Author: Stephen Eldridge

News Tax

How to begin collecting your 2015 tax refund now

Post author By Stephen Eldridge
Post date July 20, 2015

How to begin collecting your 2015 tax refund now

If you usually receive a large federal income tax refund, you’re essentially making an interest-free loan to the IRS. Rather than wait until you file your 2015 tax return in 2016, why not begin enjoying your “refund” now by reducing your withholdings or estimated tax payments for the remainder of 2015?

It’s particularly important to review your withholdings, and adjust them if necessary, when you experience a major life event, such as marriage, divorce, birth or adoption of a child, or a layoff suffered by you or your spouse.

If you’d like help determining what your withholding or estimated tax payments should be for the second half of the year, please contact us.

News Tax

Tax impact of the Supreme Court’s same-sex marriage decision

Post author By Stephen Eldridge
Post date July 10, 2015

Tax impact of the Supreme Court’s same-sex marriage decision

On June 26, 2015, the U.S. Supreme Court ruled that same-sex couples have a constitutional right to marry, making same-sex marriage legal in all 50 states. For federal tax purposes, same-sex married couples were already considered married, under the Court’s 2013 decision in United States v. Windsor and subsequent IRS guidance — even if their state of residence didn’t recognize their marriage.

From a tax planning perspective, the latest ruling means that, in states where same-sex marriage hadn’t been recognized, same-sex married couples no longer will need to deal with the complications of being treated as married for federal tax purposes but not married for state tax purposes. So their tax and estate planning will be simplified and they can take advantage of state-level tax benefits for married couples. But in some cases, these couples will also be subject to some tax burdens, such as the “marriage penalty.”

Same-sex married couples should review their tax planning strategies and estate plans to determine what new opportunities may be available to them and whether there are any new burdens they should plan for. Employers will need to keep a close eye on how these developments will affect their tax obligations in relation to employees who have same-sex spouses. Please contact us if you have questions.

News Tax

Married with a large estate? Why you still need a credit shelter trust.

Post author By Stephen Eldridge
Post date June 16, 2015

Married with a large estate?
Why you still need a credit shelter trust

Even though portability now allows married couples to use up both spouses’ estate tax exemptions without having to make lifetime asset transfers or set up trusts, this “easier” path isn’t necessarily the better path. For couples with large estates, making lifetime asset transfers and setting up trusts can provide benefits that exemption portability doesn’t offer.

With portability, if one spouse dies and part (or all) of his or her estate tax exemption is unused at death, the estate can elect to permit the surviving spouse to use the deceased spouse’s remaining estate tax exemption. But making the portability election doesn’t protect future growth on assets from estate tax like applying the exemption to a credit shelter trust does.

Also, the portability provision doesn’t apply to the GST tax exemption, and some states don’t recognize exemption portability. Credit shelter trusts offer GST and state estate tax planning opportunities, as well as creditor and remarriage protection.

If you’d like to learn more about credit shelter trusts or other estate planning strategies for your situation, please let us know.

Healthcare Helpful Articles

Increasing Patient Engagement in Your Practice

Post author By Stephen Eldridge
Post date June 16, 2015

Increasing Patient Engagement in Your Practice

Many patients want to be involved in managing their health care. Empowering patients to schedule their own appointments and manage correspondence, refills, and prior authorizations can lead to higher levels of patient engagement and satisfaction. Patient engagement initiatives have been found to reduce hospital visits, decrease morbidity and mortality rates, improve treatment adherence, and reduce costs. How can your practice attain higher levels of patient engagement? The answer lies in how your practice incorporates technology into its day-to-day operations. Technology can play a major role in helping medical practices improve patient engagement levels.

Technology Is Key

Incorporating a technology-based infrastructure to handle a variety of typically labor-intensive tasks can help increase patient engagement. Not every patient will respond favorably to conducting health care interactions online, but patients who are already comfortable with technology will likely embrace the opportunity. Areas where utilizing technology may be beneficial include:

Online scheduling. Appointment cancellations can impact both a practice’s schedule and its revenues. Giving patients the convenience of scheduling their own appointments online may lead to lower no-show rates.

