Omlin, Gunning & Associates, P.S.

Current Job Openings

Mon, 18 Oct 2021 01:09:00 GMT

CPA or Candidate

Job details

Benefits & Perks

Qualifications required

Full Job Description

Omlin, Gunning & Associates, PS is a well-established north Spokane public accounting firm that has been providing quality services for many years. We are currently seeking a full-time Professional CPA to join our team. The ideal candidate will be experienced with preparing and reviewing individual, corporate, and partnership tax returns and will have strong interpersonal skills to enable them to work with clients and numerous professionals in our firm.

Qualifications:

· 4 + years of preparing and reviewing individual, partnership and corporate tax return preparation

· Strong knowledge of QuickBooks

· Working knowledge of Excel and Word

· Lacerte Tax software experience a plus

· Research tax law to assure compliance with federal and state tax codes

· Excellent verbal and written communication skills

· Ability to multitask under pressure, and prioritize work to meet deadlines

· Strong organizational skills and attention to detail

· Ability to work in both a team environment as well as self-manage

· Stable work history

· Service minded and motivated to help clients

· Meeting with clients

· Develop tax & business strategies

· PTIN required

We have knowledgeable staff that currently includes 10 CPAs and a total team of 16 members: We offer a competitive pay, bonus incentive, benefit package, retirement plan and flexible work schedule to our staff. References required for all applicants considered for this position.’
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Work Remotely

Job Type: Full-time

Benefits:

Physical Setting:

Schedule:

Supplemental Pay:

COVID-19 considerations:
Following Washington state guidelines for staff and clients to help keep everyone safe.

Education:

Experience:

License/Certification:

Work Location: One location

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September Newsletter

Fri, 24 Sep 2021 13:42:00 GMT

How to Reduce Your Property Taxes

M arket values of homes are skyrocketing and higher property tax bills are soon to follow. Prepare now to knock your property taxes back down to earth.

What is happening

Property taxes typically lag the market. In bad times, the value of your home goes down, but the property tax is slow to show this reduction. In good times, property taxes go up when you buy your new home, but these higher prices quickly impact those that do not plan to move.

To make matters worse, you can now only deduct up to $10,000 in taxes on your federal tax return. That figure includes all taxes – state income, property and sales taxes combined! Here are some suggestions to help reduce your property tax burden.

What you can do

If you dread the annual letter informing you that your property tax is going to go up again what can you do? Your best bet is usually to approach the assessor and ask for a property revaluation. Here are some ideas to successfully reduce your home’s appraised value.

Do some homework to understand the approval process to get your property revalued. It is typically outlined on your property tax statement.

Understand the deadlines and adhere to them. Most property tax authorities have strict deadlines. Miss one deadline by a day and you are out of luck.

Do some research BEFORE you call your assessor. Talk to neighbors and honestly assess the amount of disrepair your property may be in versus other comparable properties in your neighborhood. Call a few real estate professionals. Tell them you would like a market review of your property. Try to choose a professional that will not overstate the value of your home hoping to get a listing, but will show you comparable sales for your area. Then find comparable sales in your area to defend a lower valuation.

Look at your property classification in the detailed description of your home. Often times errors in this code can overstate the value of your home. For example, if you live in a condo that was converted from an apartment, the property’s appraised value could still be based on a non-owner occupied rental basis. Armed with this information, approach the assessor seeking first to understand the basis of the appraisal.

Ask for a review of your property. Position your request for a review based on your research. Do not fall into the assessor trap of defending your review request without first having all the information on your property. Meet the assessor with a specific value in mind. Assessors are used to irrational arguments, that a reasonable approach is often readily accepted.

While going through this process remember to be aware of the pressure these taxing authorities are under. This understanding can help temper your position and hopefully put you in a better position to have your case heard.

Published 9/24/2021

March 15

– Deadline for Partnerships and S Corporations

April 15

– Deadline for Individuals and C Corporations

Don’t forget to make your IRA contribution by the filing deadline.

IRS Announces Common Tax Scams

The IRS recently announced its 2020 edition of its annual Dirty Dozen list of tax scams with a special emphasis on aggressive and evolving schemes related to COVID-19 tax relief, including Economic Impact Payments. Here are six of the more common scams.

Phishing. Phishing refers to potential fake emails or websites looking to steal your personal information. Remember the IRS will never initiate contact with you via email about an outstanding tax bill, refund or Economic Impact Payment.

What you can do. If you receive any suspicious phishing emails, forward them to phishing@irs.gov.

Fake charities. Criminals frequently exploit natural disasters and other crisis situations such as this year’s pandemic by setting up fake charities to steal donations. Fraudulent schemes normally start with unsolicited contact by telephone, text, social media, e-mail or even in person.

What you can do. Verify the charity’s existence by searching for it using the IRS’s search tool.

Threatening phone calls from IRS impersonators. IRS impersonation scams include phone calls threatening arrest, deportation or license revocation if you don’t pay a bogus tax bill. The IRS will never demand immediate payment or ask for financial information over the phone.

What you can do. If you received a phone call, contact your local IRS office to verify whether you owe any taxes.

Social media scams. A scammer will use social media platforms such as Facebook and Twitter to obtain personal information from you, then use that information to trick you into providing them with confidential information. For example, the scammer could impersonate a family member, friend or co-worker in an attempt to obtain financial information.

What you can do. Be careful of publishing confidential information on social media. Verify the identity of any person or organization that asks you for confidential information.

Economic impact payment or tax refund theft. Criminals file false tax returns or supply other bogus information to the IRS to divert refunds or Economic Impact Payments to wrong addresses or bank accounts.

What you can do. Contact a qualified professional to help walk you through how to report identity theft to the IRS.

Senior fraud. Senior citizens have become more comfortable with various technologies such as social media. This has opened the door for scammers to take advantage of senior citizens by using fake emails, text messages and fake websites to steal personal information.

What you can do. Be the eyes and ears for the senior citizens you come in contact with. According to the IRS, anecdotal evidence indicates that senior fraud decreases substantially when a trusted friend or family member takes an interest in the senior’s affairs.

Great Tips to Improve Your Credit Score

You’re ready to take out a loan to buy a house, a car or get a credit card. You fill out the application and wait to hear back from your bank on its decision whether to loan you the money.

And then you get the dreaded phone call. Your credit score wasn’t high enough to approve the loan! Was there anything you could have done to get a higher credit score?

Getting and maintaining a high credit score is just like playing a game. But just like any game, you first need to understand the rules so you can create a winning game plan. Here are the rules of the credit score game you need to understand so you can get the highest score possible.

You can improve your credit score by understanding these rules and putting them into practice.

Wardrobe Shopping Doesn’t Have to Break the Bank

Shopping can be fun, but also drain your wallet. So how do you maintain a respectable wardrobe in a cost-effective way? Here are three tips to help you find your back-to-school and fall attire without breaking the bank.

Think versatility. Purchase items that can be paired with various articles of clothing and avoid apparel that is only occasionally useful.

For example, if you’re going to a beach party, don’t buy the Hawaiian shirt or sundress you’ll only wear once (or twice!). Instead, guys could buy a lightweight button down shirt that can later be paired with a t-shirt combined with either shorts or pants, and women could purchase a flowy maxi dress that could be combined with a sweater and different types of footwear fitting any occasion.

Stick to items you can mix and match with the rest of your wardrobe and wear often.

Do you really need this? Consumers often find something they like—maybe even for a good price—and toss it into the shopping cart regardless of whether or not it will really be used or needed. When you’re tempted to buy something new, ask yourself if you really need this or how often you will wear it.

To help yourself answer these questions, imagine a specific time in the future when you will wear the item. Imagine what else you will wear with it. Then think about what you have at home. If you have something that would do just as well, consider leaving the new article of clothing on the rack.

Asking yourself these questions doesn’t mean you can never buy something new, but it will help you make thoughtful spending decisions when it comes to new clothes.

Shop second-hand. Most shoppers prefer shopping for new clothes rather than buying second-hand. You may be surprised, however, by the stylish, quality items you’ll find for a fraction of the original retail price.

Consider taking the kids to a thrift shop and look for treasures at a fraction of the cost of one brand-new outfit. If you’re looking for name brand attire, hit up the local consignment stores. Some resale stores sell only name brand and designer items, so you won’t have to worry about filling your closet with cheap or out-of-style apparel. This doesn’t need to replace your retail experience, it can simply compliment it.

As we collectively look for ways to save money during the pandemic, finding creative solutions in your wardrobe budget can really come in handy!

Find a Budget Method That Works

Which unique method of budgeting will work for you?

You have your own unique personality, preferences and lifestyle. Likewise, how you manage and organize your finances can have its own personality, including how you budget. Here are five different methods of budgeting, each with a distinct way of helping you organize your spending and finances.

The best budget approach? One that works for you and one that you will continue to use. So pick an approach and try it. It can really change how you spend your money.

IRS Rolls Out Quicker Fix for Missing, Incorrect Stimulus Payments

Are you still waiting for your Economic Impact Payment? Did you get your payment but it was for the wrong amount?

The IRS initially said you needed to wait until filing your 2020 tax return to resolve any issues with missing or incorrect Economic Impact Payments. Thanks to the prodding of the Taxpayer Advocate Service, the IRS has established procedures to help correct payment issues in the following scenarios:

What you need to do

Contact the Taxpayer Advocate Service to determine if your Economic Impact Payment will either be corrected now or in 2021 when you file your tax return. The Advocate Service will be providing more details in the coming weeks about how to reach out to them for assistance.

Crisis Avoided: Connecting with Your Customers During an Emergency

Worldwide GPS technology giant Garmin became the latest high-profile business to get targeted by cyber criminals. It was widely reported that Garmin suffered a ransomware attack and ultimately paid a ransom of close to $10 million to the perpetrators.

While Garmin immediately issued press releases notifying its customers and the public that it was experiencing an outage when the attack first took place, there was still criticism surrounding Garmin’s lack of transparency with customers about the attack.

Here are the most important lessons learned from Garmin’s ransomware attack about connecting with your customers during a crisis.

Crisis and catastrophes – no matter what form they take – must be proactively dealt with in real time as they happen, including effective communication with your customers.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

This publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. This publication includes, or may include, links to third party internet web sites controlled and maintained by others. When accessing these links the user leaves this newsletter. These links are included solely for the convenience of users and their presence does not constitute any endorsement of the Websites linked or referred to nor does OMLIN, GUNNING & ASSOCIATES have any control over, or responsibility for, the content of any such Websites. All rights reserved.

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Tax Deadlines

Fri, 12 Mar 2021 20:46:00 GMT

What you need to know now!

Deadlines for 2021 remain in tact for now. The IRS at this point has not granted an extension for filing deadlines. We will continue to work and file on schedule. Contact our office about extensions if you need more time!

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October Newsletter

Thu, 01 Oct 2020 22:04:00 GMT

This month:

October 15

– Extension deadline for individual and C corporation tax returns

October 31

– Halloween

Does your monthly income seem a little higher than normal? If so, that may actually be a sign of trouble ahead. Find out how a tax trap could be lurking in your paycheck. Also read about your options for what to do with your 401(k) when switching jobs, common mistakes that businesses make with their websites and fascinating facts about your favorite fall gourd.

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

Is a Tax Trap Lurking in Your Paycheck?

Does your paycheck look a little higher than normal? If so, it could be a tax trap.

The Problem

A payroll tax holiday effective September 1 was recently signed via a presidential executive order. Payroll tax holidays typically provide forgiveness of Social Security and Medicare taxes that are normally withheld from your paycheck.

This year’s tax holiday, however, is NOT necessarily a forgiveness of Social Security and Medicare taxes because the order is not yet supported by an underlying legislative action. So even if your employer removes your Social Security and Medicare tax from recent paychecks, there is a possibility you will need to pay it back at a later date. That could mean a pretty large tax bill for you in early 2021!

What you need to do

If you have any questions about how this payroll tax executive order affects you, please call.

Switching Jobs? Here’s What To Do With Your 401(k).

Suppose you’re switching jobs if you were furloughed because of the pandemic or you’re simply searching for greener pastures. If you have a 401(k) from your soon-to-be former employer, you must decide what to do with your retirement account when you leave. Here are your four options:

So which of these options should you choose? Here are some things to consider as you think about what to do with your 401(k) account:

Keep the borrowing option open. If you want to borrow money from your employer-sponsored 401(k) account in the future, consider rolling the money into your new employer’s 401(k) plan. While you can borrow money out of your 401(k), that option is not allowed with an IRA. And if you leave your 401(k) at a former employer, they often will not let you borrow funds if you are not currently employed.

Take the money. This year may be the best time to make a withdrawal from a retirement account. In a normal year, when you make an early withdrawal from a retirement account, you owe income taxes on the amount of the distribution plus a 10% early withdrawal penalty. In 2020, this 10% penalty has been suspended. So while you’ll still pay taxes on the distribution, you may be able to avoid the early withdrawal penalty.

Invest the money. While it might be tempting to borrow or take an early distribution from your retirement account, you’ll also be depleting future earnings intended for your retirement years. So consider whether you truly need the money now to pay for an emergency or if you’re ok leaving it in your 401(k).

Whatever you decide, it is always best to transfer the funds directly from one retirement account to another. This direct transfer eliminates the possibility of your fund movement being characterized as a distribution subject to income tax. If in doubt, ask for help.

Don’t Make These Business Website Mistakes

Your company’s online presence leaves a lasting impression—positive or negative. When people check out your homepage, will they stick around? Will they buy? Will they return? Make your website easy to use and current, and new orders may be just a click away. Annoy visitors and they’ll flee to a competitor.

Steer clear of the following website mistakes:

Designing the website for you—not the customer. Studies have shown that online visitors form an opinion of a company’s brand in about three seconds. If your home page is well designed, they may stick around for another ten to twenty seconds. Don’t waste these precious moments spouting details about the firm’s stellar history and the owner’s credentials. Consumers are visiting your website to get answers. Provide these answers quickly or they’ll click elsewhere.

Heavy graphics, poor load time. Many consumers are surfing the web from smart phones and tablets. Don’t make them waste valuable time waiting for a fancy webpage to load. Consider projecting a professional image with text-based content that answers the most pressing questions about your products and services. Graphics can work well, but only if size and load times are fully vetted to ensure a seamless load experience.

Unfriendly navigation. If your homepage looks cluttered, potential customers will become frustrated. Make it easy for users to navigate your site from home page to supplemental pages and back again. Use a handful of clearly-labeled tabs in a top level menu. Deliberately design each page to have the same look and feel.

Stale data. When you visit a webpage and note that it was last updated five years ago, do you sense a vibrant, cutting-edge enterprise? Keep your site up to date. Consider subscribing to content services that will keep your information fresh. Remember, developing a web presence is not an event, it is an ongoing journey. Your site must display current prices, merchandise that’s available right now, with up-to-date details about new product offerings.

Sloppy content. A website riddled with typos, grammatical mistakes and industry jargon will turn customers away. Visitors may ask themselves if your business doesn’t care about the quality of its website, how can they trust your products and services?

A carefully crafted website can draw customers in, enhance their buying experience and leave a lasting impression of professionalism and quality.

The Lowdown on the Great Autumn Gourd

Corn might be the king of U.S. crops, but pumpkins are always in demand this time of year by kids and others celebrating fall’s festivities.

Here are several interesting tidbits about one of America’s favorite fall gourds.

Germany boasts world’s largest pumpkin. Mathias Willemijns showed off the world’s largest pumpkin in 2016 at the Giant Pumpkin European Championship, officially weighing in at a stout 2,624.6 pounds. Steve Geddes of New Hampshire is the owner of the largest U.S. pumpkin, weighing 2,528 pounds at the 2018 Deerfield Fair.

Illinois is the U.S. pumpkin leader. Pumpkins are grown in all 50 states, but Illinois is by far the leader with about 600 million pounds of pumpkins harvested every year. Runner-up honors go to California, Indiana, Michigan, New York, Ohio, Oregon, Pennsylvania, Texas and Virginia. Each of these states annually produce approximately 100 million pounds of pumpkin.

Pumpkin beer has plenty of fanfare. Pumpkin beer was actually a thing hundreds of years ago when the Pilgrims arrived in America as pumpkins were plentiful and provided an easy source of fermentable sugar. Who knew?

Pumpkin carving started with the Irish. Jack-o’-lanterns were first carved by the Irish and Scottish using turnips and potatoes. They used the carved vegetables as part of their Celtic celebrations. Immigrants brought their carving traditions to America, but found that pumpkins were an easier vegetable to carve.

There are more than 40 varieties of pumpkin. The best pumpkins to use for cooking are Bab Pam, Autumn Gold, Ghost Rider, New England Pie Pumpkin, Lumina, Cinderella and Fair Tale. Most of the pumpkins you see on roadside stands and farms are for decoration only and not very tasty.

Generate Business Buzz With a Press Release

When crafting your business’s marketing strategy, don’t forget about developing a relationship with the press. Although newspapers and magazine circulation has drastically decreased over the past 20 years, the demand for content still exists via online platforms.

Here are several suggestions for crafting a press release to tell your business’s story and how to best connect with local, regional or national reporters.

Forget the hard sell. Think like a reporter with a deadline. Pitch a story, not your company. Ask yourself why would this publication’s readers care about your story. Your press release must deliver actual news or interesting information. It should read like a news story with a catchy headline.

Do your homework. Read the publication that you’d like to see your story appear in to learn about its writing style and what types of stories it prefers to publish. Focus on articles that overlap with your company’s offerings. Identify the common interests of the publication’s readers and tailor your press release to their needs. Consider how your idea might extend the subject matter further or offer an alternative solution to a problem.

Send story ideas to the right person. Larger publications and broadcasting outlets often have various departments, each of which may be inundated with press releases from governments, businesses and non-profit organizations. So it’s important to identify the reporter or editor who normally handles stories related to your industry, and send your press release to that specific person.

Follow a standard news story outline. For most newspaper, magazine or internet venues, you’ll want to follow a tried-and-true story format. Start with a catchy headline followed by an introductory paragraph that answers who, what, when, where and so what. Follow-up with paragraphs that include quotations from interesting people, statistics, a brief company history or newsworthy trends.

Keep it short and simple. A standard press release typically runs 400 to 500 words, just enough to grab the reader’s interest. Don’t include exaggerations or claims that can’t be readily supported or make readers reach for a dictionary with complicated jargon.

Follow up. After you’ve sent the press release, reach out to the reporter or editor to see if they have any questions. If your story is picked for publication, a reporter will reach out to you for additional information.

How to Build Your Emergency Fund – When You Have No Money

This year’s pandemic highlights the importance of having enough money set aside in an emergency fund to cover six to nine months of key expenses should you lose your job.

