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Business Planning

05/01/2017

Trump Tax Reform Goals: Press Release and Articles

Trump at microphonePresident Donald Trump has released a single-page summary of the goals and priorities of his tax reform package.  We have a copy of the document to share with you as well as links to various articles on the subject available online for your review. While specifics of an actual proposal are not yet available, we hope the information and various media reviews will help clarify the intended direction of a tax reform proposal from the perspective of the White House. Please contact one of our tax planning experts if you have questions as to how the proposed tax reforms may affect your individual and/or business tax planning strategies.

Click on the information lines below to download articles and postings:

Actual Media Release from the White House

White House Press Briefing on Proposed Tax Reform Goals

Various Media Articles With Responses and Opinions   (Postings of these links to articles should not infer that McRuer CPAs is in agreement with any or all of the following media responses. The list is simply a way to provide you more information from various views.)

Journal of Accountancy from the American Institute of CPAs (AICPA.org)

FOX Business News

Wall Street Journal

New York Times

Bloomberg Review

The National Review

CNN Money

Kansas City Star

St. Louis Post-Dispatch

Jefferson City News Tribune

01/09/2017

2017 Mileage Rates for Business Use of a Vehicle

As reported by the Journal of Accountancy: The IRS has announced  the optional standard mileage rates for business use of a vehicle will drop slightly in 2017, the second consecutive annual decline. For business use of a car, van, pickup truck, or panel truck, the rate for 2017 will be 53.5 cents per mile, down from 54 cents per mile in 2016. Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile.

Driving for medical or moving purposes may be deducted at 17 cents per mile, which is two cents lower than for 2016. The rate for service to a charitable organization is unchanged, set by statute at 14 cents per mile (Sec. 170(i)).

The portion of the business standard mileage rate that is treated as depreciation will be 25 cents per mile for 2017, one cent higher than for 2016.

To compute the allowance under a fixed and variable rate (FAVR) plan, the maximum standard automobile cost is $27,900 for 2017 (down from $28,000 for 2016) for automobiles (not including trucks and vans) and $31,300 for trucks and vans (an increase of $300 from 2016). Under a FAVR plan, a standard amount is deemed substantiated for an employer’s reimbursement to employees for expenses they incur in driving their vehicle in performing services as an employee for the employer.

See more at: http://www.journalofaccountancy.com/news/2016/dec/irs-2017-mileage-rates-201615701.html#sthash.sxZ6OHvw.dpuf

03/09/2016

State-Managed Retirement Savings Accounts Now in 27 States

Retirement jar 1Several states are working on plans to help workers save for retirement. The Bureau of Labor Statistics shows that only about half of full-time workers employed by small businesses or organizations have access to an employer-based retirement plan. By comparison, the numbers show 85 percent of Americans who work for employers with 100 or more employees do have access to an employer-provided retirement plan or benefits program.

To help close the gap, some states are providing access for eligible workers to state-managed individual retirement accounts funded by automatic deductions from the worker’s paychecks.  For example, in 2017 Illinois will launch the Secure Choice Retirement Savings Program, which gives workers a retirement plan option. Full-time employees working for qualified businesses (who do not already provide retirement benefits) will be automatically enrolled into a direct deduction retirement savings plan with a minimum three percent deduction each paycheck.  The employee can choose to have more withheld or to opt out of the program entirely. The money is deposited into a Roth IRA.

The Pension Rights Center in Washington, DC has been monitoring the development of state-administered retirement plans for private-sector workers. It shows that currently 27 states have already approved or are debating proposals to launch state-based retirement plans including: Arizona, California, Colorado, Connecticut, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin.

Last September, the Government Accountability Office (GAO) published a report detailing how “half of private sector workers, especially those who are low-income or employed by small firms, lack coverage from a workplace retirement savings program primarily because they do not have access.” The GAO is recommending ways that the federal government can make it easier for states to manage such plans, while not placing a financial or administrative burden on small business.

12/18/2015

2015 Tax Extenders Summary

After months of uncertainty and speculation, it appears Congress has finally sufficiently collaborated to propose the “Tax Extenders” legislation in which a large number of expired tax provisions will be extended, some permanently.  Some tax credits that would be made permanent include the Child Tax Credit, the American Opportunity Tax Credit and the Earned Income Tax Credit

Of particular interest, it appears Section 179 will be permanently fixed at $500,000 of qualified assets for years in which taxpayers place in service up to $2,000,000 of assets.  For amounts above $2,000,000, the Section 179 deduction is reduced dollar for dollar until $2,500,000, at which time no asset additions are eligible.  Bonus depreciation is temporarily extended at 50% for 2015, 2016 and 2017, then stepped down to 40% in 2018 and 30% in 2019, after which time it is scheduled to be completely phased out.

