For investors, fall is a good time to review year-to-date gains and losses. Not only can it help you assess your financial health, but it also can help you determine whether to buy or sell investments before year-end to save taxes. This year, you also need to keep in mind the impact of the Tax Cuts and Jobs Act (TCJA). While the TCJA didn’t change long-term capital gains rates, it did change the tax brackets for long-term capital gains and qualified dividends. For 2018 through 2025, these brackets are no longer linked to the ordinary-income tax brackets for individuals. So, for example, you could be subject to the top long-term capital gains rate even if you aren’t subject to the top ordinary income tax rate. Old rules For the last several years, individual taxpayers faced three federal income tax rates on long-term capital gains and qualified dividends: 0%, 15% and 20%. The rate brackets were tied to the ordinary-income rate brackets. Specifically, if the long-term capital gains and/or dividends fell within the 10% or 15% ordinary-income brackets, no federal income tax was owed. If they fell within the 25%, 28%, 33% or 35% ordinary-income brackets, they were taxed at 15%. […] Details
A shortage of skilled workers is a real concern in some of the nation’s largest industries. If you fear your business could find itself struggling to fill positions, one way to lay the groundwork for a solution is to create an apprenticeship program. Apprenticeships are paid positions that focus on gradual, step-by-step training aimed at creating fully realized, often certified workers. By creating such a program, you can “stock the waters” with quality employees who are not only proficient in their professions but also invested in their industries. Here are four tips for getting started: 1. Think it through. Discuss your apprenticeship strategy with both your business’s leadership and your rank-and-file employees. Address questions such as: • What are our biggest hiring challenges for technical jobs that don’t require a college degree? • Do we already have employees who could participate in an apprenticeship program? • How will our business change in the future and which skill sets will we most likely lack? Ideally, your program will focus on the specific types of skilled workers who will be in shortest supply in the years to come. 2. Look for partners. Successful apprenticeship programs often involve collaboration among various partners. These […] Details
Here are some of the key tax-related deadlines affecting businesses and other employers during the fourth quarter of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements. October 15 If a calendar-year C corporation that filed an automatic six-month extension: File a 2017 income tax return (Form 1120) and pay any tax, interest, and penalties due. Make contributions for 2017 to certain employer-sponsored retirement plans. October 31 Report income tax withholding and FICA taxes for third quarter 2018 (Form 941) and pay any tax due. (See exception below under “November 13.”) November 13 Report income tax withholding and FICA taxes for third quarter 2018 (Form 941), if you deposited on time and in full all of the associated taxes due. December 17 If a calendar-year C corporation, pay the fourth installment of 2018 estimated income taxes. © 2018 Details
Inventory is expensive, and therefore, it needs to be as lean as possible. Here are some smart ways to cut back inventory without compromising revenue and customer service. Objective inventory counts Effective inventory management starts with a physical inventory count. Accuracy is essential to know your cost of goods sold — and to identify and remedy discrepancies between your physical count and perpetual inventory records. A CPA can introduce an element of objectivity to the counting process and help minimize errors. Inventory ratios The next step is to compare your inventory costs to those of other companies in your industry. Trade associations often publish benchmarks for: Gross margin [(revenue – cost of sales) / revenue], Net profit margin (net income / revenue), and Days in inventory (annual revenue / average inventory × 365 days). Your company should strive to meet — or beat — industry standards. For a retailer or wholesaler, inventory is simply purchased from the manufacturer. But the inventory account is more complicated for manufacturers and construction firms; it’s a function of raw materials, labor, and overhead costs. The composition of your company’s cost of goods will guide you on where to cut. In a tight labor market, it’s […] Details
Do you own a vacation home? If you both rent it out and use it personally, you might save tax by taking steps to ensure it qualifies as a rental property this year. Vacation home expenses that qualify as rental property expenses aren’t subject to the Tax Cuts and Jobs Act’s (TCJA’s) new limit on the itemized deduction for state and local taxes (SALT) or the lower debt limit for the itemized mortgage interest deduction. Rental or personal property? If you rent out your vacation home for 15 days or more, what expenses you can deduct depends on how the home is classified for tax purposes, based on the amount of personal vs. rental use: Rental property. If you (or your immediate family) use the home for 14 days or less, or under 10% of the days you rent out the property, whichever is greater, the IRS will classify the home as a rental property. You can deduct rental expenses, including losses, subject to the real estate activity rules. Your deduction for property tax attributable to the rental use of the home isn’t subject to the TCJA’s new SALT deduction limit. And your deduction for mortgage interest on the home […] Details
Tyler, Simms & St. Sauveur, CPAs, P.C.
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