Keeping You In The Know

Important Update: 1099 Reporting for 2018

The Protecting Americans from Tax Hikes (PATH) Act of 2015 requires Forms 1099-MISC reporting non-employee compensation (NEC) in box 7 to be filed by January 31.

All filing deadlines are as follows:

• Reporting NEC, whether filed on paper or electronically: January 31
• Not reporting NEC and filed on paper: February 28
• Not reporting NEC and filed electronically: March 31

Important changes for filing in 2018:

1099-MISC forms reporting NEC must be submitted in a single submission. This means if additional 1099-MISC forms with NEC are required after originally submitting them to the IRS and after the January 31 due date, then ALL 1099-MISC forms with NEC have to be reprocessed and filed together. If they are not filed as one submission, the IRS Section 6721 penalty will apply to all forms that were not included in the single submission.

In addition to submitting all 1099-MISC with NEC in one submission, if our firm does need to file after the January 31 due date, any 1099-MISC without NEC need to be a separate submission as well.

For us to serve you best, we strongly recommended that you aggregate all vendors requiring a 1099 prior to the January 31 deadline. Failure to submit data in a timely manner can result in penalties and processing fees that we want to help you avoid.

If you have questions, please contact us.

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Bring in extra traffic with some trick-or-treat action

Small business owners in many communities offer downtown trick or treat events. Take advantage of this opportunity to build your business reputation. Involvement in local events goes a long way with both existing and prospective customers—indicating a vested interest in your community. Find creative ways to make your business stand out this trick-or-treat season. We hope the following suggestions will spark fun promotional ideas:

• Offer a wide variety of treats for the kiddos. All kids are unique, so have a variety of goodies on hand. Mini chocolate bars, Smarties and gumballs are among fan favorites. If you do offer candy, have special-needs alternatives on hand. Hand out sugar-free candy for children with diabetes and nut-free treats for those with nut allergies. Plastic spider rings, rubber bouncy balls, and Halloween-themed novelty toys are wonderful alternatives to sugary favorites.
• Keep it fun and age appropriate. Try to keep decorations acceptable for varied ages. Too scary, and the little ones might be too terrified to walk by your storefront.
• Research community involvement opportunities. Check into a booth at the fall carnival to promote your business, or set up a photo op area for parents to snap pics of their children in costume.
• Have a promotional item for each child. Order paper pirate hats and princess crowns printed with your company logo. Wearable items may provide added advertisement for days after Halloween!

Wishing everyone a safe and happy Halloween!

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Recognizing Women-Owned Small Businesses Everywhere!

October marks Women’s Small Business Month, and we are happy and proud to recognize women in business both locally and around the world. Successful business women of the past and present continue to forge new paths for female entrepreneurs. We celebrate all those who are breaking the glass ceiling and serving as role models and mentors to women everywhere.

To support Women’s Small Business Month, we wanted to share a few statistics to spotlight the powerful impact women have had and continue to have on the American economy. Women solely own 36 percent of small businesses in the United States, employ 9 million people, and generate $1.7 trillion in sales. Additionally, 2.5 million businesses in the United States are owned equally by women and men. These dually owned companies contribute $2.5 trillion to America’s economy, provide $189 billion in payroll, and employ 6.5 million people.

Our firm effusively congratulates each and every woman in business! Please feel free to reach out to our firm at any time for support and advisory services as needed. Our goal is that you continue to succeed.

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Take Advantage of the September Slowdown

For many business owners, September tends to bring a bit of a slowdown. The chaos of getting kids prepared for going back to school has passed, and a focus on saving money tends to kick in as people prepare for the coming holiday spend. Combined, this can often translate into a lull for business owners.

Take advantage of September slow time to tackle these tasks:

Clean it up— Keeping your business clean and presentable to the public is a big part of maintaining a strong brand presence. Divide chores among staff during slow periods to keep everyone busy…and your business spotless.

Organize and restock—Organize storage areas, recycle unwanted goods and donate gently used items. Purging is good for the soul…and helps you stay organized and efficient.

Perform a filing flush and software updates. It’s always when you are the busiest that you can’t find that needed file or you experience a system crash. Periodic system updates and file purging can help avoid these situations. Take time to clean out electronic files and update software to keep operations running smoothly for everyone.

Plan your holiday marketing strategy. Research ideas for amping up your holiday sales. Meet with designers to start developing your holiday social media, digital and print campaigns. If you also host a party for staff and/or the community, start mapping that out as well and book needed vendors.

If you experience a September slowdown, make good use of this down time to enhance business processes, keep your staff busy, and plan for upcoming events. An organized and well-run business is good for the soul…and for the bottom line.

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Reminder: Q3 Tax Estimate is Due Soon!

This is a friendly reminder that the Q3 tax estimate payment deadline is coming up fast. Be sure to make your payment by September 15, 2018 to avoid penalties. Currently, penalties for late or no payment average about 4 percent. And wouldn’t you rather keep that money in your pocket?

Staying current on your estimated payments is good business practice. If you are due to make a Q3 payment and have questions, feel free to contact our firm.

Have a great month. And remember, we are here to help!

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Dinner, Drinks and Deductions

According to new rules from the Tax Cuts & Jobs Act, meals and entertainment tax-deductible expenses for businesses have undergone considerable reform. Because the explanations of new deduction guidelines can be confusing, we’ve created this brief outline for you. A visit with your accounting professional to ensure your Chart of Accounts is correct may also be beneficial.

• The office holiday party has been salvaged and is still 100% deductible.
• Taking a client golfing, out to a concert or giving them tickets to a sporting event all fall under entertainment expense. These perks are no longer deductible.
• Meals taken while on mandatory business travel will remain 50% deductible.
• Meals provided for the convenience of the employer (i.e. feeding an employee working through lunch or dinner) are now only 50% deductible.
• Meals provided to the public to generate business remain 100% deductible.
• Travel for business reasons and costs associated continue to be 100% deductible.

Keep expense details specific with coinciding receipts. Your bookkeeper will be grateful!

Remember, we are here to help, so contact our office any time for further explanation on new meals and entertainment rules.

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Back to School on a Budget

August is upon us once again. The collective “UGH!” is heard nationwide as families trudge toward the school supplies aisle in preparation for the upcoming academic year. Sadly, the “days-gone-by” supplies such as a box of crayons, spiral-ring notebooks and a pack of #2 pencils have evolved into a much longer list. But never fear, we’ve put together these useful tips to help you do “back to school” on the cheap.

1. Recycle older children's supplies. In our world of waste conscientiousness, why not teach children it’s perfectly acceptable to repurpose school supplies? Throw those backpacks in the washing machine. They’ll look just like new!
2. Check with friends who have children. Before you buy that higher math calculator or the latest technological gadget required for a modern education, ask a friend with a graduating student if you can purchase their used items before you pay full price.
3. Inquire about your community’s back-to-school relief projects. Do some research online or stop by your local Chamber of Commerce to gather information on organizations that offer school supplies aid such as Lions Club, Rotary Club, Masons, churches and other non-profits.
4. Open a savings account. Setting aside a small amount each month will be considerably less painful than paying for everything at once. To make saving easier, restrict yourself from eating out more than a few times a month or scale back your latte purchases. You’ll be surprised at how much you can save.
5. Research and prepare ahead of time. Set a good example for your little learners and do your homework. Compare sale ads, clip coupons or find out if your area offers a tax-free shopping weekend. Proper preparation can save you some serious green.

Best wishes to all the families facing the back-to-school frenzy. Take a deep breath. 
You got this. Or, as my English teacher would say, “You have this!”

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Healthy Summer Eating Made Easy – Part II

So popular was the topic of our last post, that we created Part II to create our eating-healthy-this-summer-themed blog series. Enjoy these added nutritional and time-saving tips for summer meal planning.

Summer truly is one of the hardest seasons to stick to a sound nutrition plan—especially when you consider vacations, hosting summer guests and lack of quiet time because kids are out of school. With the added activity that comes with summer, sometimes the energy to plan and cook simply disappears. So, let us help you with a few tips to get your healthy summer eating back on track.

• When and what to ‘snack’ on. Snacks should happen when there is a long period between meals—about 4-5 hours. Snacking can often turn into prime time for processed, sugar-filled foods…because they are packaged and convenient. If you can, shop for a week’s worth of fruit and veggies and keep them out for snacking. Whole grain crackers, cheese cubes and chicken or turkey slices are other great options for quick charcuterie-style snack breaks that take only a few minutes to prepare.
• Opt for better fast-food salads. Salads are a great go-to for a summer meal, but they take prep time. It’s totally fine to pick up pre-made salads, just be sure that they are mostly fresh greens and vegetables. Avoid salads with a lot of mayo, oils and croutons. And consider salsa instead of higher-calorie salad dressing.
• Throw veggies on the grill, too! The grill isn’t just for meat anymore. Grilling can be a quick and easy cooking fix, especially when you throw the entire meal on the fire. Wrap corn on the cob, potatoes, zucchini and other vegetables in foil and grill to perfection. Add a little teriyaki sauce, marinades and seasoning to give veggies some flair.
• Don’t forget the drinks. While water is always the best choice, you can make sugar-free drinks with relative ease. Put out a self-serve crock of sun tea or sugar-free lemonade (with fresh lemon and lime slices). A big enough crock can last all weekend, and all you have to do is offer up ice and cups.

Have fun this summer, no matter your plans…and stay healthy while you are at it. Keep these tips in mind to eat healthy with ease.

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5 Tips to Eat Healthy While on Vacation this Summer

If you are like most, summer is prime time for family and friend vacations. It’s a time to unwind and recharge…to see new places and try new things. For many, “new things” often means food. And if you are trying to maintain or lose weight, that can be a problem. So, for all you travelers trying to stay healthy this summer, here are 5 great tips to help you stay on a healthy eating plan and still enjoy your vacation!

1. Resist the urge to splurge—Most people tend to splurge when eating out, which means pumping far more calories into the body than it needs. It’s best to reprogram your thinking about eating out. Don’t view it as a special treat (which often leads to carte blanche to overindulge). Instead, view eating out as a way to fuel your body (like every other meal), and then consider sharing an entrée, ordering half-sized portions, or making a healthy plan for what you will eat before you sit down.
2. Have it your way—A lot of restaurants will allow you to customize your order. Order your meal YOUR way by asking for smaller portions, substituting fries for veggies, or eliminating the butter for cooked food.
3. The secret weapon of walking—When sightseeing, be sure to cover a lot of ground by walking. This will burn calories, which gives you some wiggle room if you choose to indulge now and again. Plan to take an extra stroll after dinner, a swim in the hotel pool, or an early morning hike to burn a few extra calories. 
4. Lose the mini-bar key—It seems overly simple, but you’d be surprised how quickly you forget about the snacks in your room when they are locked away with no key in sight. That little key tends to lead to no good…physically and financially.
    
5. Get in your “five a day”—Make an effort to get in your five servings of fruits and vegetables each day. This will fill you up faster and make meals feel more satisfying. It also helps you meet your daily fiber count…which will keep your digestive system on track while vacationing as well.

Apply these five easy tips while you are enjoying your summer away with family and friends. You’ll feel better while vacationing and when you get home.

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5 Tips to Get Kids Out of Technology and Into Nature this Summer

If you are like most families, summer means vacation. And if your kids are like most kids, they tend to be tethered to their technology. Whether planning to travel abroad or a long weekend at a local campground, summer is a time for exploration and simply paying attention to the beauty around us.

We want to help you “disconnect” your kids from their favorite devices and get them back to nature this summer with these helpful tips:

• Plan activities from your own childhood. Remember the days when you played outside for hours? Those same activities are still fun…especially when the entire family engages. Play a game of kickball, go for a bike ride (with a fun destination at the end of the ride; perhaps an ice cream stand or park), explore the woods, or play a game around the campfire. You’d be surprised at how quickly kids forget about technology when they are having fun outdoors.
• Identify vacation destinations that are family friendly. It’s tough to disengage kids from technology when there is “nothing” to do. While nature is fantastic, kids can only look for so long. They need to be active. If you are a camper, make sure your campground has activities for kids onsite or nearby. For example, a go-kart park, rock climbing wall, zip line or a swimming pool. If you are a hotel dweller, the same ideas apply.
• Bring fun nature projects for kids to work on. Engage your child’s mind in something hands-on that isn’t a smartphone. Build a birdfeeder from a kit, create a bug box or plan a fun outdoor scavenger hunt. Build in some creative time with your kids and experience the fun together.
• Find apps with built-in timers. You can certainly offer kids some time with their devices. Just keep it to a minimum while on vacation. There are game apps that offer internal timers so the app stops on its own. It's up to parents to make sure kiddos don’t just jump into another app.
• Lead by example. When children see their parents constantly connected to a mobile device, it validates their own use. Put down your own smartphone or tablet and engage in your vacation with your kids.

Here’s to getting your entire family back to nature! Have a fun and safe summer.

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Ideas for Multigenerational Family Vacations this Summer

Multigenerational family vacations have experienced an uptick in popularity, especially with older generations being more active and families living farther apart. Family getaways certainly bring people together physically, but also emotionally. Dedicated family time is simply good for the soul…even more so when multiple generations take part. With this in mind, we bring you a few ideas and tips to consider when planning your next multigenerational vacation.

Identify the purpose of the vacation
Family vacations, at the core, are about families sharing time and experiences. But what other reasons might you have for the trip? Getting to know your grandkids better? Re-experiencing traveling with your parents like when you were a kid? By being clear on expectations of multigenerational family trips, you can address the type of experience you’d like and make sure it meshes with what the rest of your family expects.

Consider mobility issues
If there are family members for whom traveling is difficult, take the vacation to them. This doesn’t mean staying in their home, but rather booking rooms for everyone in a local hotel (preferably one with a pool for the kids). This allows your less-mobile family members to join in on the fun without having to travel far from home base.

Take a tour
Experiencing the world with your family adds to any adventure. Many tour companies cater to a wide range of active age groups—offering tours of Alaska’s interior to a safari in Tanzania. As active seniors increasingly want to introduce their pre-teen/teenaged grandchildren to travel, many tour itineraries are being designed to accommodate all family members.

You can go home again
For the kids, getting a personal tour of where parents or grandparents grew up can make for an enriching trip. For parents and grandparents, it offers a trip down memory lane. It also creates a lasting connection with grandkids as you visit spots that are linked to your family’s history.

Do a little heritage travel
Consider taking a trip to trace your family’s roots. Make an ancestor’s hometown part of a larger trip or your official destination. Whether it’s the next state over or another country, communities warmly welcome families looking into their history and are often eager to share information.

Get everyone's input
Before you plan your next (or first) multigenerational family vacation, make sure to get everyone’s input up front. Having all family members agree on the plan will make for a much more enjoyable getaway and help create some wonderful new memories.

For all those who plan to travel with family this summer, these ideas and tips can help as you make plans for your extended family. Safe and happy travels!

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Your Smartphone Preparedness Travel Guide

For many of us, our smartphone is a vital travel tool. We rely on it for navigating unfamiliar places, taking photos, and identifying recreational activities. Michael Zhao, an editor for TheWirecutter.com, offers the following tips on what to pack in addition to your smartphone—so you won’t be stranded when traveling this summer...or any other time of the year.

• A backup battery. When traveling, you will likely use your smartphone for many tasks, causing you to burn through your battery quickly. A small, lightweight external battery pack is a must.
• At least three power cables. Pack two power cables for your phone—one that stays in the hotel room and another to carry with your battery pack. Your third power cable should charge your battery pack.
• A multi-port wall charger. For the sake of traveling light, don't pack multiple power bricks to charge your phone and battery. Buy a multi-port wall charger that can power all your gadgets at the same time.
• A plug adapter (if applicable). Some countries will have power outlets that are incompatible with your plugs. Research the type of power outlets that your destination has to determine if you need a plug adapter.
• A SIM card ejector (if applicable). If you plan to use a foreign wireless carrier's service, you will need to pack a card ejector. This looks like a small metal pin and is used to swap out your SIM card for the foreign carrier's.

A few other tips for smartphone-dependent travelers:

• Download important apps and maps ahead of time. You never know whether cell service will be sluggish or spotty, so download must-have media ahead of time at home.
• Have a backup plan for logging into important apps, such as those with two-factor authenticathat require a special code be texted to your phone.

In addition to all of these tips, you may also want to pack noise-canceling headphones to eliminate background noise while en route to your destination…as well as help you relax during your stay. So, if you are traveling this summer, here’s to a relaxing, stress-free and quiet time away from home!

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Facing the Facts: How to Interpret Facial Expressions at Work

You may be completely proficient at decoding emojis on social media and in text messages, but for many of us, figuring out what other people’s facial expressions mean can be quite a challenge. Here’s a quick rundown of how to interpret different facial stances based on research from people-communicating.com:

1. A smile—The lips can lie, so to truly know if a smile is genuine check to see if the eyes of your subject are also smiling. If they aren’t chances are that the smile is fake.
2. Pursed lips—Usually, this is a sign that your comrade or client is holding back their dislike for something. It might be worth asking them if they agree with what is being proposed.
3. Pouting lips—Going beyond the pursed lips into pouting, as you may guess, generally means that the person you are with is unhappy, hurt or dissatisfied in some way. Asking gentle questions can help to uncover the issue.
4. Biting lips—This expression is often a sign of worry, or a dry mouth. Suggesting a break and a glass of water can be a way to ease both of these possibilities.
5. Tight jaws—If the person you are with is stressed about something they may clench their jaws. If you are discussing a particularly hot topic consider taking a breather or asking them if a compromise could help alleviate their tension.
6. Frowning—Unhappiness is a common reason for frowning, but some people may just have a natural lip position that looks like a frown. If you are not sure, ask if something is upsetting them, if not, just move on with the meeting or talk you are having.

Whether you are face to face with your co-workers or clients in real time or via a video call, knowing what their faces are telling you can help avoid miscommunication and create better working relationships…no emojis needed!

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Summer is Just Around the Corner— And So Are Potential Childcare Tax Credits

Summer will be here before you know it! If you are a working parent with school-aged children, you know that it can also mean pretty steep bills for childcare and summer camp. However, you may be able to soften the hit to your family’s budget if these services qualify for the Child and Dependent Care Tax Credit.

This credit reduces your tax liability dollar for dollar when you deduct the cost of day care provided by a day camp, day care, preschool, babysitter or nanny. Keep in mind, expenses for sleep away camps and tutoring are not eligible for this tax credit.

Here are the other qualifications for deducting the cost of these services on your next tax return:

• If you are married and filing a joint return, both spouses must be employed, or one spouse may be a full-time student.
   
• If you are looking for employment, you can claim the cost of childcare provided during your job search—with the caveats that a) you have also earned some income during the year and b) your child is under 13 years of age.
•  You can claim up to $3,000 in eligible childcare expenses if you have one child and up to $6,000 if you have two or more children.
•  The amount of these expenses you can claim with the credit ranges from 20 to 35 percent, depending on your income.
•  The maximum of 35 percent of eligible expenses is available for those earning $15,000 or less.
•  The credit decreases to 20 percent of eligible expenses if you earn $43,000 or more, with no maximum income limit.
•  It doesn’t matter whether you file your taxes as married jointly, single, or head of household in regard to the income stipulations for the credit. However, you cannot file as married filing separately and also claim the credit.

Another note: You cannot double dip between a dependent care flexible spending account (DCFSA) and the childcare tax credit for the same expenses. However, if you have maxed out funds from your DCFSA, you can use the tax credit up to the limit for any additional childcare expenses.

For more information on the Child and Dependent Care Tax Credit contact our firm.

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Employee Recognition – A Great Way to Motivate Your Staff!

Quite often we can get so wrapped up in checking projects off the company’s to-do list that we forget to recognize the labor that went into each accomplishment. Acknowledging milestones provides opportunity to show appreciation to the employees who helped you achieve them. This will go a long way in retaining top-tier staff. Use a few of our fresh ideas to recognize your team members:

• Surprise them. A totally unsuspecting employee will be blown away when they receive unexpected acknowledgment for their work. Take it up a notch by having friends and family show up for your employee’s spontaneous celebration.
• Capture celebratory moments. If you have regular award ceremonies or even during spontaneous surprise moments, capture the celebration on video or in a photo so you can share it with your team and even your clients.
• Do something thoughtful for the employee's family. Offer tickets to an amusement park or a sporting event. When your employee is working, they are spending time away from their –so you are acknowledging the family’s contribution to your company as well.
• Share personal anecdotes. When it comes to motivating employees, the recognition of their peers is very effective. Ask staff to nominate an employee for recognition and to write down outstanding qualities of the nominated staff member. Then share these comments during the recognition event.
• Create a scrapbook. This might take a little work, but it will be one of most memorable acknowledgements you can offer an employee. Have pees and even clients write comments about the difference this employee has made. Along with some photos have it all printed within a scrapbook (print or digital).

Getting into the habit of recognizing your dedicated employees is well worth the effort in terms of employee productivity, motivation and loyalty. Use the ideas above as a springboard for creating your own employee appreciation traditions.

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Receiving a Tax Refund? Spend It Wisely With These Tips!

Are you expecting a tax refund? If so, don’t treat your tax refund as ‘bonus’ cash. Rather look at it as simply a return of taxes paid beyond your actual obligation. This will help you think about using this money purposefully. Here are some ideas to try:

• Start or increase your emergency fund: By stashing away your refund into rainy day fund, you’ll build both a financial safety net and peace of mind.
• Eliminate or pay down high-interest debt: Once you have established an emergency fund, paying off any high-interest debt such as credit card balances, payday loans and debt consolidation loans is one of the best things you can do to improve your financial situation.
• Consider refinancing your mortgage: With relatively low mortgage rates available, you may want to consider refinancing your mortgage to lower your monthly payment and save money. Your refund can provide the funds to pay closing costs and other refinance fees.
• Contribute to tax-sheltered accounts: Using your tax refund to top-up (or start) a Roth IRA or 529 college savings plan offers you a double bonus. Not only will you be compounding dollars and interest for your future retirement or college tuition needs, but you’ll be creating a tax deduction as well.
• Improve the lives of others: If you have your own financial bases covered, then making a charitable donation is another good use of your return. The less fortunate will benefit from your generosity while offering you a tax deduction.
• Reinvest in yourself or your business: Is there something you would like to improve in your business? Or would you like to take a class? If you have funds leftover after taking care of savings and debts, these are a few more smart choices to invest in.

While it is tempting to use your tax return as a windfall, it is important to remember that you earned it. Also, if you are receiving a sizable refund, consider adjusting your tax withholding amount, so you have more of your income to use to cover expenses throughout the year.

Questions? Please contact our firm.

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Spring Cleaning Time is Here! An Easy 3-Step Checklist for Cleaning Your Office

The spring season is here! In addition to taxes, many of us want to take care of some overlooked cleaning tasks. Procrastination often creeps in when it comes to cleaning—especially our offices. It can feel overwhelming and somewhat unproductive to spend time decluttering and cleaning your workspace, but once complete, most people feel a sense of relief and calm. Use this handy checklist to expedite your office cleaning:

1. Your computer

• Clean your keyboard and computer vents with compressed air.
• Disinfect monitor keyboard, mouse and any devices on your desk.
• Untangle and label computer cords and cables.
• Backup files to the cloud, delete trash files and perform necessary updates.
• Defragment your hard drive and/or perform a disk utility cleanup.

2. Your Desk

• Dust and disinfect the surface.
• Trash any broken office supplies and nonfunctional pens and pencils.
• Enter contact information from business cards to your digital contacts.
• Clear all unnecessary documents and file, shred or recycle them.

3. General Housekeeping

• Dust the room, all window treatments and lights.
• Clean area rugs and carpets.
• Clean air vents, ducts and baseboards.
• Wash the windows and clean the floor.

By breaking down tasks into the manageable groupings, you’ll be more efficient as you clean your office. Keep this checklist handy—knowing that a cleaner office offers a sense of relief and calm.

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Disappearing Tax Deductions! Don’t Miss Them on Your 2017 Tax Return

Have you filed your 2017 taxes yet? If not, you still have the opportunity to make sure that you lower your tax obligation as much as possible. With new tax laws in effect for 2018 and beyond, the following deductions will disappear after this tax season—check them out to see which ones may help you lower your taxable income:

1. Personal and dependent exemptions. The $4,050 in potential personal and dependency exemptions are being replaced in 2018 with a higher standard deduction. This tax season is the last chance to use them.

2. Uncapped state and local tax deductions. Starting this year, you can only claim $10,000 in deductions for state and local taxes. There is no cap on these deductions on your 2017 tax return. Check to see how much you are eligible to claim before filing this year’s taxes.

3. A larger mortgage interest deduction. After the 2017 tax year, the ability to deduct interest on up to $1 million in mortgage debt will be phased out. The new tax laws cap this deduction at $750,000.

4. General deductions for home equity loan interest. Your 2017 tax return is the last one on which you can deduct all of the interest paid on a home equity loan. Next year, unless the money you borrow is used for home improvements, you cannot deduct interest on a home equity loan.

5. Deductions for unreimbursed employee expenses. Another deduction ending this tax season: unreimbursed purchases related to your employment (the total must exceed 2 percent of your 2017 adjusted gross income).

6. Itemized deductions. With the introduction of a higher standard deduction, there are several itemized deductions that are being eliminated after the 2017 tax year, including unreimbursed qualified employee education expenses, some professional services fees, and professional dues. You may want to ask a tax professional to see if there are others that you should claim this year.

7. Moving expenses. Did you move for work in 2017? Then you may be able to deduct your moving expenses if they meet the IRS guidelines. Unless you are in the armed forces, going forward, moving expenses will not be deductible.

These are just some of the deductions and exemptions that are impacted by tax reform. Now is the time to see which ones you should take advantage of as you prepare to file your taxes. If you need help preparing your 2017 tax return, contact our firm for assistance.

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Tips to Boost Client Appreciation Efforts… Even When Time is Tight

When you are super busy running a business, it can be easy to let customer appreciation slide to the bottom of your long to-do list. The problem is, if you don’t show your customers love on a regular basis, they’re going to feel neglected, which can put their continued loyalty at risk.

Good news! You don’t have to spend a lot of time to make your customers feel appreciated. The following ideas coupled with your genuine gratitude makes it easy to show how much you care.

Send an unexpected treat. Imagine receiving an unexpected gift card or a sampler of delicious local fare. Offering a simple treat “just because” will show your appreciation and go a long way toward keeping your customers loyal. Time involved: Maybe five minutes to buy something online or to call a local bakery or food delivery service.

Give a shout out on social media. When your clients achieve an important milestone, take a minute to recognize it by posting your congratulations on Facebook, LinkedIn or Twitter. You can also share your customers’ content to add an extra level of engagement. Time involved: One minute or less.

Pick up the phone or schedule a video conference. While sending emails and texts is great, picking up the phone or having some virtual face time once in a while is important. Schedule a short “check in” call every quarter to show your clients that you appreciate their feedback. 
Time involved: 10 to 15 minutes.

Profile them. Here’s a win-win strategy for appreciating your clients and growing your business. Ask them if you can write a success story for your website or other marketing channel about how they are benefiting from working with you. They’ll get exposure and you’ll get social proof to help win more clients. Time involved: 90 minutes to interview, write the profile and post it on your website.

Offer referrals. The best business relationships are mutually beneficial. One of the best ways to appreciate the business your customers do with you is to return the favor, either by using their services yourself or by referring them to others.  Time involved: 10 minutes to either reach out yourself or to make an introduction.

Author Kevin Starts wrote, “Every contact we have with a customer influences whether or not they’ll come back.” Even if you are short on time, these tips can help you and your staff create meaningful contacts with your customers that show how important they are to you!

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Considering Hiring a Cybersecurity Professional? Here’s What to Look For.

With the occurrence of cybercrimes affecting businesses increasing daily, many companies are looking for outside expertise to help them mitigate their risks. If your company has never engaged a cybersecurity professional before, you may be unsure of what to look for. The IRS suggests businesses use the following four steps when evaluating and selecting a cybersecurity professional:

1. Ask other business owners or professionals for recommendations and references.

2. Keep trust at the forefront of your selection process. Since any cybersecurity professional you hire will have access to sensitive data and systems within your organization, it is essential that you feel comfortable granting such access to them.

3. When interviewing candidates, make sure you learn how much experience they have in data protection. The IRS suggests asking questions such as:

• How does ransomware work and what can we do to protect our systems?
• What are the best options to securely back-up data and why are those options the best?
• Do you have suggestions regarding the following: data encryption, malware, firewalls, disaster recovery and remote access tools?
• Have you ever created a security plan for a similar business?
• Can you do an assessment of my systems and processes to find vulnerabilities or weaknesses? If so, will you then provide recommendations to strengthen my security?
• Will you conduct security simulation tests with our staff? 
• What resources do you have to provide continuous staff education regarding security?
• Will you provide ongoing monitoring of my systems as security threats evolve? If so, how often do you recommend changes?

4. Once you have identified the cybersecurity professional or firm that you wish to engage, make sure that you execute a written agreement or engagement letter to ensure both parties understand how you will be working together.

For businesses that do not have an internal resource to help them safeguard their sensitive data and computer systems, hiring an independent cybersecurity professional or firm can be a wise decision. If your business decides to engage this type of resource, use the steps above to help you find the right fit for your company’s unique needs.

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Need Help Trying to Make New Habits Stick? Try These Simple Tips…

Even if you are not a New Year’s resolution maker, it’s likely that at some point in your life you’ll want to adopt healthier or more productive habits. When you do want to make a change for the better, consider trying the following tips from lifehack.org to increase your chances of making your new good habits stick:

1. Identify the root of the resistance you may be feeling when adjusting to your new habit. If you are having trouble making a change to your routine last, take some time to journal how you feel about the new activity. This can lead you to uncover unconscious barriers that may be keeping you stuck and allow you to find ways around them. For example, if you find it hard to get out of bed and get to the gym, you may resent that you are losing extra rest time. If that is the case, consider going to bed a little earlier so you don’t shortchange yourself on sleep.

2. Try to change complementary habits at the same time. Many of our habits are intertwined, which means if you try to change one, you may be more effective if you also change a related behavior. For example, if you want to read more this year, you may want to reduce your TV-watching time to make room in your day for your new book-loving habit.

3. Monitor your progress. Tracking how successful you are at consistently practicing your new habits keeps you accountable and can also provide a visual reminder of your commitment. You can track the times that you reinforce your habit on a simple piece of paper, calendar or whiteboard. Or, you can use one of the many apps available for smartphones if you prefer to monitor your progress digitally.

4.  Recruit cheerleaders. It can be very difficult to change deeply ingrained habits without a supportive environment, so don’t be shy about sharing your goals with friends, family and co-workers to keep you on track and encouraged. Plus, for habits that may impact other people (like you getting up early to go to the gym while your partner is tasked with getting kids off to school), having supportive cheerleaders is even more critical.

It can be very challenging to make new habits stick, but whether you attack your goals now or sometime in the future, keeping these simple tips in mind should make it a little easier. Also, be sure to share these tips if you know someone who could use a little encouragement while trying to achieve their own goals.

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Quick Tips to Help You Tackle Your Taxes with Ease

Tax season is approaching quickly. It’s just a few weeks until the IRS officially starts accepting returns, which means now is the perfect time to use the tips below to help you net some last-minute tax-savings and tackle tax season with ease.

1. Top up your retirement accounts. You still have until April 17, 2018 to make a contribution to a traditional IRA or a Roth IRA and reduce your taxable income. If you have a Keogh or SEP IRA, you have until October 15, 2018 to top them up. Note that the maximum IRA contribution you can make for the 2017 tax year is $5,500 ($6,500 if you are age 50 or older by the end of the year). For self-employed individuals, the maximum annual addition to SEPs and Keoghs for 2017 is $54,000.
2. Ready your tax records. You will likely start seeing tax documents such as your W-2, investment account summaries and other receipts or information return copies come in your mailbox. Or you will receive notifications that they are ready to access via email over the next few weeks. Put these items in a safe place with your tax receipts and other tax documentation so you can avoid the stress of searching for documents. This will also allow you to expedite the filing of your tax return by beating the April rush.
3. Be aware of the tax deadlines. Our firm will work to keep you on track for meeting the filing deadlines. However, if you don’t think you’ll be able to make the filing deadline, just let us know in advance and we can file an extension on your behalf, giving you until October 15, 2018 to file your personal taxes. Be aware that you will still need to make a reasonable estimate of your tax liability for 2017 and pay any balance due with your extension request.
4. Let us know if you need help. Our tax experts are here to help. If you have questions about the information you need to submit in order for us to handle your taxes, please let us know. We are happy to answer any questions you may have about this year’s taxes and the impact of tax reform. We may also be able to identify areas of additional tax savings as well.

The key to easy tax filing is to get organized early and to reach out to our firm as soon as you can. This will help expedite any potential refund you may be entitled to—which is a great incentive to tackle your taxes now!

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5 tips to mitigate paying taxes on Social Security benefits

Like the old paraphrased saying goes: In this world, two things are certain—death and taxes. The recent federal tax overhaul changed a lot of rules, so it’s as important as ever to understand your tax obligations, including those on Social Security benefits.

According to the Social Security Administration, some will be obligated to pay federal income taxes on Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return).

No one can avoid the long arm of the tax man altogether, but there are ways to reduce your income and lower (or even avoid paying) taxes on your Social Security benefits. Consider the following tips:

1. Consider withdrawing money from a Roth account:
   If you need additional cash during the year, consider withdrawing it from your Roth IRA or Roth 401(k), Taxes are not due on Roth distributions and will not impact your adjusted gross income. Be aware of the minimum required distribution (RMD), however. Taxes are not due on Roth distributions as long as you have contribution basis.
    
