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Tax Tips

29 04, 2024

Tax Benefits that Small Business Owners Need to Know

2024-04-26T15:49:14-05:00April 29, 2024|0 Comments

Are you a small business owner looking to maximize your benefits and save on costs? There are two tax benefits that small business owners need to know about with recent law changes that could help them reach both goals.

Two must-know tax benefits for small businesses

Let’s look at two credits that can help business owners save money and provide valuable employee benefits: the retirement plan start-up cost credit and the small employer health insurance credit.

Retirement Plan Start-up Cost Credit

As we start to review tax benefits that small business owners need to know, we should mention the law change in 2022 that enhanced the tax credit known as Secure 2.0. One of the most notable changes the Secure 2.0 Act brought about is the significant increase in the retirement plan start-up cost credit.

More specifically, it increases the credit to 100% of qualified start-up costs for employers with up to 50 employees. Employers with 51-100 employees are still eligible for a credit of 50% of qualified start-up costs.

According to the IRS, eligible employers could claim a tax credit of up to $5,000 for three years. Credits can apply to the costs of starting a SEP, a simple IRA or a qualified plan such as a 401(K).

Small Business Health Care Tax Credit

Another one of the tax benefits that small business owners need to know about is the small business health care tax credit. This credit helps small businesses afford the cost of providing health insurance to their employees.

This tax credit can benefit small businesses with less than 25 full-time employees who, on average, pay less than $61,400 per employee in 2023. 

In general, the maximum credit is 50% of premiums paid for small business employers and 35% of premiums paid for small tax-exempt employers. What’s more, the credit is available to eligible employers for two consecutive taxable years.

Find out more information about qualified health plans offered through the SHOP Marketplace at Healthcare.gov.

Summary

Are you wondering if your small business is missing these tax credits or others? Are you ready to learn more about the requirements for each tax credit? That’s what we are here for! Contact us to schedule your free consultation to learn how we can help your small business with taxes and more. Keep reading our blogs for additional tax tips and other industry news.

28 03, 2024

5 Things to Know about 2023 Taxes

2024-03-25T14:19:16-05:00March 28, 2024|0 Comments

Are you realizing Tax Day is quickly approaching and you still haven’t noted what’s changed for 2023? Deadlines have a way of sneaking up, and luckily, we’re here to remind you of five things to know about 2023 taxes before you file.

Tax brackets changed slightly. 

First on the list of things to know about 2023 taxes is that the tax brackets, or income ranges, for each of the seven tax rates shifted to account for inflation. To clarify, the rates didn’t change, but there was an increase in the income brackets. 

The top rate remains at 37% for single filers, but the income rate increased for single filers with an income of $539,900 or more in 2022 to $578,126 or more in 2023, for example. For a married couple filing jointly, the income range increased to $693,751 or more in 2023 versus $647,850 or more in 2022. 

The lowest rate is still 10%. The income brackets have bumped up to $0 to $11,000 for single filers and $0 to $22,000 for married couples filing jointly. Review all seven tax rates and brackets here. 

The standard deduction increased. 

Another change for taxes in 2023 is the standard deduction will increase too. 

For instance, according to the IRS, the standard deduction for married couples filing jointly for 2023 increases to $27,700, which is a $1,800 jump from 2022. What’s more, the standard deduction for single taxpayers and married couples filing separately increased by $900, rising to $13,850 in 2023. For heads of households, the standard deduction increases to $20,800 in 2023, a $1,400 boost from 2022.

The Child Tax Credit may give you a tax break.

If you have a qualifying child under 17 in 2023, the maximum Child Tax Credit is $2,000 per child if your annual income is less than $200,000 or $400,000 for a joint return. For other qualified dependents, you can claim a $500 credit.

Changes were made to retirement contribution limits. 

For those planning for retirement, it’s important to note that the contribution limits for retirement accounts have increased for 2023. The contribution limit for 401(k) plans has increased from $19,500 to $20,500, while the catch-up contribution limit for individuals over 50 has increased from $6,500 to $7,000.

This increase in contribution limits provides an opportunity for individuals to save more for retirement and potentially reduce their taxable income.