To find out more information about the specifics of the legislation, here are some online resources:

If you have any questions about how these tax extenders may affect you or your business bottom line, please contact us at McRuer CPAs by calling 816.741.7882 or click here to connect with us online.

12/15/2015

Standard Mileage Rates Go Down in 2016

Standard mileage rateThe IRS has released the standard mileage rate allowances for the 2016 tax year. The deductible amounts will be less per mile than in 2015. 

The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates.

Click here to read the complete IRS release on the 2016 rates.

If you need more information or have a question, contact us at McRuer CPAs.

03/28/2015

Tax Tips on Tips

Consumers debate about how much they should tip a server at a restaurant with the general understanding that an average 10% to 15% tip indicates the service was good and up to a 20% tip
indicates it was exemplary.  As the food and service bill total is tallied, they usually don’t consider that the employee will be paying taxes on the tips.

Waiter with tip jarIRS rules require restaurant employees to report their tips daily from both cash and credit or debit card payments. Restaurant employees and employers must both pay social security and Medicare taxes on the tips, and the employee must pay income taxes on them just like other wages.

Employers are required to ensure that the total tip income reported by employees is at least equal to 8% of total receipts collected during each pay period.  The rules generally apply to food or beverage establishments with 10 or more employees. So, when a restaurant customer leaves no tip for a server, it can cost that employee and the entire wait team more than embarrassment.

02/27/2015

Have a Complicated Tax Return? Here's What to Do

Is preparing your own income tax return becoming more complicated every year? How do you know when it's time to hire a professional?

Taxpayer with stack of papersConsider these questions as you determine whether you should turn to an accountant to help you file your tax return:  

Are you confident you know enough about new laws that apply to your income tax filing?  

Have you had a major life event that will affect how you file your return such as; the change or loss of a job, buying or selling a home, addition or loss of a dependent, education expenses, borrowing money from an IRA, buying or selling a business, experiencing a major illness, or going through a divorce?

Are you certain you know what forms to use? Are you confident you are calculating deductions and credits properly?  Are you stressing out over what you're finding out about your income and what you don't know about your income taxes?  Have you received a letter from the IRS about an income tax issue?

If any of the above questions apply to you, it's time to talk to an accountant who is experienced and qualified to handle even the most complicated tax return.

What to Do About Complicated Income Taxes

When you realize that you can no longer prepare your income taxes on your own, don't panic. Instead, do your best to get organized to present your income tax "story" to a professional.  This means get your documents in order.  Collect any documents that report income you have earned in the past year as well as any proof of any federal, state and local taxes you may have already paid.

Gather up receipts and statements that will document your expenses that may qualify as tax deductions or result in a tax credit.  Categorize the documents by subject and date to help the tax professional you select better understand your financial picture and how it applies to your tax obligation.

Find copies of your tax returns from the past two years to show your chosen tax professional so that a thorough review of your tax filing history can be made.  There may be something that was missed that could save you tax dollars or cost you in the long-run.  The sooner the issues are identifed, the better.

Note: Complicated tax issues and questions do not go away if you simply ignore them.  Bring any tax-related question or issue you have with you to your appointment with a tax preparation expert. They will help you understand the significance and meaning of IRS letters or other documents. Sometimes taxpayers ignore important notices because they are hard to understand or feel that the information is wrong or doesn't apply to them, but that can be a costly mistake. 

Graphic with ad infoWith tax laws and regulations changing on a regular basis, it is essential that you use a tax professional who fully understands these changes and how to apply them to your unique situation.

Without expert tax preparation assistance, many taxpayers who fill out their own returns make unnecessary errors either through miscalculation of numbers or through not knowing the proper forms to file.  All of this can cost plenty in fees, penalties and interest payments.  So, the cost of making mistakes and omissions should be carefully considered against the cost of bringing a professional on board to help you with tax preparation.

When you decide that it's time you find a tax expert, we hope you'll choose McRuer CPAs.  No matter the tax problem, we can help you make the best choices efficiently and effectively while helping you put together a long-term plan to make certain you pay no more than the taxes you owe. That will give you peace of mind.

Contact us online by clicking here or all us at 816.741.7882.

02/21/2015

How to Know When You Need a CPA

The DIY (Do It Yourself) industry is flourishing these days.  This trend also extends to accounting and income tax services.  The availability of affordable computing power, improved entry-level accounting and income tax software, and cloud-based applications and storage options are attractive because they may help you save money by doing it yourself.  Added to that is some very effective advertising claiming that at the push of a button your business accounting and income tax filings will be worry free.  However, be warned; our clients often turn to us when their experience with DIY solutions show the ease and efficiency of using these products has been oversold.