2. Distribute your RMD to charity: Giving money to charity is a great way to help make the world a better place. While doing good for others, you can also lower the odds that your Social Security benefit will be taxed. You can transfer up to 100k per year to qualified charities.
3. Reevaluate working a part-time job: Money earned working a part-time job pushes you a little closer to owing taxes on Social Security benefits. If your part-time wages make little difference in your quality of life and/or you don’t like the work, consider ditching the part-time gig.
4. Reconsider municipal bonds: People are often attracted to municipal bonds as a way to lower their tax bill because they are not subject to federal and state income taxes. However, municipal bond income is included in the formula that determines whether or not you will pay taxes on your Social Security benefits.
5. Delay benefit collection: Delaying benefits until full retirement age (or beyond) is the best way to avoid paying taxes on Social Security benefits, at least for a while. Waiting to file for benefits also means a bigger check each month once you finally do start collecting.

Of course, be sure to consult with our firm if you have questions and to ensure the best tax strategy. Here’s to a happy and financially healthy New Year!

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Tips to Help You Truly Enjoy the Most Wonderful—and Overwhelming—Time of the Year

It’s amazing how much festive fun can be packed into a few weeks. While the holidays truly can be wonderful, they can also feel overwhelming with too much to do and too many temptations that derail us from enjoying what is truly important. To help you make your holidays feel more fulfilling and less frantic, try these suggestions:

1. Be intentional. Staying focused in the midst of the hectic holiday season can seem like a daunting task, but it's key to staying relaxed. Be mindful of what your priorities are and act with intent to make sure you keep focused on what you really need and want to do.

2. Give yourself a break. Funny how we call this time of year the “holidays” and it can feel anything but relaxing. Make a vow to carve out time to give yourself the break that you deserve.

3. Take vacation time. Rather than trying to cram personal errands into your workday, schedule a personal day to focus solely on those domestic and personal holiday preparations. This will allow you to focus 100% of your energy on work when you are at the office and help you feel more in control.

4. Just say no. It’s simple to do, but not always easy to say “No”…especially around the holidays. However, accepting an invitation because you don’t want to hurt someone’s feelings can have you burning the candle at both ends. So, practice politely and graciously declining invitations, and then put this skill into action.

5. Manage your own expectations. While you can do everything—you can’t do it all at once. This is an important mantra to keep in mind during the holiday rush. You and those around you can only do so much, so set realistic expectations about what you are willing to do and then be at peace with your decisions.

We hope you take these tips to heart in order to truly enjoy this special time of the year and avoid that overwhelmed feeling. Happy Holidays!

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Tax Reform Update: A Snapshot of Key Proposals in the GOP Bill

On November 16, the House passed a new tax reform bill that moves the GOP closer to bringing the legislation to fruition. Now the Senate is preparing its own tax reform package. If passed, it must be reconciled with the House before any final legislation goes to the White House. Here is a snapshot of some of the key changes proposed in the tax reform bill:

• Individual tax rates would be reduced and there would be four revised brackets of 12, 25, 35 and 39.6 percent. There is also a new maximum rate on business income for individuals of 25 percent.
• The standard deduction would be almost doubled, but personal exemption deductions would be repealed.
• The mortgage interest deduction would be capped at $500,000 of debt for newly purchased homes, but the $1 million cap will remain for current home owners.
• State and local sales and income tax itemized deductions would be eliminated and the property tax deduction would be limited to $10,000.
• Several personal deductions would be eliminated including those for medical expenses, alimony and student loan interest.
• Many education incentives would be consolidated.
• The child tax credit would be increased; and a temporary family tax credit would be introduced. The child and dependent care credit and the adoption credit would remain.
• Also, families of four or more would have fewer standard deductions and exemptions combined under the new plan which may or may not be offset by the increase in child tax credits or new tax brackets, depending on income levels.
• The estate tax exemption amount would be doubled and the rate would be lowered with the estate tax repeal not taking effect until 2024.
• The top corporate tax rate would drop to a flat 20 percent which will eliminate the graduated rates up to 35%.
• A new pass-through entity tax structure would be created, and the rules for deducting business interest would be modified.
• The individual and corporate AMT would be repealed.
• The Work Opportunity Tax Credit and many other business tax preferences would be eliminated.

These are just some of the latest changes outlined in the draft tax reform bill. We will continue to provide updates on this legislation as it progresses. If you have questions, please contact our firm.

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Tips to Simplify Your Thanksgiving Spread

With just days to go before Thanksgiving, the clock is ticking down to some of the most memorable meals of the year. However, for many of us, the pressure of preparing a perfect Thanksgiving feast can be overwhelming. If this is true for you, consider these tips to simplify your seasonal spread.

Take a potluck approach. If you’re charged with feeding a houseful of guests, there’s no reason why you can’t make a meal out of shared dishes. Just be sure to ask guests in advance to bring a dish to pass so everyone has time to prepare their favorites.

Breakdown the bird. A roasted turkey, the traditional centerpiece of a Thanksgiving feast, can be an absolute beast to prepare, cook and carve. So instead of tussling with a whole turkey, try cooking just a turkey breast or a breast and some legs if you like having both white and dark meat.

Put your slow cooker to work. There’s no reason that everything you make has to involve you slaving over a hot stove. Line up a slow cooker (and ask friends and family if they can bring theirs, too) and use it to cook meat, vegetables or even mull cider.

Buy pre-prepped foods. Yes, vegetables that are peeled and cut and ready-made mashed potatoes are more expensive than doing the prep yourself. However, if you’re short on time and want to have time to visit with family, the extra cost may well be worth it.

Create a “must-have” list. The holidays are often tied to memories of specific recipes, which can make it hard to prepare everything on your traditional menu. To avoid culinary overwhelm, have family members make a wish list of favorite foods and then enlist their help to make the dishes.

The tips above can help simplify preparation of this year’s Thanksgiving meal. Remember, while the perfect turkey and trimmings are delicious, they’re much less satisfying than the time you can spend with family and friends.

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Plan Now and Take Advantage of 2017 Tax Savings

The end of the year is often hectic, which is why it’s important to take some time now to reduce your tax bill. Our firm can offer additional strategies to further mitigate your tax burden; however, the following 5 tips are an excellent starting point:

1. Defer income. Because income is taxed in the year it is received, it may be beneficial to postpone income to lower your tax obligation. For example, ask your employer to postpone your annual bonus to pay in 2018, or if self-employed, bill your clients after the end of the year.
2. Look at last-minute tax deductions. Accelerating deductions can help lower your income. Charitable contributions is one way to do this…just be sure that you have a receipt. You may also be able to take advantage of additional deductions if you plan to itemize instead of claiming the standard deduction.
3. Use loss harvesting to offset investment gains. This is an important year-end strategy for taxpayers who have low-performing investments, such as stocks and mutual funds that they can sell at a loss. Losses can be used to offset taxable gains dollar-for-dollar. If your losses are more than your gains, you can use up to $3,000 of excess loss to reduce your total taxable income, and any other losses can be carried over year-after-year for your lifetime.
4. Maximize your retirement contributions. Using tax-deferred retirement accounts such as 401(k)s and IRAs to reduce your taxable income is win-win. You can both reduce your taxable income and increase your retirement nest egg. If you are employed and have a company-sponsored 401(k) plan with matching contributions, it’s advised to contribute the maximum ($18,000 for 2017 for those up to age 49 or $24,000 for those age 50 and over). If you can’t afford the maximum, be sure to contribute enough to qualify for your employer’s matching contributions.
5. Focus on your Flexible Spending Account (FSA). An FSA allows you to use tax-sheltered funds to pay for child care and medical bills and can help save tax dollars—but only if you use the funds by the end of the year. So, be sure to review your FSA balance so you can make a plan for last-minute qualifying expenses. You may also want to see if your employer is offering the IRS- approved grace period, which allows you to spend 2017 FSA funds through March 15, 2018.

The tips above offer a few ways to save significant money by putting a tax plan in place before the end of the year. You can also schedule an appointment with our firm to develop a customized tax strategy and perhaps reap additional savings.

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Simplify Seasonal Staffing with these Smart Strategies

Whether your business needs temporary workers to get through the holiday season or you hire short-term help on a regular basis, the process of finding the right candidates can be challenging. Try applying these strategies to make seasonal staffing easier:

1. Create an ideal employee profile. Even though temporary help may not be with you long, it’s still important you find the right fit for your business. Spend a few minutes to jot down the kind of characteristics a successful candidate should possess.
2. Detail the job description. If you regularly hire seasonal or temporary staff, be sure to consistently update job descriptions based on changes in your business or to add the ideal employee profile information mentioned above. If this is your first time hiring short-term help, ensure your job descriptions are clear about specific duties and expectations.
3. Create a recruitment network. Relying on only one source to find good seasonal help can limit your potential for finding great employees. Consider creating a recruitment network including current employees, trusted referral sources, social media, local higher education institutions, recruitment agencies and online job sites.
4. Standardize your screening process. Comparing potential candidates is much easier when you have a set of standard interview questions for each position. In addition, make sure you perform appropriate background and reference checks—this will help you protect your business and avoid potential issues.
5. Invest in onboarding. You may think it’s not worth taking seasonal employees through a formalized onboarding process. However, by doing so, you’ll save time and money in the long run by not having to answer simple questions, redo work or explain how your company operates. This will also make your candidate feel valued, which is an important part of increasing productivity.

Once you’ve identified your ideal seasonal employees, you can also apply these strategies to complement your existing recruitment process for full-time employees.

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5 Tips to Reset Your Stress Response

Because stress related to work, family issues and other events is something that affects many of us, it’s important to reset your own stress response to protect your health and productivity. Sharon Melnick, Ph.D., a business psychologist, offers these tips:

Act don’t react. According to Melnick, “Stress occurs when we feel that situations are out of our control.” This feeling activates stress hormones affecting our confidence, concentration and well-being. Since you can only control your own actions and responses, Melnick advises doing the best you can to make your own actions positive and letting go of what you cannot change. 

Breathe deeply. While this advice may seem simple, it can be very effective. Simply inhale for five seconds, hold and exhale in equal counts through your nose. This practice will help you restore calmness and clarity.

Avoid interruptions. Emails, phone calls, spontaneous meetings and texts leave us distracted—but they don’t have to. Melnick offers a three-point strategy: 1) Accept the interruption, 2) Ignore it if it’s not important or relevant and 3) If it is important, make a plan to address it after you’ve completed your priority tasks.

Work when energy and focus are at their peak. Working longer than a regular eight-hour day doesn’t necessarily make you more productive. When you are constantly pushing yourself, productivity tends to decrease and stress levels increase—depleting your overall energy. If possible, do your most important work when you are fresh and energized, take breaks every 90 minutes throughout the day, and wind down your work at a reasonable hour.

Take care of yourself. It goes without saying that a poor diet, poor sleep and little exercise are going to add to your body’s stress level. So, make sure that you put some energy into ensuring that your lifestyle helps you combat the external stressors that are out of your control.

While it’s virtually impossible to eliminate stress completely, you can control your reaction to it and take steps to reduce its negative impact. Follow these tips and be well!

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Proposed Tax Reform Plan: What Could It Mean for You?

Tax reform, one of President Trump’s key legislative agenda items, is moving closer to fruition. Based on the outline of his proposed tax reform package, which he unveiled on September 27, 2017, we’ve compiled this brief overview of the President’s major tax proposals:

Individual tax changes:

• There would be only three tax brackets including one at 12%, one at 25% and one at 35%. Legislators would have the option of adding a fourth bracket as a safeguard should wealthy taxpayers be in the position to pay less than they do in the current system.
• The standard deduction would be doubled to $24,000 for married couples and $12,000 for single filers.
• Personal exemptions would be eliminated. In addition, many itemized deductions would be eliminated or modified with the exception of mortgage interest and charitable contribution deductions.
• The proposal encourages lawmakers to keep tax incentives for home ownership, retirement savings, charitable giving and higher education.
• The child tax credit would be significantly increased from the current $1,000 per child under 17 years of age.
• The estate tax and the alternative minimum tax (AMT) would be eliminated.

Business tax changes:

• The C-corporation tax rate would be lowered from 35% to 20%. The deduction for net interest expense incurred by C-corporations will be partially limited.
• Sole proprietors, partnerships and S-corporations would have a maximum tax rate of 25%. Measures will also be implemented to prevent wealthy taxpayers from avoiding the top personal tax rate by re-characterizing their personal income as business income.
• A one-time low tax rate on existing overseas profits will be offered to companies in an attempt to have them move corporate money back to the United States.
• Future international earnings will not be taxed by the United States when paid as dividends from a foreign subsidiary if the U.S. parent company owns at least a 10% stake in the foreign subsidiary.
• A lower tax rate will be implemented on the foreign profits U.S. multinational companies to discourage them from sheltering profits in overseas tax havens.
• The proposal allows for the immediate expensing of the cost of new investments in depreciable assets, other than structures, that are made after September 27, 2017.
• The Section 199 production deduction will be eliminated based on the premise that it is no longer necessary in light of the lower corporate and individual income tax rates.
• The research and development credit and low income housing credits will be retained.

If you have any questions about these potential changes to the tax code and how they may impact your tax situation or your business, please contact us.

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Impacted by the Equifax Hack? Take These Steps Now!

If you were a victim of the recently announced Equifax hack, you need to take action to mitigate any negative impact it may have on your finances and credit. If you’re not sure if you were affected, you can use Equifax’s Potential Impact tool to find out. You will need to input your last name and the last six digits of your social security number to use this tool.

Unfortunately, hacks like this one are likely to happen again, so it’s vital to prepare by protecting your digital information as much as possible. Here are some steps you can take to begin the process:

1. Set up fraud alerts with the three major credit reporting agencies (Equifax, Experian and TransUnion) to alert you if someone tries to apply for credit in your name.
2. Use the fraud alerts that are available for your credit and debit cards, if you don’t already.
3. Consider credit freezes to lock your credit files to stop any new credit information releases. This will prevent any new accounts being opened in your name by an identity thief.
4. Check your credit report. You can get one free credit report every year from all three major reporting agencies at annualcreditreport.com. It is advisable to check in every four months, using one of your “freebie” reports rather than using them all at once. When you get your credit report, look for any suspicious activity. This should be a regular part of your financial self-monitoring.
5. Consider a credit monitoring service. Equifax is offering one free year of credit monitoring. However, before signing up you should review the terms of the agreement—and those of any other credit monitoring services that you may consider.

The Equifax hack is one more reminder of how critical it is to regularly monitor your financial and personal information for potential theft and misuse. If you do suspect that your information has been compromised, contact one of the credit reporting agencies mentioned above and the FTC Identity Theft Hotline at (877) IDTHEFT (438-4338).

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Tips for Maximizing the Value of Your Next Staff Retreat

Staff retreats can offer companies a lot of value. They can also be expensive and, unless managed effectively, not particularly productive. Before you plan your next (or first) staff retreat, review the following key factors to help you make the most of it.

1. Atmosphere. From physical conditions and dress code to receptivity to new ideas, think through all aspects of atmosphere to ensure everyone is comfortable and understands that the retreat offers a safe space to share and exchange concepts and viewpoints. The right atmosphere will encourage openness and spark creativity. Also consider timing. After a long day, you may want to cap things off with social events that run into late evening. However, be sure to build in breaks and offer staff time to recharge.
2. Participation. Make sure that everyone has the chance to participate. If there are a few employees who tend to monopolize conversations or exclude others in decision making, plan for this in advance by coordinating exercises where everyone has a part to play. You may also want to assign pre-retreat homework to further encourage participation. Finally, be sure to weave in a few fun activities that further motivate people to join in.
3. Relevance. For those facilitating the retreat, make sure you’ve planned thoroughly. Activities and content must be timely and relevant to your team. Spend time on identifying clear goals and objectives for your retreat, and then build your agenda accordingly.

Report on results post-retreat

In addition to the tips above, be sure to analyze results and plan next steps to maximize the value of your staff retreat. Follow-up on action items and direction that came out of your retreat by regularly checking in with your staff on progress. This will keep your team accountable for changes required. Combined, all of these tips will help you generate the greatest value from a company retreat.

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Free Money-Saving Apps for Every College Student

There likely aren’t many college students who don’t have a smart phone loaded with helpful apps. However, it is unlikely that any of these apps are dedicated to helping them build their financial fortitude. This is why we created our list below—chock-full of apps designed to make it easier for college students of any age to save money.

Mint—This personal finance app from Intuit is a great tool to easily track spending and learn how to budget…and can also help cut down on calls to the “Bank of Mom and Dad.”

Square Cash—Small debts are often accrued in college, but now it’s easier than ever to make good on paying them back—or collect on them. A few bucks borrowed or lent for a beer or a latte is easily repaid or collected using Square Cash. This app allows a user to send from or receive money to their bank account with no fee.

ATM Hunter—ATM fees can add up. MasterCard’s ATM Hunter helps students locate the nearest ATM and enables them to filter locations based on hours of operation, fees and more.

mySupermarket—Using this app allows students to avoid impulse buys and find the best deals on supermarket items. The app is great for food shopping online or in a store.

Big Oven—Getting great deals on grocery items is a good way to save money, but not if food is wasted by tossing leftovers. The Big Oven app helps students figure out ways to thriftily use food they’ve purchased. The app also offers more than 350,000 recipes and the ability to manage grocery lists.

Share our list with a college student you know. It’s a great start toward managing money wisely while in school.

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Expert Advice to Keep Your Internet-Enabled Devices Safe from Cyber Criminals

Did you know that your webcam and even your home or office internet router can be the gateway through which cyber criminals gain access to your most sensitive data? If not, don’t panic—we have helpful tips below from the experts at the National Cyber Security Alliance to ensure that you head off this type of malicious action.

1. Educate yourself about maintaining the security of all your devices. We’ve all read about the need to reset passwords on our smartphones, tablets and home computers—and not to connect to unsecured networks. The same precautions should be taken with all the devices you use to connect to the web, such as web cams and routers.

2. Keep up with your apps. We’ve all done it…downloaded an app that we no longer use and allow to sit on our device. Hackers are always looking for easy ways to access data and a “stale” app is one way to do it. To prevent this, check your devices periodically and delete apps you no longer use.

3. Know what you are buying. Before you purchase any device, conduct your own research to see if it has a reputation for security issues. Look for an alternative product if the one you are considering has been compromised in the past.

4. Revisit your home and office router regularly. Cyber security experts advise that every business and home owner who uses an internet router should schedule routine maintenance for it. This is as simple as using a strong password and changing it regularly, but it’s a step that too many people fail to take—leaving them vulnerable to a cyber attack.

Take a few minutes out of your schedule on a monthly basis to keep your home and office protected by following these tips. It just might save you and your business from a costly and disruptive cyber crime.

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Be Alert and Aware: Tax Scammers Don’t Take a Summer Vacation

The IRS has identified several new variations of standard tax scams involving fake tax bills and demands for payments. Many of these scams involve purchasing and transferring information using a gift card or iTunes card. Other scams to be aware of include:

Electronic Federal Tax Payment System (EFTPS) Scam
This scam involves con artists claiming to be from the IRS. Scammers call and demand immediate tax payment and threaten arrest if a payment is not made immediately by a specific prepaid debit card. Victims are also warned that they should NOT talk to their tax preparer, attorney or local IRS office until after the payment is made.

“Robo-call” Messages Demanding Payment
It is important to remember that the IRS does not call and leave prerecorded messages requesting a call back, but scammers do! According to the IRS, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.

Private Debt Collection Scams
The IRS recently sent letters to taxpayers whose overdue federal tax accounts are being assigned to one of four specific collection agencies. Scammers are aware of this and are now calling taxpayers posing as private collection firms. If you receive a call like this and you have not been notified by the IRS about a tax debt, it is safe to consider the call a scam.

Protect Yourself: Know the Signs of a Scam
Given the level of sophistication and perseverance of scammers, it is sometimes difficult to determine legitimate contact by the IRS (and its authorized private collection agencies) versus ploys to get your money and personal information. Protect yourself by understanding that the IRS will:

• Never contact you initially by phone or demand immediate payment by prepaid debit cards, gift cards or wire transfers.
• Never threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for non payment.
• Never demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
• Never ask for credit or debit card numbers or other sensitive information over the phone.

Remember, the IRS will mail a bill to taxpayers who owe. And all tax payments should only be made payable to the U.S. Treasury and never to third parties.

If you are contacted via phone by a scammer this summer, do not give out any information. Hang up immediately and report the scam to the Treasury Inspector General for Tax Administration at this site or call the hotline at 800.366.4484. If you are unsure about any potential outstanding tax obligations, it is also a good idea to check with your tax preparer.

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Tips for Implementing a Successful Flex-time Schedule this Summer

Now that summer/vacation season is here, your business may be enjoying a more relaxed vibe with employees taking time off or leaving early. If you’ve ever thought about implementing a flexible work program, now may be the time to pilot one, especially if your business is a bit slower this time of year. To help, we offer the following tips:

Start with a strategy—Think through which departments and job functions can successfully work on a flex schedule. Then create a strategy that identifies which positions are suitable for flex time, the levels of flex time to be offered, and who will manage flex-time arrangements.

Make metrics matter—Studies have shown that flex-work arrangements are great for employee retention and engagement. However, these arrangements also have to support your business productivity. Be sure to identify which metrics you will track to ensure your flex schedule is beneficial for everyone.

Take a trial run—Before adopting a full-scale flex program, perform a trial run in one department or with a few select employees. This will help you work out issues related to technology, connectivity and communication—as well as help you gauge overall impact on your business before launching the program business wide.

Train your managers—Managing a flexible workforce is very different than managing employees on-site. Make sure managers know how to motivate remote and flex-time workers and understand how to best communicate with remote employees. In addition, encourage managers to hold regular meetings to keep your business on track.

Flexible work programs are a highly valued benefit for most employees. This kind of program also has many benefits for businesses, including cost savings, lower employee turnover and higher productivity. Consider using the tips above to trial your own flex work program this summer.

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Four Money-Saving Mid-Year Financial Planning Tips

It’s almost exactly the mid-point of the year, which makes it prime time for a mid-year financial review. If you need some monetary motivation for evaluating your financial progress so far this year, you may want to think of mid-year planning as a series of potential money-saving opportunities, for example:

1. Save tax dollars by evaluating your 401(k). Take a look at your current 401(k) contributions to see if you are on track to maximize your annual contributions. Making the maximum contributions this year is not only good for your retirement fund, but will also save you money by lowering your tax bill.
2. Trim your budget. Make one or two small changes to your weekly or monthly expenditures. Skipping a meal out or your daily coffee run can save you a lot of money over the next six months.
3. Fight financial fatigue from fees. Banks and credit card companies (not to mention all those online subscriptions you have) are always changing their fee structures—which may mean you aren’t even aware of some of the things you are paying for. Now is the time to take stock and cancel or downgrade the services you no longer need. Doing so will help you reduce fees and may save you considerable money.
4. Ask about your tax estimate. You may be thinking that April wasn’t that long ago—and you are right—but the end of the year is already half-way here, and after that, you can’t impact your 2017 taxes. Now is the time to talk to our firm about your current tax situation and make any changes to increase your tax savings.

These are just four financial planning tips that can save you money before the end of the year. There are many other mid-year planning strategies that can increase your savings, too. Not sure where to start with your plan? Let us help you. Contact our firm today.

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How to Protect Your Business from the Next “Wanna Cry” Attack

The recent “Wanna Cry” ransomware attack that paralyzed several large organizations in the U.S. and Europe is a solemn reminder that the risk of cyber security breaches is real. Every business owner should take steps to assess the type of cyber security threats their business could be subject to and how to avoid them. The tips below are a good place to start:

• Don’t underestimate the risks. Many small business owners are too busy taking care of day-to-day responsibilities to keep cyber security top of mind. This is a mistake—the greatest weapon against attacks is awareness and having a plan in place to prevent them. Reinforce prevention by incorporating a plan into employee onboarding and offering ongoing training.
• Make updating software a priority process. As the “Wanna Cry” attack taught us, updating your computer software is an essential prevention strategy. Many of the infected computers at large organizations were not updated—leaving entire networks vulnerable when just a single computer was compromised. A regular schedule and protocols for updating software can help mitigate cyber security risks.
• Learn the signs of an attack and what to do about them. The most effective way to avoid falling victim to another Wanna Cry-like attack is to be aware of the type of emails that may contain ransomware or other viruses. These emails typically include an attachment (often a .zip file) that you didn’t ask for, and may come disguised as an email from someone you know. If in doubt, the best course of action is to delete the email immediately.

With the risk of cyber attacks growing by the day, it’s time to take action to protect your business. Educating your employees is key, as is updating your software on a regular basis. You may also want to ask an IT professional to help you evaluate and mitigate risk in this area.

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Tips to Help You Stem the Flow of Potential Risks This Flood Season

Whether from heavy rains or hurricanes, this time of year can bring with it the risk of floods across many parts of the United States. While you may not be able to predict the likelihood of a flood in your area, with these tips you can help to mitigate physical and financial damage if a flood occurs where you live.

1. Treat structural damage seriously. In any flood situation, the Federal Emergency Management Agency (FEMA) advises to look for any visible structural damage at the site of your home or office including warping, loosened or cracked foundations, cracks, and holes. If you aren’t sure if your home or office is safe, do not return to it until you have it evaluated by a flood remediation professional.
2. Turn off your electricity. If you experience severe flooding from a storm and power is lost, it is critical to immediately turn off the main electrical source and all individual fuse connections at your home or office to avoid electrocution. In addition, check your water, gas, electric, and sewer lines and notify the appropriate utilities if you suspect they are damaged.
3. Document any damage. Before cleaning up from a flood, be sure to fully document any damage if you plan to make an insurance claim using notes, digital photographs and video. Keep in mind, homeowners and business property insurance often do not cover flood damage, unless you have a special waiver.
4. Avoid flood-related health hazards. Flood water is often contaminated, so it’s important to protect yourself and others before coming into contact with it by using protective clothing, waterproof gloves and boots. FEMA also recommends boiling water for drinking and other uses until authorities declare the water supply to be safe.

Hopefully you or your business won’t be affected by a flood now, or in the future. However, by making note of the tips above, you’ll know just what to do if flooding occurs and how to mitigate the associated physical and financial risks.

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How to Really “Clean Up” at Your Next Yard Sale

This time of year is when you often see yard sale signs popping up. For some, holding a yard sale is a means of clearing out unwanted items. For others, it’s an opportunity to get some great “finds.” Whichever side of the yard sale fence you’re on, these tips can help you “clean up”:

Choose your timing carefully. Research continues to show early morning on Saturday is the best time for high volume traffic. If you are looking to shop yard sales, be prepared to set your alarm early on the weekend.

Tune to your local community. If you want to get the word out about your sale (or find one to go to), social media and online community yard sale listings are very effective. You can also post signs if your neighborhood permits this. Also, tell your family, friends and co-workers.

Pay attention to prices. After all the time and effort you put into your yard sale, you don’t want to be stuck with a lot of leftover items—so price your merchandise competitively. Do a little comparison shopping by looking on eBay or other auction sites to get a feel for what prices make sense. For yard sale buyers, you may want to see if the seller is willing to barter a little to get items off their hands—but be realistic, and respectful if you do this.

With these tips and a little bit of luck, whether you’re buying or selling, you should be able to really clean up at your next yard sale!

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Take Your Spring Cleaning to the Office with These Tips

Window washing, carpet cleaning, garden grooming—these are all popular spring cleaning chores for homeowners. However, with year-end and tax season behind you, this time of year is also perfect for spring cleaning at the office. These tips will help you and your staff get—and keep—that “just cleaned my office” feeling:

Start with a clean sweep of your desk. Take an hour or two and ruthlessly cut the clutter by emptying all of your desk drawers, sorting out only what you need, and shredding or recycling the rest of your papers.

Knock-out the knick-knacks. If your desk “mementos” are covered with dust and rarely given a glance, you know what to do: take them home or, if appropriate, donate them to a charity.

Digitize your documents. If you haven’t already, move your files to cloud storage. Make a list of the documents you need to store or access on a regular basis, then evaluate your cloud-based file storage options to see which platform will best suit your needs.

Corral your online credentials. LastPass and other online password-saving applications can save you time, while also eliminating the need to keep sticky notes and paper lists of passwords on your desk.

Declutter your desk daily. Once you have invested the time to spring clean your desk and office, spend a minute or two at the end of each day to do a quick tidy up in order to preserve your pristine work area.

Spring cleaning your office is not just a feel-good activity. Studies have shown that a neat and orderly office space leads to improved productivity and efficiency, which means you may be able to leave the office a few minutes early to enjoy warmer weather or to continue your cleaning spree at home.

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These Tax Day Treats Shine Light at the End of the “Tax Season Tunnel”

With just a few weeks to go until Tax Day on April 18, it’s time to make sure that you’re on track to get your individual return filed. If you haven’t already engaged our firm to help you with your taxes and you need assistance, don’t delay…it’s time to let us know!

While tax season can be stressful, Tax Day itself can be quite rewarding if you consider some of the Tax Day freebies that are available across the country. For example, according to the website DealsPlus.com—Kona Ice, Great American Cookie, Boston Market, Target and many other businesses are offering discounts or free items to help ease the pain associated with paying taxes.

If you need a little light at the end of the proverbial “tax season tunnel” as April 18 approaches, keep these Tax Day treats in mind. You may want to check your local area for other free or discounted goodies available that day, too.

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Do You Sit All Day? Take a Stand Against a Sedentary Lifestyle

The average American sits a lot. Many of us sit while we work, while we relax and while we learn. Over the long term, this sedentary way of life can have a negative impact on our health, increasing the risk of diabetes, heart disease and cancer—in addition to shortening life spans. To counteract these negative effects, it’s important to get up, get active and get moving!

Even if you engage in a formal exercise program, it’s usually not enough to reverse the negative health effects of sitting most of the day, but it is a big step in the right direction. If your physician clears you to exercise, try doing a daily workout or at least exercise as often as you can throughout the week. Then use these tips to incorporate more movement throughout your day:

• Set a timer to get up every 30 minutes and stand, walk or stretch.
• If you sit at a desk, try a standing desk.
• Swap out your chair for an exercise ball to engage your muscles.
• Use part or all of your lunch break to take a walk.
• Walk places that are within a reasonable distance instead of sitting in a car.
• Use the stairs; they require extra effort, which helps to improve your health.
• Instead of fast forwarding through commercials when you watch your shows, use this time to take a break from sitting.

Taking a stand against excessive sitting may take a little bit of effort, but it will add years to your life and make you feel more energized while improving your health.

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Set the Stage to Help Your Home Sell This Spring

Spring is in the air...which means peak home-selling season isn’t far away. In fact, according to recent market data, 60 percent of all home sales in the United States will occur in the spring and summer months. If you’re thinking about putting your home on the market, now is the time to get prepared—which includes considering how you will “stage” your home to make it more attractive to potential buyers. These tips can help:

• Cleaning your home thoroughly is one of the most important things you can do to stage it effectively. If you don’t have the desire or time to clean, it’s worth hiring someone to help you.
• Pay special attention to sprucing up the interior and exterior of your home’s front entrance to make a great first impression.
• De-clutter all rooms and consider putting excess furniture and other items into storage.
• In addition to visual appeal, don’t forget to make your home smell good. Use sweet, but subtle, air fresheners or set out freshly baked goods, like cookies or muffins, to create that comforting smell of home. Your visitors will appreciate the treats as well.
• Be sure that the exterior of your home offers that all important curb appeal. This is especially true during the spring and summer months when plants—and weeds—are growing. Keep your lawn manicured and clean up outdoor clutter.

The aim of staging your home is to make it memorable to potential buyers—in a good way. Home buying is often an emotional process and, according to real estate experts, buyers often decide within the first minute of a home showing if it is “the one.” Use these tips to bring out your home’s full market potential.

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Avoid March Madness—Why You Should File Your Taxes Now

For sports fans, this time of year is an exciting one. First the Super Bowl, and then the buildup toward the NCAA March Madness tournament. While tax season isn’t quite as exciting as these events, you’ll still want to make the effort to get ahead of the game—and the April 18 deadline—to score the benefits of early filing.

Avoiding identity theft.
Filing your tax return early helps you sidestep criminals who want to steal your sensitive information. With identity theft related to tax returns on the rise, this is an important early filing benefit. Once your return is filed with the IRS, your social security number is locked, preventing it from being used again by someone other than yourself.

Dialing down stress.
One obvious benefit of early completion is crossing it off your to-do list and avoiding the prolonged anxiety that comes with the approaching tax deadline. Beat the “March Madness” and “April Angst” of last-minute tax filing for your business and individual taxes by having us file them for you now.

Expediting any potential refunds.
If a tax refund is in your future, the earlier you file your taxes, the sooner you will see your refund check. Keep in mind, the IRS reports some delays are expected this year for filers claiming the Earned Income Tax Credit or the Additional Child Tax Credit.

Maximizing all deductions.
Filing early allows us to have the time required to prepare your return and research all the tax deductions you may be entitled to. Starting the return process earlier gives you more time to gather your supporting paperwork and get any additional documentation you may need to claim a deduction.

Having time to pay outstanding tax bills.
If you owe taxes, filing early gives you time to save for payment if needed. It also removes the last-minute element of surprise—you’ll know exactly where you stand with the IRS.