Double-check for any energy tax credits for 2023. 

Be sure to ask your tax professional about the changes and additions to energy tax credits in 2023 under the Inflation Reduction Act. If you’re a homeowner who made qualifying energy-efficient improvements, for instance, you may be able to claim up to 30% of the improvement expenses in 2023 instead of just 10% previously. 

Summary

Now that we’ve shared these things to know about 2023 taxes, it’s time to spring into action. Whether you want to make sure you are maximizing your tax return or you want to ensure the information is accurate, we are here to help. Contact us to learn more about our tax services, and keep reading our blogs for more industry news and tax tips. 

28 02, 2024

Direct Tax vs. Indirect Tax: What’s the Difference?

2024-02-20T10:50:06-06:00February 28, 2024|0 Comments

Direct tax vs. indirect tax. You’ve probably heard these terms before, but do you understand what they are and how they differ? Keep reading to learn the differences between direct tax and indirect tax.

What is a direct tax?

A direct tax is a tax levied on companies and individuals that cannot be passed onto another taxpayer.

What’s more? Direct tax is progressive, and the tax burden increases with income. Meaning, an individual with a high income will pay a disproportionate share of the tax burden, whereas someone with a lower income will see a small tax burden.

Direct tax types

There are five categories of direct tax: individual income tax, corporate income tax, capital gains income, estate tax and property tax.

Individual income tax

Individual income tax, or personal tax, is a tax imposed on salaries, wages, investments or other forms of income a household receives.

Corporate income tax

Incorporated businesses are taxed on their profits minus their allowable deductions. This is a corporate income tax.

Capital gains tax

Capital gains tax is a tax on the profit made from the sale of an asset, such as stocks or property. These tax rates can vary depending on two factors: income level and how long an asset has been held.

Estate Tax

Estate tax is a tax on the net value of a person’s taxable estate at the time of their passing. The estate pays the tax before any assets are distributed to the heirs.

Property tax

Property tax is a tax imposed on commercial and residential properties such as buildings and land. This tax can also be levied on tangible personal property like business equipment, inventory and vehicles. Property taxes vary between states.

What is an indirect tax?

Continuing with direct tax vs. indirect tax, indirect tax is a tax that can be passed on to another entity or individual. This type of tax can be imposed on goods or services.

Furthermore, an indirect tax is regressive. Meaning the tax is applied regularly regardless of an individual’s level of income.

Indirect tax types.

There are four main types of indirect tax: sales tax, excise tax, value-added tax and gross receipts tax.

Sales tax

Sales tax is a consumption tax on the sale of goods and services. This means once the tax is added to the sales price of a good or service, it is then charged by the retailer. The retailer then remits that tax to the government. Sales taxes differ from state to state.

Excise tax

Excise tax is a tax levied on specific goods such as alcohol, tobacco and fuel. Typically, companies pay the excise tax and then pass the cost of it onto the consumer—this is known as the hidden tax.

Value-add tax

Value-add tax, or VAT, is a tax on the value added at each stage of the production of a good. Each business along the production chain pays a VAT at that stage, and the business in the earlier stage is then reimbursed. Ultimately, the end consumer pays the VAT.

Gross receipts tax

The gross receipts tax is a sales tax that applies to business-to-business transactions. Businesses are required to pay on their gross receipts, or their gross sales, without deductions. The gross receipts tax is applied to the business, but the cost of the gross receipts is often passed onto the consumer.

Summary 

To summarize, it may help to talk to a professional when it comes to dealing with direct tax vs. indirect tax. If you are ready to start understanding your taxes better, give us a call at (704) 919-3220. And in the meantime, continue reading our blogs for more industry news and tips.

29 01, 2024

6 Tips for Learning How to Use QuickBooks

2024-01-22T16:03:41-06:00January 29, 2024|0 Comments

As the end of January approaches, are you realizing that accounting software like QuickBooks could be useful in reaching your 2024 business goals? Luckily, we are here to help by sharing these six tips for learning how to use QuickBooks with ease! 

Have a basic understanding of accounting principles.

First of all, learning QuickBooks will be easier if you have a basic grasp of accounting. That doesn’t mean you need to become an expert, but understanding the guidelines for reporting financial data is key to having accurate numbers and making informed financial decisions. 

