Investors and lenders beware: What’s undisclosed on a company’s financial statements can be just as significant as the disclosures. Examples of unrecorded liabilities include warranties, pending lawsuits, IRS investigations and an underfunded pension. It’s also important to consider hidden items buried in the assets, such as bad debts or damaged goods in inventory. We can perform an external audit or agreed upon procedures that target specific areas to provide a clearer picture of a company’s financial well-being.
For small businesses, managing payroll can be one of the most arduous tasks. A crucial aspect is withholding and remitting to the federal government the appropriate income and employment taxes. If your business doesn’t, you, personally, as the business’s owner, could be considered a “responsible party” and face a 100% penalty. This is true even if your business is an entity that normally shields owners from personal liability, such as a corporation or limited liability company. Hiring a payroll service can help. Contact us to learn more.
Post-TCJA, certain strategies that were once tried-and-true will no longer save or defer tax. But some will hold up for many taxpayers. And they’ll be more effective if you begin implementing them this summer, rather than waiting until year end. Consider these three: 1) Take steps to stay out of a higher tax bracket, such as accelerating deductible expenses. 2) Bunch medical expenses into 2018 to exceed the low 7.5% of AGI deductibility floor. 3) Sell depreciated investments to generate losses to offset realized gains. Contact us to discuss your midyear planning.
While donations to charity of cash or property generally are tax deductible (if you itemize), donations of time or services aren’t. But you potentially can deduct out-of-pocket costs associated with volunteer work, such as supplies, uniforms, transportation and even travel. To be deductible, the costs can’t be reimbursed or be “personal, living or family” expenses. And they must be directly connected to the services you’re providing and be incurred only because of your volunteering. Additional rules apply; contact us with questions.
The recent U.S. Supreme Court decision in South Dakota v. Wayfair allows states to impose sales tax on more out-of-state online sales. But does it mean your business must immediately begin collecting sales tax on online sales to all out-of-state customers? No. You must collect such taxes only if the particular state requires it. South Dakota’s law, for example, requires out-of-state retailers that made at least 200 sales or sales totaling at least $100,000 in the state to collect sales tax. But laws vary dramatically from state to state. Contact us with questions.
As June 12th, both chambers have voted to override Governor Cooper’s veto of the new state budget, allowing it to become law. Included in the budget was a state extension proposal NCACPA worked diligently on over the past several months. The provision requires any taxpayer granted an extension of time for filing a federal income tax return be granted an automatic extension of time to file the corresponding state income tax return and franchise tax return. This becomes effective for taxable years beginning on or after January 2019.
Do you know the ABCs of HSAs, FSAs and HRAs? The accounts in this “alphabet soup” offer tax-advantaged health care funding. If you have a qualified high-deductible health plan (HDHP), you can contribute to an HSA. It can grow tax-deferred similar to an IRA. An HDHP isn’t required for you to contribute to an FSA. What you don’t use by year end, you lose, but there are exceptions. An HRA also doesn’t require an HDHP, but only your employer can contribute. Any unused portion typically is carried forward. Questions about taxes and health care expenses? Contact us.