Ready to tackle your taxes and take advantage of these early-filing benefits? Start uploading your tax documents to your portal today, or contact our office for assistance.

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Small Businesses Can Restart Health Reimbursement Accounts in 2017

Although the fate of the Affordable Care Act (aka Obamacare) is not yet clear, thanks to the passing of the 21st Century Cures Act at the end of 2016, employers with fewer than 50 employees can now start funding stand-alone health reimbursement accounts (HRAs) again. Employees can use HRAs to pay for medical expenses, including health insurance coverage on the Obamacare health insurance exchange market.

Until this year, employers were not allowed to offer stand-alone HRAs under the Affordable Care Act because they didn’t meet credible coverage rules. Now employers can restart stand-alone HRAs, and if they failed to halt them despite the Obamacare mandates, they will also receive retroactive penalty relief. However, there are some new regulations related to HRAs that business owners should be aware of including:

• A new limit to annual employer contributions of $4,950 for employee-only coverage and $10,000 for family coverage.
• Employees cannot contribute to these HRA accounts, only employers can.
• HRA funds can be used by employees to pay for insurance premiums or bills from physicians.
• The Obamacare premium tax credit will be reduced dollar for dollar by the HRA amount if an employee uses both.
• Any HRA reimbursements for health insurance purchases which fail to satisfy the “minimum essential coverage” requirements of Obamacare for will be considered income for employees.

For more information about the rules related to the reintroduction of HRAs, please review the Department of Labor fact sheet here.

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Tips to Defend Your Business from Cyber Attacks

You need only tune into the news to see that cybercrimes are a very real threat. From viruses to malware, everyday computer use and online browsing can leave you vulnerable to hackers who want your valuable information. If you have a small business, your risk of a cyberattack is likely even higher, especially if you do not have the resources or know-how to enact effective security policies. In addition to engaging an IT professional to help you identify and mitigate your cyber risks, consider using these tips from Entrepreneur.com to keep your business safe:

1. Analyze your email security to identify potential threats. If you’re not protecting your company emails and other electronic communications with encryption, you should. This will make it harder for hackers to succeed in accessing your data.
2. Do the obvious: Install malware, spyware and firewall programs. There are many good, cost-effective software programs you can use to protect your business from incoming cyberattacks such as those made by Malware Bytes, McAfee and Norton. Part of the protection plan for your business should be to install these programs on every work-related computer to help catch and eliminate threats.
3. Power up your password policies. Passwords are your first line of defense against cyber criminals, so make sure that you and your employees know how to use them effectively. While using longer, complex passwords and changing them frequently may be a bit of a hassle, it’s a crucial strategy for avoiding a devastating cyber attack.
4. Train your employees to recognize suspicious online activity. It’s definitely a good idea to school yourself on how to avoid being a victim of a cyber attack, but unless you’re a solopreneur, you need to make sure that your employees know how to protect themselves and your business, too. Be sure to provide formal computer and online security procedures and information that will help your staff spot and stop potential threats before they do damage to your business.

Protecting your company against cybercrimes is an absolute must in today’s business environment. Use the tips above to help you get started and be sure to reevaluate your cyber protection plan at regular intervals to defend your business against new and emerging threats.

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Break Barriers in 2017 with These Mind-Changing Mini Resolutions

There’s a reason why the regular New Year’s resolutions like losing weight, exercising more and sticking to a budget are popular—so many of us need to do them! There’s also a common reason why so many of us fail to meet our goals in these areas: we haven’t developed the mindset to support the changes that we want to make.

Instead of setting a big, audacious goal right now, consider making some of what Jacob Geers of the ThoughtCatalog.com terms “mini-resolutions.” They’re little changes that can have a big impact on your mindset, and which can ultimately allow you to break the barriers holding you back from reaching bigger goals, such as losing 25 pounds this year. Here are a few examples:

1. Get enough sleep. If you think sleep is a waste of time, consider that most people need between 7 and 8 hours a night to operate at peak performance. Getting less sleep can cause you to overeat, make poor choices when it comes to dealing with stressful situations, and just be plain cranky.
2. Just say “no.” If you’re always taking on one more thing to help other people out, you may be sabotaging your own health and happiness in the process. Being more mindful about how you spend your time will give you the opportunity to do things that will move you closer to your own goals.
3. Take a social media holiday. Research has shown that heavy use of social networks can actually cause feelings of negative self-worth, which is counterproductive in making good on self-improvement resolutions. Taking a break from social media will also free up your time to focus on your goals.
4. Give yourself space. It’s amazing how much calmer, in control, and focused you’ll feel if you simply give yourself a little time and space to connect with nature, or even just allow some extra breathing room between meetings and other obligations. This can have a positive impact in other areas of your life which may need some tweaking, too.

While these mini resolutions may seem too small to make a difference at first, once you try them, it’s likely you’ll find yourself feeling more ready and energized to break down the barriers that lie between you and achieving the bigger goals you have for this year.

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Keep the Holidays Merry with These Simple Stress Relievers

The holiday season can be wonderful, but they can also be one of the most stressful times of the year. Fortunately, the experts at Psychology Today also offer these simple stress relievers to put the joy back in this special time of year:

1. Take a time-out. Time-outs aren’t just for toddlers who have a tantrum. In fact, rather than being a punishment time-outs (a.k.a. quick relaxation breaks) can be a positive addition to calming adults with frenetic schedules. So, when you feel overwhelmed during the day, do one to five minutes of a relaxing activity to restore your sense of calm.
2. Opt for optimism. If you find yourself getting annoyed with friends or family over the holidays, try to shift your negative thoughts to positive ones. This can help you view the situation at hand with gratitude instead.
3. Fit in fitness. Even if you are tight on time, squeeze some exercise into your schedule. You will feel better and calmer if you get your body moving. Even just a 20 minute walk once a day will help you keep stress at bay.
4. Eat smart. Okay, easier said than done this time of year, but if you make a concerted effort to control your portions and balance your diet, you will avoid sugar crashes and the other negative effects of overdoing it on holiday treats. This will not only help to stabilize your mood, but it will keep your energy up, too.
5. Make a ‘to-do’ list—then cut it.  Writing down all that you have to do during the holidays can be overwhelming, but it can also help you realize how do-able your tasks are. Be realistic as to what you put on your lists. Then lighten your load by cutting items that are not absolutely necessary.

It’s easy to become overwhelmed by economic and social pressures to live up to unrealistic expectations for what you are supposed to do, give and feel during the holidays. Use the tips above to help you beat seasonal stress and truly enjoy this special time of year.

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Obama’s New Overtime Pay Rule is On Pause—What Does it Mean for Your Business?

Just days before it was scheduled to be implemented on December 1, a federal judge in Texas has blocked the implementation of the new Department of Labor (DOL) federal overtime rule, which would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay. According to an NPR report, this extension of overtime eligibility would have affected 4 million Americans and required employers to pay time-and-a-half to their employees who worked more than 40 hours in a given week and earned less than $47,476 a year.

Lawsuits objecting to the overtime rule were filed by 21 states, the U.S. Chamber of Commerce, and other business groups concerned about the negative impacts of the legislation on businesses—including higher payroll costs and reduced staffing flexibility. The DOL plans to challenge the decision and argues that the new rule would have helped to offset income erosion due to inflation and that the rule would deliver fairer pay to lower-wage employees who are currently exempt from overtime pay. The DOL also stated that the salary level was set purposefully low to screen out obviously nonexempt employees such as executives and higher-level professionals.

Although the overtime extension rule will not take effect in December, it could still be implemented in the future. Employers should continue to follow the existing overtime regulations until a final decision is reached. For those employers who have already raised exempt employees’ salaries to meet the new threshold or who have reclassified employees who are still earning less to nonexempt status, the Society for Human Resources Management (SHRM) recommends leaving such decisions in place because they would be difficult to reverse. However, employers may want to postpone making any further moves until a final ruling is made.

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Take Note of New Business Tax Deadlines in 2017

As a result of the highway funding extension bill signed into law by President Obama in 2015, there are important changes coming in 2017 to deadlines for business tax filings including:

1. W-2 and 1099 filings are due January 31 in 2017 instead of March 31. These forms are still due employees and contractors by January 31, so it’s important to prepare and file them early if possible.
2. S-corps, partnerships, LLPs and multi-member LLCs filing Form 1065 must file by March 15 or the 15th day of the third month following the end of the organization’s fiscal year. The previous deadline was April 15. Extensions are available for up to six months, filed no later than September 15, 2017.
3. C-corps filing Form 1120 must file by April 15 (previously March 15) or the 15th day of the fourth month following the end of the organization’s fiscal year. Extensions can be filed no later than September 15. After 2026, C corporation extensions will be available for up to six months after the initial due date.
4. Trust and Estate filing Form 1041 the extension due date has changed from September 15 to September 30.
5. Exempt organizations filing Form 990 now have only one extension until November 15.

If you have any questions about the above changes please do not hesitate to contact our office.

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Five Key Areas Every Business Owner Should Review Before Year End

We’re well in to the fourth quarter of the year, which means year end is fast approaching. Here are five important areas of your business to review before the calendar turns to 2017.

1. Tax planning opportunities. November and December are prime time for tax planning, which can pay big dividends when filing time arrives. Touch base with our firm now to reduce your business tax obligations as much as possible.
2. Payroll. Make sure you have all information updated, employees are properly classified, and that you are in compliance with all payroll regulations. Plus, you’ll want to ensure that all employee information is securely stored.
3. Cash flow. As you well know, cash flow is the lifeblood of your business, so if you’re having trouble controlling it, now is the time to analyze why and ask for assistance if needed.
4. Estimated tax payments. If you've paid estimated taxes throughout the year, review your totals so that you have the information on-hand for tax season and you can make up any shortfall before the end of the year.
5. Your overall progress. Take a step back and consider if you have met your annual projections for profitability and growth. If you’ve gotten off-track it’s time to make a plan to rectify the situation. If you’re satisfied with where you are, take time to lay out next year’s plan.

By reviewing these five areas now, you’ll be able to lower your taxes, reduce potential payroll-related penalties, and have a good handle on how to move your business forward in the coming year. If you need any help in the process, please contact our firm.

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Start Holiday Gift Giving for the Kids with an IRA Contribution

If you’re like many parents and grandparents, you may already be thinking about what kind of gift to get the children on your list this holiday season. For teens and young adults especially, it can be challenging to come up with truly unique and meaningful gifts. One idea with long-lasting impact is to make a contribution to either a traditional or Roth IRA on your children or grandchildren’s behalf.

IRS rules state that the maximum that can be contributed to an IRA each year is the lesser of the child’s earned income or $5,500 (the 2016 limit for an individual under age 50). So if your child or grandchild already has an IRA, you’ll need to know if they’ve already contributed to it this year.

If your child or grandchild does not have an IRA account already, you’ll need to decide on the type of IRA you would like to use for your gift (i.e. a traditional or Roth IRA). Traditional IRA contributions are tax deductible with taxes paid when the funds are withdrawn at retirement. Conversely, Roth IRA contributions are not tax deductible. However, the distributions, including earnings, are tax-free at retirement.

As long as your contribution to an IRA is below the annual $14,000 gifting exemption, it is not subject to any gift tax unless you give additional reportable gifts throughout the year. Keep in mind that such a contribution will not hold any benefits for you on your own income tax return.

If you have questions about an IRA holiday gift for your children or grandchildren, please contact our office.

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Don’t Let Year-End Cost-Cutting Derail Your Business Goals

Many businesses need to adjust their spending to meet the reality of their cash flow during the last few months of the year. While it can be tempting to just cut expenses across the board, this strategy may actually backfire if you cut in the wrong places. Here are four budget areas you should try to preserve to avoiding derailing your long-term business goals:

1. Marketing—It’s one of the easiest things to cut, but doing so will eliminate your ability to grow. The smarter strategy is to continue doing the marketing initiatives that bring you results so you don’t miss opportunities to gain new customers.

2. Training—Instead of eliminating employee education opportunities, look for cost-effective options such as online training or in-house peer-to-peer training to reinforce skills. Regular training is especially important for frontline employees who can make an immediate difference in maintaining and winning business.

3. Safety—Cutting your budget should not mean increasing the risk for workplace injuries or creating an unsafe work environment, which can expose your business to potential workers’ comp claims. Consider safety an “untouchable” area when it comes to budget cuts.

4. Quality—Another area where shortcuts should be avoided is your product and service quality. Reducing resources to the point that it affects your end product is not going to help drive more business—in fact, it may have a significant negative impact on sales.

If you keep these four key expense areas steady, how can you make up budget deficits? The best way is to look at all of your expenses, line by line, and identify unnecessary or hidden costs that can be eliminated. It’s also important to maintain an in-depth view of your financials throughout the year—not just when your budget is tight—so you can take proactive steps to avoid future cash crunches and keep to financial goals.

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Wondering About Tax Deductions for Political Contributions? Here’s the Lowdown

With election season in full swing, you may be wondering, “Are political contributions tax deductible?” Here’s the lowdown:

Whether it’s your county mayor or the future President of the United States, the rules on taking advantage of tax deductions for political contributions are the same: Donations are deductible if the organization you give to is a 501(c)(3) tax-exempt charity. This means that the organization you give to must have tax-exempt status, which is a special designation obtained from the IRS, in order for you to claim a tax deduction.

Many political organizations are automatically disqualified from this status. For example:

• Any donation to a political party, campaign, or action committee is non-deductible.
• Other non-deductible contributions are those to individual people, labor unions, business associations, for-profit schools, for-profit hospitals, foreign governments, and fees paid to associations or state or municipal governments.

Despite these rules, you can still reap the benefits of a tax deduction if you support 501(c)(3) tax-exempt political organizations that are non-partisan, in compliance with IRS guidelines on charitable contributions. Such organizations are allowed to communicate with politicians to ask them to make an issue a priority and educate them about why they should do so.

The bottom line: While you can’t make a tax-deductible donation directly to a candidate or campaign, you can make a tax-deductible donation to an organization that lobbies candidates about issues that are important to you. Just remember that in order to reap the benefits of a tax-deductible contribution, you’ll need to itemize the deductions on your tax return.

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Take Note! The Filing Deadline for W-2s and 1099s is January 31 in 2017

Consider this blog post as early notice that the date by which employers must file their W-2s and 1099s with the Social Security Administration (SSA) and IRS will change to January 31 in 2017.

Previously, W-2s and 1099s were not due to governmental agencies until March 31, so this new deadline will significantly reduce the window for making any necessary changes. These forms are still due to the recipient by January 31.

In order to meet the new deadline, it is important to keep your payroll and employee information as up to date as possible. Please keep in mind that if our firm will be filing your W-2 and 1099 forms, we will need your data in a timely manner in January. Additionally, if you are notified of any incorrect information contained on these forms, it will need to be corrected right away.

The new filing deadline for W-2s and 1099s represents a significant change and makes it imperative that payroll and employee information is accurate and up to date. If you have any questions about this information, please contact our office.

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The World is Chipping Away at Credit Card Fraud—But Individual Vigilance is Still Key

EMV chip technology, which is the first major upgrade for credit card fraud protection in many years, is slowly being rolled out by merchants around the world, including in the United States. While this technology has the potential to provide better security for your credit card data, it still has its limits and it is not completely hacker-proof or secure. As such it is still important to be vigilant about protecting your personal information and your credit card whenever you use it. A few key points to keep in mind:

• Double check the whereabouts of your credit card often. This may sound silly at first, but the instances of people forgetting their cards in credit card terminals and bank machines is actually increasing according to industry sources (partly because chip card processing takes a little longer), so try to remember to take your card back after leaving a store so that it doesn’t get stolen….and double check that your credit card is in your possession on a regular basis.
• Create account alerts. If someone does get unauthorized access to your credit card information, you’ll want to know asap. Most financial institutions and credit card companies have free text message and email notifications that can alert you to suspicious account activity so please, sign up!
• Take data breach notifications seriously. With so many stories in the news about retail data breaches, it’s easy to tune them out. However, according to AARP (American Association of Retired Persons) 1 in 5 data-breach victims suffered fraud in 2015, up from 1 in 7 in 2014. Clearly, this is a growing problem and you should take any news or notices of a breach where your card has been potentially compromised seriously and take the actions recommended by authorities to avoid losses.

Payment industry research shows that more than $16 billion was lost in worldwide credit card fraud in 2014 and 48 percent of the losses occurred here in the United States, making it more important than ever to keep tabs on your credit card and use the tips above to avoid having your credit card and other sensitive information compromised.

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Before the First School Bell Rings, It’s Time to Reset the Alarm Clock

It’s August and children and parents everywhere are facing a grim reality: back to school season is just around the corner. At this time of year, many parents struggle to get their kids back into a regular sleep routine. To help, we offer these tips to reset your family’s alarm clock before the first school bell rings:

1. Start tonight. While child health experts advocate keeping children on the same sleep schedule all year, the reality is that over the summer break many kids get up and go to bed later than usual. It generally takes three weeks to adjust to a new sleep routine, so start now.
2. Stay strong. Set regular waking and sleeping times, then stick to them. Most kids and teens need at least 10 hours of sleep a night, so take this into account as you establish your routine.
3. Eliminate evening electronics. While you may think that playing games on a phone or tablet is relaxing, it can actually stimulate children and disrupt bedtime routines. Establish a time when electronics must be put away each night and don’t allow them in bedrooms.
4. Set a good example. It’s harder for kids to stick to a routine if they see their parents doing otherwise. While you may not want to go to bed at 8 p.m., you can still set a good example by participating in a more low-key nighttime routine and not staying up until all hours.

Now is the time to start settling into a more school-friendly sleep routine. By making it a priority now, it’s more likely that everyone will be well-rested as the school year starts.

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Getting Married this Year? Here’s Your Tax Tip Sheet

While most couples go to great lengths to ensure that their wedding day is perfect, far fewer think about how their nuptials will impact their tax liability. The truth is, the moment you get married, no matter what time of the year it is, in the eyes of the government you are considered to have been married for the entire tax year. With this in mind, here are some tax tips to consider as you prepare to walk down the aisle:

• A prenuptial agreement may impact your filing status and complicate your tax filing, so you may wish to speak with a tax professional.
• Once you combine incomes, you and your spouse may be subject to a higher tax bracket. This may eliminate tax benefits for which you were previously eligible.
• If marriage involves a name change for either party, contact the Social Security Administration to advise them and to get your Social Security card and records updated. This helps avoid delays in the processing of your tax return or potential refund.
• Review your current withholding and estimated tax payments in light of your new marital status. This will help you avoid any unexpected tax bills next tax season.
• The Affordable Care Act (ACA) may complicate your tax filing if you and/or your new spouse purchased health insurance through the ACA marketplace because any premium tax credits you have received may be impacted.
• If your new spouse owes child support or back taxes to either the IRS or the state, they may become your obligation unless you complete the IRS’ injured spouse allocation form.

Don’t let tax stress put a damper on your big day. Take a few moments to talk about taxes with your partner before your wedding, or schedule some time to consult with one of our professionals after the honeymoon.

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Key Lessons from the Financial Fallout of the ‘Brexit’ Vote

It’s fair to say that the recent ‘Brexit’ vote by Britons to exit the European Union (EU) has shaken global financial markets to their core, at least in the short-term. Financial analysts say that it’s too early to tell what the long-term impact of this historic vote will be. But one thing is for certain, the Brexit offers several important lessons that individual investors and business owners can take to heart as they review their own situation at mid-year.

1. Prepare for the unexpected. One of the reasons why the Brexit vote has people and the financial markets so on edge is that it was unexpected. No one really thought that the ‘Leave’ camp would actually win the referendum. Well, they did…and no one is prepared to handle the situation. This is not a pattern that you want to repeat with your own finances. If you do nothing else, plan ahead for unexpected shifts such as job losses or your child not getting a full-ride scholarship for college.
2. Take a long-term view. Many experts agree that the Brexit is going to create some short-term financial pain. However, things are likely to stabilize and, hopefully, improve over time. This is an important tenet for any investor or business owner to follow for their own financial sanity and planning. Working with a financial professional who can offer guidance and an objective perspective based on their experience and market data can be invaluable in this regard.
3. Seek the support of allies. In the days immediately after the Brexit vote, Britain no doubt felt somewhat ostracized by the rest of the EU. However, once the initial shock wore off, it rallied the support of its usual allies to determine what the next steps would be in the process. The parallel for individuals and businesses: having a financial advisor in your corner can help you work through difficult decisions and challenging circumstances to find the best solutions.

It is likely to be years before we know how the Brexit will affect the financial strength of our domestic and world markets. This makes it more important than ever to keep the above tips in mind, and to consider doing some proactive mid-year planning to protect your own individual and business finances this year, and in the years to come. Need help with your mid-year planning? Contact our firm today, we look forward to assisting you.

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Smart Strategies to Handle the “Downfall” Problem 1 in 4 New Businesses Experience

One of the most (if not the most) important indicators of business health is its cash flow. Even if your business is profitable and growing, if you don't have a consistent stream of cash coming in, you'll run into financial trouble. Lack of cash flow is the primary reason that more than one quarter of new businesses fail—29 percent to be exact. Here are some smart strategies that can help ease the cash flow crunch.

1. Reduce your business overhead. While this may seem obvious, trimming fixed costs is something that many business owners overlook, getting stuck in a this-is-how-we've-always-done things rut. Take a fresh look at your operations with the goal of maximizing efficiency.
2. Be proactive about securing credit. If you wait until you're financially strapped before you line up credit sources, you may be in for an unpleasant surprise (e.g., you can't get the credit you thought you could or the credit you can get is too expensive). Know how you can secure funding before you need it.
3. Know your numbers. This is so important—you should have a dashboard of key performance indicators that you follow closely so that you can head-off any cash flow issues before they happen. You can use a DIY approach with business accounting software, or work with our firm to keep you on track.
4. Encourage quick payments. An essential key to cash flow management is to keep the cash coming in from customers. Aside from keeping your invoicing current, consider incentives such as early payment discounts on large invoices or discounts for cash payments when appropriate.

With the stakes so high in today’s economy, it's not surprising that many new businesses struggle with cash flow issues. However, by implementing the strategies above and working with our professional team, you'll have a better chance to keep the cash coming in and your business going strong.

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IRS Fights Scammers – Instructs Staff to Initiate All Future Audits by Mail; Never by Telephone

With a rise in IRS phone scams, the Agency changed its policy on contacting taxpayers whose tax records are subject to an audit. The new policy instructs IRS agents to contact affected taxpayers only by mail—never by phone (which used to be the IRS’ go-to method of contact). As such, we urge all of our clients to adhere to the following guidelines should you receive a call from someone claiming to be from the IRS and you’ve NOT received a contact letter prior:

• If you receive a phone call that you suspect to be a scam, hang up right away. If you receive multiple calls, try to record them and turn the recordings and any other related information that you have over to the IRS and local law enforcement.
• If you receive emails claiming that the sender is from the IRS, save the emails, do NOT click on any links or open files contained within the email, and forward these emails to the IRS at: phishing@irs.gov.
• Never share your personal information over the phone or by email with someone claiming to be from the IRS. The IRS will never e-mail or call you to ask for this type of information or to ask you to send money right away.
• Protect your personal information. Any type of documentation that contains your sensitive data is a treasure trove for tax thieves and identity scammers. Keep documents containing your Social Security Number, bank account numbers, and other sensitive information in a secure location. Electronic forms should be stored on a password-protected or encrypted external drive or disk.

If you have any questions about the risks related to tax and financial scams, please contact our office.

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No Time to Garden? Try These Time-Saving Tips

While many of us appreciate the glory of a beautiful garden, there’s no denying that having one is a time-consuming endeavor. That’s why we’ve compiled these tips to help you make the most of your yard in less time:

1. Start with a plan.
A well-thought-out plan for your garden that utilizes low-maintenance plants and flowers will save you time throughout the season. You can even map out what you are going to plant while you’re watching Netflix!

2. Take out weeds with ease.
When low-growing weeds grow into a mat, don’t spend time taking them out one at a time. Instead, use a sharp spade to slice beneath them and turn them over to bury the leaves, which will decompose, enriching your soil.

3. Water without wasting time.
Don’t spend time filling a watering can—use soaker hoses instead! Set the pressure on low to slowly irrigate sections of your garden while you do something else.

4. Garden-on-the-go.
Make every minute you are outside of your home count! Use the time when you let your dog out or your kids are waiting for the bus to pull a few weeds or dead-head flowers. This will cut what could be a long weeding and maintenance session on the weekend into more manageable mini-sessions throughout the week.

Whether you have a green thumb or not, use these tips and you’ll have more time to enjoy a beautiful yard—and the other things you like to do.

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Overtime Pay Eligibility Expanded – What Businesses Need to Know

President Obama, declaring that “Americans have spent too long working more and getting less in return,” ordered the Labor Department to revise federal rules on overtime pay for salaried workers that log more than 40 hours a week. The long-awaited rule change will extend overtime pay to an estimated 4.2M workers.

Under current federal regulations, only salaried employees who make no more than $455 a week, or $23,660 a year, are guaranteed to receive overtime after working more than 40 hours a week. The new rules would raise that threshold to $913 a week, or $47,476 a year, giving salaried workers who are higher up the income scale the ability to work less or earn more for long hours.

The ruling also establishes a mechanism for automatically updating the salary and compensation levels every three years.

You can find detailed information on this new ruling on the United States Department of Labor website: https://www.dol.gov/whd/overtime/final2016/index.htm

Please feel free to contact our office if you have questions.

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Sleep on This! Think Quality Not Quantity When It Comes to Shut-Eye

We’ve likely all heard the news—Americans are incredibly sleep-deprived. However, according to recent research, achieving better quality sleep may be more important than actually increasing the number of hours of sleep. In fact, experts report that 6 hours of deep refreshing sleep is more beneficial than 8 hours of light interrupted sleep.

May is Better Sleep Month, so with that in mind, consider the following ways you can improve the quality of your sleep and reap the benefits of improved health and productivity:

• Establish a consistent sleep schedule by sleeping at the same time each day of the week (including weekends).
• Before bed, relax and limit any stimulating activities such as exercise and work.
• Avoid alcohol, nicotine and caffeine close to bed time, as they can disrupt sleep.
• Make the area where you sleep dark, well-ventilated, and at a comfortable temperature.
• Remove any distractions such as computers, mobile devices and televisions from your bedroom.

The key to better sleep is to create an environment that supports these habits. It may take a few weeks to do so, but the effort is worth it!

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Be $1,000 Richer by Next Year with These Simple Savings Strategies

Wow! May is already here—and if you’re like many Americans your savings account balance is still stuck where it was at the beginning of the year. So what to do? You can’t make up for lost savings opportunities…or can you? We believe that you can with a little bit of discipline. For example, saving $125 a month can be as easy as:

• Renegotiating your mobile phone, cable and other subscriptions.
• Reducing the number of takeout meals you consume.
• Relying on yourself to clean your home or mow the lawn instead of paying for third-party services.

Try these and a few more simple tips for saving serious dollars over the course of the next eight months and you can easily save at least $1,000—which you can deposit directly into your savings account for a kick start to your 2017 financial goals.

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5 Actions to Reduce Cyber Liability Risks in Your Business Today

A quick glance at the news is all it takes to realize that the threat of cyber attacks is increasing for businesses. So how can your business beat the odds and avoid becoming another victim of cybercrime? Try putting the following five action items at the top of your priority list:

1. Encrypt your data. Whether it's bank routing digits, credit card accounts or employee social security numbers, company-held information is what hackers use to steal money, so make sure it is adequately encrypted.
2. Secure your hardware. Obviously, cyber criminals use the internet to steal information, but others may actually try to steal physical hardware as well. To prevent this, make sure your business has a security system and physically lock down your computers (to desks) and servers (behind controlled-access doors) to make it harder to remove them from your premises.
3. Secure your network. Unlocked Wi-Fi networks are like an open door to your company’s data. One solution is not to have Wi-Fi at all at your company. The more practical solution may be to disable the service set identifier (SSID) broadcasting function on the wireless router. This creates a cloaked or hidden network, invisible to casual Wi-Fi snoops and accessible only to users with the exact network name.
4. Install anti-malware and anti-virus protection. Email phishing and apps that access social media accounts are popping up with increasing regularity. Loading anti-malware and anti-virus protection on your computers and mobile devices can help protect your business. In addition, keeping programs and hardware updated is key.
5. Educate your employees. If just one computer on your network becomes compromised, your entire operation is at risk. Employees are your first line of defense, so make sure you educate them about what to look for and what to avoid (a formal internet policy can help) to keep your business secure.

The risk businesses face from cybercrimes is greater than ever. Implementing these tips will help you mitigate risk and ensure that your company avoids a potentially devastating data breach or other malicious acts, which can compromise both security and business viability.

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Final Check – Did You Claim Every Eligible Tax Deduction?

Every year, American taxpayers leave millions of dollars on the table for Uncle Sam—in the form of unclaimed tax deductions. With Tax Day just around the corner, it’s time to do one final check to make sure that you are not missing out on three of the most common deductions:

• Retirement contribution deductions for single-income couples and the self-employed. It’s not too late to open an IRA account and make a contribution for a non-working spouse or yourself if you’re self-employed to gain an additional tax deduction—plus some additional retirement funding. Simply do it before the tax deadline and keep in mind the maximum annual contribution is $5,500 per person, or $6,500 for people 50 and older.
• Sales taxes on big ticket items. Tax law allows individuals to deduct the larger of the amount paid in either state income tax or sales tax. While you should check the specific rules for your state, it’s worth checking this potential deduction out, especially if you made a major purchase such as a new car, truck or boat in 2015.
• Deductions for charitable contributions. Many people contribute to charities throughout the year and incur out-of-pocket expenses. This includes clothing donated to a local shelter or miles driven (14 cents per mile deduction) while volunteering for a charity. Just remember you need a receipt for any contribution over $250.

If you have yet to file your taxes, consider asking your tax professional if you qualify for any of these deductions and take that hard-earned money off the table so you can put it back in your pocket!

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Five Snacks to Spring Clean your Body and Mind

Spring is here and the season for new beginnings. This is a good time to re-think "spring cleaning" and choose snacks that can cleanse our bodies from the inside out.

These five snacks are guaranteed to feed your mind, detoxify your body, and satisfy your palate!

1. Guacamole - High in fiber and “fat” but don’t worry, it’s good fat! Spread it on toast or eat it with veggies. This fruit is not only delicious but contains a ton of antioxidants and glutathione, a nutrient that can block up to 30 carcinogens and detoxify your liver.

2. Kale chips - Kale is king. It’s loaded with antioxidants, vitamins, and minerals and boosts metabolism while providing cancer fighting compounds. Baked Kale chips satisfy the “crunch” we all crave and taste delicious.

3. Raw almonds - Almonds are the perfect grab–and-go snack. Almonds are rich in vitamins and minerals such as magnesium, which helps break down glucose into energy.

4. Greek yogurt - Greek yogurt has fewer carbohydrates and sugar while boasting more protein than other yogurt. It’s a great source of vitamin B12 and potassium, which helps to decrease blood pressure and muscle cramps while increasing energy. Try plain yogurt and add your own fruit or a drizzle of honey.

5. Dark chocolate - Sometimes chocolate is the only thing that will satisfy your craving, so you might as well give in. Dark chocolate is one of the best sources of antioxidants on the planet, plus it has half the sugar and four times the fiber of milk chocolate. Choose 70 percent cocoa content or higher for optimal antioxidant benefits.

Whichever of these snacks you choose, planning ahead is the key to success. Make time to pack your snacks in portion-controlled containers and bring them with you so that when hunger strikes, you aren’t left having a face-off with the vending machine.

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Make Your Spring Break Worry-Free with These Home Security Tips

If you’re packing your bags for a spring break getaway, take a little time before you leave to implement the tips below—they’ll help keep your home safer while you’re gone, and free your mind of worry so that you can truly enjoy your trip.

1. Tell your neighbors that you will be away. Inform your neighbors and friends of the dates that you will be gone and ask them to keep an eye out for any suspicious activity around your home.
2. Clean up the kitchen. Dispose of any food that will spoil and take out the garbage and recycling. Any food left in the trash or even the sink can rot and may even attract unwanted, four-legged animal or insect scavengers into your home.
3. Turn off the water. If you live in an area of the country where your pipes might freeze, or if you’re concerned about a plumbing leak occurring while you’re gone, it’s a good idea to turn off the water while you are away so you can avoid a potential indoor flood.
4. Invest in simple security measures. These easy and inexpensive security tips can make your home more secure: install a light switch timer that can turn your house lights on and off on a schedule; park a car in your driveway to make it look like you’re home; make sure all windows and doors are locked before you go; and just to be safe, put valuables away out of plain sight.

Spring break should be a time to get away and relax, not to be worrying about your home. With these tips, you’ll be able to reduce your risk of theft or damage occurring at your residence, and have peace of mind as you travel.

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Tax Season is Scam Season... Keep Your Information Safe!

The IRS has joined with industry and states on a public awareness campaign to provide taxpayers with easy tips to better protect themselves. For some quick tips, you can watch an informative video here.

Tax-related identity theft occurs when someone uses your stolen Social Security Number to file a tax return claiming a fraudulent refund. To prevent becoming another victim of identity theft, the IRS has compiled the following tips to help keep you safe:

1. Don't carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
2. Don't give a business your SSN or ITIN just because someone asks. Give it only when required.
3. Monitor your financial information regularly, including your credit report. You can get a free report yearly at annualcreditreport.com, and several financial services now offer free monitoring at any time.
4. Review your Social Security Administration earnings statement annually.
5. Secure any personal information kept in your home.
6. Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
7. Don't give personal information over the phone, through the mail, or via the Internet unless you have initiated the contact or you know who you are dealing with.