Note your daily objectives.

If you are tackling QuickBooks on your own, try breaking up your daily objectives to help structure your learning plan. For example, day one could include going through initial QuickBooks tutorials to get started and browsing through the program to become familiar with it. 

On day two, objectives might include entering basic information, getting organized and possibly setting up a few accounts. From there, you can start learning more about inputting employee information, customer information, invoicing and so on.

Explore QuickBooks tutorials and videos. 

Next on the list of tips for learning how to use QuickBooks is a no-brainer! Take advantage of the plethora of information created by QuickBooks to help beginners like you. 

Their resources include tutorials, webinars and videos to make learning easy and self-paced. 

Learn handy QuickBooks keyboard shortcuts.

The software also uses a variety of convenient QuickBooks keyboard shortcuts to make some common actions even quicker. For instance, Ctrl + A pops up the Chart of Accounts window. Ctrl + C copies your selection to the clipboard, and Ctrl + I takes you to an invoice. 

Watch YouTube videos. 

Try learning QuickBooks through a variety of approaches, including watching YouTube videos made by QuickBooks pros. 

Work with us for one-on-one training.

Finally, when it comes to tips for learning how to use QuickBooks, work with a professional for personalized, one-on-one instruction. Did you know we are your local QuickBooks professionals in Charlotte? 

As a proud member of the QuickBooks ProAdvisor Program, we can ensure you set up QuickBooks for your business correctly from the beginning. Plus, we can help you manage and apply it moving forward.

Summary

In summary, find out more about the benefits of using QuickBooks for your small business. Then connect with us to get started. Are you looking for additional accounting information, from tax tips to deciding what business entity is right for you? Keep reading our blogs and discover all that and more! 

28 12, 2023

6 Accounting Resolutions for Your Business This New Year

2023-12-28T10:15:35-06:00December 28, 2023|0 Comments

With the new year just around the corner, it’s time to make your new year’s resolutions. And we don’t mean changing your diet or exercise routine—we’re talking about the resolutions you should make as a small business owner. Check out these accounting resolutions for your business this new year.

Meet with your accountant.

First and foremost, it is important you meet with your accountant. This will allow you to review your year-end numbers and lay out a plan of action in order to achieve the new year’s goals. Additionally, you should schedule regular meetings with your accountant to stay up-to-date on your finances.

Conduct a financial review.

Not so much a resolution, but an essential task for moving into the new year—if not every quarter—is to conduct a financial review. In doing so, you can double-check your figures and see if your business is in good financial standing as the year ends.

Understand any tax changes.

Tax codes and regulations change every year. This includes district, county, state and federal levels. Be sure, when meeting with your tax professional, that you review and understand the newest and most up-to-date regulations and how they will affect your company’s tax returns.

Update your accounting software.

When making accounting resolutions for your business this new year, add updating your account software to the list. There are a wide variety of accounting software options that can help your business run smoothly and more efficiently with accurate bookkeeping.

Talk to your clients.

When creating goals for your business in the new year, you will want to know what your clients wants and needs are, as well as where your business is excelling and lacking. Send out a survey or contact your clients for feedback in order to find where you can improve.

Set your business goals for the new year.

Now onto the most important resolution for your business: setting goals for the new year. How can you improve your business? How will you grow your revenue? Make a plan and set goals in order to streamline your accounting and more.

Summary

And don’t worry, if you’re searching for a team of trusted professionals that can help you with these accounting resolutions for your business this new year, contact Todd Greene! We can help you with small business accounting and bookkeeping, new business planning, tax preparation, tax planning and much more.

In addition, continue reading our blogs for more financial tips and accounting news.

28 11, 2023

5 Tips for Charitable Gifting

2023-11-27T14:11:21-06:00November 28, 2023|0 Comments

‘Tis the season of giving, so why not get the most out of your giving, not just personally but financially as well? We’re sharing these five tips for charitable gifting to help you, the giver, maximize the benefits. 

Before we get into our helpful tips for charitable giving, let’s quickly state the obvious. Giving to others makes us feel good. But the benefits of giving can go well beyond feelings. In some instances, charitable gifts can actually reduce your taxable income. 