But how do you build an emergency fund if you don’t have any extra money? The easiest way to accomplish this is by reducing your expenses. Here are some creative ways to increase your cash flow by cutting your spending.

How much you need

First, determine how much of an emergency fund you need. Identify the essential monthly bills and multiply by the number of months of funds you’ll need. At minimum include the following:

Ideas to fund your emergency account

You may need to get creative with your approach, but finding the money to build your emergency fund is essential, now more than ever.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post October Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

July Newsletter

Thu, 25 Jun 2020 17:19:00 GMT

This month:

July 4

– Independence Day

July 15

– Individual income tax returns for 2019 are due

– C corporation tax returns for 2019 are due

– 1st and 2nd quarter 2020 estimated tax payments due

Other July 15 Deadlines

– Gift tax returns

– 2019 IRA contributions

– 2019 HSA contributions

Remember, July 15 is now the tax filing due date because of the pandemic! It also means you may have a tax payment due on or before July 15. And if you have not yet received your federal stimulus check, this month’s newsletter tells you what you should do. Also included is a recap of recent news that gives business owners more flexibility for getting your PPP loan forgiven.

Also included in the newsletter are some ideas for fun, summertime activities for the entire family.

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

IMPORTANT! You May Owe a Tax Payment This Month

Find out if you owe the IRS an estimated tax payment

You may owe the IRS a tax payment for your 2020 tax return and not know it.

Most Americans have income taxes withheld from their paychecks, with their employer sending a tax payment to the IRS on your behalf. This year, however, many more Americans will have to write Uncle Sam a check to pay a portion of their 2020 taxes on or before July 15. You may be one of these people!

Who needs to pay now!

You may need to make a payment if one of the following situations applies to you:

What you need to do

Estimate your total income for 2020, then calculate your total 2020 tax bill and divide it by 2. Compare this amount to how much has been withheld from your paychecks, unemployment benefits and any other payments you’ve made to the IRS. If you’re short, consider making an estimated payment by July 15 to make up the difference. This payment is made with Form 1040-ES.

If you do not make this payment on time, the IRS may impose a penalty plus interest on top of the underpaid taxes. Fortunately, you can avoid a penalty by paying at least 90% of the current year’s tax liability or 100% of the prior year’s tax liability (110% if your adjusted gross income for the prior year exceeds $150,000).

Help! My Stimulus Payment is Wrong or Missing!

Millions of Americans already received their economic impact payment. But what if you’re still waiting or your payment was for an incorrect amount?

Here are some common scenarios why you may not have received your payment, or the payment you did receive was for an incorrect amount, and what you can do.

Receiving the wrong amount of money in your stimulus check or not receiving a check at all can be very frustrating. But be reassured the IRS is doing everything it can to help you get the correct amount of money that you deserve.

More information: If you have other questions or concerns, the IRS has a question and answer resource. Click here to read through the IRS Q&A.

Small Business Owners Get Good News on PPP Loan Forgiveness

Small business owners, self-employed workers and freelancers received some welcome news when Congress recently passed the Paycheck Protection Flexibility Act. This new law clarifies how businesses can qualify to have all or a portion of its Paycheck Protection Program (PPP) loan forgiven.

Here is what you need to know:

December 31, 2020 is the new deadline to spend loan proceeds. When the PPP program was rolled out this spring, businesses were given 8 weeks after loan funding to use the loan’s proceeds if they wanted to qualify for loan forgiveness. That timeline has now moved to 24 weeks. Due to the extended stay-at-home orders and further assessment of the pandemic, the new deadline is now effectively December 31, 2020.

More loan proceeds can be used for non-payroll expenses. The original law required 75% of loan proceeds to be spent on payroll. For businesses with high cost of goods sold or who had trouble convincing furloughed workers to return to work, hitting this 75% threshold was problematic. The new law reduces the amount of loan proceeds required to be spent on payroll to 60%.

More flexibility in fully restoring workforce. Borrowers now have through December 31, 2020 to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. There are three exceptions allowed for not having a fully-restored workforce by Dec. 31. Borrowers can adjust their loan forgiveness calculations because of:

Loan terms extended. For loans that do not qualify for forgiveness, borrowers now have up to five years to repay the loan instead of two. The interest rate remains at 1%. Since your bank has 60 days to process your loan forgiveness application and the SBA has 90 days to process the request, your initial payment is now effectively five to six months after your forgiveness application.

What you need to do

Get Rid of Your Kids’ Summertime Blues

Have some family fun with these activities (while social distancing, of course!)

Let’s be honest. This is a strange summer. With many recreation activities canceled or significantly altered because of this year’s pandemic and social distancing guidelines, families need to be creative to keep their kids energized and engaged. Never fear! Here’s a list of activities to create a memorable summer for your kids:

Don’t let this unique summer keep you from making amazing memories. With a little imagination, you might be able to make it the best summer ever!

How Stay-at-Home Orders Change Money Habits

The most fruitful periods of growth often happen when they are the least expected. Teachers and parents call them teachable moments. By reflecting on how you handle the situation, you can learn a lot about yourself. The disruption caused by this year’s pandemic is a massive teachable moment for all of us regarding money. Here are three ways you can take advantage of our recent stay-at-home orders to improve your spending and saving habits.

Take a different approach to tracking your spending. No matter who you are, your spending habits have changed during the pandemic. For example, more money is being spent at the grocery store and less on eating out and entertainment. And if you own a home, odds are you’re investing more in your house projects than you have in the past.

By taking away the ability to spend on things we would normally purchase, stay-at-home orders offer the opportunity to learn about the things that bring us joy. Look at your purchases over the last month and note which ones were worth the money. Then think about the things you miss the most. Maybe it’s going out to eat with friends or attending a concert or a sporting event. This exercise will give you a snapshot of what type of spending is the most satisfying for you and will help your decision making in the future.

Save, save, and save some more. If you learn one thing from this pandemic, it’s that nothing is certain. Circumstances can change in an instant and even the best plans can be tossed to the side at any moment. If you are fortunate enough to have consistent income, now is the time to start building your emergency and retirement funds. Instead of diverting funds to your entertainment budget, put it in savings. You never know when the next income-altering event will arise, so stuff that financial cushion while you have the chance.

Create a habit of giving. With unemployment rates in some places as high as we’ve seen since the Great Depression, there are plenty of opportunities to help those in need. If you have some extra cash, now is a great time to increase your giving. Beyond the positive impact to others and your community, studies show that giving can make you feel happier, provide greater life satisfaction, and even activate reward centers in the brain (according to the University of Oregon). On top of all that, you may be able to deduct your contributions on your taxes — just make sure to give to qualified 501(c)(3) charities.

Will That Be Cash or Barter?

How swapping products and services could benefit your business

Bartering, the act of trading goods or services with other goods or services instead of money, is more popular than ever. With high unemployment rates and cash flow being stressed, bartering is a good way to create value for your business.

The new world of bartering

Bartering traditionally worked something like this: You know someone who has something you need and you have something they need. You talk, figure out comparable value and make the swap. Everybody’s happy. But other than blind luck, finding a match to barter with was very difficult.

But with online platforms, bartering is now easier than ever with the creation of posting sites and exchanges. Posting sites provide a platform where businesses can skim for or post items they are looking to acquire or trade. These are usually free and unmonitored, so surf at your own risk. Bartering exchanges offer a marketplace and bartering credits that act as a middleman. You can trade goods and services and receive credit that you can use towards acquiring a different good or service. These tend to be actively managed and typically charge a monthly membership fee.

Remember, most bartering can create a taxable event. If you receive something of greater value or trade a deductible expense for a non-deductible expense, the difference is taxable income and needs to be reported on your tax return — so careful record keeping is very important.

When bartering can help

Finding bartering partners can often have long-term benefits without having to dip into cash reserves. And if structured correctly, the service provided can offset the expense of the service received.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post July Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

June Newsletter

Thu, 28 May 2020 19:36:00 GMT

This month:

June 21

– Father’s Day

This month’s newsletter details several reasons why you should look for other sources of cash instead of tapping into your retirement funds, along with identifying potential tax surprises if you are using any of the pandemic-related relief programs, including unemployment benefits.

There are also some tips on how you can help local businesses as they re-open their doors and an overview of changes coming to your banking experience.

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

Think Before Tapping 401(k) as Emergency Fund

Do you need a quick infusion of cash?

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you may be able to take money out of a qualified plan, like a 401(k), or an IRA, with favorable tax consequences. But should you do it? You might view withdrawing money from a retirement account as a last resort.

Background

Among other changes in the CARES Act relating to qualified plans and IRAs, a participant can withdraw up to $100,000 of funds without paying the usual 10% tax penalty on distributions before age 59½. Plus, you can take as long as three years to pay the resulting tax bill, spread out evenly over the three years. If you repay the full amount within three years, you owe no tax.

To qualify for this program, you or your spouse must be diagnosed with COVID-19 or experience adverse financial consequences due to the virus such as being laid off, having work hours reduced or being quarantined or furloughed.

What are the pitfalls?

There are several reasons why you may want to avoid taking money out of your retirement accounts unless it’s an absolute emergency:

You’re diluting your retirement savings. Although the money comes in handy now, you’re chipping away at your nest egg and forfeiting growth. For example, if you withdraw the maximum amount of $100,000 that would have earned 6% annually tax-deferred for ten years, the value would have been $179,000.

It may be bad timing. Experts say it is difficult to time the markets in the current volatile environment. If you sell some holdings right now, you may be locking in losses that would miss the recovery in the next few months or years.

You still owe income tax. Income tax is due unless you replace the full amount within three years. Also, depending on your situation, you could end up paying tax at higher rates than you would in your retirement years.

Better options might exist. Arranging a hardship loan from your 401(k) might be a better alternative for your situation. You avoid the taxable event of the withdrawal and you pay back yourself with interest. Other options include refinancing a mortgage with lower interest rates, taking advantage of payment relief from mortgage, rent or student loan payments or deferred credit card billing.

While it is an option, retirement plan withdrawals are not always the best choice. Think through all scenarios before withdrawing from retirement funds to cover emergency expenses.

Be Prepared for Pandemic Tax Surprises

Numerous new laws provide economic relief to individuals and businesses hardest hit by this year’s pandemic. This much-needed financial assistance, however, comes with a few strings attached.

Here are three potential surprises if you use the available economic relief packages:

The New Face of Banking

It suddenly just got a whole lot more difficult to buy a home

The banking sector is the latest industry to dramatically change how it operates in response to the current economic environment. The most visible change for consumers are new requirements for taking out a mortgage.

Here are some tips for working with banks and other lending institutions in the midst of tighter lending requirements and a heightened awareness of staying healthy.

Save more for a mortgage downpayment. New requirements for taking out a mortgage are requiring borrowers to put down at least 20% and have a credit score of 700 or better. Unfortunately, the average credit score of U.S. citizens under the age of 50 is below 700. The short-term reality is that you may need to save for a bigger downpayment and actively manage your credit before getting your dream home.

Take advantage of your bank’s mobile app. Social distancing is changing the way we interact in public and banking is no exception. Traditional bank tellers, drive through options, and in some cases entire branches, are being replaced with digital banking options and mobile deposits. This trend will surely accelerate in the aftermath of COVID-19. For the branches that remain open, visiting will likely be more restrictive. Smaller capacity banking spaces and appointments might be required to help banks control the flow of traffic.

Use digital payments for your purchases. While cash might still be king in the U.S. economy, consider using “germ-free” digital payments as retailers are steering customers toward electronic transactions. With businesses needing to adapt to new spending habits, innovation is going to steer towards digital payment technologies and make paying with cash more difficult in the future.

Look for lending deals. During these uncertain times, banks will be putting more effort into connecting with their customers. Bank leaders are making it a priority to personalize the banking experience with proactive marketing campaigns. Be on the lookout for special deals offered by lending institutions to help keep you as a customer.

Ideas to Help Local Businesses

Shuttered businesses are realizing that lifting lockdown restrictions doesn’t mean a return to business as usual. Social distancing guidelines and a public wary of venturing into crowded environments means light customer traffic for many businesses.

Here are several ideas to help local businesses financially as they re-open their doors:

Continue buying gift cards. For many small businesses, positive cash flow is the primary factor whether they survive this economic downturn. Buying gift cards is a great way to get them the cash they need now, while still providing value for yourself down the road. Even better, if you are in a position to do so, consider giving a gift card to a friend who’s negatively been affected financially. Also consider donating gift cards to schools, churches or non-profit organizations. Just remember to keep your receipts so you can potentially claim a tax deduction!

Tip more than usual. Of all industries impacted by the economic downturn, the leisure and hospitality industry is being hit the hardest. On top of the millions of workers in this industry that have filed for unemployment, even more have had their hours scaled back. When you order takeout or pay for a service, consider tipping more than you normally would. It may not seem like much, but every extra dollar helps.

Shop online locally. The prices you pay might be higher, but when you add the property taxes, local employment taxes and donations to school events that local businesses fund, the added costs are worth it. Also, with many retail shops restricted to limited foot traffic because of social distancing guidelines, online sales are currently a significant source of revenue for many small businesses.

Write a review. Reviews left on Google, Yelp, and other sites are a major source of new customers for local businesses and restaurants. Take the time to leave a positive review for each of your favorite local businesses so new, potential customers can find them.

Offer your services. With the change in spending habits, businesses are forced to adapt. If you have skills and knowledge that could help a small business make the transition, consider donating some of your time. Some examples include web development, marketing strategies, cash flow management and budgeting.

Financial Questions to Ask Mom and Dad

Many Americans have been focused on their own finances over the past several months. But don’t neglect helping those closest to you with their finances as well, especially aging parents. Here are some questions to ask your parents to help them sort through their financial picture.

Have you decided when you’ll start taking Social Security benefits? If your parents have not started taking Social Security, a discussion in this area will help both of you. Generally, Baby Boomers can receive their full amount of benefits at age 66, but benefits increase gradually if they wait longer, reaching the peak at age 70. Conversely, if your parents intend to retire early, they may wish to start receiving reduced benefits as soon as age 62. To add more complexity, a spouse can take retirement benefits from their partner’s work history. Often a rule of thumb is if you expect to live past 80, consider delaying when you first receive benefits, if you can afford to do so.

Do you have a durable power of attorney? If you need to act on behalf of your parents regarding financial matters, you will need a power of attorney. Without this document in place, you’ll have to go to court to get guardianship of your parents in order to access their financial accounts.

Is there an executor? Who is responsible for going through everything when necessary? You don’t really need to know who it is, just that there is someone in place with a potential backup executor if the primary executor is unwilling or unable to help.

Where do you keep financial records? Does someone, other than your parents, know where financial documents and information are kept? This includes bank account numbers along with usernames and passwords for websites.

Who are key advisors? The executor will need the names and contact information for each member on your parents’ team of trusted advisors. Ideally your parents have introduced their executor to each of the members of their team.

How are you planning to pay for long-term care? One of the main financial concerns is the possibility of paying exorbitant amounts for long-term care in a nursing home or with stay-at-home assistance that will drain all your parents’ assets. Traditionally, this was handled by long-term care insurance to absorb at least some of the cost. Unfortunately, these policies are now very expensive. But there are other ideas that can help, including certain tax advantaged insurance policies and establishing a trust to shield assets from nursing home costs (subject to certain restrictions for Medicaid assistance).

Do trusts need to be created or updated? Although there are numerous types of trusts, each with a various purpose, your parents may use a trust to preserve assets for their heirs. They are also used to avoid probate. An irrevocable trust can fully protect assets, but your parents must give up all control over their assets. In contrast, a revocable trust can be modified (where your parents can still change beneficiaries), but offers less protection.

Remember, your goal is not to pry into your parents’ finances, but to help ensure a plan is in place. And as an added benefit, many of the questions outlined here are great to apply to your own situation!

Keep Cultivating Your Network

Don’t let social distancing get in the way of your personal and professional relationships

Keeping up with your friends and maintaining professional relationships is a challenge as most in-person activities have come screeching to a halt. Drive-by birthday parties, video happy hours and pre-recorded commencement speeches are the new normal.

Despite social distancing guidelines, here are some tips to stay connected.

Embrace digital communication. Whether you were ready for it or not, face-to-face contact has been replaced with video screens, headphones and microphones. For many, this introduces a whole host of new variables. To hold a simple conversation, you need a solid internet connection and reliable equipment just to hear and see each other. Take time to learn best practices for the different communication apps like Zoom, Skype and Teams. In addition, give yourself some time before a scheduled meeting or digital hangout to work out all the kinks before others join.

Up your social media game. For all its faults, social media is very good at connecting people. With more time and less entertainment options, people are spending a lot of time scrolling through their feeds. Don’t just be an observer, figure out a way that works for you to get connected. Even if you aren’t interested in posting a bunch of pictures, try to find an old friend and check in to see how they are doing. On the professional side, use this time to create or update your profile on professional networking sites. Being more visible can help create future professional and business connections.

Make a habit of checking in. This is good advice for any time, but it’s especially important now. Uncertain times bring out different emotions for people that can be unexpected. Checking in on friends and loved ones can provide a positive boost for you and them. Whether you want an opinion from someone you trust or just wish to touch base, a simple conversation can go a long way. Create an appointment on your calendar to have a check-in time with your key friends, family and cohorts at least quarterly.

Practice engaged listening. With everyone being affected by COVID-19 in one way or another, small talk may seem trivial. However, don’t be afraid to engage in a conversation, be authentic and ask purposeful questions. Spend more time listening than talking and use your contact time to nurture and strengthen your relationships. In other words, don’t just connect when you need something.

Even though the mediums of connecting have changed, the importance of human relationships remains. Take the time to develop your listening skills in this new environment so you can continue to invest in and grow your network.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post June Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

May Newsletter

Fri, 15 May 2020 18:43:00 GMT

This month:

May 10

– Mother’s Day

May 25

– Memorial Day

COVID-19 uncertainty abounds for everyone. This month’s newsletter provides a round-up of tax-related laws to help with tax planning for 2020 as we all navigate the coronavirus pandemic. Also in this edition are ways to track your stimulus payment, tips to find cash, and how to protect your video conference meetings from unwanted visitors.

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

Key 2020 Coronavirus Tax Changes

Coronavirus uncertainty abounds. Thankfully, by monitoring tax changes on your behalf, we can work together to navigate the right path for you and your family. Here is a round-up of tax-related laws and information to help with tax planning for 2020.

Get Your Money: Ensure You Receive a Stimulus Payment

The IRS has two websites to help with stimulus payments: One for non-tax filers to register to receive their economic impact payment and a new “Get My Payment” tool.