If you have any questions about the security of your tax information, please contact our firm.

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Identity Protection PIN Letters List Incorrect Tax Year

According to a recent IRS notice, due to an error, taxpayers are receiving Identity Protection (IP) PIN letters with an incorrect year listed. If you received the CP01A Notice dated January 4, 2016, be aware that the PIN contained in it is valid for use on all individual tax returns filed in 2016.

The IRS notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return.

If you have any questions, please contact our office.

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Getting Over It… Quick Tips for Beating the Post-Holiday Slump

It’s a stark reality that millions of us face once the holiday season is over: the post-holiday slump. Even just a few days off can make coming back to the office seem excruciating—there’s all that work to do, the anticipation and cheer of the holidays are gone, and for many people the next vacation day is a long way off. Yes, being a working adult is tough, but getting over the post-holiday slump doesn’t have to be with these tips:

Keep the special treats coming. There’s no reason to go cold-turkey on self-kindness just because the holidays are over. Why not savor a festive mug of hot cocoa instead of coffee at your desk? Or bring that nice hand cream you received as a gift to the office and use it when you need a little pampering during the workday.

Flex your schedule, if possible. You know when you’re most productive and energized at work… so try not to fight your natural rhythm. If you’re not as perky first thing in the morning, see if you can start your workday a little later and rejuvenate with some extra sleep. If you like to get things going early, take advantage of this energy and get a head start, then leave a little earlier if you can.

Lighten your load a bit. The start of the new year often means a renewed sense of urgency to get things done. To avoid feeling completely overwhelmed and cranky, try to pace your schedule so that you have time to breathe and get things done as opposed to running from one meeting to the next.

Get on with your goals. If you find it hard to resume the regular routine after the holidays, try to respect your feelings while avoiding getting mired down in self pity. You may find that reevaluating your professional goals can be quite energizing. Break down your objectives into manageable tasks and, “Just do it!” Sometimes getting started is difficult, but once you have momentum you’ll recapture your pre-holiday mojo.

Transitioning back to post-holiday can be tough, but as we all know, all good things must come to an end. So be kind to yourself—and your co-workers—ease back into your regular workdays and tackle the goals that will make 2016 one to remember!

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Customer Service Goes Social—Is Your Business Prepared?

If your business engages in social media, you may have noticed an uptick in the number of customers who are posting questions on your Facebook page, tweeting comments or engaging with your company on other social platforms looking for customer service support. It’s a trend that is affecting just about every type of business—and using social media as a customer service channel will continue to grow in the future. So prepare your company to handle social customer service effectively with these tips:

1. The number one way to preserve your company’s reputation in the social sphere (and beyond) is to continually monitor your social media channels so that you can respond swiftly to questions and comments—especially the negative ones.
2. Create a Frequently Asked Questions (FAQ) section on your company’s website and link to it in your social media profiles (i.e. the “About” area that is available on many social platforms). This will provide an easy way to for customers to “self serve” and for you and your staff to refer customers to “standard” information when needed.
3. When it comes to negative comments (and you are likely to receive them no matter how great your business is), no matter how you feel about the complaint, you need to respond publicly, professionally, and immediately. Your objective should be to try to diffuse the situation by acknowledging the customer’s feelings and then to encourage a resolution in private by asking the customer to direct message or email you. Don’t engage in a debate on social media…that will only hurt your business.

Just like in other customer service scenarios, consistency and professionalism are key when you're using social media for customer service. Keep this in mind as you prepare yourself and your team to implement the tips above and master social customer service!

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IRS Simplifies Filing and Recordkeeping for Small Business – Hooray!

In an ongoing effort to keep you informed of IRS changes, we have a new and important one to report. And this time, the change eases your filing burden.

Within the last month, the IRS significantly simplified the paperwork and recordkeeping requirements for small business by raising the safe harbor threshold for deducting certain capital items from $500 to $2,500. This applies to money spent to acquire, produce, or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item substantiated by an invoice. As a result, small businesses will be able to immediately deduct many expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions.

For more detail on this new change, please read the full IRS article here.

And, as always, contact our firm if you have questions. We are here to help!

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Tis the Season! Avoid Common Holiday Scams with These Tips

As cybercriminals begin to take advantage of the holiday season, it’s important to take extra precautions to avoid having your money, credit card information, social security number, or identity stolen. E-commerce thieves, at this time of year especially, will try to create holiday-related websites, scams, and other phishing e-mails that can trick even the most alert consumers. The following tips can help:

Don’t let your generosity leave you vulnerable to criminals. Many cybercriminals want to take advantage of your generosity by sending e-mails that appear to be from legitimate charitable organizations. Do not click on links in any such email—instead, go directly to the website of charities that you know and trust to make a legitimate online donation.

Make sure things are really signed, sealed, and delivered. During the holidays, cybercriminals often send fake email invoices and delivery notifications appearing to be from Federal Express, UPS, or the U.S. Customs Service. These e-mails may ask for credit card details or require users to open an online invoice or customs form to receive a package. Such actions can result in stolen information and/or malware being installed on your computer. It is best to check with the specific delivery service directly before answering these emails.

Stop before you shop. It’s important to think about where you are doing your holiday shopping—even if it’s online. You may be used to shopping on your tablet or phone, but if you’re doing so on an unsecured Wi-Fi network or an open hotspot, a hacker can easily steal your personal information…so wait until you get home to shop online.

Be merry and wary when doing festive online searches. It’s sad but true. During the holidays, hackers often create fraudulent holiday-related websites based on popular searches for holiday ringtones or wallpaper, Christmas carol lyrics, or festive screensavers. Downloading such files may infect your computer with spyware, adware, or other malware, so be careful in your quest for holiday fun online.

While it pays to be vigilant about protecting your personal and financial information all year round, it’s especially important to do so during the holidays when criminals are counting on us to be hurried, distracted, and more active online. Use the tips above to help prevent being the victim of an unexpected holiday cybercrime.

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The Key to Scoring on Black Friday? Create a Pre-Game Plan

The countdown is on to the what retailers hype as the best shopping day of the year—the day after Thanksgiving dubbed by Americans as ‘Black Friday’—represents the kick-off to the holiday shopping season. However, given the explosion of retail competition and the Internet in the past several years, Black Friday is really not what it used to be. And if you’re not careful, you can end up spending more than what you planned on poor quality merchandise.

The key to scoring real deals is to go into the holiday shopping season with a pre-game plan. Retail analysts offer this advice: Do the homework by researching deals and create a game plan in advance. In addition to the copious number of direct mail and email offers you’re likely receiving now, don’t forget to checkout social media for exclusive deals as well. Then make a list of the absolute best deals on the items that you need to check off your holiday gift, décor, and entertaining lists.

The bottom line is that while you can certainly find some great deals on Black Friday, you need to be aware that much of the advertising is just hype—so don’t let it overtake your logic when it comes to your spending. Set a Black Friday budget prior to heading out to the stores or to your favorite retail websites, stick to your list, and take a moment to think through your purchases before making them—but by all means, take the opportunity to score some big savings if given the opportunity!

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It’s Tax Planning Time—Here Are Some Money-Saving Tips for Individuals and Businesses

With just a few short weeks to go before the end of the year, it’s important to take a look at your tax situation and consider ways to decrease your tax obligations. In other words, it’s time for tax planning. We put together the following tips for you to support smart tax decisions:

1. Stay apprised of potential tax provision extensions. Congress still has time to extend some popular tax provisions before the end of 2015, so keep an eye out for news on provisions including (but not limited to): taxpayers 70.5 years and up can make tax-free charitable contributions, businesses can deduct half of eligible equipment placed in service, and more!
2. Track the time you spend on business activities. Business owners may be exempt from the 3.8 percent Medicare tax on business income if you are active enough in the business to avoid being a “passive investor.”
3. Keep on top of information reporting. Make sure you complete your mandatory reporting on time this year to avoid potentially large penalties.
4. Make good on your state and local tax obligations. Remember that State and local governments impose their own filing and payment responsibilities with income, sales, and property taxes to avoid added penalties.
5. Accelerate deductions and defer income. When it comes to taxes, you want to accelerate deductions and defer income. How? Consider deferring bonuses, consulting or self-employment income; also consider accelerating state and local income taxes, interest payments, and real estate taxes.
6. Do you anticipate a tax shortfall? Take care of it with increased withholding. Check your withholding and estimated tax payments now while you still have time to fix the issue. If you face an underpayment penalty, you can eliminate the shortfall by increasing withholding on your salary or bonuses.

Our firm can help you take an in-depth look at your current tax position, explain how changes to the tax code will affect you and your business, and help you implement strategies to reduce your tax bill. Contact us today so you can benefit from advance planning this coming tax season.

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4 Steps to Finding the Sweet Spot for Success

Ah, the sweet smell of success! Achieving goals and bringing our vision to fruition is the end-game for most of us, especially in our business lives. Unfortunately, success can sometimes elude us to the point where we have to start looking at what, exactly, is going wrong. Perhaps, though, the question we ought to be asking is this: What is going right? By honing in on what is bringing you or your company the results you want, instead of focusing on the things that are taking you further from where you want to be, you can discover your sweet spot—the place where you can find true success.

So how do you find your sweet spot? We’ll get to that in a minute, but first, let’s define what we mean by sweet spot. The sweet spot (for an individual or a business) is the intersection of the things that you are good at and come (relatively) easily to you or your team, and the things that the market (or an employer) is willing to pay for.

Finding your sweet spot as an individual professional and as a business owner is important because it allows you to operate with efficiency, strength and, usually, profitability. Surprisingly, many people and even entire companies continue to struggle without ever finding or leveraging their sweet spot. If you haven’t found your sweet spot yet, then now is the perfect time to start looking by following these four steps:

1. Cultivate your core competencies
Finding your sweet spot is really an inside job. It’s not about trying to add to what you have, it’s about leveraging your existing core competencies. You (or your business) made it this far, so you must have some valuable competencies that you can leverage into a viable career, company, or new product or service.

2. Seize on your strengths
Making a list of what you love to do (or what your company does well and profitably) is a great way to hone in on your strengths and identify your sweet spot. Maybe you love to design websites, create winning proposals, sell, write, do financial analysis, or sew cushions—whatever it is, it’s likely something that can lead you to your sweet spot. The other important thing to keep in mind is that you need to match up your strongest skills and talents with market demand. For example, while you may love to crochet potholders, the market may not support building an entire empire on that one activity alone.

3. Listen to your fans
Do people always tell you that you have an aptitude for art? Or do your customers rave about the unique flavors of cupcakes that your bakery only offers periodically? Make notes about what people praise you or your business for—and chances are, the exceptional things that others notice likely reside at the center of your sweet spot.

4. Start seeing your sweet spot
Now that you’ve identified your core competencies, your strengths, and the things that you are objectively good at (according to your fans), put them all together and start seeing where your sweet spot lies. Once you do this, consider if there are things that you are innately good at that can be monetized (i.e. people have a need for what it is you provide and will pay decent money for it). Once you have these figured out, create a plan to bring them to market. (Or, if you’re an individual, highlight them on your resume.)

If you’re seeking success and it seems to be eluding you, consider working toward identifying your sweet spot…the place where the things that you (or your team) are good at and the things that the market (or an employer) is willing to pay for come together in sweet harmony. While it may take a little bit of work on your part, the dividends of doing something you truly love and are well-suited for will be well worth the effort.

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Ease Aches, Pains and Worker’s Comp Claims with These Ergonomics Tips

The Human Factors and Ergonomics Society has designated each October as National Ergonomics Month (NEM). Ergonomics is an applied science that incorporates principles of usability into the design process with the goal of making finished products more effective and safe for people to use.

In the workplace, proper ergonomic practices can play an important role in reducing pain, injuries, loss of productivity and the resulting Worker’s Comp claims. One of the most common ailments involved in Worker’s Comp cases, according to the Bureau of Labor Statistics are musculoskeletal disorders (MSDs) such as low back injuries, carpal tunnel syndrome, and soft tissue damage, which can increase the risks of accidents and repetitive strain injuries. With October almost here, it’s the perfect time to consider the following tips for reducing MSDs from the Occupational Health & Safety Administration to make your workplace safer and more productive:

• Provide Management Support - A strong commitment by management is critical to the overall success of an ergonomic process. Management should define clear goals and objectives for the ergonomic process, discuss them with their workers, assign responsibilities to designated staff members, and communicate clearly with the workforce.
• Involve Workers - A participatory ergonomic approach, where workers are directly involved in worksite assessments, solution development, and implementation is the essence of a successful ergonomic process. Workers can:
  • Identify and provide important information about hazards in their workplaces.
  • Assist in the ergonomic process by voicing their concerns and suggestions for reducing exposure to risk factors and by evaluating the changes made as a result of an ergonomic assessment.
• Provide Training - Training is an important element in the ergonomic process. It ensures that workers are aware of ergonomics and its benefits, become informed about ergonomics related concerns in the workplace, and understand the importance of reporting early symptoms of MSDs.
• Identify Problems - An important step in the ergonomic process is to identify and assess ergonomic problems in the workplace before they result in MSDs.
• Encourage Early Reporting of MSD Symptoms - Early reporting can accelerate the job assessment and improvement process, helping to prevent or reduce the progression of symptoms, the development of serious injuries, and subsequent lost-time claims.
• Implement Solutions to Control Hazards - There are many possible solutions that can be implemented to reduce, control, or eliminate workplace MSDs.
• Evaluate Progress - Established evaluation and corrective action procedures need to be in place to periodically assess the effectiveness of the ergonomic process and to ensure its continuous improvement and long-term success. As an ergonomic process is first developing, assessments should include determining whether goals set for the ergonomic process have been met and determining the success of the implemented ergonomic solutions.

Ergonomics tools and practices can help to keep workers healthy, reduce the costs of Worker’s Comp claims, and increase productivity, quality, and employee morale. Implementation may take some time and effort, but the benefits are well worth it.

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Spending Less Cash on Gas? Use Your Savings to Rev-Up Your Finances

If you did any road trips over the summer—or you commute to work—you’ve likely noticed that filling up your vehicle doesn’t necessarily empty your wallet anymore. Thanks to lower gas prices, the average American is on track to save approximately $750 on gas this year.

While it’s not life-changing, $750 can make a difference to your personal finances if you use it wisely. Here are some smart ideas for taking the money you save on gas for the remainder of this year (or as long as gas prices continue to stay low) and revving-up your financial situation.

1. Pay down credit card debt. Credit cards have some of the highest interest rates, so reducing any balance you have on your credit card will save you additional money in the long run.
2. Make an extra payment on a lower-interest loan. Although interest rates on mortgages, car loans and student loans are typically much lower than on credit card debt, you can still save money by reducing the principal on a lower-interest loan with a lump sum payment or by making an extra payment, if your creditor allows you to do so.
3. Pump up your holiday savings. Thanksgiving and the winter holiday season are just a few short months away—why not take the money you save every time you fill up your car and put it in a special savings account to use to buffer your holiday budget?
4. Put money away for a rainy day (or for a future gas price increase). What goes down, will likely go up again, especially when it’s something like gas prices that are impacted by market forces. To ease the pain of facing higher fuel prices in the future, put the financial differential of your current fuel costs compared to what you used to pay for gas into a rainy day account so you can access it when you need it.

It’s unlikely that gas prices will remain low forever, so instead of frittering away the money you’re saving on fuel now, make a conscious effort to use it to accelerate your personal financial goals with one of the tips above.

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New Tax Law More Than Doubles Fines for Failure to File Information Returns and Failure to Provide Payee Statements

The Trade Preferences Extension Act of 2015 was recently signed into law. Part of this new law includes a provision that more than doubles the cap on penalties from $1.5 million to $3 million for 1) failure to file correct tax information returns and 2) failure to provide payee statements. In both cases, fines have been increased from $100 to $250.

These changes are effective for returns and statements required to be filed after December 31, 2015.

The impact of these increased penalties is likely to be significant given that the penalties apply to a wide range of information returns and statements, including W-2s, 1099s, and Forms 1042 and 1042-S (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons). In addition, the IRS has formed special units to address information reporting issues both within the Large Business and International (LB&I) Division and within the Office of Associate Chief Counsel (International). These actions may suggest heightened IRS interest in information reporting audits that could lead to adjustments to which the increased penalties would apply.

In light of these changes, it is critical that businesses be vigilant about filing information returns and providing payee statements to all applicable parties. If you have any questions about these requirements related to your business or your personal situation, please contact our firm.

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Highway Funding Bill Ushers in New Tax Return Due Dates and Other Important Changes

As reported by The Journal of Accountancy on July 31, the short-term highway funding extension passed by the Senate—and signed by President Obama—at the end of July contains several important tax provisions (H.R. 3236). The bill was passed by the House of Representatives, 385–34. The bill modifies the due dates for several common tax returns, overrules the Supreme Court’s Home Concrete decision, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries. Here is a summary of the changes:

Due date modifications for business and other tax returns

• The act sets new due dates for partnership and C corporation returns, as well as FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), and several other IRS information returns.
• For partnership returns, the new due date is March 15 (for calendar-year partnerships) and the 15th day of the third month following the close of the fiscal year (for fiscal-year partnerships). (Currently, these returns are due on April 15 for calendar-year partnerships.) The act directs the IRS to allow a maximum extension of six months for Forms 1065, U.S. Return of Partnership Income.
• For C corporations, the new due date is the 15th day of the fourth month following the close of the corporation’s year. (Currently, these returns are due on the 15th day of the third month following the close of the corporation’s year.)
• Corporations will be allowed a six-month extension, except that calendar-year corporations would get a five-month extension until 2026 and corporations with a June 30 year end would get a seven-month extension until 2026.
• The new due dates will apply to returns for tax years beginning after Dec. 31, 2015. However, for C corporations with fiscal years ending on June 30, the new due dates will not apply until tax years beginning after Dec. 31, 2025.
• The due date for FinCEN Form 114 is changed from June 30 to April 15, and for the first time taxpayers will be allowed a six-month extension.
• The due date for Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, will be April 15 for calendar-year filers with a maximum six-month extension.

Additional information is now required on returns relating to mortgage interest

The bill also amended Sec. 6050H requiring new information on the mortgage information statements that are required to be sent to individuals who pay more than $600 in mortgage interest in a year. These statements will now be required to report the outstanding principal on the mortgage at the beginning of the calendar year, the address of the property securing the mortgage, and the mortgage origination date. This change applies to returns and statements due after Dec. 31, 2016.

Consistent basis reporting between estate and beneficiaries

The act also amends Sec. 1014 to mandate that anyone inheriting property from a decedent cannot treat the property as having a higher basis than the basis reported by the estate for estate tax purposes. It also creates a new Sec. 6035, which requires executors of estates that are required to file an estate tax return to furnish information returns to the IRS and payee statements to any person acquiring an interest in property from the estate.

These statements will identify the value of each interest in property acquired from the estate as reported on the estate tax return. The new basis reporting provisions apply to property with respect to which an estate tax return is filed after the date of enactment.

Our firm will keep you informed on these and other changes that affect your tax planning and reporting. If you have any questions about the changes outlined here, please contact us.

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Not Sure Which Metrics Are Right for Your Business? Help is Here!

As legendary business author Peter Drucker once said, "What's measured improves." If you've been in business any length of time, you know that creating meaningful measurements that tell you how your business is doing (a.k.a. Key Performance Indicators or KPIs) can be challenging. The good news is, you only need a few KPIs to really get a handle on the financial pulse of your business.

Rick Smith, Director of Business Analysis and Process Improvement at Yale University says the best place to start is by clarifying what should be included in the "critical few" measurements that business owners focus on. He suggests using a problem-solving perspective and asking three key questions:

1. How are you doing?
2. How do you know?
3. Where must you improve?

While this approach is simple, it does require you to dig deep and ask probing questions in order for it to be effective.

Smith also says that it's important to differentiate between KPIs and metrics. A KPI equals a metric, but a metric does not equal a KPI. A metric is simply a data point such as 300 calls per day. That doesn't tell you if it's good or bad. A KPI includes two points to measure: 1) where you are and 2) where you should be as defined by your business objectives, service level agreements, or company specifications.

Smith also points out that businesses often create both operational and customer experience metrics, and they can get out of sync. Operational metrics show everything is working fine, but the customer experience metrics tell a different story. This is usually caused by not measuring the right things or not measuring correctly. To counteract this problem, Smith developed an indicator called the FVI (FACE Value Index). A high FVI is a good indicator that your business practices are in harmony with established KPIs.

The FACE components include:

F = Fast (i.e. Are you being efficient?)

A = Accurate (i.e. What is your error ratio?)

C = Cost Effective (i.e. Are you meeting profitability goals?)

E = Easy (i.e. Can you maintain the process without excessive effort or resources?)

By using Smith's two-part process for establishing and measuring KPIs you can more easily determine metrics for your business processes, beginning with the three key questions above to narrow down the "critical few." Then use the FACE components to establish your metrics. Two to three metrics in each major area of your business to determine how you are doing should be sufficient.

Our financial experts have a wealth of experience in helping business owners measure and improve their KPIs. Please contact us if we can be of assistance in this regard.

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Plan in Advance to Help Aging Parents Manage Their Money

For many adult children, it’s hard to contemplate the fact that their once seemingly invincible parents may now—or at some point down the road—become dependent on them to take care of their everyday needs. If you don’t feel prepared to take on these tasks, this scenario can be very stressful—especially when part of your duties involves taking care of your parents’ finances. Even if you're not at this point with your parents yet, it is important to engage in some basic planning and start preparing in case you do have to take control of their financial affairs later. Follow these tips to help you prepare:

Be proactive—talk to your parents now. If your parents are still mentally and physically fit, now is the time to have a conversation about what they would like to see happen if they eventually need you step in and manage their finances. A critical part of this kind of preparation is to encourage your mom and dad to assemble a document that details the location of their financial accounts and safe-deposit boxes, as well as the names of their financial professionals. They may not be comfortable with you knowing how much money they have, but you need to have access to account numbers, contact information, and names of financial institutions so that you have them in case of an emergency. If you don’t need it right now, make sure this information is kept somewhere secure.

Find out what their financial obligations are. Knowing where your parents stand with bank accounts, their relationships with financial institutions, and their overall assets is only half the story when it comes to being proactive about helping your parents manage their finances. You also need to know what their financial obligations are. Have your parents create a list of all their expenses, so you’ll know what bills need to be paid on a regular basis in case you have to make payments on their behalf. Writing down the specific names of utilities, credit card companies, and the like on this list may seem like a pain, but you’ll be glad you have them if you have to start paying your parents’ bills suddenly—especially if you live far away and aren’t familiar with your parents’ local service providers.

Learn who your parents’ trusted advisors are. In addition to being familiar with the actual transactions of your parents’ financial affairs you should also know which financial professionals they have relationships with. If your parents are still capable of actively managing their finances, but are open to you at least meeting their CPA, investment advisor, and attorney, it may be worthwhile taking advantage of the opportunity to meet them and introduce yourself, in case you need to step in. If your parents aren’t open to the idea of making these introductions, make sure you at least have the information you need to contact your parents’ advisors in the event that you need to act on their behalf.

Having a parent who becomes dependent on you can be a burden that takes its toll on you in many ways. However, with a little bit of advance planning, you should be able to prepare the information you need to manage your parents’ finances effectively, and reducing your stress when it comes to handling the financial piece of their affairs.

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Four Ways Mid-Year Financial Planning Can Pay Off

Tax season is over and one of the biggest American celebrations—the Fourth of July—is just around the corner.  Maybe you’re looking forward to a little downtime this summer, so perhaps working on your financial plan has slipped to the bottom of your to-do list. It’s understandable, but putting your finances on cruise control at mid-year is not an ideal strategy. Here are four reasons why you should put a mid-year financial review at the top of your priority list…

1. Looking at your finances mid-year means you still have time to meet your goals

Mid-year is an ideal time to do a financial review because a) you’re not under the gun trying to get your taxes done and b) there are some important planning opportunities that you can benefit from now that won’t be available if you wait until the end of the year. For example:

• Are there any life-changing events occurring soon such as marriage, the birth of a child, retirement, or a career change?
• Will your income or expenses substantially increase or decrease this year?
• Are you on track with your savings goals?
• Are you comfortable with the amount of debt that you have?
• How is your investment portfolio doing?

These are all areas to review at mid-year to ensure you can reach your goals and not end up with costly surprises once it is too late to take corrective action.

2. You may be able to reduce your taxes now—and pay less next April

Sure, you may have digitally filed your tax return away for the year, but taxes are not meant to be a once-a-year task. Having an ongoing tax plan is the best way to reduce your tax burden—and relieve the pain of tax season.

Your tax professional can help you do a mid-year estimate of your tax liability, which may reveal tax planning opportunities. Using last year’s tax return as a basis, you can make adjustments to your income and deductions that will pay off next tax season. In addition, you can check to make sure that you are withholding the correct amount of tax on your income—especially if you owed a lot of money or received a big refund this past April.

3. You’ll really be ready for retirement

Do you look at your investment account statements when you receive them, or do you put them in a drawer unopened? Are you in a set-it-and-forget-it investment mindset? If either of these scenarios sound familiar to you, then make this summer the time to take a good look at how your investments are doing and make any necessary adjustments to your investment strategy.

If you are an active investor and you received a pay increase this year, consider increasing your retirement plan contributions by asking your employer to set aside a higher percentage of your salary. In 2015, you can usually contribute up to $18,000 to your workplace retirement plan ($24,000 if you’re age 50 or older).

Already retired? Then a mid-year review is equally important for you to ensure you have the income you need and that your current investments and distribution strategy are ideal for your situation.

4. Enjoy the summer with financial peace of mind

One of the most important things that a mid-year financial review can do for you is provide peace of mind. By taking a little bit of proactive action now and working with our team to make sure you are on track with your financial goals, you’ll be able to really relax and enjoy all the summer season has to offer—knowing that you’ll be in great shape when year-end and next tax season come around again.

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Summer Break for Your Kids Could Mean a Tax Break for Your Business

School’s out for many kids, and if you run your own business, you may be able to turn your child’s summer break into a tax advantage—and some extra help—for you.

Hiring your offspring as an employee to do legitimate work in your business provides several tax benefits:

• You can deduct the salary you pay your child from your business income as a business expense.
• You can shift part of your business income from your own tax bracket to your child’s bracket, which often creates substantial tax savings.
• Your child only pays tax on the money they earn in excess of the standard deduction amount for the year.
• If your child is a minor, in most cases (see the exceptions below) you don’t have to withhold or pay any FICA (Social Security or Medicare) tax on the salary due to the federal employment tax exemption for under-age-18 employees.

Sounds great…doesn’t it? Keep your kids busy all summer, get additional assistance at your business, and reap the tax savings. However, the IRS does keep close tabs on parents who employ their children to ensure that the situation is legitimate and in keeping with these three rules:

Rule 1: Your child must be a bona fide employee
The work your child does must be common and necessary for your business and their pay must be for services actually performed. Their services don’t have to be indispensable, but they do need to be appropriate for your business. Any real work for your business can qualify, but personal services such as babysitting or lawn mowing at your residence do not.

How young can a child be to qualify as an actual employee? According to recent reports, the IRS accepts children seven and older as being able to perform useful work for a business. You should keep track of the work and hours your children perform by having them fill out timesheets with the date, the services performed, and the time spent performing the services.

Rule 2: Keep compensation reasonable
Your child’s total compensation (salary plus fringe benefits) must be reasonable. This is determined by comparing the amount paid with the market value of the services performed. In order to keep track of what you pay your child, use checks (not cash) once or twice a month just like you would for any other employee. The funds should be deposited in a bank account in your child’s name.

Rule 3: Legal requirements for employers still apply
Even if you are hiring your child, you must comply with the same legal requirements as you do when you hire any other employee. This includes completing IRS Form W-4 and U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You must also record your child’s Social Security Number and complete and file IRS Form W-2 showing how much you paid your child.

An important note: The federal employment tax exemption for minors employed by their parents mentioned above, is only available when the parent’s business (the employer) is conducted as: (1) a sole proprietorship, (2) a single-member LLC (SMLLC) that’s treated as a sole proprietorship for tax purposes, (3) a husband-wife partnership, or (4) a husband-wife LLC that’s treated as a husband-wife partnership for tax purposes.

If your business is a corporation, the federal employment tax exemption is unavailable for wages paid to your child, but hiring them can still be a tax advantage because your child’s standard deduction will provide an income tax shelter and your business can deduct the wages and the employer’s share of employment taxes.

If you’re a business owner with a child capable of doing meaningful work, this summer may be the perfect time to introduce them to the concept of earning their keep—and helping mom or dad in the process!

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The IRS Confirms Hacking of Taxpayer Accounts—What You Need to Know

Last week, the Internal Revenue Service (IRS) announced that a "brute force" hacking attempt compromised approximately 104,000 taxpayer accounts through the utilization of the “Get Transcript” tool located on IRS.gov. In the attack, hackers utilized information gleaned from black market sources to answer identity verification questions and receive confidential information from the IRS system. 

The IRS reports that the system has been used 23 million times to provide taxpayers important information about their tax accounts as well as wage and earnings information. Although this hacking attempt is significant, as one industry source reports, less than one half of one percent of successful requests to the Get Transcript system were fraudulent—the hackers already had access to Social Security numbers, birthdates, and identity verification information like former addresses and phone numbers. They did not steal this information from Get Transcript.

Taxpayers whose accounts were compromised will be notified by the Internal Revenue Service. Individuals who believe their identities have been compromised in this, or any other attempt, should review the IRS “Taxpayer Guide to Identity Theft,” which advises the following course of action:

1. File a police report.
2. File a complaint with the Federal Trade Commission.
3. Contact one or more trade bureau and request a “fraud alert.”
4. Close any financial accounts opened without your permission.
5. Respond immediately to any IRS notice.
6. Complete IRS Form 14039, Identity Theft Affidavit.
7. Continue to file your tax return, even if by paper.

Source: CPA Tax & Compliance Advisor email published by CPA Practice Advisor.

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Take Time to Really Live Offline

It’s no secret that the majority of Americans are spending a lot of time online. While some of the time we spend on the Internet is productive, there’s a lot of it that’s not—and it’s crowding out some of our higher value offline activities, according to research from the National Bureau of Economic Research (NBER).

In a recent NBER study, each minute of online leisure time is correlated with 0.29 fewer minutes on all other types of leisure—with about half of that coming from time spent watching TV and video, 0.05 minutes from (offline) socializing, 0.04 minutes from relaxing and thinking, and the balance from time spent at parties, attending cultural events, and listening to the radio. While these may seem like really small increments of time, they do add up over the course of weeks and months. As such, you may want to consider replacing some of your offline time to do the things that really make life worth living. Here are a few ideas to get you started:

• Talk to people face-to-face. Even in today’s connected world, digital communication is no substitute for in-person interaction. It’s simply not the same as in-person interactions with all of the emotion and body language cues.
• Take care of yourself. No time to exercise or to eat a healthy meal? No time to take a relaxing bath or to read a good book? If you spend time surfing the web or using social media, it’s likely that you have at least half an hour a day of leisure time that could be used to do these things or something else that’s good for you.
• Spend time in nature. Let’s face it; when we’re surfing the web or navigating social media, we’re generally being sedentary and unengaged with the world around us. Instead of spending your usual time on Facebook or Pinterest, why not take a walk outside, appreciating the beauty of the natural world around you—even better take a friend with you so you can really connect.
• Reconnect with relatives. Life is short, so taking every opportunity we have to enjoy time (offline) with our families should be a priority. Instead of exchanging messages on Facebook or through email, invite your relatives over for some real bonding time, including board games, a real meal cooked together at home, or just an afternoon of relaxation and recounting family stories.
• Do nothing. Part of the allure of the Web is that we can feel productive simply by surfing it. However, there’s nothing wrong with doing nothing—and it might actually do you a lot of good in terms of enhancing your problem-solving and creative abilities. So disconnect, unplug, and learn to be still with life on a regular basis.

There’s no doubt that the Internet has transformed our lives and, for the most part, it’s been for the better. However, like most things, balance is the key. Take time daily—or at least weekly—to do some of the activities suggested above or to incorporate some of your own favorite offline pursuits. Chances are, you’ll find that doing so will improve the overall quality of your life.

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Want to Improve the Efficiency of Your Business? Toss the To-Do List

When it comes to running a business, building as much efficiency as possible into your operations is the key to keeping things running smoothly and freeing up your own time to focus on the big picture. While employing the right team and the right technology are integral to boosting efficiency, so is having the right mindset when it comes to how you approach day-to-day tasks.

You may be surprised to learn that the traditional to-do list can actually hamper your ability to improve the efficiency of your business—and your own productivity. So what is the alternative for those of us who “Live by the list?” According to entrepreneurial efficiency and business experts, the key is to make sure that your to-do list is not just a vehicle for checking off mundane items, but instead that it remains a tool for helping you do the things that will have the greatest benefit to your business first.

Think in terms of priorities, not tasks.
Entrepreneur and author Mike Michalowicz writes, “The problem with a to-do list is that every entry has the same value.” Instead, he suggests business owners should use a priority list that has the following three symbols (you can substitute alternative symbols if you like), to help prioritize activities: The dollar sign ($), which is assigned to any task that generates revenue in the next 60 days; a smiley face, which is assigned to any task that pleases a current client; and a ∞ symbol for any task that creates a system—something that can run itself thereafter ∞.