Check-in. Allowing patients to use kiosks or tablet computers to enter personal information and other relevant data before their scheduled appointment can help expedite and streamline the check-in process and increase efficiency levels throughout the practice.

Online care. Many time-consuming routine interactions, such as data collection, can be performed more efficiently online. Portals designed to allow patients to view test results and ask questions related to their care save time and increase patient satisfaction levels.

Off-site Monitoring

Devices that allow patients to monitor information related to their medical conditions and relay the data electronically can foster greater understanding among patients about how lifestyle decisions impact their health. Engaged patients may be more likely to comply with medical treatments.

Patient engagement initiatives have been found to reduce hospital visits, decrease morbidity and mortality rates, improve treatment adherence, and reduce costs.

Please let us know how we can help with your accounting and essential business service needs.

News Tax

Warning! IRS Phone Scams

Post author By Stephen Eldridge
Post date June 2, 2015

Warning! IRS Phone Scams

Please be wary of any unsolicited phone calls or emails you get from individuals claiming to represent the IRS or the US Treasury. This is one of the biggest scams out there and is a crime of opportunity. Do not engage these callers, who often threaten to issue arrest warrants or involve local law enforcement if you do not cooperate. If they call you, simply hang up on them.

The IRS usually first contacts people by mail — not by phone or email — about unpaid taxes. The IRS will never request personal or financial information by email, text or any social media. And the IRS will NOT ask for payment using a pre-paid debit card or wire transfer. The IRS also won’t ask for a credit card number over the phone.

If you get a call from someone claiming to be with the IRS asking for a payment, here’s what you need to do:

* If you owe Federal taxes or think you might owe taxes, hang up and call the IRS at 800-829-1040. IRS workers can help you with your payment questions.
* If you don’t owe taxes, fill out the “IRS Impersonation Scam” form at www.treasury.gov/tigta or call 800-366-4484.
* You can also file a complaint with the Federal Trade Commission. Add “IRS Telephone Scam” to the comments in your complaint.
* Forward scam emails to phishing@irs.gov. Do not open any attachments or click on any links in questionable emails.

We hope you find this information helpful. Please contact us if you have any questions.

Construction Financial News News Tax

100% Deduction for Certain M&E Expenses

Post author By Stephen Eldridge
Post date May 7, 2015

100% Deduction for Certain M&E Expenses

Generally, businesses are limited to deducting 50% of allowable meal and entertainment (M&E) expenses. But certain expenses are 100% deductible, including expenses:

• For food and beverages furnished at the workplace primarily for employees,
• Treated as employee compensation,
• That are excludable from employees’ income as de minimis fringe benefits,
• For recreational or social activities for employees, such as holiday parties, or
• Paid or incurred under a reimbursement or similar arrangement in connection with the performance of services.

If your company has substantial M&E expenses, you can reduce your tax bill by separately accounting for and documenting expenses that are 100% deductible. If doing so would create an administrative burden, you may be able to use statistical sampling methods to estimate the portion of M&E expenses that are fully deductible.

For more information on how to take advantage of the 100% deduction, please contact us.

News Tax

2015 Tax Planning Starts Now

Post author By Stephen Eldridge
Post date April 22, 2015

2015 Tax Planning Starts Now

Whether you filed your 2014 income tax return by the April 15 deadline or filed for an extension, you may think that it’s a good time to take a break from thinking about taxes. But doing so could be costly. Now is actually the time you should begin your 2015 tax planning — if you haven’t already.

A tremendous number of variables affect your overall tax liability for the year, and starting to look at these variables early in the year can give you more opportunities to reduce your 2015 tax bill. For example, the timing of income and deductible expenses can affect both the rate you pay and when you pay. By regularly reviewing your year-to-date income, expenses and potential tax, you may be able to time income and expenses in a way that reduces, or at least defers, your tax liability.