Background

As a response to the COVID-19 pandemic, the government is sending $1,200 to single taxpayers with income less than $75,000 ($98,000 with phaseouts). $2,400 is being sent to married taxpayers with income less than $150,000 ($198,000 with phaseouts). An additional $500 is being sent for each child under the age of 17.

The Problem

The payments are being made based on 2019 or 2018 tax returns. If you do not need to file a tax return for either of these years, you run the risk of not receiving this payment.

The Solution

The IRS launched a way to register to receive your payment and to determine the status of your payment. Here are the websites:

Who should use the app for non-filers

If you fall into one of the following cases, you need to review whether it makes sense to use the app mentioned above for non-filers:

Who should NOT use the app for non-filers

DO NOT use the app for non-filers if you will be filing a 2019 return. If you are required to file a return, using this tool will not speed up your stimulus payment and will likely slow down processing of your tax return and receiving any refund.

Ideas to Help Make Payments During Tough Times

How to get cash quickly when you’re out of work

You’re not alone in trying to navigate the financial uncertainty during the coronavirus pandemic. Millions of American workers who lost their paycheck because of COVID-19 need to find creative ways to pay bills.

Here are 6 ways to get cash to help pay for your monthly expenses.

Protect Your Video Conference Meetings

Avalanche of new remote workers creates latest playground for hackers

Hackers have found their new playground amid the increased use of video conferencing during the coronavirus pandemic: Zoombombing!

Zoombombing defined

Named for the company Zoom, the unfortunate first high-profile victim of this phenomena, Zoombombing occurs when internet trolls hack video conference meetings and join as uninvited attendees. After infiltrating a meeting, the hackers then have their fun, doing everything from performing harmless pranks to posting sexually explicit content.

Ideas to keep your meetings private

You can protect yourself, your friends and your company while using popular video conferencing tools with these tips.

Answers to Common COVID-19 Unemployment Questions

The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act provides individuals and businesses significant financial relief from the financial strain caused by the coronavirus epidemic.

Here is a snapshot of the unemployment benefits section of the bill and how it affects individuals and businesses.

What to do now

If you have not already done so, you must file for unemployment with your state as soon as possible. State offices and websites are being slammed, so the sooner you get in the queue the better for you and your loved ones. And remember, these benefits now apply to self-employed and part-time employees.

Beware of Scams Tied to COVID-19 Economic Impact Payments

The IRS is warning you to be on the lookout for a surge of calls and e-mail phishing attempts related to COVID-19.

They will come in the form of e-mails, text messages, websites and social media attempts that request money or personal information.

It can come in many forms

The IRS says that scammers may do the following when trying to contact you:

Some live examples

Here are some audio examples of scam calls put out by the Federal Trade Commission.

What you can do

If you receive unsolicited e-mails, text messages or any other type of attempt to gather information that appears to be from either the IRS or an organization closely linked to the IRS (such as the Electronic Federal Tax Payment System, or EFTPS), you should forward it to phishing@irs.gov.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post May Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

April Newsletter

Wed, 08 Apr 2020 00:16:00 GMT

This month:

April 15 (Extended to July 15)

– Individual tax returns due

– C corporation tax returns due

– First-quarter 2020 estimated tax due

April 12

– Easter Sunday

The IRS rolled out deadline extensions and new programs to help individuals and businesses navigate the COVID-19 pandemic. A recap of these announcements is included here for your review. Also in this month’s edition is an interesting tax quiz to see if you can guess which states have the highest taxes! All this plus an interesting way to keep your spare change digitally. These are challenging times. Rest assured as things change on the tax landscape, you will be among the first to know. Please stay safe.

Tax Deadlines Move to July 15

The April 15 federal income tax filing due date has been moved to July 15, the U.S. Treasury Department and IRS recently announced. Here is what you need to know:

Some thoughts

While the federal government grants you an additional 3 months to file and pay your 2019 taxes, you may wish to still file your tax return by April 15. Here are some thoughts on different situations.

You anticipate a refund. If you are expecting a refund, file your tax return immediately. A refund right now can come in handy.

An extension might still make sense. The normal tax extension filing moves the tax return date to October 15, 2020. While payments are now due on or before July 15, a simple extension buys you more time to file your tax return.

Watch for state announcements. States are rolling out their own guidelines for extensions. Since most states require copies of federal tax return information, be prepared to still file by April 15. Remember, even if you wait until later to file your federal return and pay your tax, you may have to file your state and/or local return sooner.

What if I get a penalty anyway? Affected taxpayers subject to penalties and additional tax despite this relief provision may seek a waiver.

Rest assured, as the rules and deadlines change, updates will be provided. In the meantime, please stay safe during this challenging time.

Note: This is a fast changing topic. These rules are as of March 24, 2020.

New Law Requires Small Business to Provide Paid Leave

Families First Coronavirus Response Act provides worker benefits

The Families First Coronavirus Response Act is a new program that offers COVID-19 assistance for both employees and employers.

This new law provides businesses with fewer than 500 employees the funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.

Here are the details of the new law’s benefits:

What it means for you

Tax Quiz: Who’s the Highest?

Take this trivia quiz and test your state tax knowledge!

Here’s a quiz to test your state tax IQ and give you some fun facts about the taxes paid by friends in other states.

Thinking about buying a new house? Which state has the highest property taxes?

a. Texas
b. New Jersey
c. Illinois
d. New Hampshire

b. New Jersey. Unlike most states, New Jersey does not allow counties and cities to impose their own sales tax, so these localities get all their tax revenue from property taxes. In 2018, the property taxes in the 8 most expensive New Jersey towns averaged more than $20,000 while another 47 towns exceeded $15,000!

Which state will drive up the cost of your shopping spree with the highest sales tax?

a. Tennessee
b. Washington
c. New York
d. Arizona

a. Tennessee. At 9.53%, Tennessee has the highest combined sales tax rate in the nation. It’s a tough pill to swallow when you consider that the same purchase made in Kentucky may cost only 6% in sales tax!

Relocating for a new position? Which state will take the most taxes out of your new salary?

a. Hawaii
b. California
c. Minnesota
d. Oregon

b. California. Before accepting your new job, run the numbers to see how your take-home pay compares. California’s top income tax bracket rate is 13.3%.

If you are headed on a brewery tour, in which state will you pay more for a pint of your favorite adult beverage?

a. Alaska
b. South Carolina
c. Maryland
d. Tennessee

d. Tennessee. The Volunteer State charges a beer tax of $1.29 per gallon. Fun fact: Tennessee is technically a dry state. The state leaves it up to individual counties and cities to determine whether alcohol can be purchased.

When planning a vacation, which state charges you the most for staying in a hotel?

a. Massachusetts
b. Connecticut
c. Colorado
d. Florida

b. Connecticut. Book a room in Connecticut and you’ll pay a whopping 15% in lodging taxes. To fix a temporary issue with the state budget in 2011, the state bumped it up from 12%. The Nutmeg State must have gotten used to the extra revenue.

Spare Change Goes Digital

A clever new way to save…

With close to 85% of purchases made with credit or debit cards, many people have forgotten the satisfying clinking sound of tossing a penny, nickel, dime or quarter into a glass jar of spare change. But all that is starting to change!

Clever new savings ideas

In today’s world of smartphones, several apps have digitized yesterday’s jar of coins by sweeping electronic spare change into a digital jar to increase savings balances or pay down debt. For example, if you make a purchase for $1.89, the app rounds up your purchase to $2.00 and transfers the extra 11 cents into the app’s account. Here are three of the more popular apps and how they work.

Popular digital savings players

The area of digital money saving applications is rapidly evolving. Before using any of these apps, it is important to understand their costs and risks involved, compared to other ways of saving money.

Is Your General Ledger Squeaky Clean?

Spring cleaning for your business should include cleaning up your general ledger

With spring now here, it’s natural to start thinking about doing some spring cleaning. But don’t limit the cleanup effort to your house — your business’s accounting system and general ledger needs cleaning, too! Here are five areas of your financial statements that may be due for a spring cleaning:

Taking the time now to review these key accounts will ensure accurate financial statements and make future period closing activities easier to handle.

Keep Your Social Security Number Safe

Identity thieves are very active right now

Countries and citizens around the world are banding together to defeat the coronavirus. While your attention is concentrated on protecting your family, friends and community, identity thieves are seeing an opportunity to swipe your confidential information.

Very few things in life create a higher degree of stress and hassle than having your Social Security Number (SSN) stolen, especially during a pandemic like we are now experiencing. This is because, unlike other forms of ID, the SSN is virtually permanent. While most instances of SSN theft are outside your control, there are some things that you can do to minimize the risk of this ever happening to you.

Replacing a stolen SSN is not only hard to do, it can create hardships. You will need to re-establish your credit history, re-assign your SSN benefits history, and realign your tax records. Your best defense is to stop the theft before it happens.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post April Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Additional Paid Leave for Workers Affected by COVID-19

Tue, 31 Mar 2020 20:52:00 GMT

What you need to know!

The Families First Coronavirus Response Act is a new program that offers COVID-19 assistance for both employees and employers.

This new law provides businesses with fewer than 500 employees the funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.

Here is a summary of the new law’s benefits for employees and employers:

What it means for you

What you need to do now

EMPLOYEES. To take advantage of the Act’s paid leave provisions, you must provide your employer with documentation in support of your paid sick leave. There is yet no official application that needs to be completed. If you believe that your employer is required to provide paid leave but is not making paid leave available, or for other questions or concerns, you may call the Department of Labor’s Wage and Hour Division at 1-866-4US-WAGE or visit www.dol.gov/agencies/whd .

EMPLOYERS. While the details are being worked out on how to implement these new rules, here is what you need to do now:

Remember, there are upper limits to compensation that you may need to review and there are many other federal programs being rolled out. It will take time to implement them. Be patient, be safe and stay alert for any updates.

The post Additional Paid Leave for Workers Affected by COVID-19 appeared first on Omlin, Gunning & Associates, P.S. .

COVID-19 Bill Enhances Your Unemployment Benefits

Tue, 31 Mar 2020 20:49:00 GMT

What you need to know!

Here is a snapshot of the unemployment benefits section of the bill and how it affects individuals and businesses.

What to do NOW!

If you have lost your job, you must file for unemployment with your state as soon as possible. State offices and websites are being slammed, so the sooner you get in the queue the better for you and your loved ones.

The post COVID-19 Bill Enhances Your Unemployment Benefits appeared first on Omlin, Gunning & Associates, P.S. .

COVID-19 Stimulus Payments

Tue, 31 Mar 2020 20:35:00 GMT

The Coronavirus Aid, Relief, and Economic Security (CARES) Act recently signed into law provides a one-time payment, among other items, to individuals to help ease the economic strain caused by the coronavirus epidemic.

Here are the details of the stimulus payment initiative.

Alert! Invalid bank information. If you have not filed your 2019 tax return AND the direct deposit information on your 2018 tax return is no longer valid (i.e. you opened a new bank account), you will need to take action immediately! If you do nothing, the bank deposit will, hopefully, be rejected and you will receive your check in the mail. Expect a delay, however, as it may take several months to receive a check by mail. You can also try calling the IRS to update your information.

Single adults with income of $75,000 or less get the full $1,200. The $1,200 payment is reduced by $5 for every $100 in income above $75,000. Full income phaseout is $99,000.

Married couples with income of $150,000 or less get the full amount of $2,400. The payment is reduced by $5 for every $100, making the full payment phased out at $198,000.

Head of Household adults (normally single adults with children or other dependents) will receive the full $1,200 payment if they earn less than $112,500. Reduced amounts will go out to Head of Household adults who earn up to $136,500.

Alert! Don’t use my current situation. It may make sense to get your 2019 tax return in immediately. If using 2018 information lowers your payment, consider filing your 2019 tax return now to get a larger amount. So pull out last year’s return NOW and take a look!

Remember, this is only one of the many relief components in recently passed legislation. There are also unemployment benefits, small business benefits and much more to come.

The post COVID-19 Stimulus Payments appeared first on Omlin, Gunning & Associates, P.S. .

March Newsletter

Wed, 11 Mar 2020 17:34:00 GMT

This month:

March 16

– Due date for partnership and S corporation tax returns (Forms 1065, 1120S)

Reminders

– Daylight saving time begins Sunday, March 8

The tax filing deadline is right around the corner! As you’re busy gathering your tax documents or reviewing your tax return, included here is a caution concerning the security of IRS online applications and websites.

If you’re an independent contractor, there is an article outlining tips for surviving the world of self-employment.

This issue also includes an article on the pros and cons of renting or buying a home and an interesting article on new viewing alternatives targeting younger audiences.

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

The IRS Data Theft Problem

Here’s how to minimize your risk

What better place for online thieves to target than a database that contains 300 million+ Social Security numbers and a treasure trove of financial information?

The IRS has 52 Internet applications to help U.S. citizens comply with their tax obligations. But these online portals, which collect, process and store large amounts of personal information and tax data, are also a potential gateway for online criminals and identity thieves.

While the IRS’s electronic authentication security controls have improved, the Treasury Inspector General recently said that the IRS’s internet applications are not yet compliant with the National Institute of Standards and Technology guidelines.

Here’s what you can do to protect your tax-related identity and information while the IRS tries to improve its security controls:

Live Streaming Entertainment is Changing!

If it’s between 9:30 am and 6 pm CST, a 28-year-old named Tyler Blevins—better known as Ninja—is most likely broadcasting himself playing video games. He’s also making an estimated $500,000 a month doing it.

Blevins represents the new wave of visual entertainment and video game streaming. His popularity started to soar in late 2017 when he and other video game streamers began playing a game called “Fortnite.” Fast forward to 2019, and Blevins is the most recognized name in the video game streaming industry with nearly 15 million followers.

But it’s not just Blevins and the video game streaming industry that are racking up huge audiences. The entire streaming industry is estimated to reach $125 billion by 2025, according to findings from Grand View Research.

Here are three of the most popular social media platforms that are currently dominating the live, visual entertainment market.

Should You Buy or Rent a Home?

The pros and cons of renting versus buying

For many folks, the lyrics of a 1960s rock song summarize the American dream: “Our house is a very, very, very fine house.” According to U.S. Census figures, about two-thirds of American families are homeowners.

But buying a house or condo may not be the best choice for every family in every situation. Renting offers the following advantages:

Of course, as many realtors and financial analysts rightly point out, homeowners also enjoy significant advantages:

Clearly, the choice to rent or buy a home depends on individual circumstances and tastes. If you’d like help with this important decision, give us a call.

How to Succeed as an Independent Contractor

Are you one of the now 33% of Americans who work as either an independent contractor or freelancer?

If you answered yes, you are now a participant in the gig economy, a modern term for an economy characterized by workers who earn money through short-term contracts or freelance work.

Succeeding as an independent contractor can be challenging because it requires understanding a different set key success factors than being a full-time employee. Here are some tips on developing your skill set as an independent contractor and where to turn to if you need help.

Remember you are not alone. The complex nature of tax obligations for contractors can easily be navigated with professional help.

Ease the Pain of Repaying Student Loans

Student loan debt is a hot topic and for good reason. Managing the burden that comes during repayment is very difficult. Fortunately, there are ways to get some relief while taking advantage of timely tax breaks at the same time. Here are four ways to help lessen the strain of repaying your student loans.

If you receive a Form 1099-C for cancelled student loan debt, conduct research to determine if one of these exclusions applies to your situation.

College debt can seem daunting. But by combining a long-term plan while taking advantage of tax benefits, the mountain of debt can become a manageable hill.

Heads I Win, Tails You Lose

Things to consider when selling on Amazon

Thinking about selling products on Amazon? They are a great company and consumers love them. But before you leap, it is good to try to understand how they think. A simple method to help you do this is the following phrase:

Heads I win, tails you lose.

Consider this phrase to help you understand your risks when using this selling channel.

Here are some examples of this idea in action:

The problem: How does Amazon discover what products it should sell?

The problem: Amazon wants to start direct shipment, but too many sellers are shipping the product themselves.

The problem: Amazon makes less money on seller-listed items.

The problem: Sellers complain when third-party sellers jump on listings, sell inferior products, and take over the prime seller box.

These scenarios do not mean you can’t earn money by selling products on Amazon. Hopefully, by understanding the principle “heads I win, tails you lose,” you can more readily discover your path to profitability using this popular selling platform.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post March Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

February Newsletter

Sat, 01 Feb 2020 00:14:00 GMT

The 2019 tax filing season is in full swing. If you have not already done so, now is the time to collect your tax forms, organize your records and set a schedule to get your tax return completed.

Deep in the Form 1040 instructions is an annual recap of federal income and how the money is spent. Since most taxpayers no longer see these instructions, a recap of this information is provided here for your review.

Given late breaking tax laws, now is a good time to read a review of how newly passed retirement rules could help you save more. This issue also includes an article with several interesting facts about Valentine’s Day and for small business owners, some information is provided to help your employees navigate the new W-4 paycheck withholding form.

Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them.

This month

In this issue:

Finding the Balance of Income vs. Spending

The IRS primer every voter should know

Every year the IRS publishes instructions to prepare your Form 1040, individual tax return. The publication for 2019 is a whopping 108 pages! On page 103 of the IRS booklet is a summary of collections (income) and spending (outlays) by the federal government. Given the election year, here is a summary of this recap and some general observations.*

Observations

23%: The amount of annual spending with no income to cover it.

63%: The amount of spending for social programs, Social Security and Medicare.

20%: National defense (15%), veterans benefits (4%), foreign aid (1%)

8%: Amount of annual budget required to pay interest on prior year deficits.

Why care?

Want to learn more?

The website www.usafacts.org is a great resource for an objective review of the numbers. This nonprofit is committed to providing the figures and letting you decide what they mean to you.

*for fiscal year 2018 ending September 30, 2018.

New Rules Mean Saving More for Retirement

The Setting Every Community Up for Retirement Enhancement Act, also known as the SECURE Act, was passed by Congress in late December 2019. Here are some of the features in the new legislation that will help you save more for retirement:

Retirement planning is often put off by most of us. If nothing else, these rule changes are a reminder that now is a great time to look at how you plan for retirement, all while making the best use of tax benefits along the way.

Valentine’s Day – Did you know?

Saints, dogs and cash all play a role

Cupid, candy hearts, flowers and chocolates are common items associated with Valentine’s Day. According to the National Retail Federation, Americans now spend more than $20 billion lavishing gifts on their kids, friends and significant others.

But why?

Who decided a day in the middle of February is a time to celebrate love and spend a bunch of money on gifts? The actual story of how Valentine’s Day (and its symbols) got its wings, and how much Americans spend on gifts for Valentine’s Day, might surprise you.

Knowing the history of Valentine’s Day and how the U.S. spends money on gifts for this special day certainly adds some intrigue to the holiday, but recreating the actual events is probably not a great idea. Instead, give your loved ones a hug, a simple treat and have a wonderful Valentine’s Day!