The key to this type of priority list is that you can assign more than one value to each activity—or you can assign nothing to an activity, which means you may want to consider dropping it completely from your list. When you use your priority list the items with the most symbols should be addressed first. Those tasks without symbols are your lowest priority.

Another way to make a priority list is to divide your tasks into the following four categories based on Stephen Covey’s iconic Important/Urgent grid: Important and urgent, Not urgent but important, Not important but urgent, Not important or urgent. Using this convention, you would prioritize tasks falling in the “important and urgent” category first and perhaps reduce or eliminate tasks in the “Not important or urgent” category.

Use your list to organize action, not delay it.
Many business owners do find that lists are an essential way to track the numerous things they need to accomplish on a daily basis. Whether you toss your traditional to-do list for one of the alternatives mentioned here, or keep it, be sure that the process you are using to create lists actually enhances your ability to take action efficiently—rather than being an end in and of itself.

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Tax Day 2015 is Gone. Time to Ask These Three Questions.

Yes, Tax Day has come and gone for this year, but the memory of your tax return is likely still fresh. So before you move on, consider the following three questions that may point you toward areas you want to work on before next April 15 rolls around.

Do I need to start my tax filing earlier?
Ideally, you should engage in tax planning year-round. As your trusted advisors, we can help you identify tax savings strategies throughout the year, so set up an appointment to talk to us about how we can help you mitigate tax obligations and make sure that you are taking full advantage of the tax savings available to you.

It’s also worth noting that the introduction of new tax reporting requirements related to the Affordable Care Act added considerable complexity to many individual returns this year. This, combined with delays in receiving tax documents from employers and other entities compressed the amount of time available to file returns. For the future, this means that the earlier you start getting your tax documents in order the more likely it is that your return can be filed promptly. The best strategy is to file (or better yet scan and electronically store) your receipts and any other documents you’ll need at tax time as they come in to avoid having to rush to meet tax deadlines.

Does my tax withholding need an adjustment?
Once you are done filing your taxes, the answer to this question becomes quite obvious. If you found yourself in the position of writing a large, unanticipated check to the United States Treasury Department, you may wish to look at how much tax you are withholding through your employer. Or, if you are self-employed, you should consider increasing your estimated tax payments. On the other hand, if you are receiving a big tax refund, you may want to consider reducing your withholding or estimated tax payments to increase your take-home pay or to fund additional investments in eligible tax-sheltered retirement savings plans.

Is my retirement strategy effective?
On the topic of retirement savings plans, your tax return clearly shows whether you made the maximum allowable contribution to tax-advantaged retirement savings accounts. If you didn’t in the 2014 tax year, you may want to consider increasing your contributions now so you can reduce your taxable income on next year’s return while also improving your financial future.

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Control the Clutter! 5 Tips to Create a More Organized Life

If compiling all of your tax documentation this year triggered the thought that you really should try to be more organized, then the following tips are for you. Constantly searching for things you have misplaced, missing important dates, and not feeling like you have control over your days can waste your time and increase your stress level.

The following tips will help you take manageable steps toward strengthening your organizational skills, helping you feel less overwhelmed in the process:

1. Modify your mindset. While we often focus on the external tasks associated with becoming more organized, the first step you should take is to shift your mindset so you become committed to making changes that improve the way you function and how you manage your time and resources.
2. Create structure that works for you. Many problems related to disorganization are actually caused by a lack of structure. If the thought of a schedule makes you uncomfortable, think about applying this concept only to those areas of your life that need it most, such as your morning routine and the parts of your workday where you tend to get distracted. Start by breaking down the time you want to manage more effectively into 15- or 30-minute increments for completing specific tasks.
3. Identify your trouble zones. It’s likely that you are more organized in some areas of your life than others. Make a plan to tackle the places that give you the most trouble, such as your car or desk. Pick a specific day of the week or month to clean these areas and then use the “place for everything” mantra to keep them organized.
4. Compartmentalize the clutter. If you regularly spend time searching for keys, documents, and other items, it can make you very frustrated. The remedy for this problem is simple, but it does take some effort: A) Create specific places for all of the things you use daily. B) Set up designated places for your phones and chargers, hooks to hang your keys, and baskets to hold kids’ and adults’ miscellaneous items.
5. Technology can help. Digital tools can support you in your organization efforts and help you maintain the progress you make. Reducing or eliminating your paper trail by scanning and securely storing documents is just the beginning. For example, our firm offers you a convenient way to organize, exchange, and streamline key financial documents using a secure online portal on our website. There are also many smartphone apps you can use to create task lists and reminders to help you ensure that you know what needs to get done and that it fits into your newly implemented schedule.

The tips above offer a good starting point to become more organized, but it’s up to you to find the motivation and tools that fit your lifestyle and your long-term goals. Instead of trying to tackle all areas of your life at once, start with the areas that you can tackle relatively easily when you begin—such as organizing your desk or creating a place to hang your keys. Taking just a few small steps toward streamlining your routine will go a long way in helping you feel calmer and more in control.

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Keep Safe with These Spring Break Travel Tips

If you’re planning to travel this spring break, you have likely already spent time planning your trip—but have you spent time thinking ahead about how to reduce the chances of a mishap while you’re traveling? While no one wants to ruin their vacation worrying excessively, it is wise to take a few preventative steps to ensure that your time away is not marred by an easily preventable mishap. Check out these tips to keep you safe during your spring break travel:

1. Know the places you should avoid. Spend some time before you leave on your trip to learn as much as you can about the place you are going and any areas or activities that may be unsafe so you can avoid them.
2. Pack for function, not flash. It is best to avoid bringing anything that’s flashy or expensive (such as jewelry and cameras) on vacation to avoid being targeted by thieves. Instead of carrying large quantities of cash, use ATM’s (in well-lit public areas) to replenish if you need to. If you take credit cards, take only the ones you plan to use and make photocopies of the front and back of them to leave with someone at home. This will make it much easier to cancel your cards if they are lost or stolen while you are away.
3. Post your plans and pictures after your vacation. While it’s tempting to post about your vacation plans prior to your departure and share pictures from your trip in real time on social media, for safety’s sake, you should wait until you are home to do so. To avoid giving thieves clues that your home would be an easy target for a break-in.
4. Pack for emergency preparedness. Unfortunately, illness and injury do not take vacations—so you should be prepared for them, just in case. Consider whether you need any additional medical insurance while you are away and bring clearly labeled pain and fever relievers and any prescription medications you may need in your purse or carry-on luggage. It’s also a good idea to bring the name and number of your family physician and a travel-size first aid kit with you.
5. Have fun, but stay alert. While you definitely want to enjoy your trip, keeping alert and being aware of your surroundings will help you avoid unsafe situations. When traveling with children, discuss with them what to do if they get separated from you while away from home.


For many of us, a vacation offers the perfect opportunity to relax and enjoy time away from the regular routine. By exercising common sense and using the tips above, you’ll reduce your risk of any safety mishaps while you are away.

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IRS Offers Small Businesses Limited Relief for Health Coverage Reimbursement Arrangements

Some health coverage reimbursement arrangements offered by small employers (those with less than 50 full-time employees) are considered by the IRS to be non-compliant with the health coverage plan requirements set forth in the Affordable Care Act (ACA). Beginning January 1, 2014, employers who offer such plans were facing a significant penalty: an excise tax of $100 per employee per day, up to an annual maximum of $36,500 per employee. Employers should breathe a sigh of relief, however, because on February 18, 2015, the IRS issued notice 2015-17, which provides relief from this excise tax with the following provisions:

1. Transitional tax relief for employers who reimburse for health insurance premiums but do not have ACA qualifying plans. These employers now have until June 30, 2015 to change their plans to ACA qualifying plans without penalty. Alternate arrangements that reimburse employees for medical expenses, rather than for premiums only, do not qualify for this relief. In addition, employers covered by this exemption are not required to file Form 8928, regarding failures to satisfy requirements for group health plans, including market reforms, with their 2014 tax return.
2. Temporary tax relief for employers with S-Corp plans that reimburse more-than 2% shareholder employees for health insurance premiums. Essentially, these plans are still in violation of the ACA, but the IRS has yet to issue guidance for this type of situation so until further notice (likely until the end of 2015), these employers will have tax relief. S-Corp shareholders will continue to have health insurance premiums included in their gross wages, while receiving a deduction for self-employed health insurance and the IRS will not assert the Section 4980D penalty on S corporations that reimburses the insurance premiums of a more-than 2% shareholder.

   For S corporations maintaining more than one reimbursement arrangement for different employees (regardless of whether they are more-than 2% shareholders), the various arrangements are treated as a single arrangement covering more than one employee. The S corporation will then be classified as conducting a group plan, rather than a single employee plan, and will be subject to the penalty when transitional relief expires. An important note: Notice 2015-17 exempts S corporations with only one employee from market reforms.

3. Employers may keep their non ACA compliant health insurance reimbursement arrangement and give employees a raise instead of reimbursing them for health insurance premiums. If an employer opts to keep their existing non-ACA compliant plan instead of establishing a qualifying group plan, the only way to avoid penalties is for the employer to increase the salary of each employee which will be subject to increased income and payroll taxes. Importantly, an employer can in no way condition that the increased salary is dependent on an employee obtaining health insurance. An employee must be able to use their increased compensation at their discretion.

While Notice 2015-17 does offer some relief to businesses from the tax impact of the ACA, it is important to keep in mind that this relief is only temporary and that the IRS will be providing further clarification in the future. It is a good idea for employers to take this window of opportunity to review their employee healthcare plans and method of funding in order to make any adjustments necessary to avoid penalties. If you have additional questions, please contact our office, we are happy to help you.

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Don’t Be a Victim! Beware of Scams Targeting Taxpayers This Tax Season

With the rise of identity theft and tax and financial fraud, it is critical that we all remain vigilant about protecting our sensitive personal and financial information—especially during tax season. Being alert to any attempts by criminals to intercept your information is one important way you can protect yourself. The IRS recently issued the following alerts about a new crop of tax season scams. Take a few moments to review this information to keep yourself safe from scammers looking to target taxpayers.

1. An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, is making the rounds throughout the country. According to the IRS website, callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.

   

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are threatened with arrest, deportation, or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Alternatively, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.

   The IRS urges taxpayers to note that they will never: 1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill; 2) demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe; 3) require you to use a specific payment method for your taxes, such as a prepaid debit card; 4) ask for credit or debit card numbers over the phone; or 5) threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

2. Be on guard against “phishing”—fake emails or websites looking to steal personal information. The IRS will not send taxpayers emails about a bill or refund without contacting them by mail first. Don’t click on an email link claiming to be from the IRS unless you are expecting the IRS to send you an email based on previous contact you have had with them.
3. Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security Number. The IRS is making progress on this front, but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim.
4. Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. If you want to contribute to a charity, take a few extra minutes to ensure that the organization in question is actually a currently eligible charitable organization. Be especially wary of charities with names that are similar to familiar or nationally known organizations.

These are just some of the current tax season scams that you should be aware of. You can visit the IRS website to see additional scam alerts. If you have any questions, or you encounter any suspicious activity related to your financial or tax information, contact our office. We are committed to helping you protect yourself and your financial health.

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Four Easy Ways to Energize Your Employees

February can be a tough month when it comes to motivation and energy levels for many people. So it’s not surprising that employees may seem a little less productive at this time of year. Fortunately, the following four tips can help you put the spring back in your team’s step—and boost the productivity of your business.

Keep Sharing Your Vision
People want to have a goal to which they can aspire—and a shared vision of where your business is going can be a strong motivational force. By sharing your vision and reminding your team periodically about the important role they play in it, you can energize your workforce.

Stop Hovering
If you tend to micromanage, try stepping back and letting your employees’ creativity and morale soar. Unless you have new team members who really do need handholding, your employees will feel much more empowered if you simply let them do what you hired them to do.

Offer Ongoing Education
When it comes to energizing your team, providing periodic learning opportunities is key. Giving employees the chance to sharpen their skills will not only improve your business, but your willingness to invest resources in staff development will also elevate your employees’ enthusiasm for doing their best work.

Spread the Love
Encouragement is a powerful elixir for increasing employee engagement. Everyone wants to be recognized and appreciated for the work they do. Be sure to recognize people on your team, even informally, as often as possible.

Don’t let the post-holiday doldrums dampen the spirits or productivity of your team. Try implementing these tips to energize your employees—and your business.

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Keep This, Not That—Which Documents Should You File and Which Should You Toss After Tax Season?

If there’s one time of the year that may inspire you to finally come up with a filing system for all of your bank statements, receipts and other important documents, it’s tax season. Not only will keeping your documents organized make it easier and less stressful for you to find what you need on a daily basis (and when you are getting ready to have your taxes prepared), it will also ensure that if something happens to you, your loved ones will be able to quickly find essential information about your finances and other relevant items.

One of the major challenges that many people encounter when they start going through their documents is knowing what they should keep and for how long. The following list from Consumer Reports may help you determine what to keep and what to toss (remember to shred all sensitive documents before you put them in the recycling bin or trash) once tax season is over:

Documents to keep for a year or less

• Bank records: Keep deposit and ATM receipts until you reconcile them with your monthly statements. File your monthly checking and savings account statements. After you do your taxes, file any statements needed to prove deductions with your tax records; the rest can be shredded.
• Credit-card bills: Shred them after you've checked and paid them, unless you need a bill to support a deduction you'll be taking on your taxes, such as for a charitable donation (in which case you'll need to file the bill with your current-year tax records).
• Current-year tax records: Keeping your records organized can save you headaches and money at tax time. Place documents you'll need for your next return in a file.
• Insurance policies: Keep policies that you renew each year, such as those for your home, apartment, or car, until you get new policies, then shred the old ones.
• Investment statements: You can shred your monthly and quarterly statements from brokerage, 401(k), IRA, Keogh, and other investment accounts as new ones arrive. But hold on to annual statements until you sell the investments.
• Pay stubs: Keep the calendar year's records until you reconcile them with your annual W-2 form, then shred them.
• Receipts: If you're not doing anything with your receipts—like tracking your spending, itemizing tax deductions, or using them to return purchases—you don’t need to keep them.

Documents to keep for at least a year

• Investment purchase confirmations: You will need these to establish your cost basis and holding period when you sell investments. If this information appears on your annual statements, you can keep those instead of quarterly or monthly statements. Store the records until you sell the investments, at which time you should move the back-up records into that year's tax-return file.
• Loan documents: Keep closing documents for mortgage, vehicle, student, and other loans in a safe-deposit box. You can dispose of them after the loan is paid off.

Documents to archive for seven years

• Personal federal and state tax returns and their supporting records: These documents must be kept for at least seven years. Remember, your returns can be audited by the IRS up to three years after the date you filed the return. If you fail to report more than 25 percent of your gross income, the government has six years to collect the tax or start legal proceedings—and you can be audited at any time if the IRS suspects you of fraud.
• Tax records: If they are more than seven years old, tax records can be stored—or even better scanned—for your records.

Documents to keep indefinitely

• Essential records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept in a safe-deposit box.
• Permanent life insurance: Policies that have a cash value or investment component—keep documents and a list of the companies that issued them and their phone numbers in your safe-deposit box. If you have a term life policy, hold the documents until the term is over, then toss them.
• Pension-plan: Documents from your current and former employers and estate-planning documents including wills, trusts, and powers of attorney should also be stored in your safe-deposit box.

If you’ve already instituted a filing system for your key documents, kudos to you. If you haven’t, now is the perfect time to do so. If you have any questions about which financial records you need to keep or which ones you can safely dispose of, please let us know, we are happy to help.

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Ten Tax Changes That May Impact Your 2014 Tax Return

Tax season is here, and there are many tax changes that were implemented in 2014 and more to be introduced in 2015. From Obamacare to tax hikes and changes to standard deductions, there's a lot to keep track of. To help you get organized for this tax season and beyond, review this summary of some of the most significant tax issues and changes.

Obamacare Penalties Kick In
The Obamacare individual mandate goes "live" this tax season. The mandate requires that consumers purchase health insurance or face a penalty of $95 or 1% of their annual income, whichever is greater. The penalty is $47.50 per child, up to $285 for a family.

Changes to FSAs
2014 was a big year for health care-related tax changes. If you take advantage of a Flexible Spending Account (FSA) to help pay for future medical expenses with pretax dollars, you should note that in 2014 Congress made a change so that if you carry over funds (up to the $500 maximum carry over limit) into 2015, you will be disallowed from participating in an HSA in 2015.

Flexible Spending Account Limits
The annual limit on employee contributions to flexible spending accounts is now $2,550 for qualified health care expenses. That's up $50 from 2014, so make sure you opt in for this new maximum amount if you take advantage of a health care FSA.

Only One Annual IRA Rollover is Allowed
Up until now, individuals could use tax-free rollovers for each of their IRA's. Starting in 2015, only one tax-free IRA rollover will be allowed for a period of one year for any number of IRA accounts. This includes SEP, SIMPLE IRA's, Roth, and Traditional IRAs.

Income Tax Rate Changes
The American Taxpayer Relief Act of 2012, or ATRA, added a seventh federal income tax bracket (39.6%) in 2013, while the remaining six rates were unchanged. In 2014, taxable incomes above the following thresholds now fall into the 39.6% bracket: Married Filing Separately ($228,800), Unmarried Individuals ($406,750), Head of Household ($432,200), and Married Filing Joint Returns ($457,600).

Unified Credits, Gift Tax and Estate Tax

Additionally, ATRA increased the estate and gift tax rate from 35 to 40%. The gift tax and estate tax exclusion continue to be indexed for inflation and increase to $14,000 and $5.34 million respectively in 2014.

Standard Deduction Increases

The standard deduction—that is, the basic tax break extended to all Americans rises this year to $6,300 for single filers and $12,600 for married taxpayers filing jointly in 2015. That's up $100 and $200, respectively, from 2014 figures.

Tax Bracket Adjustments
For the new tax year starting in January, income tax thresholds have again been adjusted up for inflation. The highest tax rate of 39.6%, for instance, will now apply to single filers who make over $413,200 and married couples making $464,850. Both figures are up about 1.6% from tax year 2014. For more information on specific income tax brackets by filing status, check out the latest IRS revenue procedure document.

AMT Changes
The so-called "alternative minimum tax" is quite a headache for many middle-class Americans. Since certain breaks can significantly reduce your tax bill, the IRS created the AMT to set a limit on those benefits and ensure a minimum tax burden on you. The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 for individuals or $83,400 for joint filers. That's up slightly, about 1.5% from 2014.

Social Security and Medicare
As was the case in the past, all wages earned in a given year are taxed at the 1.45% rate for Medicare. On your 2014 tax return, wages paid in excess of $200,000 for Unmarried filers and in excess of $250,000 for Married filers will be subject to an extra 0.9% tax. The Social Security tax rate remains at 6.20%, while the wage limit, or Social Security maximum, increases from $113,700 to $117,000. The Cost of Living Adjustment (COLA) was 1.5% in 2014, raising the SSI limit to $2,642 per month.

With so many tax changes instituted last year and more coming this year, it is likely that you will notice the impact of several of them..Please be sure to contact us with any questions. We look forward to helping you.

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Tips for Achieving Your Financial Goals This Year

With 2015 just around the corner, it’s smart to take a few minutes to plan ahead for the coming year in terms of the goals you want to achieve. If managing your money more effectively in the year ahead is one of the things you want to tackle, it helps to break your goal down into manageable steps.

Figuring out your financial plan comes down to three essential steps: managing, growing, and protecting your money. Here are some tips to help you succeed in these three areas of your financial life.

1. Managing your money. If you can't figure out how to earn more, spend less, save more, and pay down debt, you won't have the assets you need to grow your wealth. From recent college graduates to baby boomers near retirement, learning how to live on less than you make, borrowing money and using credit responsibly, and saving money for unexpected situations are critical steps you must take.

2. Growing your money. When it comes to saving and investing, it’s never too early, or too late, to start. By putting money aside each month and investing it wisely, you can grow your money to help pay for your child's education, buy your first home or a vacation home, and fund your retirement. It may be helpful to talk to a financial professional to make sure your investment strategy is sound.

3. Protecting your money. Getting up to speed on the best retirement and tax and estate planning practices can make all the difference in being able to retire on your terms and leave a positive financial legacy for your loved ones. Federal income taxes can be a family's greatest annual expense, underscoring the importance of strategic tax planning. Knowing your tax liability before the annual April 15th deadline is critical to your overall financial plan, so get in touch with our office if you have any questions in this regard.

In addition, careful estate planning can prevent confusion and chaos for your family when you're gone. So make sure you have a will and a clearly articulated plan for how your assets should be handled in the event of your passing.

Being proactive about managing, growing, and protecting your money and other assets this year may be one of the best New Year’s resolutions you can make—paying dividends to you well beyond 2015. If you need any assistance putting your financial plans into action, please contact our office—we are happy to help you.

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Give Yourself a Last Minute Gift: Year End Tax Planning

It’s the most wonderful time of the year—and for many of us, it is also one of the busiest. While adding one more thing to your to-do list—like year-end tax planning—may induce a feeling of overload, it really is one task you shouldn’t skip, because it can give you the gift of a lower tax bill next April.

Here are a few tips to help you end 2014 with the good feeling of knowing that you are in good shape for the coming tax season.

Act now to accelerate deductions and manage your income for the current year. Depending on what your income level is this year, you may want to defer some income (through investments or other tax-deferral vehicles) if you think it will help keep you from reaching a higher tax bracket or if your income will be near the thresholds for the additional Medicare tax ($250,000 if married and filing jointly; $200,000 if single; and $125,000 if married and filing separately). On the deduction side, you may be able to accelerate your state and local income tax payments, real estate taxes, interest payments, or business investments, so think about paying these obligations before next year is here so you can claim the deduction on your 2014 tax return.

Keep up with estimated tax payments. Having the dates for estimated tax payments on your calendar is important—including the fourth 2014 estimated tax payment due this January 15. By calculating this payment and the first one due for 2015 (April 15 next year) you will have a preliminary idea of what your tax liabilities will be, giving you an idea of how much you'll need to set aside to make these payments.

Check your withholding and estimated tax payments now while you have time to fix a problem. If you’re in danger of an underpayment penalty based on the calculations you made above, try to make up the shortfall now instead of waiting until your next tax payment. If you need assistance handling delinquent taxes or other tax issues, contact our firm for professional guidance.

Now is the time to apply for health care tax exemptions. If you do not have health insurance, the Affordable Care Act mandates that you must pay the "shared responsibility payment" with your federal taxes. Exemptions are available, however, the process to qualify for one (which must be approved by the Health Insurance Marketplace) can take several weeks. Now is the time to apply.

Maximize “above-the-line” deductions. Above-the-line deductions are valuable because you deduct them before you calculate your Annual Gross Income or AGI. They are allowed in full and make it less likely that your other tax benefits will be limited. Common above-the-line deductions include traditional IRA and health savings account (HSA) contributions, moving expenses, self-employed health insurance costs and alimony payments.

Make the most of retirement account tax savings. In addition to any 401(k) contributions you may make if you are employed, depending on your income, you may want to make contributions to other retirement accounts—or start one if you haven’t already. Traditional retirement accounts like an individual retirement account (IRA) still offer some of the best tax savings. Contributions reduce taxable income at the time that you make them, and you don’t pay taxes until you take the money out at retirement. The 2014 contribution limits for an IRA are $5,500 ($6,500 for those 50 years of age and older). If you have questions about your investment strategy and tax savings contact us for assistance.

With just a few weeks left in 2014, now is the ideal time to look at your current financial situation and plan for the future, in addition to starting to get your tax documentation in order. If you have any questions, please contact our firm—we are happy to help you.

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Unique Ways to Share Your Gratitude This Thanksgiving

With Thanksgiving literally right around the corner, it’s the perfect opportunity to reflect on the abundance that we have in our lives and how we might express our gratitude to the people who mean the most to us.

If you are enjoying a gathering with family and friends this Thanksgiving, here are a few unique, fun activities from that can help you create an atmosphere of genuine gratitude during the traditional festivities.

Introduce the Annual Appreciation Awards at the end of your Thanksgiving feast. Make some fun, inexpensive turkey trophies and label them with an achievement accomplished by each guest, or give out awards based on why you’re thankful for each family member.

Make gratitude your secret ingredient. As your guests come in, have them write what they’re thankful for on small strips of parchment paper. Then lay each strip on top of store-bought crescent dough before rolling it up and baking. When dinner’s ready, your family and friends can read messages of gratitude out loud.

Share a jar of thanks. If you’re looking for a way to share gratitude with your immediate family, have each family member drop a note of gratitude into the jar each day leading up to Thanksgiving. Open the jar and read each note on Thanksgiving.

Create a Thanksgiving journal that expands each year. Pass a blank notebook around the Thanksgiving table each year and have your guests record what they are thankful for. You can then look back and see how your family has grown and changed throughout the years.

Our firm is thankful for the opportunity to serve the individuals and businesses in our community. We extend our best wishes for a safe and happy Thanksgiving to you.

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Five Things You Can Do to Reduce the Risk of Spreading Cold and Flu in Your Office

Late fall typically marks the beginning of cold and flu season, which can pose a real threat to businesses. While public health officials continue to push flu shots, the message isn’t inciting many people to act. Add to this those employees who are hesitant to take sick days, meaning they come to work and inadvertently spread germs, and the potential for a cold and flu outbreak heightens.

The impact such behaviors can have on businesses—especially small ones—is nothing to sneeze at. The website HealthyWorkPlaceProject.com, estimates a 25-employee company loses $33,000 every year to lost productivity, sick days, and temporary workers brought in to replace sick employees. So what can you do to keep your employees healthy? Here are five tips to reduce sickness in the workplace:

1. Advise sick workers to stay home. Keeping sick employees from becoming a drain on productivity often requires a company policy on illness—one that gives workers peace of mind that taking a sick day will not have a negative impact on their employment.
2. Encourage preventative care. Simply encourage employees to get vaccinated—in addition to other healthy habits such as eating well, exercising, getting plenty of rest, and proper sanitary practices for themselves and their work areas.
3. Remind employees to wash their hands often. Incorporating reminders into company emails, newsletters, and even signage can be a non-intrusive way of relaying the importance of hand washing.
4. Provide sanitizing products to keep workspaces clear of germs. Providing hand sanitizer, wipes, disinfecting sprays, and towels for employees to clean their desks and keyboards regularly will foster good sanitizing habits.
5. Plan for increased sick days during cold and flu season. If possible, prepare telecommuting options for employees who feel well enough to work, but who may be contagious. Unless they're laid low by a bad flu, most employees can work a little bit from home. This strategy can help slow or eliminate the spread of cold and flu during peak season.

Of course, it is unlikely that you and your employees will be able to escape illness altogether, so having a solid healthcare benefits plan in place is another smart strategy. If you have any questions about healthcare benefit options, contact our firm for assistance.

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Reaping the Rewards: Tips for Implementing an Effective Employee Incentive Program

For some employees, the satisfaction of doing a great job is a reward in and of itself. However, for many companies, implementing a rewards program for employees is necessary in order to maintain employee morale and productivity. While investing time and money to develop and implement an employee incentive program may seem like an inefficient use of resources that detracts from your bottom line, if you look at the big picture, quite the opposite is true.

The cost of unhappy workers to a business can be extremely high. A recent Gallup survey estimates that this kind of unhappiness is costing employers $300 billion annually due to decreased productivity, including more sick days and lackluster operational results. To help you avoid these negative effects, here are a few points to keep in mind when creating a rewards program for your business.

Rewards should appeal to your employees—not just your company leadership. Creating a work environment that boosts happiness, productivity, and morale requires more than a few free doughnuts every now and then. It requires genuine recognition, meaningful feedback, training, and support. However, these things will only improve employee morale so much—after you’ve recognized the efforts and output of your employees, you’ll need to start building an effective rewards program. Doing so will show your employees that there is a system in place that encourages their engagement and productivity with tangible and intangible incentives they value.

Your rewards programs should be customized and tailored to your unique company. Incentives that work for one company might not necessarily work for another, so it’s important that you create a program that fits your company culture and reflects your employees’ interests. For example, if your organization is very health-minded, offering rewards that include a lot of unhealthy foods are not likely to be appealing. Instead, you may want to offer rewards such as free fitness facility memberships or branded company workout gear. In addition to tangible rewards for special achievements, you can also offer employees additional vacation days and the reward of peer recognition by publicly announcing in person or in a company publication the details of their accomplishments.

A key component of any rewards program is measurement. Keeping track of employee progress and who has received rewards is important not only so you know who has performed well, but also because it can actually motivate other staff members to up their game to reap the rewards being offered as well. Leaderboards, periodic email updates, and sharing staff achievements via social media or newsletters can be powerful ways to quantify and publicize the progress or your internal rewards program.

Implementing a solid employee rewards program not only encourages and motivates employees, it can also pay huge dividends in terms of improving productivity, your bottom line, and employee advocacy. If you’re considering offering rewards to your employees, you may also want to involve them in the process of shaping and implementing your incentive program—another easy way to show that you value your employees’ contributions to your company.

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Do Your Employees Know What Customer Service Means to You?

If you own a business, you know that your customers are its lifeblood, so customer service is key. While you may recognize this fact, it may not always resonate with your employees. So how do you ensure that all your hard work to win customers isn’t undermined by poor customer service when they come face-to-face with your employees—especially if you can’t always be there to supervise?

The following tips may also be useful in making your customer service consistent and truly exceptional:

Provide customer service resources. Give your employees clear instructions for creating and maintaining service superiority—a written customer service policy manual for example. If your employees are unclear how customers should be served, they need to have resources available to help them learn. You can also offer resources such as FAQs in your employee manual, a manager or supervisor who can be a customer service coach, and of course, reminders of your own vision, as the business owner, for how customers should be treated.

Develop and communicate benchmarks for superb customer service. Be certain that your employees know the specific behaviors that constitute exceptional service at your company. Don’t take it for granted that your team knows what good service is—or what you consider good service. Measurable benchmarks that indicate great service should also be identified and shared.

Share the good, and the not-so-good. Make your employees aware that because customer service is so important to your business, you monitor it closely and want to share with them how everyone can work to make sure customers have the best possible experience. Meet with your employees regularly to talk about improving service and to reward employees who practice great customer service. The sharing should also be a two-way endeavor, so solicit ideas from employees—after all, they are likely the ones who are dealing with customers most often.

Formalize the customer feedback process. While many businesses rely on anecdotal comments to judge whether they are doing a good job serving customers, it can be helpful to formalize the customer feedback process so you can track trends over time and quantify results against your goals. Obtaining regular feedback using surveys or other tools also helps to show your customers that you care and are listening to what they have to say. You may even get some great ideas to help improve your service or other areas of your business.

By defining and communicating what your company’s specific customer service standards and policies are, involving your employees in the process, and quantifying the results of your efforts, you’ll have peace of mind knowing that everyone on your team is consistently “wowing” your customers with exceptional service.

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Is Your Business Prepared for the Next Phase of Obamacare?

In just a few short months, the calendar will read 2015—the year in which the next phase of the Affordable Care Act, known as Obamacare, will kick in for businesses with 100 or more employees. Under the law, businesses with 100 or more employees on their payroll will need to start providing health benefits to at least 70 percent of their full-time workers in 2015, and to 95 percent by 2016. Companies that fail to meet these targets will be subject to penalties that start at $2,000 per employee. Businesses with 50 to 99 full-time employees will need to start insuring workers by 2016.

One area of these new regulations that business owners need to be clear about is the Obamacare definition of a full-time employee: 30 hours a week or more, versus the historic 40-hour week recognized by other federal and state laws. Obamacare also requires employers to collect signed waivers from employees who opt not to sign on to a company insurance plan. Even if an employer opts not to offer insurance, they are still required to file forms to substantiate the number of full-time and part-time workers they employ.

The required documentation means that businesses need to be prepared to monitor their employees’ hours—especially part-time employees—to make sure that they don't average more than 30 hours a week. Employers must also have a process in place for documenting that they have offered coverage to their full-time workers.

The penalties for non-compliance with the next phase of Obamacare may be significant, so it pays to prepare now. Companies with 100 or more employees that don't offer coverage may be liable for fines of $2,000 and $3,000 per worker next year. This penalty will apply for businesses with 50 or more employees in 2016.

Businesses that fall under the new mandate should also be aware that if any one of their employees receives a premium tax credit from the Obamacare insurance marketplace because the coverage they offer is deemed unaffordable or does not cover 60 percent of total costs, the employer must pay a Shared Responsibility Payment of either $3,000 for each employee getting a credit or $750 for each of their full-time employees, whichever is less. Under the Obamacare law, insurance is considered unaffordable if an employee's share of the premium costs for employee-only coverage (not the entire family) is more than 9.5 percent of their yearly household income.

It’s clear that the next phase of Obamacare brings with it some considerable new responsibilities for business owners. Adding preparation for these new mandates on to your year-end planning list will help you avoid penalties and start 2015 off right. If you have questions about Obamacare and how it will affect your business, please contact our firm for assistance.

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Is Your Business Facing Back Taxes or Penalties? Take a Proactive Approach Before Next Tax Season.

While you may still be enjoying the last few weeks of summer thinking that it’s too early to start preparing your business for tax season, you may want to reconsider putting your tax planning on hold—after all, the peak of the tax preparation period is just a few short months away.

While it is wise to engage in tax planning strategically and consistently throughout the year, if you haven’t done that this year, then now is the time to be proactive and get organized—especially if your business has fallen behind on any tax payments.