In today’s highly regulated environment, innocent omissions and mistakes from simply not knowing An-accountant-helping-clientshow transactions should be recorded, or how to properly comply with new federal, state or local tax
law, can be costly, and sometimes devastating.  Instead of spending time increasing sales, improving processes and growing their businesses, some business owners say they grow frustrated and waste time trying to learn to use and update the latest software as well as keep up with filing deadlines and regulations by themselves.  That’s when they call us.

Let’s consider how engaging professional help with your business accounting and finances can pay big benefits that will help your bottom line both short-term and long-term. 

For those business owners who have a solid accounting or bookkeeping background and a good understanding of business finances, with McRuer CPAs’ MyMcRuer/BackOffice service offering you may benefit by a combination of some DIY and some professional on-demand services.

MyMcRuer/BackOffice helps business owners control costs by personally managing their business’s books.  In addition, when a difficult issue or a question arises, they have access to a local experienced accounting professional who will view the issue real time to identify the problem and quickly provide a solution.  Then as the business grows and its operations need more of an owner's or manager’s time, a smooth transition can be made to full-time professional accountants and bookkeepers who already know the business.

If you intend to grow your business, the benefits of professional accounting services cannot be overestimated.  Is it time that you utilized a professional for your combined personal and business tax preparation?  When is it cost effective to hire an accounting firm’s experts to help with your business accounting and bookkeeping needs?

Consider the following as a mental checklist to help you find an answer to the question: 

How Do I Know When I Need a Professional Accountant or CPA?

You know you need a professional accountant or CPA when…

(circle the sentence numbers that apply to you and when finished add up the total number of sentences that describe your financial situation)

  1. You are considering investing significant time, money and passion into a business idea. Before you “take the leap” you want input about your business plan from an independent professional who will review the numbers and help you analyze your idea’s future growth potential.
  2. You are starting a new business and want to select the best business structure that fits the marketplace, your proficiency and your goals.  You have been told there are different types of business entities that may limit your personal liability for your business activities, but you don’t understand the tax consequences of this decision.
  3. Your income and deductions have changed and you no longer file a simple tax return, or you suspect you must make quarterly estimated tax payments.
  4. You need new or additional business financing, and your lender or insuror is requesting financial information that must be provided by a third party.
  5. You want to better understand your business’s financial information, and use it to improve profitability, inventory management, and cash flow.
  6. You need more information in order to prepare to sell your business.
  7. You are shutting down your business.
  8. You hire other people to help you, and you need information about employees versus independent contractors.
  9. You have become responsible for another person’s affairs, either during their life or after their passing.
  10. The IRS or another regulatory agency has contacted you about an upcoming audit or other collection actions.
  11. You wish to develop and act on a plan to provide for your financial future, including saving for retirement, your childrens’ education, and/or other obligations.
  12. You want to ensure you have the best estate plan in place by understanding the tax, financial and time-based consequences of that plan.
  13. You want to create a succession plan for passing your business on to the next person when you’re ready to retire or sell.
  14. You want to take responsibility for your business and personal financial affairs, and want a trusted advisor to help you succeed.
  15. You must prepare and file Forms W2 and 1099 annually.
  16. You need to understand your best choices on property purchase versus equipment leasing.

How many of the above statements apply to you?

These are just a few of the practical reasons that you need a professional accountant on your business’ financial team.  If you circled 3 to 5 of the above business and personal accounting points, it’s probably time you considered using an upgraded business accounting tool that provides a live accountant when you need one.  If you circled more than 5, it’s time you connect with a professional accountant long-term with comprehensive services and experience to ensure business success.

Accountant over shoulderConsider using a CPA (Certified Professional Accountant) that is experienced and trained specifically to be your business and personal financial planner, management consultant, management information specialist, business consultant and more. 

Yet, don’t forget to consider whether the professional you bring on board is someone you get along with personally.  Financial decisions are a reflection of the production and goals of real people like you who are working to make profits in order to enjoy the life you love.  It’s important to find an accountant who will work well with your business team and shares your concerns about accuracy, reliability, efficiency, and long-term effectiveness.

When you know you need an accountant, we’re here.

At McRuer CPAs, we know business “numbers” are personal and we make the extra effort to match the personalities of our professional accountants with you and your business team.  You may discover the latest online tools with the on-demand help of a CPA are the best choice for you and your business.  Maybe it's time to have a full-time accounting professional join your team?  How do you what to do?

Let’s find out what will work best for you.  Contact us for a strategic planning session by calling 816.741.7882 or contact us through our confidential online resource.  We’ll review your goals and help you make the best choice.

02/10/2015

What is Minimum Essential Coverage Under the Affordable Care Act?