In other words, tax planning shouldn’t be just a year end activity. To get started on your 2015 tax planning, contact us. We can discuss what strategies you should be implementing now and throughout the year to minimize your tax liability.

News Tax

A net operating loss on your tax return isn’t all bad news

Post author By Stephen Eldridge
Post date April 8, 2015

A net operating loss on your tax return isn’t all bad news

When a company’s deductible expenses exceed its income, generally a net operating loss (NOL) occurs (though of course the specific rules are more complex). If you’ve found when filing your income tax return that your business had an NOL, there is an upside: tax benefits.

When a business incurs a qualifying NOL, the loss can be carried back up to two years, and then any remaining amount can be carried forward up to 20 years. The carryback can generate an immediate tax refund, boosting cash flow.

However, there is an alternative: The business can elect instead to carry the entire loss forward. If cash flow is fairly strong, carrying the loss forward may be more beneficial, such as if the business’s income increases substantially, pushing it into a higher tax bracket — or if tax rates increase. In both scenarios, the carryforward can save more taxes than the carryback because deductions are more powerful when higher tax rates apply.

In the case of flow-through entities, owners might be able to reap individual tax benefits from the NOL.

Please contact us if you’d like more information on the net operating loss rules and how you can maximize the tax benefit of an NOL.

News Tax

Filling a paper return? Understand the Timely Mailed Timely Filed Rule

Post author By Stephen Eldridge
Post date April 2, 2015

Filling a paper return? Understand the Timely Mailed Timely Filed Rule

The IRS considers a paper return that’s due April 15 to be timely filed if it’s postmarked by midnight on April 15. But dropping your return in a mailbox on the 15th may not be sufficient. You need to understand the Timely Mailed Timely Filed Rule.

For example, let’s say you mail your return with a payment on April 15, but the envelope gets lost. You don’t figure this out until a couple of months later when you notice that the check still hasn’t cleared. You then re-file and send a new check. Despite your efforts to timely file and pay, you’re hit with failure-to-file and failure-to-pay penalties totaling $1,500.

To avoid this risk, use certified or registered mail or one of the private delivery services designated by the IRS to comply with the timely filing rule, such as:
• FedEx Priority Overnight
• FedEx Standard Overnight
• FedEx 2Day
• UPS Next Day Air Saver
• UPS 2nd Day Air
• UPS 2nd Day Air A.M.

Beware: If you use an unauthorized delivery service, your return isn’t “filed” until the IRS receives it. For example, DHL is no longer an authorized delivery service.

If you’re concerned about meeting the April 15 deadline, another option is to file for an extension. Call us, and we can help you determine if that makes sense for you.

News Tax

2014 IRA Contribution Deadline: April 15

Post author By Stephen Eldridge
Post date March 25, 2015

2014 IRA Contribution Deadline: April 15

The 2014 IRA contribution deadline is April 15, 2015. The limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on Dec. 31, 2014).

If you haven’t already maxed out your 2014 limit, consider making one of these types of contributions by April 15:

1. Deductible traditional. If you and your spouse don’t participate in an employer-sponsored plan such as a 401(k) — or you do but your income doesn’t exceed certain limits — the contribution is fully deductible on your 2014 tax return. Account growth is tax-deferred; distributions are subject to income tax.

2. Roth. The contribution isn’t deductible, but qualified distributions — including growth — are tax-free. Income-based limits may reduce or eliminate your ability to contribute, however.

3. Nondeductible traditional. If your income is too high for you to fully benefit from a deductible traditional or a Roth contribution, you may benefit from a nondeductible contribution to a traditional IRA. The account can still grow tax-deferred, and when you take qualified distributions you’ll be taxed only on the growth. Alternatively, shortly after contributing, you may be able to convert the account to a Roth IRA with minimal tax liability.

Want to know which option best fits your situation? Contact us.