Here are a few tips to help you put yourself in the best position possible when it comes to filing your business taxes next year:

Make a plan to pay back taxes. If you have fallen behind on any of your business tax payments, start today to right the situation by creating a plan to avoid further penalties by making payments. Accounting professionals are usually well-versed in IRS problem resolution—including those involving non-payment of taxes, so don’t be afraid to speak up and ask for help to create a plan that your business can afford.

Be proactive about payroll taxes. If your business is behind on payroll taxes, consider discussing with our firm the possibility of using an IRS installment plan to get back on track. If your business owes less than $25,000 in combined tax, penalties and interest, and has filed all required returns, this may be an option.

Avoid paying fines related to retirement plans. For businesses sponsoring retirement plans, failure to file Form 5500 for annual reporting can result in fines as high as $15,000, so be sure that you are up-to date on this requirement. If you do have a penalty and were legitimately unaware that you needed to complete this filing, you may be eligible for the U.S. Department of Labor’s program to reduce or eliminate these penalties.

Start organizing your tax records now. Organizing your business tax records now can make filing taxes much easier and faster come tax season. It can also show you exactly where you stand in terms of tax payments and any penalties that you may be facing. Compiling your documentation well ahead of time will reduce your stress and allow you to easily file a complete and accurate return and make any provisions for payment plans or IRS problem resolution.

If your business has fallen behind on taxes or you are facing tax-related penalties, don’t wait until tax season is here—please consult our office so we can help you prepare and make a plan ahead of time.

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Don’t Fall Back—Use These Tips to Get Ahead Financially Before the Year Ends

With the official start of the fall season almost here, it’s the perfect time to get your finances in shape before year-end, so you’ll be well-prepared when 2015 begins.

Increase your retirement contributions. If you’re not already saving for retirement, start now! If you know you need to save more, up the contribution you are making to your investment accounts this fall. If you are not sure what you need to do, speak with a financial professional for advice.

Start using your flexible spending account (FSA). If you don’t use your FSA before the end of the year, you’ll lose out on the funds you have in it. Now is the time to get new glasses, have dental work done, or take care of other qualified healthcare needs.

Review your health insurance. Many employers have open enrollment for health benefits in October and November. It is especially important to review your health benefits information at this time, because your employer may have made changes due to health care reform regulations.

Review your home, auto, and life insurance coverage. In addition to your health insurance, now is the perfect time to take a look at any changes you may need to make to your personal insurance coverage, which should be reviewed annually. If you have had any significant life changes (such as buying a new home or having a new baby) or have any additional assets (a new car, for example) then you may need to look at additional coverage.

Develop a budget for now and for next year. Do you feel like your bank account is always running on empty? Or perhaps you have some financial goals that you would like to achieve in 2015. Be proactive and think about what changes you need to make to feel a little more financially flush today, and get where you want to be in the year ahead.

Plan for vacations and holidays. It’s never too early to start saving for next year’s summer vacation—and by starting now you will be able to put money away without really feeling a pinch in your wallet. Plus, now is the perfect time to sock a little extra away in your savings account to cover the extra money you may need at the holidays.

Do good with donations. Fall is also the time to gather up any summer clothing you don’t need and donate it to charity. You may also want to clean out your basement and garage and take any items in good condition to your church or local charity. You’ll feel good about helping others and also get a tax deduction for this tax year.

Meet with your trusted financial advisors. The fall is a great time to set up an appointment with our firm to prepare for year-end and to start tax planning for the coming year. It’s also the ideal time to review where you are financially and develop strategies to make sure you are optimizing your finances.

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Re-energize Your Business by Getting into a Back-to-School Mindset

The back-to-school season is always an exciting time. You can feel it in the air…a time of new beginnings and opportunities. And while the kids are enjoying reconnecting with friends and teachers and the thrill of new school clothes, business owners can adopt their own form of back-to-school spirit to revitalize excitement around their business. Here are a few tips to help you get into this mindset…

• Establish new goals. If it’s all about new beginnings, then new goals are in order. Successful business owners are always looking for ways to improve and face change with a positive attitude, so make it a point to set new goals for your business as you re-energize.
• Continue your education. As business owners, you are life-long learners…because there is always something new to learn. Enroll in an online class, register for informative webcasts, or get involved in other events that serve to advance your business education. By sharpening your skills, you will ultimately grow your business.
• Expand your network. Like the kids reconnecting with friends, you can take this time to reconnect with your community—both on the personal and business side. Join in on community projects and make a visit to your local Chamber of Commerce. You never know where you might pick up a new customer or referral source.
• Plan your next break. It can be very cathartic to plan a getaway…away from the busy life of the business owner. Identify a period when you can carve out some “me time,” even if it is a ways out. Then make sure you actually get away. Days off, even if only a few, can do wonders for reducing business stress.

You are now armed with some strategies to get into a “back-to-school” mindset and re-energize your business. You’d be surprised at the positive changes that can come from it.

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Delegation: The Ultimate Productivity Enhancer for Business Owners

As a business owner, one of the hardest—yet most beneficial skills to learn—is delegation. Many people who run businesses and have staff often find delegation of duties difficult for a number of reasons—two of the most common being a perceived lack of time (the “It’s faster to do it myself” excuse) or because they have a hard time letting go of their responsibilities and trusting that someone else can take care of them effectively. However, being able to delegate effectively is key for leaders. Only through delegation can they attend to higher-value responsibilities that will have a bigger impact on their company in the long run.

If you own a business, answer this question honestly: Do you spend most of your day performing tasks that will significantly and positively impact your company and support the vision you have for it? Or, is the better part of your day spent handling work that provides no real strategic value to your organization? Are you taking on tasks that are supposed to be completed by staff or third-party vendors? If so, you probably need a little help learning how to delegate. Consider these delegating tips:

1. Determine what to delegate. The first step in delegating is to choose what tasks can be delegated. Assigning critical, time-sensitive tasks may not be the best place to start. Instead, try selecting tasks that are ongoing, necessary processes that take up your time but are not high value. That being said, it is equally important not to delegate something you’re unwilling to do yourself, which may have negative consequences for your team’s morale.

2. Match the task with the team member. Making sure that you pick the right person to delegate a task to is paramount to delegating success. Taking time to understand the strengths and weaknesses of your staff will help you make the right project assignments and will also bolster the confidence of those who are taking them on.

3. Clearly communicate expectations. Open, clear communication is another critical component of effective delegation. At the start of any project hand-off, be crystal clear about your expectations, including timelines and deliverables, and give your team members all of the information they need to achieve those goals. Putting the project parameters and your direction in writing helps to reduce frustration and ensures a positive end result.

4. Be available, but don’t hover. The point of delegating is defeated if you micro-manage the work that is being done. So, while it’s important to be available to your staff should questions about their assignments arise, you also need to allow them autonomy and flexibility to accomplish the work. Checking in from time to time, especially when a task is new, may be helpful to make sure everyone is on the right track.

5. Practice patience. Delegating will take work off your plate over time, but it will likely require additional time at the beginning to detail the task and your expectations and answer questions. And, you may have to learn from a bit of trial and error as you learn which members of your team can handle additional responsibilities and which tasks fit them best. Remember, mistakes will happen. Be sure to address any problems as they arise so they can be corrected quickly. Also, give encouragement and positive feedback when tasks are well done.

At first, letting go of your daily duties may be difficult, but, the more you delegate, the more comfortable you will become with the process. Keep in mind that by allowing others to step-up and help you, you will benefit everyone in your organization by focusing more time and energy on the things that will move your business forward.

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Why “Set It and Forget It” is Not a Winning Website Strategy

So, you have a nice website for your business—you can check “web strategy” off the to-do list, right? Not so fast! While creating a website that is easy to navigate, visible to search engines, and true to your company’s brand is no small feat, it should be just the first step in your website strategy. To maximize your organization’s web presence, you can’t just “Set it and forget it.” Keeping your site updated and evolving with your business is critical—otherwise, you are unlikely to reap the full benefit of the investment you have made in developing it.

Updating and refreshing your website is a task that never ends, but it also pays dividends in terms of the search engine optimization (SEO) of your site, not to mention the attractiveness of your site to new and existing customers. Many of the changes or additions that a website needs regularly are content-based. Adding blog posts or articles periodically not only shows your web visitors that your business is committed to communicating in a timely manner, it also provides new content for search engines to index, which improves your site’s search rankings.

While creating new content for your site seems like a simple strategy, it is often something that businesses struggle with from both a time and creative standpoint. This is why having a plan for who is responsible for website updates and a calendar of what will be posted when (for several months in advance) is essential. If you use a third-party web developer to maintain your website, it is important that you communicate with them about the frequency and type of updating you want for your site. If you plan to manage your site updates internally, ensuring that you have an easy-to-use content management system is critical.

Beyond the logistics of getting fresh content online, many companies also struggle with what information makes for high visitor engagement and search engine fuel. Focusing on topics your existing clients would be interested in is usually a good place to start when developing content. Are there questions that your customers always ask? Perhaps a “Frequently Asked Questions” section on your site would be a good addition. A blog that you update regularly is also a great way to add fresh, relevant content to your site, while highlighting your business and providing useful information.

From an engagement perspective, visual content such as pictures and videos are usually better received by site visitors than pages of text. Of course, whatever content you add to your site should be useful to your target market, so always keep the customer in mind when thinking about website updates. Remember, too, that quality content is much more important than producing quantity content. And, don’t overlook the basics when it comes to refreshing your site. If you have recently made changes to your business hours or you have staff changes or products or services that you no longer offer or are new offerings, make it a priority to update that information as quickly as possible.

Building a quality website for your business is critical in today’s market, however, it is only half of an effective web strategy. Ensuring that you regularly update your site may take some time and thought, but it is well worth the effort when it comes to attracting new site visitors and potential clients as well as providing your existing customers information and resources that will keep them engaged with your business.

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Don’t Neglect Your Own Finances When Caring for Aging Relatives

As the number of seniors in the U.S. population continues to increase, so does the number of people taking care of an aging parent. In 2011, an estimated 10 million adult children over the age of 50 were caring for an aging parent. Having to take on this type of responsibility, especially during your prime earning years, can take a toll—not only emotionally and physically, but financially as well. Research has shown that working Americans who must reduce their working hours or leave their jobs to care for an aging parent can sacrifice their own financial stability to do so.

Ideally, before you step into a caregiver role, you should have a discussion with your parent(s) or the relative who needs your help about their wants and needs and how finances will work. You should you also determine in what situation you will become responsible with the legal power to make decisions for them. While this conversation may be uncomfortable, it is critical.

Balancing your own financial needs with the need to care for your aging relatives can be stressful and challenging, so consider the following tips to help you manage both of these priorities:

1. Think long-term before you give up a job. While it may be difficult to hold down a full-time job when you need to be able to take your relative to doctor appointments or tending to their well-being, the time you gain may come at the cost of your long-term financial security. Be sure to think long and hard before you cut your current income and reduce or eliminate your retirement savings. Also consider if you will need to get another job at some point and if your skills will still be sharp if you exit the workforce completely.
2. Create a caregiving budget. Before making any caregiving commitments, create a budget with your own expenses in light of potentially becoming a full-time caregiver. In addition, make a list of the resources that your relative has available to help you support the needed caregiving expenses.
3. Research the public benefits available. Do some research online and in your community to identify what public assistance may be available to help you reduce the costs of caregiving services. Websites such as The National Council on Aging (www.ncoa.org) have extensive information available that can help caregivers find help in their local area.
4. Know the limits of Medicare and Medicaid. It is important to know that Medicare and Medicaid offer only partial solutions to the financial burden of long-term care. For example, Medicare does not pay for caregiving services on a long-term basis and Medicaid will only cover long-term care services after the individual in need has exhausted most of their assets and qualifies for the program’s nursing home benefits. Therefore it is important to factor into your financial decisions what kind of Medicare and other medical coverage your parent or relative has and what kind of out-of-pocket expenses you may incur.
5. Don’t sacrifice your own retirement. Another piece of the financial picture that you need to consider before committing to caregiving is your own retirement plan. While it is noble and sometimes necessary to give up your own livelihood to care for a sick relative, make sure that you consider the impact this may have on your own retirement plans—and even the ability to pay for your own care should you need it in the future.

Having a parent or other relative with health problems is stressful, and the burden of taking on the role of caregiver or finding affordable long-term care solutions only adds to the challenge. While it may be difficult to do so, talking through the situation and potential options with the individual needing care is critical before you make decisions that could impact your own financial future. Our trusted advisors can help you look at the financial implications of caring for your loved one. Please contact us if you would like to talk.

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Is Your Company Ready to Take on the Telecommuting Trend?

Allowing employees to telecommute, also known as working remotely, is a major trend destined to reshape the way that companies recruit and manage employees in just about every industry. According to a 2013 survey conducted by the Society for Human Resource Management, more companies were planning to offer telecommuting in 2014 than any other new benefit. And, research by Global Workplace Analytics confirms the number of work-from-home employees has been rapidly increasing in America growing by 79.7% between 2005 and 2012. So if your organization does not yet have employees that work remotely, you may want to consider how you will respond when you do.

It is important to recognize that telecommuting is not just for Millenials and moms anymore. The U.S. Census Bureau’s annual American Community Survey shows that the typical telecommuter is a 49-year-old college graduate—man or woman—who earns about $58,000 a year and belongs to a company with more than 100 employees. As such, many organizations—large and small—are forgoing a central office entirely, which means that managers are increasingly tasked with overseeing workers scattered across cities, states, and time zones.

In their book, "Remote," Fried and Heinemeier Hansson offer many best practices for managing remote workers, including these key recommendations:

1. Hire for the work you want people to actually do.

Heinemeier Hansson says the single most important thing for remote work to succeed is creating a culture where the work itself matters. Employees need to be hired on the merits of what they produce. This might mean that during the hiring process you give candidates a sample project to complete or another test of their abilities so you are sure that you are making the right decision.

2. Create a culture that supports telecommuters.

Many companies have a mix of employees including some who work on-site and some who work remotely. However, your telecommuters are bound to run into difficulties if the culture and processes of your business are built around your physical office. If everyone else at the company comes into a central office, and one or two employees work remotely, it is unlikely that the arrangement will work well over the long term.

3. Don’t let telecommuters burn out.

While many people conjure up images of telecommuting as relaxing and not as stressful as traditional office jobs, employees working at home often have a harder time setting boundaries between their work and personal lives. Employers may fear that telecommuters will slack off if they are not under their watchful eyes, however, the opposite is usually the greater danger—employees who overwork themselves and burn out. Managers should take measures to reduce this risk, such as regular check-ins, as described below.

4. Schedule regular one-on-one check-ins.

On a regular basis, managers should check in with their remote workers, either by phone or video chat, or in-person if the distance allows. Keep the tone casual and ask questions about how things are going in general rather than just going through a list of project updates. This can help to maintain an open line of communication so that everyone is on the same page and can be productive.

5. Focus on building trust and respect.

Trust and respect between telecommuters and their employers and co-workers is critical. When you don’t see people on a regular basis it is important to invest time in building strong relationships—perhaps allocating a little more time to communications by phone and email and being responsive to questions. Even with several remote workers, having periodic in-person meetings can help everyone humanize the face behind the emails.

Many of these tips are the same principles that any supervisor should adhere to no matter where their employees are located. Therefore, if your organization is considering transitioning into telecommuting or hiring some remote workers, it is also important to ensure that you have the right management structure in place to ensure that your company can reap the benefits of these arrangements.

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Are Summer Vacations a Thing of the Past? Don’t Let It Hurt the Productivity of Your Business

While we’ve just celebrated the first official summer holiday weekend, studies show that almost 75 percent of employees do not take all of their allotted vacation time. In fact, many employees hesitate to take a break from work, and those that do often check in at least daily while on vacation, returning emails or taking calls. This may seem like true dedication to a job, but experts say that when employees don’t take time to recharge it can hurt both the productivity and the quality of work they produce, in addition to increasing both their stress and disengagement levels.

Research also shows that taking time off can help promote creativity and improve critical thinking skills and productivity when employees return to work. So with the summer season almost here, now is the perfect time to discuss with your team the current workload and how to best accomplish projects while still allowing everyone to enjoy some time off. In addition, consider the following ideas for ensuring that you and your employees feel comfortable when team members are taking their well-deserved vacations.

Have a Plan for Coverage
Of course, it’s critical that business needs are met while employees are away—and nothing kills the glow of a great vacation more than when employees know they will face piles of work when they return. Take some time upfront to detail a plan, with the help of your employees, to cover the work that needs to get done while each person is away. You may also want to do some cross-training of employees so they are prepared for any new duties they need to cover for a co-worker.

Make It ‘Safe’ to Take Vacations
Many companies spend time and resources applauding employees that go the extra mile for their job, which is a great way to recognize outstanding performance. However, few organizations (knowingly or not) create a culture that endorses the need for employees to take time off to recharge. Employees may worry that if they take a vacation they’ll be perceived by their peers or supervisor as less dedicated than those that don’t. Some individuals may also fear that their position of being ‘indispensable’ will be compromised if they take time off. To help counter these feelings, make it “safe” for employees to take time off without feeling guilty by encouraging them to do so, putting a plan in place to make sure their work is covered while they are gone, and asking them about their vacation when they return.

Set a Good Example
Don’t underestimate the impact that your own behavior and attitude about vacation has on your team. If you never take time off, your employees may feel that you don’t want them to either. Share what your vacation plans are and how important it is for everyone to take time to recharge. Don’t have a vacation planned? Maybe it’s time to think about taking a few days off to refresh—it’s likely you will come back to your business feeling more energized, productive, and with some great memories that you can share with your team.

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Employer-Owned Life Insurance Policy Holders—Take Note of this Potential Tax Implication

Many business owners are unaware of the Pension Protection Act passed in 2006 and its potentially costly tax implications for beneficiaries of employer-owned life insurance (EOLI) policies. This legislation enforces a tax rate of up to 50 percent on the death benefits of EOLI policies purchased after August 17, 2006. Normally, these benefits would be tax exempt—and they still can be if the proper notice and consent forms are completed before the policy is issued.

The IRS includes key man insurance, insurance funded buy-sell arrangements, some executive compensation programs, and policies held by family entities such as a family limited partnership or a limited liability corporation in its definition of EOLI contracts. More specifically, the IRS defines an EOLI contract as “a life insurance contract that (1) is owned by a person engaged in a trade or business, and under which such person (or a related person) is directly or indirectly a beneficiary under the contract, and (2) covers the life of an insured who is an employee of the applicable policyholder on the date the contract is issued. The term ‘applicable policyholder’ with respect to an employer-owned life insurance contract generally means the person who owns the contract.”

In its Bulletin 2009-24, the IRS also specifies the term “applicable policyholder” to include any person who bears a specific relationship (defined by the IRS) to the owner of the contract, or who is engaged in trades or businesses with the owner of the contract which are under their common control.

Many of the EOLI policies affected by the Pension Protection Act were sold to small businesses who may not be aware of the potential tax obligation. Given that it is the policyholder’s responsibility to make sure that the notice and consent rules are met, if you have purchased an EOLI policy for an employee, yourself, or another stakeholder of your business, such as shareholders, it is important to take steps to avoid the possible 50% tax rate on the policy pay out.

To comply with the notification and documentation requirements for EOLI policies, the IRS requires:

• Policy holders to notify the insured employee in writing that 1) they intend to insure their life; 2) what the maximum face amount for which the employee can be insured for at that time is; and 3) that the policyholder will be a beneficiary of any proceeds payable upon their death. This must be done prior to the contract being issued.
• The employee must provide written consent to be insured under the contract and that the coverage may continue after the insured terminates employment.

If you have not met these requirements for each EOLI policy, you may want to ask your insurance carrier if you should have the policies reissued so that you can meet the notification and documentation requirements. Another avenue you can try is to apply to the Internal Revenue Service for a private letter ruling if you feel confident that you have enough documentation to satisfy the IRS requirements. However, be aware that the filing fee for such a request can be upwards of $15,000.

If you are currently considering purchasing an EOLI policy or you may buy one in the future, keep the requirements of the Pension Protection Act in mind. Make sure to have a separately executed notice and consent form from the insured employee, so there is no question about compliance and the ultimate tax-free nature of the benefit. If you have any questions about the tax implications of EOLI policies, please contact our office.

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An Ounce of Prevention – Protect Yourself Against Identify Theft

According to the most recent U.S. Department of Justice data, approximately 7 percent of U.S. residents age 16 or older are victims of identity theft each year. While the overall percentage of Americans affected by identity theft has held steady since 2008, identity theft related to tax information is increasing rapidly. In fact, the Federal Trade Commission (FTC) recently released statistics showing that tax-related identity fraud was the single most reported type of identity fraud it received complaints about in 2013, comprising 30 percent of all of its identity theft complaints. This has prompted the IRS to pilot programs in a handful of states to combat this issue.

In addition to your tax documents, identity thieves are always looking for easy access to the information they need to commit crimes. Here are a few simple precautions you can take to keep your personal information safe and reduce the chances that you will have to deal with the fallout from having your identity stolen:

Monitor your credit reports
It is important to get a handle on where your credit stands by requesting a credit report from one of the three credit reporting services: Experian, TransUnion, or Equifax. Once you check to make sure your current credit report is accurate, sign up for a credit monitoring service to receive updates and alerts when there are any changes in your credit report.

Guard your Social Security Number
Think of your Social Security Number (SSN) as the key with which someone can steal your identity and create havoc with your finances. As such, it should be guarded closely. For example, do not carry your Social Security card in your wallet, and make sure that your bank does not print your SSN on your personal checks.

Carry only essential documents with you
In keeping with the previous point, carry only what you need with you—such as credit cards, your birth certificate or passport, or other identification. Your identity can be compromised during your daily routine and when you travel—with gas stations often being prime targets for identity thieves who may tap into data from credit card sales, or even steal your documents left in a car if you opt to pay inside for your fuel or other items.

Make a record of your important numbers
Create and keep a list of account numbers, expiration dates, and telephone numbers for contacting your credit card companies and financial institutions. File this document away in both hard copy and electronically. This document can prove to be invaluable if your wallet is stolen and you need to quickly alert your creditors to prevent or stop an identity theft.

Take time to select strong passwords
While it is tempting to create online passwords or PIN numbers that you can easily remember and to use the same one across all of your online activity, it is much more secure to create strong passwords out of a random mix of letters and numbers and to make sure that they vary from site to site.

Don’t give strangers your personal or financial details
Identity thieves will use many different channels to get access to your sensitive personal and financial information, including by phone and email. They may call, posing as banks or government agencies asking for your SSN or bank account information. They may also send official-looking emails asking you to click a link to provide similar information (a tactic commonly known as phishing). To prevent identity theft, do not give out your personal or financial information over the phone or by email unless you initiate the request.

In addition, identity thieves are not above looking for financial and personal information in the trash—so be sure to shred your receipts, credit card offers, bank statements, and other documents containing sensitive information before throwing them away.

Given the potentially devastating consequences of identity theft, taking steps to prevent yourself from becoming a victim of this crime is critical. Be assured that our firm takes the security of your personal and financial information very seriously. If you have any questions regarding this subject, please contact us.

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Don’t Spend Your Tax Refund Unless You’ve Considered These Tips!

Hopefully you have already filed your tax return and are anticipating at least a modest refund. But, before you get too excited about splurging with your IRS check, stop for a moment and remember that you earned that money! While many people view a tax refund as ‘bonus’ cash—it isn’t. It is simply a return of the funds that you earned and paid as tax beyond what your actual obligation was.

Keeping this in mind, think about using the money you receive from the IRS purposefully. Also, if you did receive a sizable refund, you may want to consider adjusting your tax withholding amount, so you aren’t shorting yourself on your regular income throughout the year.

The following list can help you determine some of the best ways to use your refund—ways that contribute to your long-term financial health:

• Start or increase your emergency fund: By using your refund to stash some money for a rainy day, you’ll be building both a financial safety net and peace of mind.
• Eliminate or pay down high-interest debt: Once you have established an emergency fund, paying off any high-interest debt such as credit card balances, payday loans, and debt consolidation loans is one of the best things you can do to improve your financial situation.
• Consider refinancing your mortgage: With relatively low mortgage rates available, you may want to consider refinancing your mortgage to save money each month with a lower mortgage payment. Your refund can provide the funds from which to pay your closing costs and fees when you refinance.
• Contribute to tax-sheltered accounts: Using your tax refund to top-up (or start) a Roth IRA or 529 college savings plan offers you a double bonus. Not only will you be compounding dollars and interest for your future retirement or college tuition needs, but you’ll be creating a tax deduction as well.
• Improve the lives of others: If you have your own financial bases covered, then making a charitable donation to help someone else is an excellent use of your return. It provides something priceless to those who will benefit from your generosity and offers you a tax deduction.
• Reinvest in your business: Is there something you would like to do in your business, but you just never seem to have the money to do it? If you have some funds leftover from your refund after taking care of savings and debts, making an investment in your business can stimulate business growth and enable you to claim a few more tax deductions next year.

While it is tempting to use your tax return as a windfall, it is important to remember that you earned it! Taking steps to secure yourself financially today is an investment that will pay dividends in the future— long after the glow of any spontaneous splurge has faded.

If you have any questions about this information, please contact our office. We are here to help.

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Does Your Business Need a Post-Tax Season Tune-Up?

With the business tax return deadline behind us, this is an ideal time to think about giving your business a little post-tax season tune-up with the intention of making next tax year easier and improving your financial situation. Here are a few key areas to consider analyzing now that your business taxes are filed:

Day-to-day accounting. With the rush of preparing for tax season, on top of the regular hectic pace of running your business, it can be tough to keep your financial records up-to-date. If you fell behind over the past several months, now is the time to get caught up, before the lag in your record keeping hinders your business.

Start by reconciling your business accounts, making sure that your balances are accurate, and that you are current on your bank deposits and bill payments. By investing some time to make sure your day-to-day accounting is on track, you will have the data you need to evaluate important metrics including your profit and loss statements, annual financial comparisons, and cash flow.

Your current financial and tax situation. In just a few short months, it will be time for a mid-year review to ensure your business is on track financially. Now is an ideal time to schedule a mid-year planning session with our firm to discuss your current business financials and your operational plans for the rest of the year. You should also plan to address any new business or personal developments that may affect your tax liability in the next year so we can work with you to lower your tax obligations.

Retirement plans. If you do not already have a retirement plan, consider opening a retirement account to defer income taxes and provide future income, beyond Social Security benefits. Our trusted advisors can help you select the right retirement plan for you, and, if you desire, help you set up a retirement plan for your employees as well.

Adjust estimated tax payments. If you had a large tax liability or a large refund this year, you may want to revisit your estimated tax payments and adjust your calculations to avoid owing too much at the end of the year, or leaving your business cash-poor due to overpayment of taxes. As the year progresses, monitor your bottom line and adjust your tax estimates accordingly.

Employee benefits. If your business has employees, you may wish to consider providing them with enhanced fringe benefits, while your business reaps tax savings as well. Adding pre-tax benefits such as health insurance, group term life insurance, and child care subsidies to an employee’s pay, saves your business money because you are not required to pay the employer’s share of payroll taxes on these forms of reimbursement.

While you are probably glad to have your business taxes filed for this year, it can be extremely beneficial to fine-tune your business finances and tax situation now, rather than waiting to see where you stand at the end of the year. By being proactive, you can benefit from valuable tax savings and opportunities to improve the accuracy of the financial information that you use to manage your business. Please contact our office with any questions you may have—we are here to help you.

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The Child Tax Credit Can Give Parents Some Relief

There’s no disputing the fact that raising children today is a costly endeavor. However, the American Taxpayer Relief Act of 2012 (ATRA) has eased parents’ tax burden and put a few dollars back in their pockets with the Child Tax Credit, which ATRA made permanent. This tax credit can be worth as much as $1,000 per qualifying child depending upon a parent’s income.

Because it is a tax credit rather than a tax deduction, which simply reduces taxable income, the Child Tax Credit reduces a parent’s tax liability dollar for dollar with the amount of the allowable credit. However, the credit cannot be taken for more than the amount of tax owed to the IRS.

To see if you qualify for the Child Tax Credit, the IRS provides the following seven tests:

1. Age test—The child being claimed must have been under the age of 17 at the end of 2013.
2. Relationship test—The child being claimed must also be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. A child can also be a descendant of any of these persons. For example, your grandchild, niece, or nephew will qualify. An adopted child includes a child lawfully placed with you for legal adoption.
3. Support test—The child must not have provided more than 50 percent of his or her own support for 2013.
4. Dependent test—The child must be claimed as a dependent on your 2013 federal income tax return.
5. Joint return test—A married child can’t file a joint return with his or her spouse if the couple is filing jointly only to claim a tax refund.
6. Citizenship test—The child being claimed must be a U.S. citizen, U.S. national, or U.S. resident alien.
7. Residence test—In general, the child being claimed must have lived with you for more than half of 2013 to be claimed. However, a child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half of the time he or she was alive.

It is important to note that your filing status and income may reduce or eliminate the Child Tax Credit. If your modified adjusted gross income is more than $110,000 (married filing joint), $55,000 (married filing separately), or $75,000 (single, head of household) you cannot claim the credit.

If you qualify to claim the Child Tax Credit, you will need to file IRS Form 8812 with your income tax return. Please contact our office if you have any questions about this tax credit.

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Is the New Simplified Home Office Deduction Right For You?

A nice home office is often one of the biggest perks of being a freelancer, and it can also provide you with a significant tax deduction if you qualify for it. Up until this tax year, the calculations needed to claim the home office deduction were complex and required meticulous record keeping and a separate form (Form 8829). However, starting with your 2013 tax return, the IRS has introduced a simplified method for calculating the home office tax deduction. This reduces the paperwork but also caps it at $1,500, which raises the question: Should you use it, or stick with the standard regular method?

The beauty of the new simplified home office deduction is that it easily allows individuals who have a legitimate home office (see the IRS website to see if you do) to take a tax deduction of up to $1,500. To calculate this deduction, multiply the square footage of your home office space by $5, to a maximum of 300 square feet, or $1,500. The deduction is then entered on Schedule C of your 1040 return. You don’t have to provide any documentation to claim it, unlike the old “actual expense” method, which involves calculating, allocating, and substantiating your home office expenses.

If you use the simplified method, you can also deduct your mortgage interest and real estate taxes separately on Schedule A if you itemize. However, because it imposes a cap of $1,500 and eliminates the opportunity to deduct depreciation or carryover any losses from a previous year, this new deduction may not necessarily be the best option—especially if you can claim a higher amount using the actual expense method and you keep good records of your eligible home office expenses, such as mortgage interest, insurance, utilities, repairs, and depreciation.

In contrast, the regular method allows deductions for a home office that are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you will need to figure out the percentage of your home devoted to your business activities. The bigger your home office is, and the more eligible expenses you have, the more likely the actual expense method will yield a larger tax break than the $1,500 ceiling imposed by the new simplified home office deduction.

This tax year, it may be worthwhile to compare the size of the deduction you can take using both the new simplified method and the regular method. It is important to note that with either method, you can only reduce your business income to zero; you can’t take a loss. However, if you find that you prefer one method over the other, or you think that you will exceed the $1,500 allowed by the simplified method one year, but not the next, you can switch the method you use to calculate the deduction from year to year.

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Take Advantage of the Invaluable Learning Opportunity Your Tax Return Provides

With tax season in full swing, you are likely busy compiling all of your tax documents and expense receipts to support the preparation of your return. When you think about it, there is a lot you can learn from preparing to file your tax return. It provides the perfect snapshot of where you stand financially, which can offer important insights into your money management habits. While there are many different components that impact your finances, three key questions to consider when it comes to your taxes include:

Are You Saving Enough for Retirement?
You can tell by looking at your tax return whether you made the maximum allowable contribution to tax-advantaged retirement saving options. If you didn’t this year, you may want to consider looking into setting up a Roth IRA, or another eligible investment account. Business owners who have SEP-IRAs but aren’t making their full contribution may also want to increase them.

Did You Maximize All Available Tax Deductions and Credits?
There are some deductions and tax credits that many taxpayers are aware of, and many more that they are not. By taking the time to review your tax return with our firm you can learn about all of the options you have available to you to lower your tax obligations.

How Should You Use Your Refund?
In addition to making sure that you take the appropriate steps to maximize your tax refund, you should also consider what you do with it once you receive it. One option is to have your refund deposited directly into a savings or retirement account, effectively reducing the temptation to spend it right away. Another smart use for your refund is to use it to pay down any debts that you may have.

If you have questions about your financial situation, remember that we can help. Our team of financial professionals are dedicated to working with clients like you throughout the year to help you ensure that your tax return represents the financial picture you desire.

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Business Owners, Be IRS Audit Savvy this Tax Season

With tax season here, you might be wondering just how likely you are to hear from the IRS after you file by means of an audit notice. While the chances you will be audited are relatively low if you file a straightforward personal tax return, the more complex your tax situation becomes (reporting business income or graduating to a high-income tax bracket, for example), the more likely it is that you will be audited.

