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.
It’s a good time to check your withholding and make changes, if necessary
Did you receive a refund this year that was smaller than you were expecting? Or did you wind up owing additional tax when you filed your return? That might mean it’s time to check and adjust your withholding. This might be necessary due to changes in the Tax Cuts and Jobs Act or because something in your situation is different this year (for example, you got married, divorced, purchased a home or had changes in your income). The IRS has a withholding calculator where you can perform a paycheck checkup. You can access the calculator at https://bit.ly/2aLxK0A. Contact us if you need help determining whether you should adjust your 2019 withholding.
Build long-term relationships with CRM software
Customer relationship management software can help you build long-term relationships with those most likely to buy your products or services. These solutions are generally designed to gather and organize customer data and then integrate it with other systems and platforms (including social media). The right product can help you track leads, forecast and track sales, and assess marketing effectiveness. But, to get these benefits, you’ll need to properly train employees and encourage buy-in throughout your organization. We can help you decide whether to buy or upgrade.
The simple truth about annual performance reviews
Keeping up with the latest approaches to employee performance reviews can be overwhelming for employers. If your commitment to the process ever starts to falter, remember the simple truth: Annual reviews provide employees with feedback, set objectives for the year ahead and create written performance records critical to limiting legal exposure. When conducting reviews, ensure supervisors are using consistent documentation, consulting all relevant parties, informing employees of what the review will cover and following up appropriately. Contact us for more info.
Consider a Roth 401(k) plan — and make sure employees use it
If you want another retirement savings option to add to your company’s benefits package, consider a Roth 401(k). But make sure employees use it. The Plan Sponsor Council of America found that Roth 401(k)s are available at 70% of employer plans, but only 20% of participants who had access to one in 2017 made contributions to it. These plans have traits of both Roth IRAs and employer-sponsored 401(k)s. Contributions to an employee’s Roth 401(k) account are made with after-tax, instead of pretax, dollars. But after five years, qualified distributions are exempt from federal income tax (the same as with a Roth IRA). In contrast, regular 401(k) distributions are taxed at ordinary-income rates of up to 37%.
What type of expenses can’t be written off by your business?
If you spend money in the course of doing business, you want to be able to deduct it on your tax return. But in order to write off expenses, they must meet certain requirements. Under federal tax law, you can deduct “ordinary and necessary” business expenses. In general, an expense is considered ordinary if it’s common or customary in the particular trade or business. A necessary expense is defined as being helpful or appropriate. In order to be deductible, an expense must also be reasonable in relation to the benefit expected. Consult with us for guidance.
Check on your refund — and find out why the IRS might not send it
Are you wondering where your tax refund is? According to the IRS, most refunds are issued in less than 21 calendar days. If you’re curious about when yours will arrive, you can use the IRS “Where’s My Refund?” tool. Go to https://bit.ly/2cl5MZo and click “Check My Refund Status.” In some cases, taxpayers may be notified that all or part of their refunds aren’t going to be paid because they’re going to “offset” past-due debts. These include federal or state tax obligations; past-due child and spousal support; and certain delinquent student loans. If you have questions about your refund, contact us.
Buy vs. lease: Business equipment edition
Life presents us with many choices. A common conundrum for business owners is whether to buy or lease their companies’ equipment. Some still take pride in owning their assets. If you do, work to pass along this dedication to employees. Also, consider enhanced tax breaks under the Tax Cuts and Jobs Act for purchasing. Meanwhile, leasing offers the flexibility to more easily upgrade equipment, along with a lesser initial cash flow hit. You can also deduct lease payments as business expenses, but you may soon be subject to new accounting rules. Contact us for help.
Should your health care plan be more future-focused?
When it comes to health care plan design, many employers are looking to “future-focused” features to encourage healthful behaviors rather than trying to slash costs. This was a finding of the 2018 National Survey of Employer-Sponsored Health Plans by Mercer. Among the hottest plan features is telemedicine, which streamlines care delivery by gathering medical data and offering interaction with providers via apps and the phone. Other examples include targeted support for people with chronic conditions and access to expert medical opinions.