New W-4 Creates Questions for Human Resources

With the major Form W-4 overhaul for 2020, you may field questions from your employees concerning their federal paycheck tax withholdings. While it’s not your responsibility to provide tax advice to your employees, it’s good to be prepared to help answer common questions about the new IRS form. Here is a summary of the W-4 changes and answers to some common questions you might encounter:

The change

Form W-4 was changed by the IRS in an attempt to make payroll withholdings more accurate and easier for employees to understand following the implementation of the Tax Cuts and Jobs Act. The new Form W-4 eliminates the sometimes confusing allowance system, replacing it with targeted questions, worksheets and fields for dependents, other income and anticipated deductions.

Gone are days of simply increasing or decreasing allowances to get the proper withholding — making a change now requires some tax forecasting.

5 common questions about the new Form W-4

Remember, to avoid an underpayment tax penalty an employee must withhold 100% of last years tax bill or 90% of this year’s tax bill. This moves to 110% of last year’s bill if income is over $150,000 ($75,000 if married filing separate). Finally, coach your employees to double check their paycheck after any change, it is never fun to be surprised by a big tax bill because withholdings are too low.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post February Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

January Newsletter

Wed, 08 Jan 2020 22:42:00 GMT

This month:

January 1

– New Year’s Day

January 15

– 4th Quarter Estimated Payments Due

January 20

– Martin Luther King Jr. Day

Start tax planning for the new year

– Adjust withholdings

– Organize filing records

– Schedule tax consultation

– Rebalance investment portfolio

Welcome 2020. A new year calls for a fresh look at your financial strategies. Consider how to make the most of your savings accounts — and don’t forget you still have time to fund your IRA! You can also try the following fail-proof tricks to keep your New Year’s resolutions on track.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

Make Your Cash Worth More

Banking tips to help you cash in

Your cash is parked. Do you know if it’s making or losing you money? For instance, letting it sit in a non-interest-bearing account is a waste of earnings potential. It’s actually losing money if you factor in inflation! Here are some ideas to help you make the most of your banked cash:

There’s Still Time to Fund Your IRA

There is still time to make a contribution to a traditional IRA or Roth IRA for the 2019 tax year. The annual contribution limit is $6,000 or $7,000 if you are age 50 or over.

Prior to making a contribution, if you (or your spouse) are an active participant in an employer’s qualified retirement plan (a 401(k), for example), you will need to make sure your modified adjusted gross income (MAGI) does not exceed certain thresholds. There are also income limits to qualify to make Roth IRA contributions.

Maximum 2019 IRA Contribution amounts: $6,000 or $7,000 (with age 50+ catch-up provision)

If your income is too high to take advantage of these IRAs you can always make a non-deductible contribution to an IRA. While the contributions are not tax-deferred, the earnings are not taxed until they are withdrawn.

2020 Retirement Plan Limits

As part of your 2020 planning, now is the time to review funding your retirement accounts. By establishing your contribution goals at the beginning of each year, the financial impact of saving for your future should be more manageable. Here are annual contribution limits:

Take action

If you have not already done so, please consider:

Fail-Proof Your New Year’s Resolutions

New Year’s resolutions get a bad rap — and for good reason. They are wildly unsuccessful. Millions of people have well-intentioned aspirations for the new year, but only about one in 10 actually accomplish their goal, according to the Statistic Brain Research Center.

If you dig a little deeper into the reasons why they fail, you find it’s usually not the resolution itself, it’s in the execution. Here are four popular New Year’s resolutions and how to avoid messing them up:

Resolutions, whether at New Year’s or any other time, are a good thing. To be successful, more planning and attention are required than most people think. And if you slip up, don’t quit! Learn from your mistakes and keeping going.

It’s Time to Prioritize Inventory Management

Extraordinarily low interest rates and a rapidly evolving business climate has made inventory management a lost art. Other business initiatives may seem to be more urgent and impactful, but in reality, mastering inventory levels is a key to most successful and growing businesses. Here are reasons why prioritizing your inventory management is a must:

Inventory management will not take care of itself. Giving your inventory system the attention it deserves will pay major dividends both now and in the future.

The Highest Taxed Money in America

How the lottery preys on Americans

If you were told to voluntarily pay 75% of your wages to government-sponsored programs for the rare chance of getting everyone else’s remaining 25%, would you do it?

Most everyone enjoys dreaming of winning it big in the lottery. Large pots of money are publicized on the evening news and lucky multi-million-dollar winners are always given the media spotlight. Little do most people know, federal and state governments are quietly using this gambling device to double and triple-tax those who participate.

Net Result: Over $10.00 of your initial $13.87 wages go to fees and taxes when you play the lottery

Why is this happening?

A single lottery ticket does not cost a lot. The lucky winner is the one who pays the extra tax on everyone’s behalf, but they don’t care because the pot is so large. By taxing people in small stages and by shifting who pays the tax to the lottery winner, taxing authorities have come up with a productive high-tax formula.

What are your options?

If you think the funds being scooped up by the government is ethically wrong, what can you do about it? Here are some ideas:

Playing the lottery can be fun, but having our government promote them as an opportunity to re-tax its everyday citizens is a questionable practice.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post January Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

December Newsletter

Thu, 05 Dec 2019 19:43:00 GMT

This month:

December 22

– Hanukkah begins

December 25

– Christmas Day

December 26

– Kwanzaa begins

January 15

– 4th Quarter Estimated Payments Due

Take final year-end actions

– Deductible gifts

– Capital gains/losses

– Charitable giving

– Dividend income

It’s almost New Year! Have you done your yearly credit report checkup yet? While you’re at it, protect yourself from charity scams this season by reviewing some big red flags, and learn how to prioritize cash flow in your business.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

Time for a Yearly Credit Report

One way to head off fraud during tax season is to get your free annual credit report now. Credit reports often have errors in them; this quick checkup can be the first indication that some form of identity theft has taken place on your account.

The good news is that each of the major consumer credit reporting agencies is required by law to provide you with a free report once a year. Here’s contact information to help you get your free credit report:

Annual Credit Report.com
Telephone: 1-877-322-8228
Website: www.AnnualCreditReport.com
Via mail: (fill out the online form and mail it to the following address)
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Listed here are the three major credit agencies and how to contact them directly.

TransUnion
Telephone: 833-395-6938
Web site: www.transunion.com
Via mail: 2 Baldwin Place
P.O. Box 2000
Chester, PA 19022

Equifax
Telephone: 1-800-685-1111
Web site: www.equifax.com
Via mail: Equifax Credit Information Service
P.O. Box 740241
Atlanta, GA 30374-0241

Experian
Telephone: 1.888.EXPERIAN (397-3742)
Web site: www.experian.com
Via mail: P.O. Box 9701
Allen, TX 75013

Reminder: Each agency may try to upsell you into additional paid services. If you find problems on your credit report, work through the credit bureau’s process to correct the error. Also place fraud alerts on your credit agency account if you experience any kind of identity fraud.

3 Major Charity Scam Red Flags

You’ve probably already received several letters and phone calls from charities asking for donations. Most requests are from legitimate organizations. Some, however, are bogus charities set up by con artists who use the holiday spirit to their financial advantage.

Last year, Americans gave nearly $428 billion to charities, according to Giving USA 2019: The Annual Report on Philanthropy for the Year 2018. That’s a huge incentive for fraud.

If you’re planning to donate, take some time to learn how to spot a charity scam. Here are a few big red flags:

Many charitable organizations are seeking your aid to address genuine hardships. Avoid the schemes of unethical scammers, and your donations will provide help where it’s needed most.

If you think you’ve been contacted by a bogus charity, let the Federal Trade Commission know by filing a complaint.

Cash Flow: A Central Part of Your Business Plan

When tracking and planning your business objections, it’s easy to focus your analysis on two reports — the income statement and balance sheet. But one of the primary keys to your business’s success relies more on how you handle the money flowing in and out of the business. The appearance of a solid profit can hide a lurking cash flow problem.

Here are practices to help you give your cash flow the attention it deserves:

When businesses fail, it’s usually because they run out of money. By making cash flow a central part of your business plan, you greatly reduce this risk.

Winter Wonderland Trivia

Whether or not you hear sleigh bells ringing, winter wonderland is here! Here’s a quiz to test your wintertime wisdom and offer you fun facts to impress your family and friends.

What is the largest 24-hour snowfall ever measured in the U.S.?

a. 4 feet
b. 6 feet
c. 10 feet
d. 13 feet

b. 6 feet. It’s 6.3 feet to be exact. This amount fell in a 24-hour period in Silver Lake, Colorado on April 14-15, 1921, according to The Weather Channel . It probably had something to do with its 10,220-foot elevation in the Colorado Rockies!

Krampus, the horned half-goat, half-demon creature from Central European folklore, is known for what during the holiday season?

a. Bringing fruitcake to families
b. Singing Good King Wenceslaus while caroling
c. Seeking out children who have misbehaved
d. Stealing wooden shoes

c. Seeking out children who have misbehaved. This made-up figure seems to be pretty mischievous himself! During an Austrian Krampuslauf (Krampus Run), herds of Krampuses — people dressed in masks and costumes — stomp down streets and play tricks on parade goers.

Which sport was incorporated into the Winter Olympics?

a. Snow tubing
b. Speed skiing
c. Bandy
d. Ski ballet

d. Ski ballet. Called figure skating on snow with skis, this sport was a demonstration event in the 1988 Calgary games and the 1992 Winter Olympics in Albertville, France.

Which animal hibernates the longest?

a. Bumblebee
b. Alpine marmot
c. Bear
d. Wood frog

d. Wood frog. This bug-eyed amphibian can survive up to seven months in a “deep-freeze” period! They can live while being completely frozen by protecting their cells using glucose, according to a study published in the Journal of Experimental Biology .

How many people were part of the largest gathering of holiday sweater-wearers?

a. 3,473
b. 1,201
c. 6,552
d. 992

a. 3,473. That’s a lot of ugly sweaters! According to Guinness Book of World Records , this goal was achieved by Kansas Athletics at a Kansas University men’s basketball game against Montana in December 2015.

As you enjoy the season, spread some of these fun wintertime facts with your loved ones.

Save More This Shopping Season

This winter, the NPD Group’s 2019 Holiday Purchase Intentions Survey is reporting that Americans plan to spend an average of $740 on holiday shopping — a 7% increase since last year. The survey also found that more people started their shopping earlier than last year (even before Black Friday!).

So are you like your fellow Americans? What can you do to ensure your spending does not spiral out of control? Here are some ideas:

Avoid Misclassification: Understand Independent Contractors

The best way to avoid misclassifying workers is to understand the defining characteristics of independent contractors — and then treat them as such. Use this infographic to help you identify independent contractors and understand how they are different than employees.

Independent contractors checklist

Use this list to help determine if you or the person who does work for your business should be considered an independent contractor. An independent contractor:

Defining an independent contractor

The IRS says an individual is an independent contractor if the payer (employer) has the right to control or direct only the result of the work, not what will be done and how it will be done.

Unlike independent contractors, employees are protected by various employment laws, including:

130+ million U.S. workers are protected by the FLSA.

57.3 million people freelanced in 2017.

1 in 5 jobs is a contracting job in the U.S.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post December Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Cash in on 0% Capital Gains Tax Rate

Mon, 21 Oct 2019 21:50:00 GMT

W hile the maximum capital gain tax rate can be as high as 23.8 percent, most taxpayers pay 15 percent. But there is the possibility to have your capital gains go tax-free; zero percent! In fact, this tax break has been around for more than a decade and comes into play more often than you may think. Here is what you should know:

Qualifying for the 0% capital gains rate

You qualify for preferential long-term gain treatment if you sell stocks, bonds or real estate (and other capital assets) you’ve owned longer than a year.

For 2019, the zero percent rate applies to long-term capital gains for single taxpayers with taxable income up to $39,375 and married filing joint taxpayers up to $78,750. This often applies if you’re having a low income tax year due to:

Awareness is the key

While you may not typically have the zero capital gain tax rate available to you, it is important to note when it comes into play.

Here’s an example: Adam and Eve Johnson recently retire. They have a number of mutual funds they’ve owned for years and have retirement savings accounts. Their current income is $58,700. Should they withdraw money from a retirement account or sell some of their mutual funds? Because they’re aware of the zero percent capital gains, they decide to sell mutual funds with long-term capital gains of $20,000 this year to get the money tax free!

Consider your year-end tax moves

So, keep the zero percent capital gains rate in mind as the year winds down. Know your projected income for the year and depending on your situation, you might realize capital gains that are subject to no or lower tax rates. Remember other factors often come into play, including the taxability of Social Security Benefits, so call if you would like a review of your situation.

The post Cash in on 0% Capital Gains Tax Rate appeared first on Omlin, Gunning & Associates, P.S. .

Social Security Planning Starts Now

Mon, 14 Oct 2019 17:16:00 GMT

Even those in their 20s should review this tip!

A lthough you won’t become eligible for Social Security until your 60s, there’s a lot you can do to prepare before then. Here’s a rundown of steps you can take during each decade of your life:

The post Social Security Planning Starts Now appeared first on Omlin, Gunning & Associates, P.S. .

October Newsletter

Tue, 01 Oct 2019 21:45:00 GMT

This month:

October 1

– SIMPLE IRA plan establishment due

October 15

– Extended individual and C-corp tax return filing deadline

October 31

– Halloween

Autumn’s in full swing, meaning it’s time to start preparing for the busy months ahead. You can get ready by learning about the Form 1040 updates you’ll see this 2019 tax season, as well as the new Marketplace Facilitator sales tax laws for anyone that sells through Amazon or eBay. You can also brush up on your rights if a bill collector ever harasses you.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

Another Year, Another New 1040

In 2018, the government attempted to “simplify” the tax-filing process by drastically shortening Form 1040. The result was six new schedules that created a lot of confusion. Now the IRS is attempting to ease some of that pain by revising the form and removing some schedules. Will it help? Here is what you need to know:

How to prepare for the changes

The best way to prepare is to be aware that 1040 changes are coming. The information required to file your taxes will remain the same, but some additional hunting will be necessary to find the shifting lines and fields on the modified form.

Remember, changes bring uncertainty and potential for delays, so getting your tax documents organized as early as possible will be key for a timely tax-filing process.

Bill collector calling? Know your rights

Maybe you’re behind on paying your bills because of circumstances outside of your control. Or perhaps there’s been an error in billing. Either way, these scenarios may lead to a run-in with a debt collector. Fortunately, there are strict rules in place that forbid any kind of collector harassment in the U.S. If you know your rights, you can deal with debt collection with minimal hassle. Here’s what to remember:

If a debt collection agency is not following these rules, report them. Start with your state’s attorney general office, and consider filing a complaint with the U.S. Federal Trade Commission and the Consumer Financial Protection Bureau, as well.

Amazon and eBay Sales Tax ALERT!

If you or your business sells product on Amazon using the Fulfillment by Amazon (FBA) service, you are well into the multi-state sales tax mess … even if you are not aware of it. You may be asking yourself:

Background

The old sales tax standard required you to collect and remit sales tax only in states that you have a physical presence (also known as physical nexus). The recent South Dakota vs. Wayfair, Inc. decision by the Supreme Court then legitimized the concept of economic nexus. This means your business could be required to collect and remit sales tax based on where you ship a product and not whether you ever set foot in a particular state (economic nexus).

The bigger mess

States were quick to jump on the bandwagon and actively identify Amazon, Ebay and Walmart sellers to demand sales tax for website sales. Some states, like California, got even more aggressive and decided that FBA sellers actually have physical presence because Amazon may put your product in a warehouse in their state. They got seller lists from Amazon and sent out threatening letters to small sellers demanding back sales tax, even though businesses have no way to retroactively collect the tax because the customers are Amazon customers.

Marketplace facilitator to the rescue?

To help address this mess and alleviate the need for small businesses to collect and remit sales tax forms to 50 states, many states acknowledged the problem and have passed what is called Marketplace Facilitator laws.

In short, it’s on the facilitator, NOT you. States with these laws require Amazon, Ebay and similar companies that facilitate sales for resellers to collect and remit sales tax on reseller Amazon activity. There are more than 30 states that have adapted these laws.

You DO NOT need to register your business to collect sales tax in states that have Market Facilitator legislation unless you are otherwise required to do so.

What you need to know

Decoding the New Dating Scene

Are you feeling a little in the dark about the new vocabulary developing around dating? It’s not surprising, especially when you hear a term like getting “ghosted.”

Luckily, you’re just a few dating slang definitions away from having a better understanding of this vocabulary — often used on social media. It’s important to understand, especially if you have young people in your life who are dating.

Here are a few popular slang terms and their definitions, plus conversation-starter ideas for when you encounter them:

Use these conversation starters to start a meaningful dialogue and ultimately promote trust and open conversations with your kids.

Reminder: Time to Start the Financial Aid Process

If you have a child in college or entering college during the next school year, you need to read this. You can now fill out your required Free Application for Financial Student Aid (FAFSA) for the next school year.

FAFSA application timeframe

The Free Application for Federal Student Aid (FAFSA) process opened on Oct. 1.

The time to file is now

The earlier you file your application, the earlier you will receive aid packages from most participating schools. The application is used to receive grants, federal loans and work study awards. Here are some hints to ensure the application process works in your favor:

Filling out the form can be a daunting task for the uninitiated, but with proper preparation you can get your form done in quick order.

5 Ways Payroll Services Boost a Business

Is a payroll provider right for you and your business? While it is an added expense, there are good reasons to add a partner to help with this service. Here are five things to consider:

When laying out and understanding all aspects of using a payroll service, it may be time to review your situation.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post October Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Lower This Year’s Tax Obligation

Tue, 17 Sep 2019 23:57:00 GMT

Action to take now!

N ow is a good time to assess your current situation and address those lingering tax moves that may improve your tax picture for 2019. Here are five things to consider:

1. Check on your withholdings. Review your taxable income and the amount of tax you’ve paid to Uncle Sam so far this year. How do the numbers compare to last year? Based on your analysis, you may have to adjust your paycheck withholdings or make quarterly estimated tax payments during the balance of the year to avoid underpayment penalties or a surprising tax bill.

2. Build up your retirement accounts. Don’t neglect your retirement savings during the remainder of the year. In fact, setting aside more money for retirement can lower this year’s tax bill. For instance, if you have a 401(k) plan at work, you can defer up to $19,000 of salary in 2019, plus an extra $6,000 if you’re age 50 or older.