As you look to file your taxes this year, it pays to be aware of some red flags that can draw extra IRS attention including the following:

• Claiming 100% business use of a vehicle. From the IRS’ perspective, it is rare for an individual to use a vehicle 100% of the time for business, especially if no other vehicle is available for personal use.
• Deducting business meals, travel, and entertainment on Schedule C. Writing-off big dollar amounts for business expenses that could also be personal entertainment, especially if the amount seems too high for the type of business that is claiming them.
• Hobby loss write-offs. If you have wage income and file a Schedule C with large losses, you become much more interesting to the IRS, especially if the business activity sounds like it could also be a hobby such as dog breeding or furniture refinishing.
• Claiming rental loss deductions. Real estate losses on rental properties is another area of interest for the IRS, especially those written off by taxpayers who claim to be real estate professionals. If you have a W-2 or other non-real-estate businesses that show high income this can also be a red flag for auditing.
• Operating a small business. Owners of cash-intensive small firms such as taxi companies, hair salons, pet groomers, etc. can often be the target of an audit, so be prepared to substantiate all of your income.
• Owning a foreign bank account. The IRS has been able to obtain the ownership information for offshore bank accounts, especially those in tax havens, and is committed to ensuring that income stored in these accounts is reported by U.S. citizens. Failure to report these accounts can lead to harsh fines.
• Taking higher-than-average deductions. The IRS may pull a return for review if the deductions shown are disproportionately large compared with reported income. But folks who have proper documentation shouldn’t be afraid to claim the write-offs.

While you should definitely take advantage of every tax deduction you are legally entitled to, sometimes it can be difficult to ascertain which deductions are applicable to your specific situation—that’s where our office can help you. Now is the time to contact us to have your return professionally prepared to reduce your chances of being audited for the red flags noted above. But, if you do receive an audit notice, don’t worry, our tax experts can also help you prepare an appropriate response.

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Does Your Business Need to File 1099s? The Initial Deadline of January 31 is Fast Approaching!

If your business spends $600 or more for services from another business or an individual contractor during the tax year, you may have to report the amount on a Form 1099. The requirement to file 1099s applies to all types of businesses, C-Corporations, S-Corporations, LLCs, all partnerships, and sole proprietorships. Forms 1099 are normally issued to unincorporated businesses, however, if your business made payments of $600 or more to a Corporation (C or S) for medical, health care, or fishing activities, or to any law firm, then a Form 1099 is required to be issued.

A 1099 form is typically given to independent contractors as a record of the income that he or she received from your business. There are many different types of 1099 forms, including those used to report income from interest, dividends, real estate and debt cancellation.

Some of the most common types of transactions that you must issue a 1099 for include:

• Professional fees paid to an attorney, doctor or other professional that are made in the course of doing business.
• Payments of $600 or more in rent for office space, machines, equipment or land in the course of your trade or business if the payment was made to an individual or partnership.
• Payments of $600 or more to physicians, providers of medical or health services, or other supplier. These 1099s for medical payments are required for all entities including Corporations.

If you own your own business, you are required to send 1099s to eligible vendors. Failing to do so, or missing the 1099 IRS filing deadline (Feb. 28 for paper filing or Mar. 31 for e-filing), can result in some stiff penalties. For example, filing your 1099s past the due date can result in fines that range from $30 to $100 per 1099 to an annual maximum of $500,000. Failure to issue and file any 1099s subjects you to a minimum penalty of $250 per 1099 with no annual maximum limit on the penalty.

In an effort to reduce the number of businesses avoiding 1099 filing, in 2011 the IRS added two new questions to all federal business tax returns to determine whether any payments were made during the year that would require Form 1099 to be filed and whether or not the business actually filed them. When you sign your tax return, you are stating that, under penalties of perjury, to the best of your knowledge your tax return is accurate and complete. Given how seriously the IRS takes 1099 filing—all business owners should too!

Filing 1099s can be a tedious and time consuming process. With only two weeks to go until the deadline to get 1099s to any eligible recipients you have worked with in the past year, please don’t hesitate to contact our office if you need assistance with your Form 1099 preparation.

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This Tax Year Includes a Baker’s Dozen of Changes to Digest

Happy New Year! Now that the holidays are over, it’s time to get serious about reviewing where you stand from a tax perspective. As you may recall, in 2013 Congress and President Obama made a budget deal to avoid the fiscal cliff which resulted in seven tax increases. In addition to these increases, the introduction of the Affordable Care Act (also known as Obamacare) also included six additional tax increases, for a grand total of 13 new tax hikes which may affect your 2013 tax bill.

The following list details these tax changes. It is worthwhile reviewing it to see which changes are most likely to impact you this tax year:

1. The payroll tax increased to 6.2 percent.
2. The top marginal tax rate increased from 35 percent to 39.6 percent for taxable incomes over $450,000 for couples ($400,000 for single filers).
3. Personal exemptions are being eliminated for taxpayers with adjusted gross incomes (AGI) of more than $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
5. The tax rate on dividends and capital gains has increased to 20 percent from 15 percent for taxable incomes over $450,000 ($400,000 for single filers).
6. Taxpayers who file Married Filing Jointly with AGI of more than $250,000 ($200,000 for those filing as Single) will see an additional 3.8 percent surtax on investment income and another payroll tax hike of 0.9 percent.
7. The "Death Tax" rate was also increased on estates larger than $5 million from 35 percent to 40 percent.
8. For businesses, the full expensing of investments will expire to be replaced by the immediate deduction of capital purchases.
9. Another payroll tax hike of 0.9 percent for the Hospital Insurance portion of the payroll tax will affect those with incomes over $250,000 ($200,000 for single filers).
10. The new medical device tax means that a 2.3 percent excise tax on all sales will be paid by medical device manufacturers and importers.
11. The medical expenses income tax deduction for individuals will be reduced.
12. The corporate income tax deduction for expenses related to the Medicare Part D subsidy is now eliminated.
13. The corporate income tax deduction for compensation that health insurance companies pay to their executives has been limited.

Do any of these 13 tax increases apply to you or your business? If you need help determining how these changes will impact you, please contact our office for assistance.

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IRS Eases the “Use-it-or-Lose-it” Rule for Flexible Spending Plans

With the end of the year on the horizon, many individuals with flexible spending accounts (FSAs) are scurrying to spend residual funds to avoid “losing” them, in accordance with IRS regulations. However, the regulations have now changed with the IRS easing the “use-it-or-lose-it” rule for health flexible spending plans. Individuals with FSAs can now carry over a maximum of $500 to the following year without forfeiture. So now, employees will not have to rush to clean out their accounts by the end of the year, or by March 15 of the following year, if their flexible spending plan has adopted this grace period.

It is important to note that an employer cannot offer a FSA carryover provision and an FSA grace period at the same time. In order to allow for this $500 carry over, employers must amend their plans to adopt the change. However, if an employer’s FSA plan currently allows for the grace period, that provision must be dropped in order to allow for the $500 carryover adoption.

Employers can implement the carryover for 2013 as long as the flexible spending plan is amended by the end of 2014. However, if the plan currently allows the grace period up until March 15, then the plan must be amended by the end of 2013 to formally eliminate this provision.

If you have any questions about this information, please contact us. We are always here to help.

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Should You Apply for Social Security When You Apply for Medicare?

If you’re nearing the customary retirement age of 65, you may be considering when to apply for Medicare and Social Security benefits. This is an important decision that can have significant impact on your financial situation down the road, so it is important to understand how these benefit programs work. In particular, if you are not planning to retire at the full retirement age (FRA) of 65 you should be aware that you are not obligated to apply for Social Security even if you opt-in to Medicare coverage when you are eligible. In fact, doing so can have negative financial consequences down the road.

If you are planning to apply for Medicare benefits soon, make sure you consider whether you would be better off applying for Social Security benefits later, taking into consideration your planned retirement age, your expected income (if you earn more than $15,120 a year when receiving social security you will be subject to the earnings penalty, under which one dollar of Social Security retirement benefits is withheld for benefits before FRA), and, if you are married, the spousal benefit. In many cases, if you plan to work beyond your FRA, delaying your Social Security benefits can mean a bigger payout later on.

Because Social Security retirement benefits are based on lifetime earnings, the size of the retirement benefit check that you collect will depend on your age when you apply for them. If you choose to receive benefits at the earliest retirement age of 62, you will receive less than what you would receive if you wait until 65. And, if you delay your Social Security benefits up to age 70, you will receive a Delayed Retirement Credit (a percentage increase in retirement benefits for each year beyond FRA that you do not take them).

There are several important factors to consider when deciding the best time to take Social Security benefits. If you need assistance determining what the right choice is for you from a financial perspective, please contact our office.

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Don’t Let the Delayed Tax Season Stop You from Being Prepared

The IRS recently announced that, for the second year in a row, it will delay the start of tax season. However, the April 15 filing deadline, which is set by statute, remains in place. Last year it was the fiscal cliff negotiations that pushed back the start of the tax filing period. This year, of course, it is the 16-day government shutdown that put the IRS approximately one to two weeks behind in preparing for the 2014 filing season.

According to an IRS news release, the government entity is “exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December.”  The original start date of the 2014 filing season was January 21, so with a one- to two-week delay, the IRS will potentially start accepting and processing 2013 individual tax returns no earlier than Jan. 28 and no later than Feb. 4.

Although the IRS is behind schedule, we encourage our clients to start preparing now in order to be prepared for filing as soon as the opening date of tax season arrives. Start organizing your tax documents and don’t hesitate to contact our office if you need tax planning advice or have questions about this tax season.

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LLC Owners and Participants: Be Aware of IRS PAL Regulations

If you own a Limited Liability Company (LLC) that you are not actively managing, but you claim tax deductions, this blog post will be of interest to you. Close to 30 years ago, the IRS passive activity loss (PAL) rules (I.R.C. Section 469) were enacted to limit the degree to which money-losing LLCs could be used as tax shelters by their owners claiming losses—such as depreciation, interest, and other deductions. These rules created the passive income or loss category and they apply to all business activities, including real estate rental activity.

There are two types of passive income or losses including income earned from:

1. Businesses in which you don’t materially participate
2. All rental properties that you own

Essentially, the PAL rules are intended to prevent individuals from deducting passive losses (such as from rental activities) from their non-passive income. However, if you own or co-own an LLC on a part-time basis or have someone else manage it on your behalf, as long as you are active in the business you can claim any related losses against your non-passive income, if you meet the IRS definition of "material participation." The IRS defines “material participation” as being “involved in the operations of the activity on a basis which is regular, continuous, and substantial.” There are several tests that the IRS uses to define material participation in a business, based on your activity and the amount of time you spend working. Read about it in detail here.

Another point to keep in mind—the PAL rules state that passive losses from a business activity can only be used to offset passive income from other passive activities. Passive losses in excess of your passive income for the year are capped, but they can be carried forward and deducted in future years when and if you have passive income or if you sell or dispose of the activity that generated the suspended losses. For additional information about PAL tax regulations, please visit IRS.gov.

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You Get What You Give: Tips for Motivating Your Employees Through the Holidays

Halloween is just around the corner and in a few short weeks the calendar will flip to November 1—the unofficial beginning to the winter holiday season that can seriously reduce employee productivity. After all, who has time to put in a solid eight hours a day at the office when there is seasonal shopping, schmoozing, and socializing to be done?

Many business owners have a love-hate relationship with this time of year, due to the fact that employees are less focused on their work. However, there are some easy ways to help stave off the holiday slump and keep your employees as energized about their jobs as they are about maximizing their holiday festivities. Here are a few ideas:

1. Acknowledge that the holidays are happening. Since many of your employees are likely to celebrate a holiday of some kind over the next couple of months, be up front about how your business will handle the holidays. Let your team know the date by which they need to request time-off and which days, if any, holidays will be observed or shorter work hours will be implemented. Don’t forget that a little bit of leeway around leaving early to accommodate holiday gatherings or other seasonal obligations can go a long way toward preserving employee morale and motivation.
2. Provide a few special perks. Even if your company doesn’t have an end-of-the-year bonus plan or pay out holiday bonuses, you can still provide some low-cost perks to help promote employee productivity at the holidays. Everyone likes to feel appreciated for their hard work, so consider offering your team members a few hours away from the office on a selected day to finish holiday errands or to help at a community event. Bringing in some healthy snacks to keep your staff energized as they do their work is also a great idea. These small gestures show that you care about your staff, which tends to motivate employees to work harder in return.
3. Celebrate as a team. While few people expect that work will be fun every day, investing time to build camaraderie, especially around the holidays, is a great way to help employees feel more engaged and enthusiastic all year long. Consider hosting a holiday breakfast or lunch during the workday instead of an after-hours party. Your employees will thank you for not adding another event to their already busy personal schedule! To help reduce the budget burden, you can even make your get-together a potluck where everyone brings their favorite seasonal dish. This can help to keep the celebration inclusive of all holidays that are recognized at this time of year.

With a little bit of thought and advance preparation, you can help to keep your employees engaged and productive through the holiday season—and beyond. You may even establish a new company tradition and a spirit of teamwork that will last well into the new year.

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The Medicare D Notification Deadline is Oct. 15 for Employers Providing Prescription Drug Coverage

Employers providing healthcare insurance that includes prescription drug benefits are required to notify Medicare-eligible employees by October 15 of each year whether their drug benefit is "creditable coverage," meaning that it is expected to cover, on average, as much as the standard Medicare Part D prescription drug plan.

The Centers for Medicare and Medicaid Services (CMS) require that companies provide the notice before the annual Medicare Part D election period, October 15 to December 7 each year for coverage beginning January 1. The creditable-coverage notice must be given to all Part D-eligible individuals who are covered under, or apply for, an employer's prescription drug benefits plan. This requirement applies to Medicare beneficiaries who are active employees and those who are retired, as well as Medicare beneficiaries who are covered as spouses under active or retiree coverage.

There are two CMS disclosure requirements which include:

1. Providing a written disclosure notice to all Medicare eligible individuals annually who are covered under a company’s prescription drug plan, prior to October 15 each year and at various times as stated in the regulations, including to a Medicare eligible individual when he/she joins the plan. This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your prescription drug plan and any retirees and their dependents.
2. Entities must complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. The Disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. This requirement does not pertain to the Medicare beneficiaries for whom entities are receiving the Retiree Drug Subsidy (RDS).

For complete guidance and sample disclosure notices for this requirement, please visit the CMS Creditable Coverage website.

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Get a Head Start on Tax Season in Four Simple Steps

While the end of the year may seem like it’s a long time from now, it’s only three short months away. When you factor in the hectic weeks of the coming holiday season, that really only leaves a few weeks to pull your tax information together to avoid the stress that being unprepared for tax season can bring.

Now is the time to think about what information you will need for the 2013 tax filing season and the steps you can take in the next few months to minimize your tax burden. To help you get a jumpstart on your end-of-year planning and organization, we’ve compiled the following tips.

1. Take a look at last year’s income tax return and determine what documentation you will need to complete this year’s return.
2. Review the expenses, retirement contributions, and charitable giving that you have planned before year-end to determine if there are any additional deductions that you may still be able to capture for this tax year.
3. Organize your receipts and invoices by category and start scanning them so you are prepared for a paperless tax preparation process.
4. If you’re not already comfortable using your portal on our website, make sure to check how the process of uploading your tax documents works and how to review your return online so these tasks are quick and easy for you during tax season.

Getting a head start on your taxes now will benefit you come tax time. Providing us with your documentation as early as possible will allow us to process your return sooner so you can receive any tax refund you may be eligible for more quickly. In addition, preparing now will also help you avoid the stress of scrambling for information with a looming tax deadline before you. And remember, we are always here to help. If you have any questions, please give us a call.

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Employers Must Provide Notification of Health Insurance Options to Employees by October 1, 2013

The opening of the government’s Health Insurance Marketplace (HIM) on October 1 is fast approaching and with it comes a new requirement to Section 18B of the Fair Labor Standards Act that all businesses should be aware of. By October 1, 2013 employers must provide written notices about health insurance options, including notification of the new health insurance marketplace, to their employees. This requirement includes all current employees regardless of the hours they work or their health benefit enrollment status.

Employees can be notified by First Class mail or using email. For those employees hired after September 30, 2013, notices about health benefit options must be provided at the time of hiring, which is a change from the current window of 14 days.

The Department of Labor website details the information that must be included in the employee notices and also has links to model notices that employers can use. These model notices address both employers who do offer health insurance and those who do not. There is also an updated model notice for COBRA elections available from the Department of Labor website. According to the Department of Labor, all model notices must include employees’ identifying and contact information.

For employers providing health insurance, the Department of Labor must also provide information about which of their employees are offered coverage, the eligibility requirement for coverage, and a statement that addresses whether the cost of the coverage is intended to be affordable to each employee based on their wages.

The Healthcare Reform Act is bringing many changes that businesses should be aware of. We will provide periodic updates about this important legislation and its impact on individuals and businesses. We also recommend visiting www.healthcare.gov for the most up-to-date information.

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College Tuition and Taxation 101

The beginning of September is synonymous with the back-to-school season. If you have a child attending college, or if you are a student yourself, September is also likely to be synonymous with the beginning of annual tuition payments. While attending and paying for college may be taxing in many ways, there is some good news when it comes to tax deductions and credits related to college tuition.

As part of The American Taxpayer Relief Act, the legislation passed by Congress to avoid a “fiscal cliff” and maintain tax cuts, several tax benefits have been extended to help ease the burden of paying for classes at eligible education institutions. Tax benefits include:

The American Opportunity Credit, previously known as the Hope Credit, provides an annual credit of $2,500 per student for the costs of tuition, fees, and course materials for the first four years of an individual's post-secondary education. This tax credit is available to households with a modified adjusted gross income of $80,000 or less for single filers or $160,000 or less for married filers filing jointly.

The Lifetime Learning Credit can also lower a household's tax burden by reducing the cost of undergraduate or graduate education, even for those students who choose to take only one class at a time. The tax credit can be applied to 20%, or $2,000, of the first $10,000 of college tuition and related expenses each year. It can be used for approved expenses incurred by any member of a household enrolled at an eligible education institution.

Tuition-based tax deductions can be used by single tax filers with income between $65,000 and $80,000 and married joint filers with an income between $130,000 and $160,000.These deductions allow tax filers to claim $2,000 in tuition and related fees, depending on their tax situation. Taxpayers do not have to itemize in order to claim this benefit.

Employer-sponsored tuition assistance deductions may also be used to reduce your tax burden. The IRS allows an employee to exclude taxable income up to $5,250 per year when they receive employer-provided tuition assistance for undergraduate or graduate classes. Employers who offer tuition assistance to their employees can also deduct these costs as a business expense.

While we have outlined some of the most common tax deductions and tax credits available to individuals paying college tuition, there are many variables to consider when planning the most effective tax strategy for your unique situation. We would be happy to discuss your options for mitigating your tax expenses and reducing the costs of college education. Contact our firm today to speak with one of our tax professionals.

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Employee Theft: 4 Tips for Protecting Your Business

Given the tough economy over the past few years, it has been particularly difficult for business owners and the individuals they employee to thrive financially. Couple the poor economic climate with the fact that many businesses, especially small ones, have few controls in place to prevent employee theft and you get statistics like these reported by the National Federation of Independent Business:

• 30%─the average percentage of employees who do steal from their employer.
• 60%─the average percentage of employees who will steal if given a motive and the opportunity.
• $4,500─the amount of money per employee that is stolen from small businesses each year, totaling an estimated $600 billion per year in losses.

In addition to these grim numbers, according to the U.S. Department of Commerce, about a third of all business failures each year can be attributed to employee theft and other crimes perpetrated by staff members. So what can businesses do to protect themselves from potentially devastating losses as a result of employee theft? Here are four tips to help minimize the likelihood that employee theft becomes a problem in your organization:

1. Make employee fraud prevention a priority and part of your business culture. Develop an ethics policy for your company that clearly states that you have a zero-tolerance policy for employee theft and that you encourage employees to report any suspicious activity to management. In addition, let employees know that audits are done regularly and may also be conducted spontaneously. Research shows that openly addressing the topic of employee theft can be a very effective deterrent.

2. Use an electronic solution or outsource your accounting. Using an accounting software system that allows you to set authority levels and track employee access and activity is an effective way to monitor your business finances for unusual activity. For an added level of security, outsourcing your bookkeeping and payroll to a third party eliminates the chance of employee theft through these activities and also provides a regular audit process.

3. Know and train your employees. Taking the time to conduct proper background checks is an essential part of mitigating losses associated with employee theft. Verify job applicants’ education and employment histories. Be sure to call references to make sure a “perfect” candidate doesn’t have a criminal record or a history of suspected fraud or theft. If an employee consents, you can also check their credit score and credit history to determine how fiscally responsible they are or if they have any “red flags” indicating a lack of financial stability. Statistics show that one of the most common reasons that employees steal from their employer is to ease their own financial hardship.

4. Keep your finger on the financial pulse of your business. Although having trustworthy employees is essential, it is never wise to remove yourself completely from reviewing your company’s financial statements and account activity. Taking some time each month to look at the flow of transactions through your business accounts will ensure that you can identify any unusual activities right away. Using an online banking service can help to make regular reviews of bank reconciliations more efficient. The time you spend ensuring the integrity of your company’s financial flow will pay dividends in terms of loss prevention.

While having an atmosphere of trust and teamwork is essential for all businesses, it is equally, if not more important, to create the proper culture and controls to protect the financial stability of your company. The tips outlined above are a great foundation on which to build a customized plan that will mitigate the risk your company faces from employee theft.

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Rest Easy: Know the Tax Implications of Renting Your Vacation Home

If you’re lucky enough to own a vacation home, or are thinking about investing in one, you should be aware of the tax implications associated with this type of property, particularly if you are planning to rent it at least some of the time. It is also important to note that the IRS definition of a vacation property encompasses not only houses, cottages, and condominiums, but also mobile homes, recreational vehicles, and boats. In addition, remember that you may be obligated to pay state and local taxes on the rental of your vacation property as well as federal taxes.

The tax liabilities associated with a vacation home and the deductions you can claim against the property primarily depend on the time you spend there, or, as the IRS calls it, your “personal use” of a second home. The IRS definition of personal use covers time that you or any member of your family, including your spouse, children, siblings, parents, grandparents, and grandchildren spend at your vacation property. Personal use also includes renting your vacation home to anyone for less than fair market value, trading your place to stay somewhere else and donating your property for charitable use.

Let’s look at two scenarios that illustrate how the tax rules apply to vacation properties that are rented at least occasionally:

Scenario 1: You rent your vacation property most of the time. The IRS rules state that if you spend fewer than 14 days or 10% of your time each year at your vacation home, you can write off expenses associated with owning a rental property. These deductions are allowed in proportion to the amount of time your property is rented. For example, if you have a cottage that you rent for half of the year, then half of your mortgage interest, property taxes, utilities, insurance costs, and repair expenses would be deductible against rental income. In addition, you can deduct the other half of your second home’s mortgage interest and property taxes against your other income. You can also write off 100% of the cost of advertising for tenants or other expenses directly related to renting. Keep in mind that you have to show evidence of actively managing your vacation property to qualify for these tax deductions such as screening potential tenants, writing rental terms, and arranging for any necessary property repairs.

Scenario 2: You spend more than 15 days a year at your vacation home and also rent it periodically. The tax implications in this scenario are based on how much time you or your family spends at your vacation retreat and the length of stay of your renters.

If the personal time you spend at your vacation property is greater than the 14 days or 10% of the year mentioned above, the IRS states that you must divide your total expenses between rental use and your personal use based on the number of days used for each purpose. For short-term rental situations of 14 or fewer days, rental income is tax-free. For longer rental periods, you need to claim the rental income and deduct eligible expenses in proportion to the percentage of time that each rental period represents of the total days of property use. This is where careful record keeping is crucial.

In this scenario, you will not be able to deduct your rental expense in excess of the gross rental income limitation (your gross rental income less the rental portion of mortgage interest, real estate taxes, and casualty losses, and rental expenses like realtors' fees and advertising costs). However, you may be able to carry forward some of these rental expenses to the next tax year, subject to the gross rental income limitation for that year.

Having a vacation property in a relaxing location is a wonderful way to get away from the stresses of everyday life. Renting your retreat can also help to provide extra income and help to reduce your tax obligations. It is critical that if you do own a second home, a boat, or other vacation property, you keep track of rental income and when it is occupied for personal use and rental use so that when you are preparing to file your taxes your sanctuary does not become another source of stress.

If you have any questions about this information, please contact our firm—we are always here to help.

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Mid-Year Tax Planning Can Save You Time—and Money

As hard as it is to believe, the year is already half over. Although it may seem like the April tax deadline was just a few weeks ago, the reality is it’s time to start thinking about your 2013 taxes. And, if you spend some time now on mid-year tax planning, it can really pay off next April—which is only nine short months away. In addition, taking stock of where your business is halfway through the year can help you determine any changes you need to make in order to reach the goals that you set for 2013.

When you look at how your business has performed in the first two quarters of the year, one of two scenarios is likely to emerge:

1. You’re having a great year. Congratulations! Things are going well and you’re at or ahead of where you thought you would be in terms of income and profits. If this is the case, you’ll want to think about ways to mitigate your tax burden, such as saving additional money for retirement in a 401(k) or investing back in your business by purchasing equipment to take advantage of potential tax write-offs. If you have larger than expected profit margins, you may want to consider increasing your estimated tax payments to make sure you don’t incur penalties for underpaying your taxes.
2. You could be doing better. If your financial statements aren’t where you thought they would be or your business has experienced significant losses that you don’t believe will be offset by a stellar second half of the year, you may want to think about reducing your estimated tax payments to conserve cash. Remember, if you overpay your 2013 taxes you won’t receive a refund until next year, which could hinder this year’s cash flow.

No matter whether you fit under scenario 1 or 2, proper tax planning is a necessity to ensure your ongoing financial success. Consider the following:

Catch Up on Your Record Keeping
If the summer months are slow for your business, it is a good idea to set aside some time to ensure that your tax-related records are organized and up-to-date. Getting your travel, entertainment, and other tax-deductible expense records in order now can help ease the rush when next tax season rolls around. Keep in mind that in addition to physical receipts, you need to record the date and purpose of your business expenses. For business travel using a personal vehicle, make sure to keep a detailed record of the miles driven for business, the date on which they were driven, and the purpose of each trip. You should also track your odometer readings at the beginning and the end of the year.

Talking Taxes Now Can Save You Money Later
Don’t wait until tax season to learn what you could have done this year to reduce your taxes. Contact one of our professionals today. We’ll help you put the strategies in place to minimize your tax obligations based on the unique needs of your business. We can also make sure that your record keeping complies with the most current tax requirements.

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Obama Administration Announces Delay to Part of Affordable Care Act

On Tuesday, July 2, the Obama administration announced that it is delaying the requirement that businesses with more than 50 employees provide health insurance to their workers or pay a penalty. The delay extends to 2015. The announcement by the IRS comes after numerous complaints from businesses that the requirements were too complicated and difficult to implement in time.

Still on schedule are other key parts of the law, including the health exchanges where individuals can buy insurance. The exchanges will open on October 1, according to Valerie Jarrett, a senior adviser to President Obama. The delay also does not change the individual mandate, which requires most Americans to purchase insurance. Some consumers may receive subsidies to help them pay for the insurance depending on their incomes.

Jarrett stated, "As we make these changes, we believe we need to give employers more time to comply with the new rules. Since employer responsibility payments can only be assessed based on this new reporting, payments won't be collected for 2014."

The delay gives the IRS more time to simplify reporting requirements, as well as for businesses to get up to speed with reporting systems. The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015.

"We commend the administration's wise move to delay the employer reporting and penalty obligations under the Affordable Care Act," said National Retail Federation President Neil Trautwein. "This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."

This does not affect businesses with fewer than 50 workers, who were already exempt from that rule. Most large businesses already offer coverage to their employees.

Various parts of the law have taken effect since its passage in 2010, including allowing children up to age 26 to remain on their parents' insurance plans and discounts for prescription drugs for Medicare patients. More young Americans have health insurance than before the law, because of that change, and the discounts have saved Medicare recipients billions of dollars.

Source: USA Today

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What Does the Affordable Care Act (Obamacare) Mean to Businesses?

One of the key mandates of the Affordable Care Act (ACA), or “Obamacare” as the law is commonly known, is the creation of health insurance exchanges in each state. The intention of these exchanges is to give individuals and small businesses a means for buying affordable health insurance. With the October 1st launch date for the new health care exchanges fast approaching, business owners should be aware of the financial and tax implications related to them. Here are some important highlights of the new health insurance mandates to help your business plan ahead.

• The health insurance requirements of the ACA differ for businesses with 50 or more full-time equivalent employees (FTEs) and those with fewer than 50 FTEs. The number of FTEs your business has determines whether you must provide employees with health insurance and any penalties you will have to pay if you choose not to. The number of FTEs you have also determines if your business is eligible for tax credits and participation in the government’s Small Business Health Options Program (SHOP).
• Mandatory provision of health insurance applies only to companies with 50 or more FTEs. Beginning October 1, if your business has 50 or more FTEs you will need to choose between providing affordable care to all full-time employees or paying a penalty. If you have fewer than 50 employees, you aren’t mandated to provide health insurance, but you may wish to consider using the SHOP marketplace in your state to offer employees the benefit of health insurance coverage.
• For companies with 50 or more FTEs, the penalty for not offering health insurance is $2,000 per person, excluding the first 30 employees. Depending on the cost of insurance product premiums, it may, from a purely financial perspective, make sense not to offer insurance and pay a penalty if it costs less. However, these economic savings must be balanced against the costs of lower employee satisfaction and potential staff turnover if health insurance is not part of your benefit package.
• Employers with 50 or more FTEs may be subject to the Employer Shared Responsibility Payment in 2014. This payment applies to employers with 50 or more FTEs who don't offer health insurance that meets certain minimum standards. According to IRS guidelines, these standards include having at least one employee who could purchase their insurance for less money through the government’s health insurance exchange. In other words, if your employees will save money by buying health insurance through the government exchange, you may be subject to the Employer Shared Responsibility payment. Generally, to avoid the Employer Shared Responsibility Payment, an employer must provide insurance with a premium cost for employee-only coverage that is no more than 9.5% of an individual’s annual household income.
• Until 2016, the SHOP marketplace is only available to employers with fewer than 50 employees. Starting in 2014, small businesses with 50 or fewer FTEs (or 100 FTEs in Hawaii) can use the government’s SHOP marketplace to purchase health insurance for their employees. In 2016, small businesses with 100 or fewer FTEs will also be able to participate in the SHOP marketplace. It is important to remember that although small businesses are not mandated to use SHOP insurance products, they will not qualify for health insurance tax credits if they purchase their insurance outside of the program.
• If your business has fewer than 25 full-time equivalent employees, you may qualify for employer health care tax credits. To qualify for the Small Business Health Care Tax Credit, your company must:

1. 1. Employ 25 or fewer employees making an average of $50,000 a year or less
   2. Pay at least 50% of full-time employees' premium costs
   3. Buy insurance through the SHOP

Starting in 2014, the tax credit is worth up to 50% of your contribution toward employees' premium costs (up to 35% for tax-exempt employers) and is only available to companies purchasing health insurance through the SHOP marketplace.

As you can see, the introduction of government health insurance exchanges will have important implications for business owners. If you have questions about the tax implications of the new health insurance mandates on your business, please give us a call. In addition to the information we’ve provided, you may want to learn more at www.healthcare.gov.

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What’s The Real Secret to Success? A "Giver" Instinct

For years, aggressive, "do-what it takes" attitudes have been attributed to achieving professional success. Having at least a little bit of the "killer" instinct is what differentiates the winners in business, right? Perhaps in some cases, but according to research conducted by Wharton Business School professor, Adam Grant, the opposite is true. Success—both personal and professional—is actually the result of having a "giver" instinct.

In his New York Times best-seller 'Give and Take: A Revolutionary Approach to Success' Grant identifies three personality types: "givers," "takers" and "matchers." In a nutshell, "givers" are likely to make unconditional contributions of their time, talent, and material resources. In contrast, "takers" try to obtain maximum personal benefit from situations while contributing as little as possible. In the middle, are "matchers," who give to “givers” and withhold help from “takers.”

While very few of us are always "givers," "takers," or "matchers," many of us have a default style, which can influence our success or failure. For example, in personal relationships, the "giver" style tends to promote success while “taker” and “matcher” styles do not usually fare as well.

The same is true when it comes to working relationships and company culture. Research shows that individuals and companies with a "giving" instinct are often able to achieve greater and more meaningful success than those with “taker” or “matcher” tendencies. Why? Adam Grant believes that in part, it is because individuals and companies who are “givers” win the genuine support of others. This creates relationships and cultures based on reciprocity—and everybody wins. "Takers," on the other hand, may achieve success, but it is likely to be short-lived and not rooted in meaningful or equitable relationships.

So how do you nurture the "giver" instinct in yourself and your company? Start with small actions such as recognizing teams instead of individuals for work well done or encouraging your team members to mentor a colleague without asking for a return favor. In addition to fostering a sense of internal goodwill, encouraging a “giver” mentality with customers can also be one of the best ways to win referrals and repeat sales—not to mention a great way to build a successful business!

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Low- or NO-cost Marketing for Small Businesses

We’ve said it before, and we’ll say it again… marketing is a key component of any successful business. So, we want to provide you with as much helpful information as we can in this area. We know marketing isn’t an easy task. It takes time and money. Of course, we understand that you have to keep a focus on the bottom line, which is why we are offering a few marketing tips for those of you on a budget. Being budget conscious doesn’t mean you can’t build a strong marketing program! Consider these ideas:

• Network—Networking is still one of the most effective marketing tactics, and it can be accomplished for free or very little cost. Social networks like Twitter and Facebook are free, and you can build a network of followers in a relatively short time. Attending onsite networking events like trade shows doesn’t have to be pricey either. You can avoid spending money on a booth and simply attend the event to network and pass out business cards.
• Run a Contest—Challenge your customers to do something, like help you name a product or create a logo for your business. The winner can get recognition on your website and whatever gift you deem appropriate. You’ll be surprised at how helpful customers want to be and the great rapport that you can develop.
• Be Social—Chances are that your customers and prospects use social media. Invest in creating a Twitter or Facebook account. Building fan and profile pages offers a forum for getting relevant content and special offers out to the public. Even better, it doesn’t cost a thing…except a little of your time.
• Reward Loyalty—It’s important to remind your customers to refer business to you and to reward them when they do. Small gifts like restaurant gift cards or discounts on your products or services go a long way and accelerate loyalty.

