applications to help U.S. citizens comply with their tax obligations. But these online portals, which collect, process and store large amounts of personal information and tax data, are also a potential gateway for online criminals and identity thieves. While the IRS’s electronic authentication security controls have improved, the Treasury Inspector General recently said that the IRS’s internet applications are not yet compliant with the National Institute of Standards and Technology guidelines. Here’s what you can do to protect your tax-related identity and information while the IRS tries to improve its security controls: Use the IRS’s Internet [...]

2020-02-03T16:13:39-05:00

February 2020

The 2019 tax filing season is in full swing. If you have not already done so, now is the time to collect your tax forms, organize your records and set a schedule to get your tax return completed. Deep in the Form 1040 instructions is an annual recap of federal income and how the money is spent. Since most taxpayers no longer see these instructions, a recap of this information is provided here for your review. Given late breaking tax laws, now is a good time to read a review of how newly passed retirement rules could help you save more. This issue also includes an article with several interesting facts for small business owners as well as some information to help your employees navigate the new W-4 paycheck withholding form. Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit [...]

2020-01-02T15:22:19-05:00

January 2020

This month: January 15 - 4th Quarter Estimated Payments Due Start tax planning for the new year - Adjust withholdings - Organize filing records - Schedule tax consultation - Rebalance investment portfolio Welcome 2020. A new year calls for a fresh look at your financial strategies. Consider how to make the most of your savings accounts — and don't forget you still have time to fund your IRA! You can also try the following fail-proof tricks to keep your New Year's resolutions on track. Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them. Make Your Cash Worth More Banking tips to help you cash in Your cash is parked. Do you know if it's making or losing you money? For instance, letting it sit in a non-interest-bearing account is a waste of [...]

2019-12-02T15:34:23-05:00

December 2019

Reminders: January 15 - 4th Quarter Estimated Payments Due It's almost New Year! Have you done your yearly credit report checkup yet? While you're at it, protect yourself from charity scams this season by reviewing some big red flags, and learn how to prioritize cash flow in your business. Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them. Time for a Yearly Credit Report One way to head off fraud during tax season is to get your free annual credit report now. Credit reports often have errors in them; this quick checkup can be the first indication that some form of identity theft has taken place on your account. The good news is that each of the major consumer credit reporting agencies is required by law to provide you with a free [...]

2019-11-01T12:33:41-04:00

November 2019

2020 is coming quick — are you prepared? Take stock now and learn about the year-end moves that'll help you save. Plus, consider how the 2020 Social Security changes will affect your plans. And make sure you're hitting the employment tax deadlines. Call if you would like to discuss how this information relates to you. Save Money With These Year-End Ideas There's still time to reduce your potential tax obligation and save money this year (and next). Here are some ideas to consider: Estimate your 2019 and 2020 taxable income. With these estimates you can determine which year receives the greatest benefit from a reduction in income. By understanding what the tax rate will be for your next dollar earned, you can understand the tax benefit of reducing income this year AND next year. Fund tax-deferred retirement accounts. An easy way to reduce your taxable income is to fully fund retirement accounts that have [...]

2019-10-03T12:29:15-04:00

October 2019

This month: October 1 SIMPLE IRA plan establishment due October 15 Extended individual and C-corp tax return filing deadline Amazon and eBay Sales Tax ALERT! If you or your business sells product on Amazon using the Fulfillment by Amazon (FBA) service, you are well into the multi-state sales tax mess ... even if you are not aware of it. You may be asking yourself: Do I now need to register my business with every state and collect tax on their behalf? Do I really have physical nexus? What about economic nexus? What is nexus? Background The old sales tax standard required you to collect and remit sales tax only in states that you have a physical presence (also known as physical nexus). The recent South Dakota vs. Wayfair, Inc. decision by the Supreme Court then legitimized the concept of economic nexus. This means your business could be required to collect and remit sales [...]

2019-09-03T16:02:15-04:00

September 2019

This month: September 2 Labor Day September 16 3rd quarter estimated tax due Filing deadline for 2018 S corp and partnership returns that received extension October 1 SIMPLE IRA plan establishment due Welcome, fall! Keep your tax plan in mind as you get closer to the end of the year. In this issue you’ll find articles to help you do so, including tips on what to do if you get an IRS letter in the mail and advice for business owners about selecting the right employee health insurance. The IRS Is Not Always Right A letter in the mailbox with the IRS as the return address is sure to raise your blood pressure. Here are some tips for handling the situation if this happens to you: Stay calm. Try not to overreact to the correspondence. They are often in error. This is easier said than done, but remember the IRS sends out millions [...]

2019-08-01T13:28:11-04:00

August 2019

This month: September 2: Labor Day Summer is starting to wind down and the kids will soon be headed back to school. Now is a great time to review if you've had, or will have, any special taxable events this year. I Owe Tax on That? 5 Surprising Taxable Items Wages and self-employment earnings are taxable, but what about the random cash or financial benefits you receive through other means? If something of value changes hands, you can bet the IRS considers a way to tax it. Here are five taxable items that might surprise you: Scholarships and financial aid. Applying for scholarships and financial aid are top priorities for parents of college-bound children. But be careful - if any part of the award your child receives goes toward anything except tuition, it might be taxable. This could include room, board, books, travel expenses or aid received in exchange for work (e.g., tutoring [...]