3. Identify potential taxable events. It’s easy to overlook one-time events that will have an impact on your 2019 tax liability. For instance, if you win a prize at a church raffle, the prize is generally taxable to you. Perhaps you changed jobs, lost a child as a dependent, or got married. Each of these events can create a change in your tax obligation. Review your records now to avoid any unpleasant tax surprises later.

4. Consider business property needs. If you acquire business property, you can often choose to write off the cost in the first year the property is placed in service under the latest tax laws. If it makes sense, consider combining the benefits of the Section 179 expensing deduction, up to a maximum of $1 million (indexed for inflation), with 100% bonus depreciation for both new and used property.

5. Account for gig taxes. Finally, workers in the gig economy (like Uber and Lyft drivers) should understand the basic tax rules. Generally, income from such jobs is fully taxable, but you may be entitled to offsetting deductions. Essentially, you’re treated like a self-employed individual. Estimated quarterly tax payments are often required for these workers.

Should you wish a review of your situation, call now. It’s better to be prepared than surprised when it comes to your tax obligation.

The post Lower This Year’s Tax Obligation appeared first on Omlin, Gunning & Associates, P.S. .

Reminder: Third Quarter Estimated Taxes Due

Fri, 06 Sep 2019 23:57:00 GMT

Now is the time to make your estimated tax payment

I f you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The third quarter due date is now here.

Due date: Monday, September 16th, 2019

Remember, you are required to withhold at least 90 percent of your current tax obligation or 100 percent of last year’s obligation.* A quick look at last year’s tax return and a projection of this year’s obligation can help determine if a payment is necessary. Here are some other things to consider:

* If your income is over $150,000 ($75,000 if married filing separate), you must pay 110 percent of last year’s tax obligation to be safe from an underpayment penalty.

The post Reminder: Third Quarter Estimated Taxes Due appeared first on Omlin, Gunning & Associates, P.S. .

Leveraging Gift Rules to Your Advantage

Fri, 30 Aug 2019 23:59:00 GMT

A s you or family members approach retirement years, it is important to have a basic understanding of the IRS gift giving rules. With this understanding, there are opportunities to leverage this tax law without creating a tax problem.

The rules

Using the rules to your advantage

Remember, you can transfer up to $15,000 ($30,000 if married) to anyone you wish each year tax-free. Additionally, most states also adhere to this federal law. So if you wish to move assets to loved ones without the burden of future taxation, consider the following ideas.

Keep it in perspective

Understanding and leveraging the annual gift tax rules can create tremendous tax savings. But this strategy should be done in conjunction with understanding your personal financial needs. Providing gifts of funds that you might later need for your own retirement can be problematic. It is best to review your gift plans prior to taking action.

The post Leveraging Gift Rules to Your Advantage appeared first on Omlin, Gunning & Associates, P.S. .

September Newsletter

Fri, 30 Aug 2019 17:48:00 GMT

This month:

September 2 :

– Labor Day

September 16

– 3rd quarter estimated tax due

– Filing deadline for 2018 S corp and partnership returns that received extension

October 1

– SIMPLE IRA plan establishment due

Welcome, fall! Pumpkin spice lattes aren’t the only thing you should be focusing on this season. Keep your tax plan in mind as you get closer to the end of the year. In this issue you’ll find articles to help you do so, including tips on what to do if you get an IRS letter in the mail. There’s also advice for business owners about selecting the right employee health insurance, plus a list of ways to help older adults avoid scams. And a few key reasons why you should never skip the fine print when agreeing to terms and conditions.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

The IRS Is Not Always Right

A letter in the mailbox with the IRS as the return address is sure to raise your blood pressure. Here are some tips for handling the situation if this happens to you:

Select the Right Health Insurance for Your Business

If you have employees, you know how important health insurance is for your benefits package. It also takes a big bite out of your budget. Selecting the right insurance for your company is extremely important for employee retention and maintaining your bottom line. Here are tips to help you find the best health insurance for your business:

Shopping for health insurance for your business is complicated. Taking the appropriate time to understand each coverage option and the associated costs will benefit both your business and your employees’ wellbeing.

Help Older Adults Stand Up Against Scams

The Consumer Financial Protection Bureau recently reported in financial exploitation cases that older adults lost an average of $34,200. Unfortunately, these funds are often never recovered. You can ensure this doesn’t happen by learning more about scams and how to protect yourself. Here are some tips:

Why You Need to Read the Fine Print

According to a recent Deloitte survey, 91 percent of people agree to terms and conditions without reading the legal agreement. While reading through the legally complex language may be slow and painful, it’s more important than you think. Here are four reasons why reading entire legal agreements make sense:

Consider the Tax BEFORE You Sell

Multiple tax rates hold the key

In times of market volatility or when a financial need arises, it is only natural to consider selling some investments. Understanding the tax consequences is key to making an informed and planned decision. Here is what you need to know BEFORE you sell:

Investment Tax Rates

* a 3.8% net investment income tax may also apply to these earnings.

As the above tax rate chart suggests, understanding the tax consequence of selling an investment can be complicated. Your tax obligation could be subject to no tax or up to 37 percent plus an additional 3.8 percent for the net investment income tax. Here are some ideas to consider:

Within retirement accounts

Gains and losses outside of retirement accounts

Remember your investment decisions can often have quite different tax consequences. The best suggestion is to seek advice BEFORE you sell.

How to Handle Negative Reviews

With all the rating services on sites like Amazon and Yelp, it’s not a question of whether your business will receive a negative review, only when. Every business or service must know how to handle these negative reviews. Here are some hints:

The best defense is a great offense

You don’t have to address negative reviews if you never have them in the first place. Proactively identify possible negative experiences and encourage customers to respond directly to you to resolve their issues. Here are some suggestions:

FIRST fix the problem

When you get a negative review, try to identify the customer and contact them directly. Then work with them to solve their problem. If a solution is not possible, be willing to cancel their service or refund their money. A disgruntled customer that hasn’t been hurt financially quickly becomes a toothless monster. Once this is done, try to have the customer remove their review if they are satisfied. OR even better, try to get them to rave about how you solved their problem!

Know your dissatisfied reviewer

Conduct research on the customer. Are they habitual complainers or bullies? The current public feedback forums have created many of these types. On the other hand, people easily get frustrated with poor service and are simply at their wit’s end. It’s important to know the difference.

Problems are opportunities

Inside every negative review is an opportunity to be better at what you do. Even with the review bullies, there is an element of truth to most reviews. Try to get past the emotional impact of the negative review and think of it as a gift to make your service better than everyone else’s.

Writing the response: FREE advertising

You’ve fixed the problem. You’ve researched the customer. You’ve looked for opportunities to be better at what you do. Now you are ready to publicly respond to the negative review. But — and this is important — you are not responding to the complainer. You are responding to future readers of the complaint! The formula of a great response is:

Time is of the essence

Try to complete your contact and response within 24 hours. This speed will impress all future readers. A lot must be done to reach this goal, but if you assign someone to monitor review services for you, and they are empowered to solve problems, you can accomplish this goal.

Today’s review systems give entirely too much power to a few complainers. Your goal should be to use these systems to your advantage to build your brand and find new buyers.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post September Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Municipal Bonds: An Investment with Tax Breaks!

Fri, 23 Aug 2019 00:00:00 GMT

E verybody likes getting something for free, and taxes are no different. Investing in securities like municipal bonds (munis) or municipal bond funds generates tax-free interest income. Here is what you need to know.

Advantages of municipal bonds

You pay zero federal tax on municipal bond investment income. This makes municipal bonds more attractive than many comparable taxable investments. A municipal bond paying 6 percent to an investor in the 24 percent tax bracket is actually a better investment than a taxable bond paying interest at 7.9 percent, due to the federal income tax break.

What’s more, municipal bond income isn’t counted for net investment income tax purposes. So if you are subject to this 3.8 percent surtax, municipal bonds provide an additional tax break to you. And, if the bond is issued by an authority within the state where you reside, it’s also exempt from any state income tax.

For these reasons, municipal bonds are a popular investment, especially among retirees, because they are often stable and most bonds carry a relatively low risk.

Potential tax consequences

But that doesn’t mean there are no potential downsides to municipal bonds.

Investing in municipal bonds can provide tax-free, stable income, but you need to understand how the investments fit with your situation to maximize the tax savings.

The post Municipal Bonds: An Investment with Tax Breaks! appeared first on Omlin, Gunning & Associates, P.S. .

How to Maximize Deductions for Assisted Living

Fri, 16 Aug 2019 00:01:00 GMT

I t’s possible that someone in your family will need assisted living care at some point in their life. This care can be at an assisted living facility, a nursing home, or in their own home. Often, assisted living care is expensive and not fully reimbursable by typical health insurance policies. Thankfully, there is a medical expense itemized deduction when the out-of-pocket amount exceeds 10 percent of your adjusted gross income.

Here’s what you can do to increase the chances for you or a loved one to maximize their tax deduction.

If you have questions regarding your specific situation, please call.

The post How to Maximize Deductions for Assisted Living appeared first on Omlin, Gunning & Associates, P.S. .

August Newsletter

Thu, 01 Aug 2019 00:48:00 GMT

This month:

September 2: Labor Day

Summer is starting to wind down and the kids will soon be headed back to school. Now is a great time to review if you’ve had, or will have, any special taxable events this year. The first article highlights five taxable items that come as a surprise to many people. This month’s newsletter also includes spending traps to avoid when headed to the fair, ways to manage the burden of student loan debt, and cash flow strategies that can save your business.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

I Owe Tax on That?

5 Surprising Taxable Items

Wages and self-employment earnings are taxable, but what about the random cash or financial benefits you receive through other means? If something of value changes hands, you can bet the IRS considers a way to tax it. Here are five taxable items that might surprise you:

When in doubt, it’s a good idea to keep accurate records so your tax liability can be correctly calculated and you don’t get stuck paying more than what’s required. Please call if you have any questions regarding your unique situation.

Headed to the Fair? Avoid These Spending Traps

If you’ve ever attended a state or county fair, you know it’s really easy to spend a lot of money, and fast. The best way to avoid overspending is to know the problem areas and be prepared. Here are five typical fair spending traps (and tips to avoid them):

Fairs are a great way to spend a late summer or fall day and make some memories. Saving some cash with some savvy decisions makes it even better!

Smart Tactics to Manage Student Debt

According to the Federal Reserve, U.S. student loan debt is now $1.5 trillion with more than 44 million borrowers. Only mortgage debt currently has bigger numbers among types of consumer debt. Even worse, more than 10 percent of these loans are past due. Here are some tactics to help make student debt easier to manage:

While student debt is often an unavoidable outcome of getting a college education, it can be minimized if actively managed. Small changes can yield results if planned for in advance.

Cash Flow Concepts That Can Save Your Business

A sad and oft-repeated truth is that half of all new businesses fail within the first five years. Although many factors contribute to business failure, a common culprit is poor cash management. All businesses, large and small, must deal with the uncertainty of fluctuating sales, inventories and expenses. Follow these practices to moderate the ebb and flow of cash in your business:

By taking these steps and endeavoring to smooth out cash fluctuations, proficient managers keep their companies strong throughout the business cycle.

No Excuses. Time to Lower Your Tax Bill

It’s easy to push tax planning to the sidelines when tax laws are ever-changing and hard to understand. Here are some common (but often unfounded) reasons for avoiding tax situations, plus tips to help get past them and start paying less tax this year:

Thankfully, it’s not too late to get on track for 2019. If you haven’t scheduled a tax-planning meeting, now is a great time to do so.

Business Advice: Every Impression Matters

With competition abounding for virtually every product or service, businesses need to hone every advantage available to them. One of the ways you can set your business apart from the pack is to create an awesome customer experience starting with the first interaction that continues through the entirety of the relationship. How does one foster this level of customer service? Here are four steps to help you get there:

Creating a culture that excels at customer service is attainable if you put in the effort to know your customer’s needs and understand that every impression matters!

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post August Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

IRS ALERT: Two New Tax Scams

Tue, 23 Jul 2019 23:20:00 GMT

T he IRS remains on the lookout for tax scams that can blindside unsuspecting taxpayers. Now two variations of past scams are currently making the rounds. Here’s what you need to know:

The new scams

Clues to identify any IRS scam

You can avoid a tax scam by understanding that the IRS (or its authorized private collection firms) will NEVER:

Protect yourself and others

If you are contacted by someone threatening action because of unpaid taxes, don’t give out any personal information. If it’s a phone call, hang up immediately and contact the IRS directly at 1-800-829-1040. If it’s an email, don’t respond, click any links or open any attachments. Forward the email to phishing@irs.gov and delete it.

Other questions? Don’t hesitate to call!

The post IRS ALERT: Two New Tax Scams appeared first on Omlin, Gunning & Associates, P.S. .

Retirement Basics: Understanding Tax Efficiency

Wed, 10 Jul 2019 23:10:00 GMT

Retirement Basics: Understanding Tax Efficiency

O ne of the basics in retirement is to be as tax efficient with your income as possible. In 2019, income tax rates range from 0 to 37 percent, plus a potential 3.8 percent net investment tax. Understanding how these progressive tax rates apply to ordinary income creates a tremendous retirement planning opportunity.

The basic concept

Many retirees can control their taxable income each year by the amount they work and how much they withdraw from retirement savings accounts like IRAs and 401(k)s. When your income drives you into a higher income tax rate, you will need to decide if you want to maximize the tax rate applied to this range of income.

Example: Assume you are a single taxpayer with $10,000 in retirement income from a part-time job. You also have $150,000 savings in a 401(k) retirement account. The income range and applicable tax rate for a single taxpayer in 2019 is as follows;

In this example, excluding other variables, you have the opportunity to withdraw an additional $29,475 from the 401(k) at an income tax rate of 12 percent. Income beyond this amount will be taxed at 22 percent or higher.

*Note: Taxable income typically includes wages, interest, non-qualified dividends, short-term capital gains (assets owned for one year or less), taxable Social Security benefits and withdrawals from most 401(k), 403(b), and non-Roth IRAs.

Other factors add complexity

Unfortunately, planning for tax-efficient retirement is never simple. There are other things to consider:

What to do?

Making tax efficiency an integral part of your retirement plan can be complicated. But the rewards are tremendous for those willing to start early, dedicate the time to planning, and ask for assistance.

The post Retirement Basics: Understanding Tax Efficiency appeared first on Omlin, Gunning & Associates, P.S. .

Bad Debts and Health Insurance

Tue, 02 Jul 2019 22:52:00 GMT

Even though we’re smack in the middle of summer, your mind may be on your future to-do list. You can get prepared now by reviewing tips on managing your company’s bad debt allowance and controlling health insurance costs.

Call if you would like to discuss your tax or business questions. If you know someone that can benefit from this newsletter, feel free to send it to them. This month

In this issue:

Bad Debts Cause More Trouble than You Think

How to effectively use your bad debt allowance

When your business extends credit to customers who don’t settle accounts, their debt becomes bad debt. For businesses using the accrual basis method of accounting, establishing the correct bad debt allowance (also called an allowance for doubtful accounts) can bring the asset section of the balance sheet into focus.

The basics

The bad debt allowance (balance sheet) and related bad debt expense (income statement) accounts were established to help level out the impact of an uncollected invoice on any one particular financial month. By booking a reasonable estimate of bad debt expense each month, the roller coaster ride of writing off an account in any one month no longer materially impacts a business’ income statement. Instead, you build up a bad debt reserve on your company’s balance sheet to account for the actual recognition of writing off uncollectible sales on the balance sheet.

Here’s an example: Assume your accounts receivable totals $500,000. After careful consideration, you determine that only $440,000 is likely collectible this year. By creating a monthly bad debt expense of $5,000 on your income statement, the bad debt allowance on your balance sheet will build up to $60,000 over a year. Then when a write off is required, the reduction is in the allowance account NOT on your income statement. By doing this, you’ll gain a more accurate picture of the company’s monthly financial health, unaffected by one or two large bad debts.

Many businesses use a percentage of prior credit sales to calculate bad debt allowance. If your company’s credit sales totaled $100,000 last quarter and bad debts over the same period amount to 2 percent of sales revenue, you could establish an allowance of $2,000. As an alternative, you might assign risk factors based on individual clients, especially if the firm relies on a few large customers.

Managing your bad debt allowance

Regardless of the method chosen to calculate bad debt allowance, monitoring it should be a priority. Use these guidelines to help you manage your allowance:

Understanding the bad debt allowance and how it works in conjunction with bad debt expense can really help you manage your financial condition and quickly see if your accounts that pay on credit are being managed to your expectation. Call if you have questions.

Ideas to Help Control Health Insurance Costs

As health care costs continue to rise, businesses are facing some tough decisions to stay profitable while maintaining this important employee benefit. With insurance renewal season right around the corner, now is the time to evaluate your plan. Consider these cost-cutting ideas:

The proper approach to cutting health care costs is different for every company, so take the time to research your options to ensure the correct fit for your business.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

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July Newsletter

Tue, 02 Jul 2019 22:35:00 GMT

This month:

July 4: Independence Day

Tax day might seem far away, but waiting until year-end to make your tax moves may prove costly to you. Maximizing your tax savings starts with an effective mid-year strategy! Detailed here are some ideas to kick-start your summer tax planning. This issue also includes some unique and free summer travel destinations, an infographic with key IRS audit information, and five steps to help your business set the right salaries for your employees.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

Effective Tax Planning Starts Now!

With summertime activities in full swing, tax planning is probably not on the top of your to-do list. But putting it off creates a problem at the end of the year when there’s little time for changes to take effect. If you take the time to plan now, you’ll have six months for your actions to make a difference on your 2019 tax return. Here are some ideas to get you started.

Great tax planning is a year-round process, but it’s especially effective at midyear. Making time now not only helps reduce your taxes, it puts you in control of your entire financial situation.

Can’t Miss Stops for Your Summer Road Trip

School is out, the weather is warm, and it’s time to head out on a summer road trip! Tired of the same old locations? Every state has a number of unique destinations for the every day explorer. Here are some free ideas for the creative vacation seeker in all of us:

Hitting the road is a great way to spend some time with loved ones this summer. Adding quirky stops that will be remembered for a lifetime make it even better!

What You Need To Know About IRS Audits

The IRS recently released its 2018 Data Book, including information on its audit activities for the last fiscal year. This details what you need to know regarding your audit risk, how to prepare for and what to expect in an IRS audit.

Know the facts

What are your chances of being audited?

It depends. But for most taxpayers, LOW.

Approximately 1 in 198 tax returns were audited in 2018.

The IRS audited 0.6% of all individual income tax returns filed in 2018, and 0.91% of corporation tax returns (excluding S corporations)

There are two types of audits:

Did you know? Approximately 2/3 of audits are handled through the mail.

