Do you need to make an estimated tax payment by September 17?
To avoid interest and penalties, you must make sufficient income tax payments long before your April filing deadline through withholding, estimated tax payments or both. The third 2018 estimated tax payment deadline for individuals is Sept. 17. If you don’t have an employer withholding tax from your pay, you likely need to make estimated tax payments. But even with withholding, such payments can be necessary if you have more than a nominal amount of income from self-employment, investments, alimony, awards, prizes or other sources. Contact us to learn more.
Back-to-school time means a tax break for teachers
When elementary and secondary school teachers are setting up their classrooms for the new school year, it’s common for them to pay for some classroom supplies out of pocket. A special tax break allows these educators to take an above-the-line deduction for up to $250 of these expenses. The deduction is especially important now due to the TCJA’s suspension of miscellaneous itemized deductions subject to the 2% of adjusted gross income floor, which before 2018 could be used for educator expenses. Contact us for details on the educator expense deduction.
Keep it SIMPLE: A tax-advantaged retirement plan solution for small businesses
If your small business doesn’t have a retirement plan and has 100 or fewer employees, consider a SIMPLE IRA. Offering a retirement plan can provide your business with valuable tax deductions for its contributions and help attract and retain employees. As the name implies, a SIMPLE IRA is easy to set up and maintain. Eligible employees can defer up to $12,500 in 2018 (plus a catch-up of up to $3,000 for those age 50 or older). The deadline for setting one up for this year is Oct. 1, 2018. Contact us to learn more about SIMPLE IRAs and other retirement plan options.
HSA + HDHP can be a winning health benefits formula
“HSA + HDHP” represents the concept of offering a Health Savings Account (HSA) coupled with a high-deductible health plan (HDHP). For 2019, an HDHP must have a deductible of at least $1,350 for single coverage or $2,700 for family coverage. Your business and the employee combined can make pretax HSA contributions up to $3,500 for single coverage or $7,000 for family coverage. And HSA balances carry over to subsequent years. HDHP premiums are typically less, so savings can be used to fund the HSAs. It’s an increasingly popular formula; contact us to discuss.
Business tips for back-to-school time
Back-to-school time is an opportunity to step up your business development efforts. Here are three inspiring examples: 1) A real estate agency sponsors a middle school’s parent-teacher organization to raise the visibility of its agents. 2) An engineering firm donates equipment and mentors students to encourage interest in science, technology, engineering and math. 3) A manufacturer partners with a community college to launch an apprenticeship program to help create skilled workers. Contact us for other ideas and help assessing return on investment.
Play your tax cards right with gambling wins and losses
If you gamble, play your tax cards right with your wins and losses. Changes under the TCJA could have an impact. You must report 100% of your winnings as taxable income, but you might pay a lower rate on them because of TCJA rate reductions. Gambling losses are still allowed as an itemized deduction (up to your winnings for the year), but, with the standard deduction nearly doubled under the TCJA, you might no longer benefit from itemizing. Finally, “professional” gamblers face tighter limits on deducting their gambling expenses. Contact us if you have questions.
Assessing the S corp
The S corporation business structure offers many advantages, including limited liability for owners and no double taxation (at least at the federal level). But not all businesses are eligible, and S corps may not be quite as attractive from a tax perspective as they once were. The C corp tax rate is now only 21%, while the top individual rate is 37%, so double taxation may be less of a concern. On the other hand, S corp owners may benefit from the new qualified business income (QBI) deduction, which can be equal to as much as 20% of QBI. Contact us for details.
6 ways to get more value from an IT consultant
IT consultants are many things, but they’re not magicians. To get the most value from a consulting arrangement, businesses should consider these six steps: 1) Spell out your needs in a formal project scope document. 2) Appoint an internal contact. 3) Before the consultant arrives, prepare his or her work area and ensure everything works properly. 4) On the first day, roll out the welcome wagon, providing introductions and orientation. 5) Maintain contact during the project with regular meetings. 6) Conclude the engagement courteously and clearly.
Polk & Associates Expands Reach and Strengthens Team With Strategic Merger
New merger bolster expertise, experience and industry-specific knowledge in key core competencies Bingham Farms, MI – August 1, 2018 – Polk & Associates (POLK) announces today a strategic merger that bolsters core and expands practices such as Valuation Services, Audit and Assurance, Business Acquisition, Estate and Succession Planning and Tax Planning & Compliance services. Founded […]
Keep an eye out for extenders legislation
The pieces of tax legislation garnering the most attention these days are the Tax Cuts and Jobs Act signed into law last December and the possible “Tax Reform 2.0” that Congress might pass this fall. But what happens with “extenders” legislation is also important. It affects whether the above-the-line deduction for tuition and related expenses, the mortgage insurance premium deduction and the exclusion from gross income for mortgage loan forgiveness will be available for 2018. Contact us with questions about these breaks and whether you can benefit.