The IRS has issued new information on how to interpret "Minimum Essential Coverage" under the Affordable Care Act.

Many individuals and businesses have been concerned about having the right kind of "qualifying" health care coverage for themselves and their employees.  Here is the latest notice about Minimum Essential Coverage from the IRS that may be helpful as 2014 federal income tax returns are being prepared and tax plans are being implemented for the 2015 tax year.  If it sounds complicated, it can be. If you have any questions or need to design a tax plan to cover this and many more important issues as you prepare your tax return, contact us and we'll help you with a confidential consultation to review all your options.  You may also consider using the services of a professional team like ours for your tax preparation needs.

 

Accountants workingIRS Release:

Individual Shared Responsibility Provision - Minimum Essential Coverage

The individual shared responsibility provision requires you and each member of your family to have qualifying health care coverage (known as minimum essential coverage), qualify for an exemption from the responsibility to have minimum essential coverage, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage.

The chart shows some types of coverage that qualify as minimum essential coverage and some that do not.

Coverage TypeQualifies As Minimum Essential CoverageDoesn't Qualify As Minimum Essential Coverage

Employer-sponsored coverage:

  • Group health insurance coverage for employees under –
  • A governmental plan, such as the Federal Employees Health Benefit program
  • A plan or coverage offered in the small or large group market within a state
  • A grandfathered health plan offered in a group market
  • A self-insured group health plan for employees
  • COBRA coverage
  • Retiree coverage

 

Yes
 

Individual health coverage:

  • Health insurance you purchase directly from an insurance company
  • Health insurance you purchase through the Health Insurance Marketplace
  • Health insurance provided through a student health plan
  • Health coverage provided through a student health plan that is self-funded by a university (only for a plan year beginning on or before December 31, 2014, unless recognized as minimum essential coverage by HHS)
  • Catastrophic plans
Yes  

Coverage under government-sponsored programs:

  • Medicare Part A coverage
  • Medicare Advantage plans
  • Most Medicaid coverage
  • Children’s Health Insurance Program (CHIP)
  • Most types of TRICARE coverage
  • Comprehensive health care programs offered by the Department of Veterans Affairs
  • State high-risk health insurance pools (only for a plan year beginning on or before December 31, 2014, unless recognized as minimum essential coverage by HHS)
  • Health coverage provided to Peace Corps volunteers
  • Department of Defense Nonappropriated Fund Health Benefits Program
  • Refugee Medical Assistance
Yes  

Other coverage:

  • Certain foreign coverage
  • Certain coverage for business owners
Yes  

Certain coverage that may provide limited benefits:

  • Coverage consisting solely of excepted benefits, such as:
    • Stand-alone dental and vision insurance
    • Accident or disability income insurance
    • Workers' compensation insurance
  • Medicaid providing only family planning services*
  • Medicaid providing only tuberculosis-related services*
  • Medicaid providing only coverage limited to treatment of emergency medical conditions*
  • Pregnancy-related Medicaid coverage*
  • Medicaid coverage for the medically needy*
  • Section 1115 Medicaid demonstration projects*
  • Space available TRICARE coverage provided under chapter 55 of title 10 of the United States Code for individuals who are not eligible for TRICARE coverage for health services from private sector providers*
  • Line of duty TRICARE coverage provided under chapter 55 of title 10 of the United States Code*
  • AmeriCorps coverage for those serving in programs receiving AmeriCorps State and National grants
  • AfterCorps coverage purchased by returning members of the PeaceCorps

*In Notice 2014-10, the IRS announced relief from the individual shared responsibility payment for months in 2014 in which individuals are covered under one of these programs. See the instructions for Form 8965, Health Coverage Exemptions, for information on how to claim an exemption for one of these programs on your income tax return.

 

 

Yes

 

 

11/24/2014

McRuer CPAs Year-End Tax Planning Guide

Income tax and flag imageIt's time to review year-end tax strategies that may help reduce your tax bill or prevent you from paying more than you owe.  

The 2014 tax year has been marked by more questions and unresolved tax issues than in years past.  The current uncertainty especially about expiring "temporary" tax provisions, income tax deductions and IRA conversions leads us to send a precautionary "yellow" signal as we stay alert to react to any last minute updates.

Click here to download the McRuer CPAs 2014 Year-End Tax Planning Guide with tips and information that may help you.

Your window of opportunity to take action regarding your 2014 tax obligation is rapidly closing, but remember, this is also a very good time to consider choices about your individual and/or business tax strategies for the 2015 tax year.

If you haven't already scheduled your year-end tax planning strategy session, please contact us right away.  Call us for an appointment with one of our tax strategy experts who will explain details to help you choose the best plan for you: 816.741.7882.

 

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