Reasons you may be audited

Although the IRS uses random selection as one method to choose tax returns to audit, it may also flag returns because:

Other reasons: reporting too many losses, deducting too many work expenses and claiming too many charitable contributions may also trigger an audit.

Always be prepared

Use your past tax return as a checklist of items to keep on hand:

FYI: Always use copies of records during an audit. Keep your original documents.

More ways to prepare: Check IRS.gov to review its Audit Techniques Guides (ATGs). They are used by IRS examiners and can identify areas for potential audits, as well as help you understand what the IRS may question.

What to do if you’re audited

Your tax return may never be audited. But if it happens, here are a few tips to make the process go more smoothly:

The bright side: If you are audited, you may end up with a refund. In FY 2018, approximately 30,000 audits resulted in refunds, totaling $6 million.

Sources: IRS.gov, Kiplinger.com, Forbes.com, Nerdwallet.com

Make Setting Salaries Easier With These 5 Steps

Whether you are hiring for the first time, filling an open position, or conducting annual performance reviews, finding a salary range that attracts and retains valued employees can be a difficult task. Here are some suggestions to help make the process a bit easier for you and your company:

Finding the right salary can be tricky, but with some preparation and research, you can find the balance that satisfies the needs of your business and your employees.

How To Protect Your Social Security Number

Very few things in life can create a higher degree of stress than having your Social Security Number (SSN) stolen. This is because, unlike other forms of ID, your SSN is virtually permanent. While most instances of SSN theft are outside your control, there are some things that you can do to minimize the risk of this ever happening to you.

Replacing a stolen SSN is not only hard to do, it can create many problems. Your best defense is to stop the theft before it happens.

Basic Customer Retention Questions You Need to Answer

Your business’s ability to retain customers is one of the most important components to sustain growth and profitability. Here are the three retention questions every business owner should be able to answer:

Don’t make the mistake of assuming business success comes from constantly adding new customers. Most sustained growth and profitability comes from first understanding marketing activities targeted to keep your current customers. The best place to start is to calculate and understand your base retention numbers.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post July Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

July Newsletter

Thu, 27 Jun 2019 21:52:00 GMT

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

This month:

In this issue:

Effective Tax Planning Starts Now!

Great tax planning is a year-round process, but it’s especially effective at midyear. Making time now not only helps reduce your taxes, it puts you in control of your entire financial situation.

Can’t Miss Stops for Your Summer Road Trip

Hitting the road is a great way to spend some time with loved ones this summer. Adding quirky stops that will be remembered for a lifetime make it even better!

What You Need To Know About IRS Audits

The IRS recently released its 2018 Data Book, including information on its audit activities for the last fiscal year. This infographic details what you need to know regarding your audit risk, how to prepare for and what to expect in an IRS audit.

Make Setting Salaries Easier With These 5 Steps

Finding the right salary can be tricky, but with some preparation and research, you can find the balance that satisfies the needs of your business and your employees.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post July Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Tax Planning and Children

Wed, 19 Jun 2019 16:28:00 GMT

Replacing Tax Breaks for Your Growing Children

Your kids are getting older. Before you know it they’ll be dating, driving and entering college (if they aren’t already!). Tax breaks drop dramatically as your children grow up, but you may be able to offset the losses with some timely tax planning. Consider the following tax events based on the age of your child:

The post Tax Planning and Children appeared first on Omlin, Gunning & Associates, P.S. .

Developing a Savings Account

Wed, 19 Jun 2019 16:21:00 GMT

Get in the habit of saving

Do you save regularly? If not, you should reconsider. Developing a saving habit is one of the best things you can do for your financial health.

In the short term, savings can provide you a cushion to deal with emergencies, such as a job loss, unexpected home repairs, medical bills, etc. It will also help you reduce or eliminate your need to take out loans or other financing. Most importantly, building up savings while you work can mean the difference between a comfortable retirement and scraping by on Social Security benefits.

There’s no better time than now to start saving

If you’re not a regular saver, where do you begin? Here are three tips to help you get started:

Remember, saving leads to other financial benefits. The more you save, the less you borrow. The less you borrow, the less interest you pay and the more money you can add to your savings. So start your savings program now!

The post Developing a Savings Account appeared first on Omlin, Gunning & Associates, P.S. .

Employee Raises

Wed, 19 Jun 2019 16:19:00 GMT

Considering employee raises? Review these ideas

Deciding how to administer employee raises can perplex even the most seasoned managers. How often should raises be given? Should they be given across the board to all workers? If staff turnover is increasing, can you turn back the tide by granting raises to the most productive workers? There’s a lot to consider.

As you create or update your plan for giving out employee raises, here are some ideas to consider:

A highly structured system for granting raises may allow your company to stay within budget, but if your best workers become dissatisfied and leave, labor costs can skyrocket. A well-managed payroll system that rewards great performers on a regular basis and is understood by all employees can be an effective tool to retain workers and help keep morale high.

The post Employee Raises appeared first on Omlin, Gunning & Associates, P.S. .

2019 Q2 Estimated Taxes Due

Mon, 10 Jun 2019 16:28:00 GMT

Reminder: Second Quarter Estimated Taxes Due

If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The second quarter due date is now here.

Due date: Monday, June 17th 2019

*If your income is over $150,000 ($75,000 if married filing separate), you must pay 110 percent of last year’s tax obligation to be safe from an underpayment penalty.

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2020 Health Savings Account Limits

Mon, 03 Jun 2019 16:29:00 GMT

New contribution limits are on the horizon

The savings limits for the ever-popular health savings accounts (HSA) are now set for 2020. The new limits are outlined here with current year amounts noted for comparison.

What is an HSA?

An HSA is a tax-advantaged savings account whose funds can be used to pay qualified health care costs for you, your spouse and your dependents. The account is a great way to pay for qualified health care costs with pre-tax dollars. In fact any investment gains on your funds are also tax-free as long as they are used to pay for qualified medical, dental or vision expenses. Unused funds may be carried over from one year to the next. To qualify for this tax-advantaged account you must be enrolled in a high-deductible health plan (HDHP).

The limits

Note: An HDHP plan has minimum deductible requirements that are typically higher than traditional health insurance. To qualify for an HSA, your coverage must have out-of-pocket payment limits in line with the maximums noted above.

Not sure what an HSA is all about? Please call to discuss whether an HSA is right for you.

The post 2020 Health Savings Account Limits appeared first on Omlin, Gunning & Associates, P.S. .

June Newsletter

Fri, 31 May 2019 00:58:00 GMT

Summertime offers unique tax saving situations. Outlined here are five ideas everyone can use. Plus, this issue includes ideas to help you unplug from your electronics and discusses possible payroll fraud schemes. Finally, spend a minute reviewing the wisdom of asking for help should you be contacted by the IRS.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them. This month

In this issue:

5 Summer Tax Savings Opportunities

Ah, summer. The weather is warm, kids are out of school, and it’s time to think about tax saving opportunities! Here are seven ways you can enjoy your normal summertime activities and save on taxes:

Taking the time this summer to execute these tips can put extra money in your pocket right away and provide you tax-saving happiness in the future.

Get Your Life Back! Ideas to Unplug

With endless movies, TV shows and video games available to us 24/7, it’s become too easy to spend all our free time on electronic devices. If you and your family are looking for ways to unplug this summer, consider these ideas:

By getting your electronic habits to a manageable level, you’ll free up more time and energy to live this summer to the fullest.

Payroll Fraud Schemes Every Business Should Know

According to the Association of Certified Fraud Examiners, nearly 30 percent of businesses are victims of payroll malfeasance, with small businesses twice as likely to be affected than large businesses. Here are four scary payroll fraud schemes you need to know:

Tips to combat payroll fraud

Being aware of the threats is a start, but you also need to know how to stop them. Here are some tips to reduce your companies payroll fraud risk:

Managing your business payroll is a daunting task by itself, and actively protecting against fraud adds additional complexity. Please call for help with your business payroll needs.

Never Take on the IRS Alone

Sleuthing your way through a tax audit by yourself is not the same as fixing a leaky faucet or changing your oil. Here are reasons you should seek professional help as soon as you receive a letter from the IRS:

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post June Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Net Investment Income Tax

Tue, 28 May 2019 19:49:00 GMT

Ways to minimize net investment income (NII) tax

The new tax legislation enacted late in 2017 rewrites large sections of the tax code. However, one key provision for investors has remained in place: the tax on net investment income (NII). Although it’s still on the books, you can minimize the impact for this year with some timely tax action.

NII tax background

Generally, the NII tax is equal to 3.8 percent of the lesser of your NII or excess modified adjusted gross income (MAGI) over an annual threshold of $200,000 for single filers ($250,000 for joint filers).

NII includes most investment income items like interest and dividends, capital gains and gains from investments in passive activities. But certain other items — such as distributions from IRAs and qualified retirement plans and income from an active business — are specifically excluded from this calculation.

How to reduce NII tax

Even if the tax applies in your situation, you may minimize the tax damage by reducing NII, MAGI or both. Consider these ideas:

Of course, other financial factors may affect these strategies. Call today for help developing a plan that suits your needs.

The post Net Investment Income Tax appeared first on Omlin, Gunning & Associates, P.S. .

199A Safe Harbor Rule

Mon, 20 May 2019 19:50:00 GMT

Landlords: Review the new 199A safe harbor rule

Owners of pass-through entities (S corporations, partnerships and limited liability companies) and sole proprietors can benefit from a new deduction under Section 199A of the tax code. And now the IRS has issued new final regulations providing greater clarity that includes a safe harbor rule for rental real estate activities.

Why it matters to landlords

Generally, the deduction is equal to 20 percent of your qualified business income (QBI) for the year, including your net income from an active trade or business. However, the deduction is phased out based on income levels and whether or not you’re a taxpayer in a specified service trade or business (SSTB), such as an accountant, doctor or lawyer. Other limits based on wages of non-SSTB taxpayers may apply.

Previously, it wasn’t entirely clear how these rules would apply to rental real estate activities, but the clarifications provide a safe harbor rule for landlords. Essentially, a rental activity (including multiple activities combined in a single enterprise) is treated as trade or business if:

On the other hand, certain rental activities are excluded from the safe harbor rule, including real estate used as your home and property rented on a triple net lease basis. With this type of lease, the tenant is typically responsible for real estate taxes, building insurance and common areas.

If you have questions about your rental real estate activities, call today.

The post 199A Safe Harbor Rule appeared first on Omlin, Gunning & Associates, P.S. .

Home Office Tax Deduction

Mon, 13 May 2019 19:52:00 GMT

Watch out for the home office tax trap

The home sale exclusion is one of the biggest tax breaks around. If you qualify, you can exclude tax on up to $250,000 of profit from a sale if you’re a single filer or $500,000 if you file jointly. Often, you’ll pay zero capital gains tax. However, there’s a little-known tax trap if you’ve claimed home office deductions in the past.

Home office tax breaks bite back when you move

If you use part of your home regularly and exclusively as your principal place of business or otherwise qualify, you are eligible for home office deductions. In that case, you could offset some business income through direct expenses (e.g., painting the office) and indirect expenses (e.g., utilities, repairs, insurance, property taxes and mortgage interest, etc.) based on the business use of the home.

But when you sell the home, you must recapture some of the prior tax benefits, resulting in an unexpected tax bill when you file your return.

The tax law says you must recapture the depreciation claimed for home office deductions claimed after May 6, 1997. The recaptured depreciation is taxed at a special 25 percent tax rate instead of the usual 15 percent rate (20 percent for certain high-income taxpayers) on long-term capital gains.

This recapture rule applies to “allowed or allowable” depreciation. In other words, you may have to pay a recapture tax, even if you didn’t claim home office deductions in one or several years.

Despite this drawback, the benefits of home office deductions generally outweigh the potential for the recapture tax. Just make sure you understand the tax ramifications. Call today if you have questions.

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Homeowners Insurance Tips

Fri, 03 May 2019 18:47:00 GMT

Avoid these 3 homeowner’s insurance mistakes

Looking for a way to tackle insomnia? Read your homeowner’s insurance policy. Kidding aside, it’s worth the effort. As many families have learned the hard way, failing to evaluate policy details can lead to unanticipated expenses when disaster strikes.

Sweat the fine print, especially if you’re a first-time homebuyer, and don’t make these three blunders:

It makes sense to comparison shop. Friends and family can often provide insight into how promptly claims have been paid and whether payouts have been fair. Check online rating sites. Be especially wary if a particular insurer is routinely cited for substandard customer service. Above all, be proactive. Don’t wait until the ground starts trembling.

The post Homeowners Insurance Tips appeared first on Omlin, Gunning & Associates, P.S. .

Balancing Price Hikes

Fri, 03 May 2019 18:25:00 GMT

Don’t let price increases deter existing customers

Escalating outlays and flatlined revenue can force a business to the emergency room, figuratively speaking. If the cost of materials, loans and labor soars, drastic steps may be needed. Sometimes you can avoid price increases by slashing production costs, renegotiating leases, changing suppliers or eliminating unprofitable products.

But it’s a balancing act. If you begin to charge more, even loyal customers may balk. Some may flee to competitors. Social media may bristle with negative reviews. When price increases become necessary, it’s crucial to keep existing customers coming back. Consider following these suggestions:

Above all, keep on top of ongoing operations. Don’t let dwindling revenue plunge you into an emergency.

The post Balancing Price Hikes appeared first on Omlin, Gunning & Associates, P.S. .

May Newsletter

Fri, 03 May 2019 18:03:00 GMT

This month:

May 12: Mother’s Day

May 15: Exempt organization tax returns due

May 27: Memorial Day

With tax season in the rear view mirror, it’s full speed ahead into tax planning season. While it’s important for everyone to have a tax roadmap, there are key situations that require extra attention so you can avoid a major tax pothole. This issue includes lessons to learn from some high-profile tax scandals, sneaky vacation costs that can ruin your vacation, and an inside look at some key characteristics of a great bookkeeping system.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them.

You Know You Need Tax Planning If…

Effective tax planning helps you make smart decisions now to get the future outcome you desire – but you need to make sure you don’t miss anything. Forget to account for one of these situations and your tax plans will go off the rails in a hurry:

Don’t make the mistake of omitting key details from your tax plan. Call now to schedule a tax-planning meeting.

Al Capone, Aunt Becky, Tax Fraud and You!

How you can learn from high-profile tax scandals

The recent college admission scandal involving Lori Loughlin (who played Aunt Becky in the Full House TV series) and others is shedding light on just one way people allegedly cheat on their taxes. Here are examples of some famous people in tax trouble with the IRS and helpful hints to make sure it doesn’t happen to you:

While seeing well-known celebrities in the press for tax trouble makes for interesting reading, there are useful tax lessons for all of us. It provides an opportunity to see how IRS employees think and what they are reviewing.

Watch Out! 7 Vacation Costs That Sneak Up on You

Going on vacation is a time to get away, relax and enjoy new experiences. But if you don’t pay close attention, extra costs can sneak up on you like tiny money-stealing ninjas. Here are seven sneaky vacation costs to watch out for:

Some vacation fees can’t be avoided, but many of them can if you know where to look. Implement a plan to navigate the fees in the planning stages of your trip to avoid dealing with them during your vacation.

4 Key Elements of Great Business Books

Your bookkeeping system is the financial heart and lifeblood of your business. When set up and operating properly, your books help you make smart decisions and seamlessly turn your financial data into useful information. Here are four key characteristics to build and maintain a healthy bookkeeping system:

If properly executed, your bookkeeping system will turn out accurate financial statements that can be used for several tasks – financial reporting, budgeting, forecasting, raising capital, applying for a loan, tax reporting and decision making. Feel free to call with any questions or to discuss bookkeeping solutions for your business.

The Casualty Loss Problem

What you can do to help

Tax laws severely limit who can deduct losses on their tax return caused by a catastrophic event. Now unless a loss is in a presidentially declared disaster area, victims are on their own to pick up the pieces. This is creating problems for those on the fringe of a major disaster and those who have a local casualty loss like a local flood or fire.

Possible Solutions

With tax savings no longer available to help cover some of the damages, victims need to find relief in other areas. Here are some ways that you can help fill this void:

Be a watchdog for scams

Opportunists and scammers come from every direction when losses occur. Their goal is to exploit the victim’s suffering and inexperience with the situation to benefit themselves. Fraudsters may set up fake charity funds or pose as inspectors, building contractors or even government agents. With so many things to handle and emotions to process, the victim may be too overwhelmed to see through a scam. Here is where you can help. Take a skeptical approach to anyone soliciting business from the disaster and don’t trust anyone who asks for money.

Thankfully, victims living in presidentially declared disaster areas can still deduct casualty losses on their taxes, but people suffering localized losses cannot. Any assistance you can provide will help ease their suffering during a difficult time.

Digital Marketing Mistakes to Avoid

The keys to successful digital marketing practices are often learned through failure. But this doesn’t have to be you! The wise business owner learns from the travails experienced by others. Here are some digital marketing mistakes to know so you can keep them from unraveling your strategy:

As always, should you have any questions or concerns regarding your situation please feel free to call.

The post May Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Gig Economy Tax Tips

Wed, 17 Apr 2019 20:38:00 GMT

5 tax reminders for gig economy workers

Are you involved in the gig economy — or the labor market made up of freelance and other temporary work — that’s gaining popularity? This type of sharing economy involves individuals and groups who connect with others through technology to make money using assets they already own (like cars and houses), often doing everyday tasks. Gigs can range anywhere from Airbnb hosting and delivering groceries to ethical hacking or designing blockchain technology for cryptocurrencies.

While participating in the gig economy can put cash in your pocket, it also triggers tax obligations and possible opportunities. Here are some helpful tax tips to keep in mind:

If you have tax questions about your gig, call today.

The post Gig Economy Tax Tips appeared first on Omlin, Gunning & Associates, P.S. .

Business Website Tips

Wed, 17 Apr 2019 20:30:00 GMT

3 business website features you can’t live without

Your website is a great opportunity to bring new customers to your business. It’s also a great way to surprise and delight existing customers, encouraging them to return again and again.

As you’re creating a business website, here are three things to keep in mind — three critical features your business website must have:

Make sure your website features these things prominently. You might even want to keep a list and share it with others who are involved in creating your business website. Check the list again before your website launches, just to be safe. If a customer can find important business information easily, you’re doing things right.

The post Business Website Tips appeared first on Omlin, Gunning & Associates, P.S. .

Couples and Finances

Wed, 17 Apr 2019 20:20:00 GMT

Creating financial goals as a couple

Financial goals make it possible for you and your partner to achieve the things you dream about. Here are three things you can do to create — and achieve — financial goals as a couple:

The post Couples and Finances appeared first on Omlin, Gunning & Associates, P.S. .