Plan your giving.

For starters, impactful giving takes planning. And knowing who to give to takes thought and research, including understanding which charities and donations qualify for tax deductions. First of all, you have to give to an IRS-approved charity—for nothing in return—to claim a tax deduction.

Enjoy a little tax relief.

In fact, there are many tax-planning opportunities with charitable donations that you can take advantage of for the largest deduction possible. In general, charitable contributions allow you to deduct up to 60 percent of your adjusted gross income. But, depending on the organization and the kind of contribution, you may only be allowed to donate 20 percent, 30 percent or 50 percent of your income.

No matter how many organizations you donate to, the limit applies to all of your donations made during the year.

Cash and household items can be tax-deductible. 

Remember to ask for a receipt or proof of your charitable donation. Typically, any cash donation of $250 or more needs written acknowledgement from the organization stating when the gift was given.

However, smaller donations can be verified with a copy of a bank statement or a receipt from the charity, for example. If you decide to make a charitable donation through a payroll deduction, be sure to keep your pay stub, a W-2 form or some other record from your employer showing the date and amount. 

While certain charities and organizations will accept gently used household items, including clothes, toys and furniture, the rules for non-cash donations are a little stricter. Again, be sure to talk to your accountant for more in-depth information about these guidelines. 

Check to see if volunteer expenses are tax-deductible. 

While volunteers can’t deduct the estimated value of their time or services, they can deduct certain costs of volunteering for an approved organization from their taxes. Examples of direct expenses that could be claimed include mileage. 

The miles you travel to volunteer opportunities and charitable events, as well as the mileage you use to transport goods to donation sites, can be deducted from your tax deduction contributions—just save the receipts. 

Pay attention to the deadline.

Your donation must have been made by the end of that specific tax year for it to be recognized as tax-deductible when you file. For instance, donations that you want to claim on your 2023 tax return, which must be filed by April 2024, must be made by December 31, 2023.

Summary

Last but not least, when it comes to tips for charitable gifting, work with a tax professional you can trust. To find out more about charitable gifts and tax breaks, contact us to schedule a free consultation. For more industry news and tax advice, keep reading our blogs. 

28 09, 2023

Business Entities Defined: Limited Liability Company and Its Benefits

2023-09-28T16:21:16-05:00September 28, 2023|0 Comments

Before you start a business, several decisions must be made, including the business structure. One of the most popular business structures in the U.S. is a limited liability company. So, let’s look at a limited liability company and its benefits more in depth to see if it’s the right setup for your future company.

What is a limited liability company?

For a better understanding of a limited liability company and its benefits, let’s start with the definition of a limited liability company. To summarize, it is a hybrid entity that combines the features of a corporation with those of a partnership or sole proprietorship.

Limited liability companies protect their owners from being held personally liable for the obligations of the company. Similar to a corporation, an LLC offers its owners limited liability in the event that the company fails. However, like a partnership, an LLC “passes through” its profits so that the owners must pay taxes on it as part of their individual income.

In fact, those very traits are two of the main advantages of a limited liability company.

The benefits of LLCs

One of the biggest benefits of a limited liability company is that it is a separate entity. In other words, the personal assets of company owners or members cannot be used to fulfill the company’s debts and other obligations. Therefore, members only risk losing what they invested in the company, not their individual belongings.

The flexibility of how an LLC is to be taxed is another one of the benefits. While LLC’s can be taxed as corporations, partnerships or sole proprietors, the default tax classification is as a sole proprietor if it has one member and as a partnership with two or more members.

In a nutshell, all the companies’ profits can be distributed directly to the owners, which are then taxed as part of their personal income. This prevents “double taxation” of the business and its owners because it’s only taxed once.

Whereas with a corporation, for instance, the profits are taxed first at the company level and then again once the profits are passed on to the business shareholders.

In addition to limited liability and streamlined taxation, limited liability companies are relatively easy to set up and offer a more flexible management structure than other types of business entities. However, rules and regulations vary state-by-state, so be sure to double-check your state’s requirements.

