Employers: Be aware (or beware) of a harsh payroll tax penalty
If payroll taxes withheld from employees’ paychecks aren’t remitted to the IRS, a severe tax penalty can be personally imposed on “responsible” individuals. The IRS can assess a penalty of 100% of the unpaid tax amount on shareholders, owners, directors, officers, employees and others. The Trust Fund Recovery Penalty (or “100% Penalty”) is assessed when there’s a willful failure to collect and pay over to the IRS taxes that are withheld from employees. Unlike some liability protections that a corporation or company may have, business execs can’t escape personal liability for payroll tax debts. Contact us for information about making tax payments.
Targeting and converting your company’s sales prospects
Identifying and converting a steady flow of prospects can safeguard a business against sudden sales drops or, better yet, push its profitability to new heights. How can you accomplish this? First, continually work on lead generation. Actively involve your marketing department and consider customer relationship management software. Qualify prospects according to criteria such as fulfillable needs and a timely desire to buy. Develop questions to encourage prospects’ interest, and devise well-researched solutions to their problems. Contact us for more information.
Tax-smart domestic travel: Combining business with pleasure
You may be going on a business trip in the United States this summer that you can tack some vacation days onto. If you’re a business owner or self-employed, you may be able to deduct some of your expenses. Transportation costs to and from the business activity location may be 100% deductible if the primary reason for the trip is business. Out-of-pocket expenses for business days are generally fully deductible. Examples include lodging, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. It’s important to keep good records in case you’re audited. Additional rules and limits apply. Contact us if you have questions about your situation.
The chances of IRS audit are down but you should still be prepared
The IRS just released its audit statistics for the 2018 fiscal year, and fewer taxpayers had their returns examined compared with prior years. Overall, just 0.59% of individual tax returns were audited (down from 0.62% in 2017). This was the smallest number of audits conducted since 2002. However, even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them. The easiest way to survive an IRS audit is to prepare. On an ongoing basis, systematically maintain documentation (invoices, bills, canceled checks, receipts, or other proof) for all items reported on your returns. Contact us if you receive an IRS audit letter.
Clean up the A/R before putting the practice on the market
Cleaning up A/R likely will yield in additional payments, so the additional time and resources devoted to this activity should pay for itself in 30-60 days.
Maintaining a healthy revenue cycle means tapping into the consumer mentality
Increasingly, revenue cycle health now requires meeting patients halfway or more, with convenience and access at the center.
Revenue cycle advice: Whether bills are paper or digital, get paid upfront
In an age of squeezed operating margins, consumerism must be combined with what works to get paid faster and to collect all that is owed.
Avoid false economies that undermine your practice business
Before making any kind of cost-cutting decision, considering whether ceteris paribus really applies and can help avoid a mistake that can be very costly over the long haul. And the same thing applies to everyday business investments, such as upgrading equipment or adding technology. When the out-of-pocket cost is significant, it’s always tempting to “save” by delaying needed spending. But the initial cost mustn’t be the only consideration, because making these improvements can have a significant positive impact on productivity and profitability.
Hire your children this summer: Everyone wins
If you’re a business owner with children, hiring them for the summer can provide many benefits. One is tax savings. By shifting business income to a child as wages for services performed, you can turn your high-taxed income into tax-free or low-taxed income. You may also be able to realize payroll tax savings (depending on the child’s age and how your business is organized) and enable retirement plan contributions for the children. Everybody wins! Many rules apply. Contact us to learn more.
Selling your home? Consider these tax implications
Depending on where you live, you may see “for sale” signs dotting the landscape. Spring and summer are the optimum seasons for selling a home. So it’s a good time to review the tax implications. If you’re selling your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain, so long as you meet certain tests. For example, you must have owned the property for at least two years during the five-year period ending on the sale date. A loss generally isn’t deductible, but if part of your home is rented out or used exclusively for your business, the loss attributable to that portion might be. Contact us with questions.