Backdoor Roth IRA

Wed, 03 Apr 2019 16:18:00 GMT

Unlock tax savings with a backdoor Roth IRA

Don’t give up quickly if your path to contributing to a Roth IRA is blocked by tax law limits. Despite the obstacles, upper-income taxpayers may be able to take advantage of a backdoor Roth IRA.

IRA contribution basics

Unlike a traditional IRA where contributions may be wholly or partially tax-deductible, contributions to a Roth can never be deducted, but future distributions are generally exempt from tax. In contrast, traditional IRA distributions may be taxable in full.

The contribution limit for any combination of traditional and Roth IRAs for the 2018 tax year is $5,500 (increased to $6,000 for 2019). Plus, you can add on $1,000 if you’re 50 or older.

But there are no income limits on taxpayers who contribute to traditional IRAs. With a Roth, the ability to contribute is phased out, based on your modified adjusted gross income (MAGI).

Conversions and backdoor Roth IRAs

Of course, you can convert an existing traditional IRA to a Roth, but you must pay tax on the conversion at ordinary income rates. Currently, the top rate is 37 percent.

However, this clever tax technique may work for you: Fund a traditional IRA with nondeductible contributions. Then, when you convert to a Roth, you only pay tax on the portion representing taxable earnings. The bulk of the conversion is tax-free. This “back-door IRA” approach remains viable after recent tax legislation.

There are additional complications if you already have other IRAs. But you may be able to minimize the tax damage by rolling over those funds into a 401(k) or other plan.

Call before you make your move, or if you have questions about your IRA tax obligations.

The post Backdoor Roth IRA appeared first on Omlin, Gunning & Associates, P.S. .

April Newsletter

Wed, 27 Mar 2019 23:01:00 GMT

Tax day is upon us! As we tie a bow on the first tax season using the new tax laws, here’s a fun tax quiz you can use to impress your friends with some quirky state tax knowledge. This issue also includes handy metrics to track your business performance, tips to help you decide if you should buy or lease your next vehicle, and five big questions people are asking as the tax deadline approaches.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them. This month

Tax Quiz: Wild State Tax Laws

Think taxes are simple and filled with common sense? Think again! Enjoy this fun quiz to see how well you know the crazy world of state taxes.

C. California. Cold food is tax-exempt if purchased at a store, but subject to tax on 33% of the price if you purchase fruit from a vending machine. If you sell fruit in this state…good luck keeping track of the tax.

B. Arkansas. Body piercings are also taxed at 6%. So if you are waffling between getting that tattoo or a nose ring, you can eliminate taxes as a deciding factor!

A. Hawaii. Worried about how new developments were destroying the environment in the 70’s, the Hawaii State Legislature added the tax deduction for expenditures paid to maintain an exceptional tree.

D. New York. Slicing a bagel meets the state’s definition of prepared food and is subject to an 8 percent sales tax. That goes for applying cream cheese as well.

B. New Mexico. If you are 100 or older and are not claimed as dependent, you are exempt from filing and paying New Mexico personal income tax.

As you enjoy the nice spring weather, spread some of this fun tax knowledge with family and friends.

4 Key Metrics to Fortify Your Business

Even the best, well-prepared business plans can unravel quickly without a process in place to evaluate performance. Creating a scorecard with quality metrics can give you the daily insight you need to successfully run a business without drowning in the details.

Create a scorecard that works

An effective scorecard gives you a holistic view of the state of your business in one report. The report consists of key financial and non-financial metrics to provide a daily look at the health of your business. To be useful, your measures should be concise, available on-demand, and include properly targeted data to help you quickly spot trends and react appropriately.

Effective business metrics to consider right now

While each ratio may help you analyze different aspects of your business, they don’t tell you the whole story. Finding the right mix of metrics for your scorecard can take some time, but the end result is a valuable tool that can take your business to the next level.

Leasing vs. Buying a Car

Knowing the tricks makes you a better decision-maker

There are many reasons for you to lease a car versus buy a car, but too often it is the auto dealer’s profit motive that determines which method you use rather than what’s best for your budget and lifestyle. To help you make an informed decision, here are some things to consider:

When to lease

When to buy

Tips to know if you decide to lease

If you think leasing a vehicle is an option for you, here are some tips to ensure you are making the best deal:

Tax Day is Here!

5 Big Questions People Are Asking

The individual tax deadline of April 15 is fast approaching. Do you have all your tax arrangements in order? Here are five important questions that people are asking.

As always, should you have any questions or concerns regarding your tax situation please feel free to call

The post April Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

New Kiddie Tax Rules

Wed, 27 Mar 2019 16:00:00 GMT

Ways to save with the new kiddie tax rules

The kiddie tax isn’t just child’s play. Due to recent tax law changes, children with substantial income may end up paying more in taxes than before. Fortunately, you can take steps now to minimize the kiddie tax impact in future years.

How the kiddie tax works

Unearned income (e.g., investment income) above an annual threshold that is received by a dependent child under 19 years old (or a full-time student under 24 years old) is taxed differently than the child’s other income. For 2018 returns, the kiddie tax threshold is $2,100.

For 2018 through 2025, the calculation is based on the tax rates in effect for trusts and estates. Notably, the tax brackets for estates and trusts are much more compressed than those used under prior law, when the excess income was taxed at the top tax rate of the child’s parents.

Because you reach the higher rates faster with more compressed tax brackets, the new kiddie tax calculation may produce a higher tax than it did in the past. For example, the top 37 percent tax bracket on 2018 returns for trusts and estates kicks in when income exceeds just $12,500, while the top rate for joint filers begins at $600,000.

Here are some tips for reducing or eliminating the kiddie tax:

Kiddie tax implications are complex. Call if you have questions about your situation.

The post New Kiddie Tax Rules appeared first on Omlin, Gunning & Associates, P.S. .

Business Credit Tips

Wed, 20 Mar 2019 21:54:00 GMT

Building a strong business credit rating

When you apply for a personal loan or home mortgage, lenders generally check your credit score. They want to know whether you’re a good risk and whether you’ll make payments on time. Once that question has been answered in the affirmative, you may be able to negotiate a lower interest rate, more advantageous payment terms or a larger line of credit.

Small companies face similar scrutiny. Although credit bureaus employ different algorithms and consider additional factors when formulating business scores, a strong credit rating can provide your company with substantial benefits. For one thing, it can help you avoid prepayment for materials and services — a good thing for cash flow. It may also place you in a better negotiating position with suppliers and qualify your business for better interest rates and credit terms.

To establish a solid business credit score, consider the following tips:

The post Business Credit Tips appeared first on Omlin, Gunning & Associates, P.S. .

Social Security Spousal Benefits

Wed, 20 Mar 2019 21:50:00 GMT

Applying for the SS spousal benefit? Get the facts

Deciding when to apply for Social Security benefits can be confusing. It’s a decision that can impact your retirement income for decades. Spousal benefits, especially, are easily misunderstood. Here are three questions to consider:

The spousal benefit rules are complicated. You’ll want to consider your spouse’s timetable for claiming Social Security benefits, your own benefits, your spouse’s likely longevity (a death can affect widow’s benefits), previous marriage history (if you expect to claim benefits based on a divorced spouse’s work record), and numerous other factors.

Check out the Social Security Administration’s Benefits Planner: Retirement page for more information. Call if you have questions about how your Social Security benefits will affect your taxes.

The post Social Security Spousal Benefits appeared first on Omlin, Gunning & Associates, P.S. .

New Alimony Rules

Wed, 20 Mar 2019 21:35:00 GMT

Divorced before 2019? How new alimony rules apply

Is alimony still deductible by payers and taxable to recipients? It depends. There is some confusion around recent tax law changes, but the prior rules generally remain in effect for divorce and separation agreements entered into before 2019.

Old alimony rules vs. new rules

Previously, someone paying alimony could deduct payments made under a legally-binding divorce or separation decree, and the recipient was required to report the corresponding amount as taxable income, if these main requirements were met:

However, the new law repeals the deduction, and inclusion in taxable income, for alimony paid under an agreement executed after 2018. Accordingly, the prior rules continue to apply to pre-2019 agreements.

If you paid alimony in 2018, it’s deductible on your 2018 return. Going forward, deductions can still be claimed for years in which payments are made under the agreement. Similarly, alimony recipients continue to owe tax on payments on 2018 returns and possibly beyond.

What happens if an existing agreement is modified in 2019 or later? The alimony generally remains deductible by the payer and taxable to the recipient. However, if the modifications expressly state that the new rules apply, future alimony is no longer deductible to the payer and taxable to the recipient.

This can be important information for bargaining in separation and divorce negotiations. Make sure that modifications to an agreement reflect the intent of the parties.

The post New Alimony Rules appeared first on Omlin, Gunning & Associates, P.S. .

Flexible Spending Accounts (FSA)

Mon, 04 Mar 2019 16:09:00 GMT

March 15: Last chance to use 2018 FSA funds?

If your company provides flexible spending accounts (FSAs) for health care expenses, a key deadline is looming: March 15. That’s the last day FSA participants can use funds allocated for 2018 if the employer allows a grace period for payouts. Or other options may apply to your FSA.

Using your FSA

With a health care FSA, you set aside pre-tax funds through regular payroll deductions. The annual limit for 2018 was $2,650 ($2,700 for 2019). These funds may be used to pay for qualified health care expenses, including health insurance deductibles, copayments and most medical and dental costs.

At the end of the plan year, any remaining amount in the account is generally forfeited under the use-it-or-lose it rule. However, an employer may offer certain options to offset this rule:

To maximize FSA benefits, make a thorough analysis of the amount needed for each year and be diligent about using funds to pay for qualified expenses. The March 15 deadline may be your deadline to use your FSA funds.

The post Flexible Spending Accounts (FSA) appeared first on Omlin, Gunning & Associates, P.S. .

March Newsletter

Thu, 28 Feb 2019 04:00:00 GMT

Tax season is in full swing. Early reports from the IRS indicate that, on average, refund amounts are down compared to last year. If this is you, the first article lays out some reasons for the change. This issue also includes a warning to business owners to file their taxes on time, tips to keep your monthly bills in check, and some exciting board games to try.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them.

This Month:

In this issue:

Oh No! Your Tax Refund is Now a Bill

If you are anticipating a nice refund this year, it may be a good idea to prepare yourself for a possible letdown. Many taxpayers will receive a smaller-than-expected refund and might even owe taxes to be paid by April 15. If this happens to you, here are some of the likely reasons:

With the uncertainty regarding whether you will receive a refund, hold off on major purchases and plans until your tax return is finalized. If possible, create a cash cushion to lessen the financial burden on you and your family. This is especially true if your withholdings are lower than last year.

Hints to Eliminate Monthly Bill Creep

Paying bills is inevitable, but paying too much is not. Are you aware of all the services you are paying for every month? Here are some tips to help you get a handle on your recurring monthly expenses:

It’s easy for your bills to spiral out of control if you don’t keep close tabs on them. Go through a review exercise every few months to ensure you aren’t paying more than necessary.

Businesses: File on Time or Pay the Price!

March 15 is the tax-filing due date for calendar year S-corporations and partnerships. While this filing deadline does not require making a tax payment, missing the due date could cost you a hefty penalty.

The penalty

The penalty is calculated based on each partial month the tax return is late multiplied by each shareholder or partner. So a tax return filed 17 days late with no tax due could cost a married couple who jointly own a small S-corporation $800 in penalties!*

Take action

Here are some ideas to help you avoid penalties:

If you haven’t filed your S-corporation or partnership return for 2018, there’s still time to get it done or file an extension. Please call if you need assistance.

Candyland Getting Stale? Try These Board Games

Board games offer a great way to unplug and spend time with family and friends. Thanks to a rise in popularity over the last few years, the options available to you are endless. If you are looking to branch out from the classic games like Monopoly or Clue, here are some excellent games to try:

The time it takes to complete each of these games can be anywhere from 30 minutes to several hours (depending on your level of investment in the game) and are recommended for ages 8 and older. In addition, each of these games has expansion packs or additional versions, so if you really like a game you can continually change the experience.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post March Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Lowering the Tax Bill

Tue, 26 Feb 2019 00:04:00 GMT

Big 2018 tax bill? 4 ways to owe less next year

Recent tax legislation includes a bevy of tax breaks for individuals. However, as you may discover when you’re filing your 2018 return, not everyone comes out ahead. Loss of personal exemptions, cutbacks in deductions and the suspension of others mean you may end up paying a lot more tax than you thought you would.

Fortunately, you don’t have to use the same tax plan you did in 2018. Instead, consider incorporating these four strategies now to help lower your tax bill next time:

Call to set up a meeting to discuss the best tax strategy for your situation for 2019.

The post Lowering the Tax Bill appeared first on Omlin, Gunning & Associates, P.S. .

Part-Time Employees

Tue, 19 Feb 2019 02:58:00 GMT

Are you a part-time or seasonal worker? Although you generally must comply with the same tax rules as full-time workers, you may face special challenges at tax return time. Here are five potentially tricky tax areas:

“Tax Tips” are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in “Tax Tips,” or if you’d like to be on our mailing list to receive other tax information from time to time, please contact our office.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

The post Part-Time Employees appeared first on Omlin, Gunning & Associates, P.S. .

Penalty-free Loans

Wed, 13 Feb 2019 01:57:00 GMT

February 11, 2019

Need cash? You may have penalty-free options

Suppose you need cash quickly. Then you remember that you have an IRA. While you can’t take out a loan from your IRA, you may have other options — including access to funds short-term without any tax consequences.

You’ll need to consider the best solution for your situation. Call if you have questions about tax consequences surrounding IRA withdrawals and contributions.

The post Penalty-free Loans appeared first on Omlin, Gunning & Associates, P.S. .

February Newsletter

Tue, 05 Feb 2019 16:52:00 GMT

All systems go for tax season! Filing season kicked off on Jan. 28 and tax returns are pouring into the IRS. Now that the IRS is accepting tax returns, fraudsters are actively seeking out taxpayer information to file fake returns and claim fraudulent refunds. Please review the tips for how to protect yourself from these scammers. This issue includes remedies for common financial mistakes, tax-free benefit ideas you can offer your employees, and five things every high school senior should know.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them.

This Month

February 14:
Valentine’s Day

February 18:
Presidents’ Day

Reminders:
Receive all 1099s and W-2s
Set up tax appointment
Rebalance investment portfolios

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post February Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Retiring in Bear Market

Tue, 05 Feb 2019 16:01:00 GMT

February 2019

Tips for retiring into a bear market

You’re approaching that long-awaited day when you can say goodbye to full-time employment. But you’ve been listening to the dire predictions of financial pundits. Not exactly encouraging stuff. Should you continue to plug along at work and ride out the storm? Or should you retire as planned, even if the market’s headed for a significant downturn?

Tough questions. Unfortunately, there’s not a one-size-fits-all answer.

Take a deep breath. Forget about the stuff you can’t control: the stock market, interest rates, government programs, the world economy… etc. One of the biggest hazards of retiring into a declining market is “sequence of returns” risk. That’s the problem of taking withdrawals — especially early in retirement — from a portfolio that’s headed in the wrong direction. Once shares are sold, fewer shares are available to profit from future market recoveries.

Nevertheless, you can take steps to cushion the transition even when retirement accounts are performing poorly. Here are four suggestions:

The post Retiring in Bear Market appeared first on Omlin, Gunning & Associates, P.S. .

Cutting Business Costs

Tue, 05 Feb 2019 15:59:00 GMT

February 2019

6 tips to cut business costs in 2019

Early in the year is a perfect time to reassess your business, including organizational structure, policies, marketing and more. Reviewing company costs can also pay huge dividends throughout the year if you can create an expense-cutting plan and stick to it. Here are a few ideas for reducing costs with your bottom line in mind:

Take cost-cutting measures now to help your company reduce wasteful spending and save big.

The post Cutting Business Costs appeared first on Omlin, Gunning & Associates, P.S. .

Married Filing Jointly or Separately?

Mon, 04 Feb 2019 16:13:00 GMT

February 4, 2019

Consider this when choosing to file jointly or separately

If you’re married, it’s better to file a joint tax return, rather than separately … right? That’s usually true, but not always. It depends on your situation.

Deductions may play a role in your return status

Generally, the tax rate structure encourages couples to file joint returns. Nevertheless, you may be better off filing separately if one spouse has a disproportionate amount of expenses subject to a deduction “floor.”

For example, say your annual adjusted gross income (AGI) is $150,000, while your spouse is a part-timer with an AGI of $20,000 a year. In 2018, you had unreimbursed medical expenses of $1,000, but your spouse incurred $9,000. Under recent legislation, the floor for deducting medical expenses in 2018 is 7.5 percent of AGI. (It reverted to 10 percent of AGI in 2019.)

If you file a joint return, you get no medical deduction even if you itemize, because your total expenses of $10,000 doesn’t exceed 7.5 percent, or $12,750, of your combined AGI.

However, things change if you and your spouse file separately. While you still won’t get a deduction, your spouse will be able to deduct the excess above 7.5 percent of their AGI, or $1,500. So your spouse’s deduction is $7,500 — a big difference!

Filing separately wont help with state and local taxes (SALT)

The new law limits the annual SALT deduction to $10,000 for 2018. So if you live in a high-tax state, you may think that filing separately would provide a higher combined SALT deduction. No so. The annual limit is $5,000 for married couples filing separately.

For instance, if you pay $9,000 in SALT and your spouse pays $1,500, you can deduct $10,000 if you file jointly. But filing separately would provide a $5,000 deduction for you and $1,500 for your spouse, for a total deduction of only $6,500.

Truth be told, your return status depends on your unique circumstances. Call for help with determining the best approach on your tax return.

The post Married Filing Jointly or Separately? appeared first on Omlin, Gunning & Associates, P.S. .

Refund to Retirement

Mon, 28 Jan 2019 17:22:00 GMT

January 28, 2019

Use your tax refund for an IRA contribution

You may already know that contributions to a traditional IRA may be deductible on your personal tax return (subject to certain limits). You’re allowed to deduct a contribution on your 2018 return that is made as late as April 15.

But are you aware that you can use this year’s tax refund to make your IRA contribution for the 2018 tax year?

How to fund your IRA with a refund

The IRS says it’s OK to use this year’s tax refund to make your 2018 IRA contribution as long as you meet the April 15 deadline. If you want to use this strategy, however, you’ll want to file your tax return early.

Here’s how it works: You can contribute up to $5,500 to a traditional IRA for 2018Â ($6,500 if you’re age 50 or older). All you have to do is claim the IRA contribution on your 2018 return and then ensure the same amount is deposited in your IRA by April 15.

