Catch-up retirement plan contributions can be particularly advantageous post-TCJA
Will you be age 50 or older on December 31? Are you still working? Are you already contributing to your 401(k) up to the regular annual limit? Then you may want to make “catch-up” contributions by the end of the year. Increasing your retirement plan contributions can be particularly advantageous if your itemized deductions for 2018 will be smaller than in the past because of changes under the TCJA. The additional contributions can reduce your taxable income and help make up for the loss of some of your itemized deductions. Contact us for more information.
Estimates vs. actuals: Was your 2018 budget reasonable?
If your company created a budget for the 2018 calendar year, you can now compare its estimates to actual results and determine whether it was reasonable, and, if not, how to adjust it to be more accurate for 2019. Estimates often start with historical financial statements. But internal and external factors may merit adjustments. Think about new contracts, major growth moves and regulatory changes. Above all, find the right method of tracking your financials throughout the year so you’re working with up-to-date data. Let us help you through the budgeting process.
3 ways to get more from your marketing dollars
In a strong economy, some companies cut back on marketing while others overspend on it. A better approach is to get more from your investment so you can cut back or ramp up as prudent. Start with digital marketing: Use search engine optimization, social media and Internet-only deals to improve customer focus. And don’t assume you’re at the mercy of high advertising rates; exploit competition among today’s marketing/advertising channels to find good deals. Last, use press releases as a low-cost complement to your marketing campaigns. Contact us for more info.
Mutual funds: Handle with care at year end
As we approach the end of 2018, it’s a good idea to review the mutual fund holdings in your taxable accounts and take steps to avoid potential tax traps. For example, near year end, funds typically distribute net realized capital gains to investors. These gains will be taxable to you regardless of whether received in cash or reinvested in the fund. So, for each fund, find out the size of distributions and the breakdown of long-term vs. short-term gains. If the tax impact will be significant, consider strategies to offset the gain. Contact us to learn more.
It’s not too late: You can still set up a retirement plan for 2018
If most of your money is tied up in your business, retirement can be a challenge. So if you haven’t already set up a tax-advantaged retirement plan, consider doing so this year. There’s still time to set one up and make contributions that will be deductible on your 2018 tax return. And funds can grow tax deferred. If you have employees, they generally must be allowed to participate in the plan, provided they meet the requirements. But you might be eligible for a $500 tax credit for setting up the plan. Would you like to set up a plan this year? Contact us!
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.