Change management doesn’t have to be scary
Change management is a term used to describe the philosophies and processes an organization uses to manage change. Putting this concept into practice in your company may seem scary, but it doesn’t have to be. First, set a tone for accepting change by hiring flexible candidates, preparing them for future transformations during on-boarding and discussing change in performance reviews. View problems or setbacks as opportunities rather than triggers for conflicts. Above all, promote and manage change from the top down. Contact us to discuss the concept further.
Buy business assets before year end to reduce your 2018 tax liability
Investing in business assets is a traditional and powerful year-end tax planning strategy, and it might make even more sense in 2018. Sec. 179 expensing and bonus depreciation both allow an immediate deduction for the cost of eligible asset purchases, rather than depreciating them over a number of years. The TCJA increases potential deductions under these breaks and expands the assets that are eligible. To qualify, you must place assets in service by the end of the year. So there’s still time to make purchases and reduce your 2018 taxes. Contact us to learn more.
Time for NQDC plan deferral elections
If you’re an executive or other key employee, your employer may offer you a nonqualified deferred compensation (NQDC) plan, which pays you in the future for services currently performed and allows deferral of income tax. But NQDC plans must meet many requirements. One is that, if you wish to defer part of your 2019 compensation, you generally must make the election by the end of 2018. Questions? Contact us. We can answer them and help you determine what, if any, steps you need to take before year end to defer taxes and avoid interest and penalties.
Taking the hybrid approach to cloud computing
Many businesses struggle to decide whether to use a public cloud computing solution or invest in a private cloud. Why not both? Under the hybrid approach, a company sets up an infrastructure that uses a public cloud for accessing apps and storing less sensitive data while relying on one or more private clouds to store and protect confidential data. Going this route may be effective, but there are risks. You’ll likely have to spend more on procuring cloud access and advanced IT support to maintain the infrastructure. We can help you explore the idea further.
Donate appreciated stock for twice the tax benefits
Did you know that you may be able to enjoy two tax benefits if you donate long-term appreciated stock instead of cash? First, if you itemize, you can claim a charitable deduction equal to the stock’s fair market value. Second, you can avoid the capital gains tax you’d pay if you sold the stock. But the charitable deduction will provide a tax benefit only if your total itemized deductions exceed your standard deduction, and the TCJA nearly doubled the standard deduction. Also, additional rules and limits apply. Contact us to learn more.
Research credit available to some businesses for the first time
The TCJA didn’t change the research credit, but it has an impact on the credit. Previously, corporations subject to alternative minimum tax (AMT) couldn’t offset the research credit against AMT liability, which erased the credit’s current benefits. By eliminating corporate AMT, the TCJA removed this obstacle. Pass-through businesses can still claim the credit against AMT if their average gross receipts are $50 million or less. And qualifying start-ups without taxable income can still claim the credit against up to $250,000 in payroll taxes. Contact us for details.
Reduce insurance costs by encouraging employee wellness
The safer your workplace, the less likely you’ll incur high workers’ compensation premiums. But think about the impact of employee wellness on other insurance costs, too. From a physical well-being standpoint, a formal wellness program can encourage healthier life choices and thereby reduce health coverage costs. In terms of mental health, providing the right training and offering an employee assistance program can create a more positive work environment and lessen the likelihood of accidents and lawsuits that drive up insurance costs. Contact us for more info.
Could “bunching” medical expenses into 2018 save you tax?
Some of your medical expenses may be tax deductible, but only if you itemize deductions and have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage. The Tax Cuts and Jobs Act (TCJA) could make bunching such expenses into 2018 beneficial for some taxpayers. At the same time, certain taxpayers who’ve benefited from the deduction in previous years might no longer benefit because of the TCJA’s increase to the standard deduction. Contact us to learn more.
Selling your business? Defer — and possibly reduce — tax with an installment sale
You’re ready to sell your business and want to get the return from it you’ve earned from the time and money you’ve invested. That means getting a good price and minimizing the tax hit on the proceeds. One option that can help defer tax is an installment sale. Spreading gain over several years is especially beneficial if it allows you to stay under the thresholds for triggering the 3.8% net investment income tax or the 20% long-term capital gains rate. But it’s not without tax risk. For help determining whether an installment sale is right for you, contact us.
Following the ABCs of customer assessment
Every established business should regularly assess its customer base. One way to approach this task is to follow the ABCs. First, choose a time period and use financial data to calculate your customers’ profitability. Next, divide customers into three groups: 1) an A group of your most profitable buyers, 2) a B group of positive contributors, and 3) a C group of unprofitable customers. From here you can focus on nurturing relationships with the A group, elevating the status of B-group customers, and possibly moving on from the C group. Contact us for help.