The ability to deduct contributions is phased out if you (or your spouse) actively participate in an employer’s retirement plan, and your income exceeds a certain level. For instance, the deduction is gradually reduced for a single filer with a modified adjusted gross income (MAGI) between $63,000 and $73,000 on a 2018 return. Further calculations to determine your maximum contribution amount will be needed if your income falls inside a phaseout range.

The IRA refund strategy is especially beneficial for taxpayers who are struggling to make ends meet, but still want to save for retirement

Extensions are not allowed for IRA contributions, so don’t procrastinate! Typically you can file your tax return starting as early as late January.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

The post Refund to Retirement appeared first on Omlin, Gunning & Associates, P.S. .

Tax-Free Employment Awards

Mon, 21 Jan 2019 16:15:00 GMT

January 21, 2019

Reward employees with tax-free achievement awards

How can you motivate employees? One way is to set up an achievement award plan that rewards length of service or safety measures. If certain requirements are met, both your company and the recipients can collect tax breaks.

Achievement awards 101

Generally, employees aren’t taxed on tangible personal property given under an achievement award plan.

Recent tax legislation clarifies that “tangible personal property” does not include cash, cash equivalents, gifts cards, gift coupons, gift certificates (other than those where from the employer pre-selected or pre-approved a limited selection) vacations, meals, lodging, tickets for theatre or sporting events, securities and other non-tangible personal property.

However, items like electronic devices, watches, golf clubs and jewelry do qualify. The cost of these items is deductible by the company and tax-free to the employees.

To qualify for this favorable tax treatment, these requirements must be met:

If a company uses an award plan that doesn’t meet these qualifications, an employee may receive only up to $400 in awards without owing any tax. The limit is raised to $1,600 for awards through a qualified plan. (Any excess is taxable to the employee and can’t be deducted by the employer.)

There are two additional requirements for qualified plans:

Call if you have questions about setting up an tax-friendly achievement award plan for your employees.

The post Tax-Free Employment Awards appeared first on Omlin, Gunning & Associates, P.S. .

Tax-Deductible Employee Reimbursements

Mon, 14 Jan 2019 16:16:00 GMT

January 14, 2019

Help your employer keep your business expenses tax-deductible

Under recent tax legislation, the deduction for miscellaneous expenses has been eliminated, effective for 2018 through 2025. This wipes out any write-off for employee business expenses you pay out of your own pocket.

However, employers will often agree to authorize a plan that reimburses business expenses, like those involving travel. As a result, reimbursements you get from your employer may be tax-free to you, while the payments remain deductible by the company.

Your employer’s accountable plan

Your employer may authorize a plan that reimburses travel expenses by using an accountable plan, which helps ensure that expenses qualify for favorable tax treatment. The plan complies with tough IRS rules requiring substantiation for the date, time, place, amount and business purpose of business travel. Similarly, an accountable plan may be used to reimburse employees for the cost of tools, uniforms or other expenses.

In order for an accountable plan to qualify for tax breaks, it must meet the following requirements (and you can help):

If the accountable plan doesn’t comply with these rules, payments won’t be deductible by your company. Even worse, you and other employees will be taxed on the reimbursements — even though you incurred the costs doing your job! Check with accounting to ensure the requirements are met.

The post Tax-Deductible Employee Reimbursements appeared first on Omlin, Gunning & Associates, P.S. .

Risks of a Franchise

Mon, 07 Jan 2019 17:26:00 GMT

January 2019

Considering a franchise? Review the risks first

Franchise opportunities abound. A solid franchise company can offer a proven business model, staff training, advertising expertise and many other benefits for jumpstarting a business. But whether you’re selling fast food or repairing cars, it makes sense to identify and scrutinize potential risks before you sign a contract. Here’s what to look out for:

Franchise companies can help you build a successful business. But don’t forget to analyze the details before signing up.

“Business Tips” are published monthly to provide useful business information. Return to this site every month for helpful suggestions on how to make your business more profitable. If you would like more information on anything in “Business Tips,” or if you’d like to be on our mailing list to receive other business, tax, or financial information from time to time, please contact our office.

The business information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

The post Risks of a Franchise appeared first on Omlin, Gunning & Associates, P.S. .

Investment Blunders

Mon, 07 Jan 2019 17:24:00 GMT

January 2019

3 investment blunders everyone should avoid

Whether you’re a seasoned investor or new to the game, you’ll want to make a conscious effort to avoid these three common investment mistakes:

The post Investment Blunders appeared first on Omlin, Gunning & Associates, P.S. .

2018 Tax Records

Mon, 07 Jan 2019 16:18:00 GMT

Tax Tip from the week of January 07, 2019

Reminder: Tax records needed for 2018 returns

Tax filing season kicks off in a few weeks. What records should you assemble? Due to recent tax law changes, you may not need all the records you’ve kept before. Here are several key areas to focus on:

Under the new legislation, you may not need records this year for miscellaneous expenses, many casualty and theft losses, moving expenses and home equity debts. Call if you have tax record questions about your particular situation.

The post 2018 Tax Records appeared first on Omlin, Gunning & Associates, P.S. .

January 2019 Newsletter

Sat, 05 Jan 2019 16:33:00 GMT

T he new year is upon us! As you finish cleaning up the champagne glasses and confetti, now is the time to start thinking about your tax preparation plan. This issue is packed with useful information including tips to receive a faster refund. In addition, there are ideas to manage cash flow for your business, things to consider when living with a smart speaker, and age-appropriate suggestions for teaching your children how to handle financial matters.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them.

This Month

January 1 :
New Year’s Day

January 15:
4th Quarter Estimated Payments Due

January 21:
Martin Luther King Jr. Day

Start tax planning for the new year:
Adjust withholdings
Organize filing records
Schedule tax consultation
Rebalance investment portfolio

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

The post January 2019 Newsletter appeared first on Omlin, Gunning & Associates, P.S. .

Taking Out a Loan?

Wed, 05 Dec 2018 16:02:00 GMT

Financial Tip from December 2018

Taking out a loan? Answer 3 questions first

For many Americans, debt has become a way of life. A recent LendingTree analysis of the latest Federal Reserve data showed that total U.S. consumer debt is on track to exceed $4 trillion this year. The analysis showed Americans collectively owe more than 26 percent of their monthly income on consumer debt, including car loans, credit card accounts and student or personal loans.

Living within one’s means may seem quaint or old-fashioned, but it’s the most tried-and-true way for most people to acquire financial security. Before you take out a loan for that shiny sedan or charge up your VISA card for the latest gadget, ask yourself three crucial questions:

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Employee Retention

Wed, 05 Dec 2018 15:54:00 GMT

Business Tip from December 2018

How not to lose your best employees

In today’s tight labor market, finding and retaining top talent can be daunting. Ideally, you’ll discover and hire workers who fit your company culture, sign on to its mission, and stick around for the long haul. But retaining your “best and brightest” can be a balancing act. Here are five suggestions:

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December 2018 Newsletter

Wed, 28 Nov 2018 23:53:00 GMT

Major Tax Deadlines

For December 2018

Deductible gifts
Capital gains/losses
Charitable giving
Dividend income

Note: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business.

Payroll tax deposits: Employers generally must deposit Form 941 payroll taxes (income tax withheld from employees’ pay and both the employer’s and employees’ share of FICA taxes) on either a monthly or semiweekly deposit schedule. There are exceptions if you owe $100,000 or more on any day during a deposit period, if you owe $2,500 or less for the calendar quarter, or if your estimated annual liability is $1,000 or less.

• Monthly depositors are required to deposit payroll taxes accumulated within a calendar month by the fifteenth of the following month.
• Semiweekly depositors generally must deposit payroll taxes on Wednesdays or Fridays, depending on when wages are paid.

For more information on tax deadlines that apply to you or your business, contact our office.

6 Last-Second Money-Saving Tax Moves

As 2018 winds down, there is still time to reduce your potential tax obligation. Here are some ideas to make your 2018 tax return less of a burden on your wallet:

This is a short list of some of the ideas you can use to lower your tax obligation in 2018. If interested, please call for help with reviewing your situation.

Retirement Contributions Get a Boost in 2019

For the first time since 2013, the IRS is raising the contributions limits for IRAs. The maximum contribution for 401(k) accounts and IRAs is increasing by $500 for 2019. If you have not already done so, now is the time to plan for contributions into your retirement accounts in 2019. Check out the tables below for the new contribution limits and Social Security increases:

Don’t forget to account for any matching programs offered by your employer as you determine your various funding levels for next year.

It’s Your Money. Get it Back NOW!

According to Credit Karma, over $40 BILLION of unclaimed property is currently being held by state governments. That’s a staggering amount of money — enough to buy half of the National Football League franchises. Not included in that figure is property sitting with federal agencies and other organizations. So what exactly is unclaimed property and how do you find out if you have any? Here is what you need to know:

What is considered unclaimed property?

There are two main types of unclaimed property:

(1) IOUs. Money that is owed to you that you haven’t claimed.

(2) Forgotten funds. Money sitting untouched in an account for an extended amount of time.

Specific types of unclaimed property include back wages, life insurance, pensions, tax refunds, bank accounts, money orders, gift certificates and security deposits. For example, many states require banks to turn over funds from checking accounts that have been dormant for over three years.

Tips for managing unclaimed property

Any unclaimed property due to you is rightfully yours and should already be in your pocket. Perform regular searches to ensure that your funds aren’t sitting in a government account.

The New Business Deduction

Stop worrying and start preparing

A new deduction is available to businesses with qualified business income (QBI). While that’s great news, new deductions (especially ones with lots of rules) can bring anxiety and confusion. Never fear! Ensuring you receive a maximum deduction will come down to providing the proper information. Here is some knowledge to help you cut through the confusion:

What is the QBI deduction?

In short, it’s a 20 percent deduction against ordinary income, taken on your personal tax return, that reduces qualified business income earned for most pass-through businesses (sole proprietorships, partnerships and S-corporations). It’s not an itemized deduction, so you can take it in addition to the standard deduction. To qualify without limitations, your total taxable income needs to be below $157,500 ($315,000 for married couples) for 2018. If your income exceeds the threshold, it gets complicated.

What you need to know:

With proper planning and preparation, you can rest easy knowing that obtaining your shiny, new QBI deduction is in good hands.

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

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DPAD Alternatives

Tue, 13 Nov 2018 17:54:00 GMT

November 12, 2018

You still have options after the DPAD repeal

As you may of heard, a special deduction designed to stimulate the U.S. manufacturing sector and various other industries — the domestic production activity deduction (DPAD) — was repealed after major tax legislation at the end of 2017.

The DPAD often ended up being a valuable deduction, equal to 9 percent of a company’s qualified production activities income (including cost of goods, deductions, expenses and losses). That’s why it’s leaving a pretty big void for some businesses.

This may be especially true if you have a seasonal business relying heavily on holiday gift-shopping. While you may have gotten near-immediate tax benefits for producing goods at year-end in the past, that’s no longer the case.

Other ways to save

Nevertheless, there are other new tax law provisions that may be able to pick up some of the slack from losing the DPAD. Here are a few to consider:

Call if you have questions about implementing year-end strategies that optimize these tax benefits.

The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

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End of the Year Tax Planning

Wed, 07 Nov 2018 00:38:00 GMT

November 5, 2018

10 tax-savvy business moves to make before 2019

Even though 2019 is just around the corner, you still have time to take action and save on your business tax bill. Here are 10 ideas to consider:

Call if you have questions about your year-end business tax plan.

The post End of the Year Tax Planning appeared first on Omlin, Gunning & Associates, P.S. .

15 Year or 30 Year Mortgage?

Wed, 07 Nov 2018 00:35:00 GMT

November 2018

Deciding on a 15- or 30-year mortgage? Consider these factors

You’re in the market for a house. Let’s assume you find a great place that’s selling for $240,000 and meets all your criteria — safe neighborhood, good schools, big enough to accommodate your growing family, and close to your workplace.

With a 20 percent down payment ($48,000) and estimated closing costs of $3,000, you’ll need to cover the balance of $189,000 with a mortgage. So you talk to your banker and learn that you qualify for a 30-year mortgage with an annual interest rate of 4.8 percent. You also qualify for a 15-year mortgage with a lower interest rate of 4.4 percent. Both mortgages are “fixed,” meaning the interest rate won’t change over the payback period.

Assuming that you plan to make monthly payments for the entire term of either loan, should you opt for the longer mortgage or the shorter? These three primary factors are worth considering:

You may also consider making extra principal payments on a 30-year mortgage. You’ll pay off the balance sooner and retain a measure of flexibility.

“Financial Tips” are published monthly to provide useful financial information. Return to this site every month for helpful suggestions on how to reach your financial goals. If you would like more information on anything in “Financial Tips,” or if you’d like to be on our mailing list to receive other financial, tax, or business information from time to time, please contact our office.

The information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

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Avoiding Internal Theft

Wed, 07 Nov 2018 00:33:00 GMT

November 2018

Squelch internal theft with these basic controls

If your employees are stealing money from petty cash or strolling out the door with computers, you probably won’t need to hire a high-priced forensic auditor to catch them. Unfortunately, most internal theft isn’t so obvious.

By implementing a few tried-and-true controls, however, your business can establish effective safeguards against a wide range of abuses. Here are three common embezzlement schemes and what you can do to protect your business against them:

Of course, even the strongest controls can be circumvented. Your company’s most basic and effective control starts with the hiring process. Conducting thorough background checks and employing workers with a proven history of integrity is often your greatest defense against fraud.

The business information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.

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November 2018 Newsletter

Tue, 06 Nov 2018 19:59:00 GMT

Major Tax Dealines

For NOVEMBER 2018

During November: It’s wise to estimate your 2018 income tax liability and review your options for minimizing your tax bill. Call us if you’d like to schedule a tax-planning session.

Note: Businesses are required to make federal tax deposits on dates determined by various factors that differ from business to business.

For more information on tax deadlines that apply to you or your business, contact our office.

5 Annual Tax Essentials

The more things change the more they stay the same. This is especially true when it comes to reviewing your tax situation. Mark your calendar to review these essential items each year to ensure you are not missing something that could cause tax trouble when you file your tax return:

Understanding your current situation and having a plan will make for a smooth tax filing process and maximize your tax savings.

Retirees Should Check Withholdings…or Else…

According to a recent announcement by the IRS, retirees might not be withholding enough for taxes this year. This is due to vast tax changes in 2018, making old withholding levels obsolete. The IRS is urging retirees to check their withholdings now and make adjustments if needed to avoid penalties.

Could it be you?
How do you know if you are withholding enough? While the IRS offers a new withholding calculator online, it’s designed for employees who are paid wages – not a great option for retirees. The only good way to avoid a tax surprise is to conduct a projection based on your specific situation. You will need to consider taxes already paid, taxes yet to be paid, and estimate total income and deductions to come up with an accurate projection.

Steps to take
If the results of the projection show that you are lagging behind, you still have a bit of time to adjust withholdings or make estimated tax payments. Here are some ways to do this:

Remember, penalties can be added to your taxes if you don’t pay enough during the year, so it’s important to review your withholdings as soon as possible to avoid a surprise when you file your taxes. Sound complicated? It can be. Please call if you want help evaluating your situation.

The IRS Loves Your Business … and That is NOT Good

The IRS continues to focus their audit activities in key small business areas. The wise business owner is well advised to be able to defend the following five areas to keep the IRS at a comfortable distance:

Business or hobby? Be ready to provide proof your business is truly a business and not a hobby. Those who fail in the eyes of the IRS can have their expense deductions severely limited, while still required to report the income. Make sure you can answer and provide documentation for these four questions:

Reasonable shareholder salary . S corporations are in the unique situation where some compensation is excluded from payroll taxes. Many businesses take this too far. The IRS is looking closely at businesses who avoid paying a reasonable salary in order to lower their Social Security and Medicare bills. When determining salaries for shareholders, consider their experience, duties, responsibilities and time devoted to the business. Once you have a picture of their ongoing contributions to the business, research comparable positions and salary ranges to pinpoint a fair salary. Save your findings and calculations as backup to provide in the event of an audit.

Contractors or employees? Make sure consultants and other suppliers are not employees in disguise. The IRS looks at how much control you have over the work being done – the more control you exert the higher likelihood you may have an employee versus a contractor. Penalties can be very steep if the IRS decides your consultant is really your employee. If in doubt, ask for a review.

Expenses for meals and entertainment. The IRS is now disallowing any entertainment deductions, even if there is business conducted before or after the event. That means business meal documentation is now more important than ever and should include receipts, who attended the meal, and the business purpose of the meal. Bringing food in for business lunches rather than going out is a safe way to show business intent. If you have an event with both entertainment and food included, get two receipts – one for the entertainment and one for the food.

File your Forms W-2 and Forms 1099. Don’t forget to file all required 1099s and W-2s. Most of them are due on or before Jan. 31. The IRS is penalty crazy in this area with up to $270 per missing or incorrect form.

Knowing what the IRS is looking for helps you prepare should it turn its focus to your business.

Turkey Trivia

With Thanksgiving right around the corner, here is a quiz to test your turkey knowledge and provide some facts you can use to stump your friends and family:

Q. Where do wild turkeys sleep?

a. In trees
b. On the ground in brush or tall grass
c. In burrows
d. On large rocks

A. a. In trees. Turkeys spend their nights sleeping in trees mostly for protection from predators. The only exception is when female hens risk danger to stay with their eggs on the ground during the roughly 28 day incubation period.

Q. How far away can a turkey see movement?

a. 20 feet
b. 50 feet
c. 50 yards
d. 100 yards

A. d. 100 yards. Turkeys have excellent vision — maybe three or four times better than humans. Because their eyes are on the sides of their head, they have periscope vision and can see 360 degrees with the simple twist of their neck.

Q. Which U.S. president was the first to offer an official pardon to a Thanksgiving turkey?

a. Abraham Lincoln
b. Harry Truman
c. John F. Kennedy
d. George H.W. Bush

A. d. George H.W. Bush. While there were informal pardons and stories about turkeys spared by U.S. Presidents dating back to Abraham Lincoln, the White House records show the first official pardon was granted by George H.W. Bush in 1989.

Q. What is the specific name for a baby turkey?

a. Chick
b. Poult
c. Peep
d. Cygnet

A. b. Poult. Once a poult frees itself from the egg, it can start following its mother hen away from the nest within 12-24 hours.

Q. Approximately how many turkeys are consumed each year at Thanksgiving?

a. 19 million
b. 33 million
c. 46 million
d. 62 million

A. c. 46 million. According to the National Turkey Federation, Thanksgiving turkeys account for 18 percent of all turkeys raised on American farms this year.
Now you are in the know about some of the unique habits of our popular holiday centerpiece. Enjoy your Thanksgiving!

As always, please feel free to call if you have any questions or concerns regarding your tax situation.

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