Both traditional and Roth IRAs provide generous tax breaks but it’s a matter of timing when you get to claim them. Traditional IRA contributions are tax deductible on both state and federal tax returns for the year you make the contribution, while withdrawals in retirement are taxed at ordinary income tax rates. Roth IRAs provide no tax break for contributions, but earnings and withdrawals are generally tax-free. So with traditional IRAs, you avoid taxes when you put the money in and with Roth IRAs, you avoid taxes when you take it out in retirement. The decision to use a Traditional, Roth, or combination of both is best addressed by a thorough discussion with your CPA and financial advisor.
Even if you are a person of modest means, you have an estate—and several strategies to choose from to ensure your assets are distributed according to your wishes and in a timely fashion. The right strategy depends on your individual circumstances. For some, a living trust can be a useful and practical tool. For others, it may be a waste of time and money. When choosing, remember that one size does not fit all, and for many it comes down to a combination of both. What is right for one person may not be right for everyone. Your estate plan should be prepared in a way that best meets the needs of you and your family. Consulting with a competent attorney can help you make the right decision.
Most small-business owners share a variety of critical priorities, such as managing taxes, attracting and rewarding valued employees, and establishing a long-term strategy to ensure their own financial security. Fortunately, small-business owners also share an option that could help address all of those goals: sponsoring a workplace retirement plan. There are three broad categories of retirement plans available to small businesses: SEP IRAs, SIMPLE IRAs, and Qualified Plans (ie 401k, profit sharing, etc). The one you choose should reflect your company’s size, financial situation, and ability to comply with regulatory oversight and administrative responsibilities. You may want to consult a financial professional to help you choose a plan that’s right for you.
As an employee, a lower number claimed means more income taxes that will be withheld from your paycheck. If you are single with no dependents you are generally recommended to claim 0 or 1, but every situation is different.
Individuals with a 12/31 year end, which is almost everyone, have a due date of April 15th. If the 15th falls on a Friday, Saturday or Sunday, the due date will be pushed back to the following Monday. The 2016 due date to file your 2015 individual taxes is Monday, April 18th.
Individuals benefit from filing joint almost all of the time. You should consider asking your preparer for a comparative analysis.
There are numerous tax benefits that you may not know about. These benefits can be forfeited by avoiding a tax specialist. An accountant can also ensure compliance.
If you have an amount due while filing your taxes, you have two options for the following year. One option is to have more withheld from your paycheck, which means less take-home pay throughout the year. The other option is to make tax estimate payments which are due quarterly. If you can’t afford your current tax bill, interest will start accruing and you must make payments or settle with the IRS.
There are two education expense credits. The American Opportunity Credit is maxed out at $2,500 per student, per year, but can only be claimed by undergraduates for four years. The Lifetime Learning Credit is maxed out at $2,000 per return, per year, but is unlimited as to the number of years that it can be claimed. Please note: there are special considerations for WI residents.
Top business write-offs include: interest expense deduction, depreciation and amortization, and auto expenses. Auto expenses can be taken by two methods: the actual expense method or the standard mileage rate method.
A partnership is a business consisting of 2 or more partners. The partnership itself doesn’t pay any taxes, but rather the income is passed onto the owners and they pay the tax on their income on their individual return.
C-Corporations are subject to taxation at the corporate level as well as on the individual level, whereas S-Corporations, much like partnerships and sole proprietorships, are only taxed on the individual level.
QuickBooks Desktop offers several software options – Enterprise, Premier, and Pro. QuickBooks Enterprise is the most robust system and is geared toward businesses that need to store a large number of inventory items, customers and vendors. QuickBooks Premier has several specialization options including but not limited to QuickBooks for Contractors, Retailers and Wholesalers. QuickBooks Pro is the most basic desktop software available but still is able to cover the needs of many small business owners. For more information on choosing the right software for your office, feel free to contact one of our ProAdvisors.
QuickBooks Online allows for QuickBooks access from any computer at any time. If you would like to access QuickBooks from your home computer as well as several different business computers, QuickBooks Online may be a good option for you. It is available for purchase using a monthly subscription with a variety of different levels of service based on the needs of your company.
Our firm has several QuickBooks ProAdvisors on staff that are available for our clients’ benefit. Our ProAdvisors are certified in a variety of QuickBooks programs and also have access to software discounts exclusively available to our clients! Additionally, ProAdvisors have the ability to reach out to the QuickBooks Support Team on behalf of our clients for assistance with unique software issues and troubleshooting.
Our firm offers 1-on-1 QuickBooks training sessions with new bookkeepers to get them on track to help your business run smoothly. We can also provide training to existing bookkeepers who want to brush up on the QuickBooks options they may have forgotten about.
Affordable Care Act FAQ
The Patient Protection and Affordable Care Act (also known as the Affordable Care Act (ACA) or Obamacare) is a comprehensive health care reform law enacted in March 2010. The goal of the law is to provide at least minimum health care benefits to all US citizens and legal residents.
Beginning in 2014, individuals and any dependent of the individual are required to have and maintain minimum essential health insurance each month or pay a shared responsibility penalty if they do not qualify for an exemption. Please see your tax professional to determine if you qualify for any exemption from the shared responsibility penalty.
Minimum essential coverage is health insurance that complies with the provisions and mandates required by the Affordable Care Act for insurance in the individual and small group markets. Please see your tax professional to identify whether or not your health coverage is considered minimum essential health coverage.
If an individual and any dependent of the individual do not have minimum essential coverage for the full year they may be subject to a shared responsibility penalty. The penalty is assessed on the individual’s tax return and is calculated monthly for each month the individual and dependent do not have minimum essential coverage. In 2015, the penalty is equal to the greater of $325 for each adult and $162.50 for each child (up to $975 per family) or 2% of household income above the federal tax filing threshold.
The Affordable Care Act has many provisions that affect employers and employer-sponsored health plans. If an employer is an applicable large employer, they are required to offer their full-time employees (and their dependents) the opportunity to enroll in a health plan that provides affordable insurance that provides certain minimum value or pay an employer shared responsibility penalty. Please see your tax professional to determine if you are an applicable large employer and if your health plan is compliant with the many provisions of the Affordable Care Act.
An applicable large employer will be subject to the employer shared responsibility penalty if they do not offer affordable minimum essential coverage to at least 95% (70% for 2015) of their full-time employees. Please see your tax professional to determine if you are subject to this penalty.
An applicable large employer is an employer who employed on average of at least 50 full-time employees, including full-time equivalent employees on business days during the preceding calendar year. Please see your tax professional to determine if you are an applicable large employer.
Have a question that is not answered here? Contact us!