We want to provide you with as much information as we can to support your success. As business owners, we know the importance of marketing. Remember, as your trusted advisor, we are here to help at every level.

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Do a Little ‘Outdoor’ Marketing This Summer

Whether your business sells seasonal products or provides services throughout the year, summer is a HOT season for marketing. The warmer weather offers some flexibility with marketing events and campaigns, and that means you can be creative. Most people like to get out during the summer months, so the potential to attract prospects and clients to your marketing events is higher. The following are a few creative ideas to spice up your summer marketing efforts.

Organize a Community Service Event: Some businesses allot some time and money to support causes that are important to them and their customers. Take the time to organize a community service day to help out a good cause, and get local residents and your employees involved.

Host an Open House Cookout: Invite prospects and clients to a fun open house and supply them with good old-fashioned cookout food like hot dogs, salads, and desserts. Cookouts are always a good time to offer a casual and comfortable venue for getting to know your clients better and meeting potential new clients.

Send Out Summer-Related Promotional Items: People tend to spend much more time outside during the summer months, so offer them cool promotional items (that are clearly branded). Items like water bottles, lip balm, or outdoor toys like beach balls are fun and practical promotional items.

Offer Your Customers a Few Summer Tips: Offer your clients some seasonal tips. As a business owner, you most likely communicate with your customers throughout the year via a client newsletter or other marketing campaigns. Send a special summer newsletter to customers chock-full of tips for staying safe in the sun, events to do in the area, or barbecue recipes—just to name a few. Include information about sales or new products and services your business plans to offer during the summer while you have their attention!

These are just a few summer marketing ideas. Take a moment to brainstorm some of your own.

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Harness the Power of the Mobile Office— Enjoy the Freedom of Being Wire-free

Technology is a wonderful thing. We know it in our firm because we use advanced technology to our advantage—that is, working anytime and from any device, having 24/7 access to files, and the ability to work from home, a client’s site, or the airport! And now that just about any gadget you can imagine is portable and affordable, your small business doesn’t have to be confined to your office or your dining room table.

We encourage you to harness the power of technology (like we have) to operate more efficiently and free you from your wire tethers. Consider all the advantages of going mobile:

• Experience increased productivity—Eliminate wasted downtime. Work anywhere, anytime, and from any device!
• Explore new promotional opportunities—When you can work anywhere, you can attend more onsite networking events.
• Enjoy streamlined business processes—when everything is online, you eliminate any barriers to accessing files or communicating in real time with clients or your staff.

Building a mobile office requires that you select the right technologies to support an efficient digital work environment—from laptops and tablets to smartphones and online document management applications. Take some time to research the technologies that will work for you and build your mobile office. You’ll love the freedom!

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A Not-So-Ordinary Tax Season is History

This was more than your typical tax season. With a plethora of changes to the tax code and a late start brought about by 11th hour congressional decisions, it was an even more harried and intense process than usual. We appreciate the good working relationships with our clients that helped us keep moving to meet the April 15 deadline—thank you!

With tax season just now moving into the rearview mirror, it’s hard to believe that we’re already well into the second quarter of the year. It’s time to focus on financial strategies and planning to assure that you come in for a perfect landing at the end of 2013.

To do this, you need a trusted advisor—someone who stays engaged throughout the year and has the perspective, acumen and commitment to understand your financial complexities and management implications.

We’re here to make that journey with you. We’re all exhaling in the wake of the tax deadline, but let’s not allow meaningful time to get away from us before we reengage and give direction to business in the coming months.

Consider us your trusted advisor and advocate, and call us right away to consider your plan for the year.

Here’s wishing you a successful 2013!

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E-Filing – A Reminder WHY It’s the Way to Go!

Hopefully, you are part of the more than 80% of taxpayers that take advantage of e-filing. If you’re not, we want to remind you WHY you should. Take a moment to read our short (but very convincing) list. The April 15th tax deadline is just around the corner, so we wanted to dedicate one last post to remind you of the value of e-filing your return.

1. Safe & Secure—Tax preparers are required to meet strict guidelines and provide advanced encryption technology for e-filing—supporting the most secure method. E-filing is far more secure than mailing a paper return.
2. Faster Refunds —E-filing typically promises a faster refund than paper filing a return. The IRS issues most refunds in less than 21 days, and you have the option of direct depositing your refund. Combining e-file with direct deposit is the fastest way to get your money.
3. Accurate & Complete—There is no better way to ensure that your tax return is accurate and complete than to e-file. Remember, if your return is incomplete or has errors, it will take far longer to process.
4. Payment Options—If you owe tax, you can e-file early and set an automatic payment date any time on or before the April 15 due date. You also have several payment options from which to choose, including check, money order, debit or credit card, or electronic transfer of funds from your bank account.

Our goal is to make the tax return process as easy for you as possible. Please contact our firm for more information. We are here to help!

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4 Quick Tips to Ready Yourself for April 15

The tax deadline always seems to sneak up on taxpayers. Don’t fall into this trap and cause yourself added stress. If you’ve yet to pull things together…start preparing now. The following are four easy tips to be sure that you are ready for the April 15 tax deadline:

• Locate Last Year’s Tax Return—Previous years’ returns serve as an excellent guide for preparing for the current tax season.
• Organize Recordkeeping—Start to organize your source documents, including mileage logs, charity receipts, invoices, etc. Avoid scrambling to pull these items together at the last minute.
• Seize Opportunities to Lower Taxes—For example, if you are self-employed there’s still time to open and fund a SEP IRA (Simplified Employee Pension Individual Retirement Account). You can invest up to 25 percent of your self-employment income or $50,000, whichever is less.
• Ask Questions—If you have questions regarding your tax return, call our office. Being prepared means having current, sound information and advice from your tax professional. We are here for you.

Feel free to contact us if you have any questions. Now, go get organized…

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Spring is Just Around the Corner… and so is April 15th

As we look forward to the end of winter and the launch of spring, that also means the April 15th tax deadline is that much closer. Being prepared is the best way to ensure a smooth tax season and minimize any surprises. So, if you’ve yet to dig in and give some dedicated focus to your taxes, here are a few suggestions to get you going:

• Begin Gathering Source Documents—Start getting all of your documents ready to go. Pull together receipts, invoices, statements, etc.
• Get Organized—Be sure to organize your documents properly. This will help you identify any missing pieces. Practicing good recordkeeping will make tax season far less stressful.
• Start Scanning for a Paperless Tax Season—If you haven’t already, now is a good time to adopt a paperless process. It’s so much easier to operate in a digital environment…with invoices, receipts, and all other documents available with the click of the mouse. Going into tax season, you’ll feel a big sense of relief by having all your documents stored electronically.
• Use Your Portal—We developed our advanced online portals to provide you with an easy-to-use and convenient system to both send us your tax source documents and access your completed returns. If you are not already using your portal, take a few minutes to get familiar with the system. You will love the 24/7 access and direct line of communication with our firm!

Give our firm a call if you have questions or require some personalized assistance. Here’s to a smooth and worry-free tax season!

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E-Filing is the Way to Go – 4 Top Reasons

More than 80% of taxpayers file electronically…and for good reason. Or rather, good reasons (plural)—four to be exact. E-filing offers an efficient and highly secure method for filing your tax return. And if that’s not reason enough, take a moment to read through our Top 4:

1. Accurate & Complete—E-filing is the best way to ensure that you file an accurate and complete tax return. Incomplete returns or those that have errors take far longer to process.
2. Safe & Secure—Tax preparers (and software vendors) are required to meet strict guidelines and provide advanced encryption technology for e-filing—supporting the most secure method.
3. Faster Refunds —E-filing typically promises a faster refund than filing a paper return. The IRS issues most refunds in less than 21 days, and you can select to have your refund direct deposited. Combining e-file with direct deposit is the fastest way to get your refund.
4. Payment Options—If you owe tax, you can e-file early and set an automatic payment date any time on or before the April 15 due date. You also have several payment options from which to choose, including check, money order, debit or credit card, or electronic transfer of funds from your bank account.

Our goal is to make tax season as stress-free for our clients as possible. Please contact our firm for more information. We are here to help!

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Electronic Filing Starts January 30th

As of January 30, 2013, the IRS will begin processing individual income tax returns for the majority of United States taxpayers. Be sure to get your tax documents organized now. You can use our Client Center on our website to securely upload your documents to our office.

A few items to note as we move into February:

• E-file and direct deposit are the fastest ways to get your tax refund. Once we've completed your return, you'll want to allow our firm to e-file it by completing the appropriate electronic filing authorization form that accompanies your tax return.
• The IRS does not anticipate any associated tax refund delays, and expects to issue 9 out of 10 tax refunds in 21 days or less.
• According to the IRS, taxpayers claiming the residential energy credit and businesses claiming depreciation and amortization and general business credit will be allowed to file tax returns in late February or early March due to additional forms and processing requirements.

As always, if you have any questions, please contact our firm.

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New Tax Bill… What it Means to You

With the passing of the new ‘Fiscal Cliff” Act, taxpayers need to be aware of how it may affect them in the coming years. As such, we’ve compiled detailed information for you within this blog post.

At a high level, the act permanently extends provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) with a few modifications targeting the wealthiest Americans with higher taxes. The new bill also temporarily extends many other tax provisions that had lapsed at midnight on December 31, 2012, and others that had expired a year earlier. (NOTE: Among the tax items not addressed by the act was the temporary lower 4.2% rate for employees’ portion of the Social Security payroll tax, which was not extended and has reverted to 6.2%.)

The following are the act’s main tax features:

Individual Tax Rates—All the individual marginal tax rates under EGTRRA and JGTRRA are retained (10%, 15%, 25%, 28%, 33%, and 35%). A new top rate of 39.6% is imposed on taxable income over $400,000 for single filers, $425,000 for head-of-household filers, and $450,000 for married taxpayers filing jointly ($225,000 for each married spouse filing separately).

Phase-out of Itemized Deductions & Personal Exemptions—The personal exemptions and itemized deductions phase-out is reinstated at a higher threshold of $250,000 for single taxpayers, $275,000 for heads of household, and $300,000 for married taxpayers filing jointly.

Capital Gains & Dividends—A 20% rate applies to capital gains and dividends for individuals above the top income tax bracket threshold; the 15% rate is retained for taxpayers in the middle brackets. The zero rate is retained for taxpayers in the 10% and 15% brackets.

Alternative Minimum Tax—The exemption amount for the AMT on individuals is permanently indexed for inflation. For 2012, the exemption amounts are $78,750 for married taxpayers filing jointly and $50,600 for single filers. Relief from AMT for nonrefundable credits is retained.

Estate & Gift Tax—The estate and gift tax exclusion amount is retained at $5 million indexed for inflation ($5.12 million in 2012), but the top tax rate increases from 35% to 40% effective Jan. 1, 2013. The estate tax “portability” election, under which, if an election is made, the surviving spouse’s exemption amount is increased by the deceased spouse’s unused exemption amount, was made permanent by the act.

Permanent Extensions—Various temporary tax provisions enacted as part of EGTRRA were made permanent. These include:

• Marriage penalty relief (i.e., the increased size of the 15% rate bracket (Sec. 1(f)(8)) and increased standard deduction for married taxpayers filing jointly (Sec. 63(c)(2))
• The liberalized child and dependent care credit rules (allowing the credit to be calculated based on up to $3,000 of expenses for one dependent or up to $6,000 for more than one) (Sec. 21)
• The exclusion for National Health Services Corps and Armed Forces Health Professions Scholarships (Sec. 117(c)(2))
• The exclusion for employer-provided educational assistance (Sec. 127)
• The enhanced rules for student loan deductions introduced by EGTRRA (Sec. 221)
• The higher contribution amount and other EGTRRA changes to Coverdell education savings accounts (Sec. 530)
• The employer-provided child care credit (Sec. 45F)
• Special treatment of tax-exempt bonds for education facilities (Sec 142(a)(13));
• Repeal of the collapsible corporation rules (Sec. 341)
• Special rates for accumulated earnings tax and personal holding company tax (Secs. 531 and 541)
• Modified tax treatment for electing Alaska Native Settlement Trusts (Sec. 646)

Individual Credits Expired at the End of 2012—The American opportunity tax credit for qualified tuition and other expenses of higher education was extended through 2018. Other credits and items from the American Recovery and Reinvestment Act of 2009 that were extended for the same five-year period include enhanced provisions of the child tax credit under Sec. 24(d) and the earned income tax credit under Sec. 32(b). In addition, the bill permanently extends a rule excluding from taxable income refunds from certain federal and federally assisted programs (Sec. 6409).

Individual Provisions Expired at the End of 2011—The act also extended through 2013 a number of temporary individual tax provisions, most of which expired at the end of 2011:

• Deduction for certain expenses of elementary and secondary school teachers (Sec. 62)
• Exclusion from gross income of discharge of qualified principal residence indebtedness (Sec. 108)
• Parity for exclusion from income for employer-provided mass transit and parking benefits (Sec. 132(f))
• Mortgage insurance premiums treated as qualified residence interest (Sec. 163(h))
• Deduction of state and local general sales taxes (Sec. 164(b))
• Special rule for contributions of capital gain real property made for conservation purposes (Sec. 170(b))
• Above-the-line deduction for qualified tuition and related expenses (Sec. 222)
• Tax-free distributions from individual retirement plans for charitable purposes (Sec. 408(d))

Business Tax Extenders—The act also extended many business tax credits and other provisions. Notably, it extended through 2013 and modified the Sec. 41 credit for increasing research and development activities, which expired at the end of 2011. The credit is modified to allow partial inclusion in qualified research expenses and gross receipts those of an acquired trade or business or major portion of one. The increased expensing amounts under Sec. 179 are extended through 2013. The availability of an additional 50% first-year bonus depreciation (Sec. 168(k)) was also extended for one year by the act. It now generally applies to property placed in service before Jan. 1, 2014 (Jan. 1, 2015, for certain property with longer production periods). Other business provisions extended through 2013, and in some cases modified, are:

• Temporary minimum low-income tax credit rate for non-federally subsidized new buildings (Sec. 42)
• Housing allowance exclusion for determining area median gross income for qualified residential rental project exempt facility bonds (Section 3005 of the Housing Assistance Tax Act of 2008)
• Indian employment tax credit (Sec. 45A)
• New markets tax credit (Sec. 45D)
• Railroad track maintenance credit (Sec. 45G)
• Mine rescue team training credit (Sec. 45N)
• Employer wage credit for employees who are active duty members of the uniformed services (Sec. 45P)
• Work opportunity tax credit (Sec. 51)
• Qualified zone academy bonds (Sec. 54E)
• Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements (Sec. 168(e))
• Accelerated depreciation for business property on an Indian reservation (Sec. 168(j))
• Enhanced charitable deduction for contributions of food inventory (Sec. 170(e))
• Election to expense mine safety equipment (Sec. 179E)
• Special expensing rules for certain film and television productions (Sec. 181)
• Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico (Sec. 199(d))
• Modification of tax treatment of certain payments to controlling exempt organizations (Sec. 512(b))
• Treatment of certain dividends of regulated investment companies (Sec. 871(k))
• Regulated investment company qualified investment entity treatment under the Foreign Investment in Real Property Act (Sec. 897(h))
• Extension of subpart F exception for active financing income (Sec. 953(e))
• Lookthrough treatment of payments between related controlled foreign corporations under foreign personal holding company rules (Sec. 954)
• Temporary exclusion of 100% of gain on certain small business stock (Sec. 1202)
• Basis adjustment to stock of S corporations making charitable contributions of property (Sec. 1367)
• Reduction in S corporation recognition period for built-in gains tax (Sec. 1374(d));
• Empowerment Zone tax incentives (Sec. 1391)
• Tax-exempt financing for New York Liberty Zone (Sec. 1400L)
• Temporary increase in limit on cover-over of rum excise taxes to Puerto Rico and the Virgin Islands (Sec. 7652(f))
• American Samoa economic development credit (Section 119 of the Tax Relief and Health Care Act of 2006, P.L. 109-432, as modified)

Energy Tax Extenders—The act also extends through 2013, and in some cases modifies, a number of energy credits and provisions that expired at the end of 2011:

• Credit for energy-efficient existing homes (Sec. 25C)
• Credit for alternative fuel vehicle refueling property (Sec. 30C)
• Credit for two- or three-wheeled plug-in electric vehicles (Sec. 30D)
• Cellulosic biofuel producer credit (Sec. 40(b), as modified)
• Incentives for biodiesel and renewable diesel (Sec. 40A)
• Production credit for Indian coal facilities placed in service before 2009 (Sec. 45(e)) (extended to an eight-year period)
• Credits with respect to facilities producing energy from certain renewable resources (Sec. 45(d), as modified)
• Credit for energy-efficient new homes (Sec. 45L)
• Credit for energy-efficient appliances (Sec. 45M)
• Special allowance for cellulosic biofuel plant property (Sec. 168(l), as modified)
• Special rule for sales or dispositions to implement Federal Energy
• Regulatory Commission or state electric restructuring policy for qualified electric utilities (Sec. 451)
• Alternative fuels excise tax credits (Sec. 6426)

Foreign Provisions—The IRS’s authority under Sec. 1445(e)(1) to apply a withholding tax to gains on the disposition of U.S. real property interests by partnerships, trusts, or estates that are passed through to partners or beneficiaries that are foreign persons is made permanent, and the amount is increased to 20%.

New Taxes—In addition to the various provisions discussed above, some new taxes also took effect Jan. 1 as a result of 2010’s health care reform legislation.

• Additional hospital insurance tax on high-income taxpayers
• Medicare tax on investment income
• Medical care itemized deduction threshold
• Health flexible spending arrangement

For a comprehensive article on the what the ‘fiscal cliff’ bill means to taxpayers (including non-tax items),” click here. Be sure to contact one of our professionals with questions. Remember, we are here to help.

And, HAPPY NEW YEAR from our entire staff!

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Tips on S Corporation Compensation

The IRS continues to challenge S Corporation shareholders regarding proper methods for paying themselves. That said, it’s critical that your S Corporation structure is set up appropriately and that compensation is paid and reported correctly. For example, in a recent court appeal case, an attorney was slapped with penalties and interest after failing to remit payroll taxes for his corporation—even though compensation was reported on a 1099-MISC and individual income and social security taxes were paid. This is a good example of why S Corps must ensure that payments are reported as compensation by December 31, 2012, and that appropriate tax deposits are made and payroll tax returns are filed.

In recent years, the IRS has also instituted a payroll audit program for profitable S Corporations. The program flags income tax returns reporting little or no W-2 payroll wages. The IRS is identifying more of these cases and assessing additional taxes and substantial penalties. The penalty, over and above any unpaid Social Security (FICA) taxes, frequently exceeds an additional 50% of the total tax liability—even if you paid taxes when you filed your individual return. The core issues being identified by the IRS are negligence in paying Social Security tax and making bi-weekly or monthly payroll tax deposit payments.

Avoid being flagged by the IRS by following these tips:

Things to Avoid:

• Paying unreasonably low or no salary to shareholders who perform services for the S Corporation while the corporation is generating a profit.
• Offering loans to shareholders.
• Paying shareholders’ personal expenses with corporate funds.
• Using Form 1099 to report shareholder compensation instead of a W-2.
• Borrowing money (via vendor payables, bank loans, or increased credit card debt) and then paying shareholders a distribution or loan.
• Making distributions more frequently than once per month.
• Assuming that part-time work for the S Corporation excuses compensation payment requirements.

Things to Do:

• Pay reasonable compensation to shareholders.
• Document all loans to shareholders with a written contract that offer a reasonable interest rate and strict payment terms.
• Document all compensation, distribution, and loan issues in corporate minutes.
• Pay distributions to all shareholders on the same date in proportion to the ownership percentage.

Contact us at our office and speak with one of our professionals about what steps you can take to avoid a painful and extremely costly S Corporation payroll tax audit.

From our entire staff: Best wishes for a happy and safe holiday season!

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Tis the “Season of Giving”… Holiday Tax Tips for You

It’s year end already, and with it comes the race to get ready for tax season. Traditionally, December marks a time for giving generously to charities, family, and friends. It’s also a time that can have a major impact on your upcoming tax return. But fear not, we’ve compiled a few helpful “Season of Giving” tips for you (courtesy of the IRS), covering everything from charity donations to refund planning.

1. Contribute to Qualified Charities—If you plan to take an itemized charitable deduction on your 2012 tax return, your donation must go to a qualified charity by December 31, 2012. Be sure to inquire with the charity regarding its tax-exempt status. Donations charged to a credit card by December 31 are deductible for 2012, even if you pay the bill in 2013. The same is true for donations by check if it is mailed in December.
2. Understand What You Can Deduct—You can typically deduct cash contributions and the fair market value of most property you donate to a qualified charity. Special rules apply to several types of donated property including clothing, household items, cars, and boats.
3. Keep Records of All Donations—Always maintain a record of donations you deduct, regardless of the amount. You must have a written record of all cash contributions to claim a deduction, which may include a cancelled check, bank or credit card statement, or payroll deduction record.
4. Gather Records in a Safe Place—Be sure to file records so they do not get lost or damaged. And, as long as you’re gathering contribution documents, it’s a good time to also start gathering other source documents needed to file your tax return in 2013. These include receipts, canceled checks, and other records that support income or deductions you will claim on your tax return.
5. Plan Ahead for Major Purchases—If you are making major purchases during the holiday season, don’t base them solely on the expectation of receiving your tax refund before the bills arrive. Many factors can impact the timing of a tax refund. The IRS issues most refunds in less than 21 days after receiving a tax return; however, if your tax return requires additional review, it may take longer to receive your refund.

Be sure to contact one of our professionals with questions. Remember, we are here to help.

From our entire staff: Best wishes for a happy and safe holiday season!

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After-election Tax Implications... What to Expect in 2013

With the election behind us, we now have a much clearer picture of how taxes will be affected in 2013 and beyond. With this insight, we can better help our clients create strategic, fiscally responsible tax programs for the coming year.

Under the Obama administration, the objective is to maintain the old tax rates for taxpayers with adjusted gross income below $250,000. (The old tax rates were originally enacted under the Bush administration and set to expire at the end of 2012.)

This means that taxes will likely rise for businesses and wealthier individuals next year. Based on Obama’s policy initiatives, income tax rates for the top tax brackets will likely rise to Clinton-era rates. Estate tax lifetime credits will likely fall as well to an amount between $1 million and $3.5 million. The anticipated Congressional stalemate with a Democratic-controlled Senate and Executive branch may very well make the default “Sunset” of $1 million a reality. And finally, capital gains rates are likely to rise as well. As a result, effective tax planning in the face of these increases will become even more important for taxpayers.

We understand that these changes are complex and can be overwhelming, but we are here to help. Contact us with any questions and to begin planning an effective tax strategy.

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Changes to Your Client Portal…What You Need to Know

You may have already noticed some changes to your personal portal. To ensure that you are able to continue to easily navigate within your portal, we’ve compiled the following list that explains recent core enhancements.

What you will see when you log in:

• A more streamlined look and feel offers more direct access to your documents and other frequently used home screen features.
• The “File Exchange” link and any documents previously located in “Document Presentation” or “My Tax” are now located in a single location called "Documents." Within “Documents,” you will see each business or individual clients associated with your login.
• A new "Messages" link at the top of your screen will show you a list of recent activity—similar to what you'll find on many social networking sites. When new activity occurs (e.g., if a new document is posted to your account), the number of new activity items will display next to the “Messages” link.
• A new "Tasks Center” will be displayed when there is activity that requires action on your part (such as a signature needed). Simply click on any task and you will be directed to the proper screen.
• Your account information (including password management) and the “Log Out” link are now available by clicking your name in the top right corner of the screen.

Please contact our firm if you have any questions. Remember, we are here to help!

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Key Tips for Using Social Media Effectively in Your Small Business

First and foremost, it’s important to understand that social media is not one size fits all. Every small business is different and will have different social media needs. For example, some may be looking to acquire new clients while others may want to use social media channels to strengthen customer relationships or educate their audience.

No matter the reason, social media is a cost-effective marketing tool for getting the word out about your business and reaching a large pool of prospects. The following are a few tips for using social media effectively.

Don’t Limit Yourself to One Channel—If you have a great story to tell, you want as many people to hear about it as possible, so don’t limit yourself to one social media channel. Get your information out there using multiple tools like Facebook, Twitter, and your own branded business blog. Social media isn’t just for socializing…these tools provide a great platform for publicizing your business and interacting with your community of readers on a daily basis.

Build a Custom Community—You are in control of creating your own custom social media community based on your brand and the information you release. Over time, you can build a highly targeted audience with whom you can engage in detailed conversations and develop long-lasting, loyal relationships. You can also use the survey capabilities within some social media tools to gather valuable customer information to improve your product or service to meet the needs of your audience.

‘Talk’ to Your Audience Regularly—With social media, you have the ability to carry on conversations in real time, so be sure to maintain your online conversations. If you are inconsistent with your social media communication, your audience will lose interest. Keep your readers engaged by keeping up with conversations.

Don’t Replace Marketing with Social Media—Social media is a complement to your marketing program, not a replacement. While it’s important to be active within the social media space, it’s even more critical to keep up with your long-term marketing program. Continue to plan email marketing and print campaigns…even advertising where appropriate. You need to find the right blend of marketing and social media.

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Jumpstarting Innovation in Your Business

To ensure success, it’s important to consistently evaluate your business and identify possible areas for enhancement. Of course, because you are an integral part of daily operations, it’s sometimes hard to visualize what enhancements may be needed or to come up with that next BIG idea.

With this in mind, we want to provide you with a few tips to help jumpstart innovation in your business. Author Soren Kaplan in his new book “Leapfrogging: Harness the Power of Surprise for Business Breakthroughs,” serves up a few questions that can help you view your business from a new vantage point and inspire innovation. Take a moment to ask yourself:

• What is the simplest thing you could do right now to transform your company?
• What skill do you never use at work that could help your company perform better?
• When have you ever pushed yourself beyond your comfort zone? How did you benefit?
• What work-related experience brought out your entrepreneurial side?
• Have you ever looked at the data you manage and wonder why it matters?
• What surprises challenged your assumptions and gave you more insight into your business?

Innovative breakthroughs often require that you step back just enough to really “see” your business. These questions offer a good start.

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Real Time Collaboration… Paperless… What’s Not to Love?

With year end fast approaching, it’s a good time to slip in another push for portals. We understand the immense value online access offers, and we just want to be sure that you do too. First and foremost, portals support immediate, real-time exchange of data and documents, which translates into ultimate convenience for our clients. Your information is always at your fingertips, 24/7…when YOU need it. Working online also supports real-time collaboration with our staff—enabling us to quickly answer your questions or supply you with needed information. And of course there is also the benefit of reducing the amount of paper in your office…and we know everyone loves that.

Portals just make sense in today’s fast-paced work environment. Consider all the value:

• Access your data and documents 24/7—You are not restricted by office hours.
• Enjoy advanced data security and current views of your data—Portals are THE most secure method for sharing information…far more secure than sending files via email or through the mail. And rest assured that you are always looking at the most current versions of your data and documents.
• Communicate and collaborate with us in real-time—Interact with our staff immediately and get your questions answered quickly.
• Enjoy a paperless process—Eliminate the need to print, fax, or mail documents. Portals allow us to work with you paper free.

Immediate access to your information, paperless, a direct reach to our staff…what’s not to love? Please feel free to contact our office for more information about our secure client portals.

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The End of Summer Means Year End is that Much Closer...

Summer is coming to a close, and the end of summer is a good time to start thinking about getting your tax information together. Before you know it, year end will be here, which can leave you scrambling to get organized. Starting a little early will help ensure that you are prepared—avoiding the all-too-familiar last minute cram session that can cause disruption and stress in your personal and business lives. Starting now means you can pace yourself. Begin with the small stuff:

• Organize your receipts by category.
• Make a list of possible deductions to ask your accountant about (e.g., charitable deductions, home office expenses, etc.)
• Start to scan in receipts and invoices so you are prepared for a paperless tax preparation process.
• Get up to speed using your portal on our website so when the time comes uploading source docs and reviewing your return online are quick and easy tasks.

Getting prepared early will benefit you come tax time.

We certainly hope you have had an enjoyable summer so far. And remember, we are always here to help. If you have any questions, please give us a call.

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How Might ObamaCare Affect Your 2013 Year Taxes?

The effects of the new healthcare law are different for individuals and business. We’ve compiled the following information for you and provided a succinct explanation of specific changes. This list is certainly not all-inclusive, so please contact our firm for more detail and to inquire how ObamaCare might affect your 2013 year taxes.

For Individuals:

• An additional 0.9% Medicare tax applies to wages exceeding $250,000 for joint returns, $125,000 for married taxpayers filing separate returns, and $200,000 for all other filing categories (begins in 2013).
• The additional 0.9% Medicare tax also applies to self-employment income in excess of the thresholds noted above. The deduction for 50% of self-employment taxes does not include this additional tax (begins in 2013).
• The 3.8% surtax is probably the most significant change in 2013. The surtax applies to net investment income of individuals, estates, and trusts with modified adjustment gross income over $200,000 ($250,000 for married couples filing joint returns). Call our office for a detailed explanation of how this surtax might apply to you.
• The 3.8% Medicare surtax also applies to trusts and estates that have net investment income in excess of certain threshold amounts unless the income is distributed to beneficiaries.
• Investment income for 2013 for certain higher income taxpayers will increase as follows (unless Congress extends the Bush tax cuts):
  • Capital gains tax rate: 20% plus the new 3.8% = 23.8%
  • Dividends tax rate: 39% plus the new 3.8% = 43.4%.

For Business/Employers:

• Starting in 2012, employers who filed at least 250 W-2’s in 2011 must report the cost of employer sponsored health coverage on 2012 W-2’s.
• Starting in 2013, employers must withhold an additional 0.9% Medicare tax on an employee’s wages in excess of $200,000. No matching tax payment is required employers.

Again, if you have questions, please contact our office.

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Why Portals Make Sense for Clients

Portals are everywhere. When you access your financial portfolio or bank account, you are using portals. Online access to information is critical these days, allowing instant access to data and documents when you need them—the ultimate in convenience.

At our firm, we also want to provide our clients with the convenience of web-based access, which is why we offer our advanced and highly secure client portals. Portals allow us to easily deliver and exchange information with you and collaborate in real time—essential benefits when you are busy running your business and household.

Portals just make sense in today’s fast-paced work environment. Consider the value:

• Access your data and documents 24/7—You are not restricted by office hours.
• Enjoy advanced data security and current views of your data—Portals are THE most secure method for sharing information…far more secure than sending files via email or through the mail. And rest assured that you are always looking at the most current versions of your data and documents.
• Communicate with us in real-time—Interact with our staff immediately for true collaboration.
• Enjoy a paperless process—Eliminate the need to print, fax, or mail documents. Portals allow us to work with you paper free!

Contact our office for more information on our advanced client portals.

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Summer Tax Tip: Special Benefits for Armed Forces Personnel

Because military personnel have unique challenges in relation to duties, expenses, and transitions, the IRS offers active members of the U.S. Armed Forces special tax benefits. The following are a few of these benefits of which you may not be aware:

1. Moving Expenses—If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you may be able to deduct some of your unreimbursed moving expenses.
2. Combat Pay—If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all military pay received for military service during that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.
3. Extension of Deadlines—The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.
4. Uniform Cost and Upkeep—If military regulations prohibit wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms. However, you must reduce your expenses by any allowance or reimbursement you receive.
5. Joint Returns—Joint income tax returns typically must be signed by both spouses. However, when one spouse is unavailable due to military duty, a power of attorney may be used to file a joint return.
6. Travel to Reserve Duty—If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform reserve duties.
7. ROTC Students—Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay (such as pay received during summer advanced camp) is taxable.
8. Transitioning Back to Civilian Life—You may be able to deduct some incurred costs while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location and you meet certain tests.
9. Tax Help—Most military installations offer free tax filing and preparation assistance during and/or after the tax filing season.
10. Armed Forces’ Tax Guide (Publication 3)—Offers an excellent resource, summarizing many important military-related tax topics. Publication 3 can be downloaded from IRS.gov.

As always, if you have any questions, please call our office. We hope you are having a wonderful summer!

Information provided by irs.gov.

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It's a New Brand Day

It's a New Brand Day at Tax Savers! We are excited to announce the recent launch of our firm’s new brand. We’ve been working very hard to enhance our website, develop helpful new client communications, create premium marketing materials, and give our firm a major facelift. We’ve also continued to research and identify the latest and greatest technologies to improve the services we provide and ensure we continue to meet your needs.

Take a moment to look around our new website and review some of our advanced features, like our Client Center. The Client Center is designed to provide you with a highly secure and convenient web-based tool to access your financial documents, data, and collaborate with our firm in real time.

We hope you like what you see. It’s the same great service, just with a new look and feel. We look forward to hearing your feedback.

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