Summary

Now that we’ve reviewed more about a limited liability company and its benefits, get ready to take the next step with our help! Did you know we offer new business planning services? We do! Contact us to schedule your free consultation. In the meantime, keep reading our blogs for more industry news.

28 07, 2023

The Benefits of Working with an Enrolled Agent

2023-07-24T15:18:44-05:00July 28, 2023|0 Comments

By definition, the word “tax” is straightforward. Simply put, taxes are amounts of money collected by the government to pay for public services. However, in reality, taxes can be anything but simple, which is why the benefits of working with an enrolled agent are good to know.

They are tax experts.

While the benefits of working with an enrolled agent are varied, this is a big one! You are working with a tax expert when working with an enrolled agent.

First of all, specific, strict qualifications must be met to become an enrolled agent, including passing a comprehensive IRS exam. Candidates must demonstrate expertise in individual and business tax return preparation, representation and federal tax planning.

Secondly, to maintain their status, enrolled agents are required to finish 72 hours of continuing education courses focused on tax preparation every three years.

It’s a select group of individuals.

In fact, there are only two ways someone can become an enrolled agent. As mentioned, there is a three-part comprehensive exam.

Or, an individual can become an enrolled agent based on experience gained as a former IRS employee for a minimum of five years.

They can represent clients before the IRS.

In other words, enrolled agents earn the right to represent taxpayers before the IRS. More specifically, enrolled agents have unlimited practice rights, like attorneys and CPAs. CPAs can also represent clients before the IRS.

To clarify, it means an enrolled agent is free to represent any taxpayer. They are qualified to handle any and all types of tax matters. And, finally, there are no restrictions in terms of which IRS office they can represent clients before.

You won’t have to see or deal with the IRS at all.

Another one of the benefits of working with an enrolled agent is your agent can speak directly to the IRS on your behalf. Whether you receive a letter from the IRS or you are being audited, enrolled agents can represent you on any tax matter, no matter who prepared the tax return, for instance. Again, CPAs are also qualified to represent taxpayers before the IRS.

Summary

To summarize, an enrolled agent has earned the highest credentials granted by the IRS. If you are looking for a true tax professional to help handle your taxes, properly prepare your tax returns and more, look no further than an enrolled agent.

At Todd Greene, CPA, PLLC, we currently have two accountants in the process of earning enrolled agent status. We also have two CPAs on staff! Learn more about us, our team and our tax services—and find free tax advice—when you continue to read our blogs.

30 05, 2023

What to Do If You Missed the Tax Deadline

2023-05-22T14:15:31-05:00May 30, 2023|0 Comments

If you missed the April 18th tax deadline, don’t panic! Instead, keep reading to find out what to do if you missed the tax deadline last month.

File as soon as possible.

First of all, when it comes to what to do if you missed the tax deadline without requesting an extension, you should still file as soon as possible to limit interest and penalties.

The good news is that if you are owed a tax refund, you won’t receive any penalties for filing late.

Find out if you automatically qualify for more time.

Certain circumstances mean some taxpayers automatically get extra time to file and pay taxes without penalties or interest.

For example, if you are a disaster victim, in the military, support personnel in combat zones or a U.S. citizen who is working outside the country, you could qualify for an automatic extension. Find out more here.

File and pay what you can now.

If you didn’t file by the April 18th deadline and you owe taxes, you could be hit with at least two penalties. First, there is a failure-to-file penalty. Next, there is a failure-to-pay penalty.

Even if you do have penalties, don’t put filing and paying what you can off any longer. In fact, when you file and pay what you can, you can then request a payment plan from the IRS to help.

Use e-file with direct deposit.

If you know you owe taxes to the IRS, you can pay promptly and securely through several options, including Direct Pay, for instance.

Even if you don’t meet the IRS income threshold for filing taxes, file anyway.

Did you know you could be missing out on potential refundable tax credits by not filing? It’s true. Even if your taxable income is less than the IRS income threshold for filing, you should still file a tax return.

You may be eligible for tax credits such as the Earned Income Tax Credit.

Work with tax professionals.

Finally, work with tax professionals like the ones you will find at Todd Greene, CPA, PLLC, to help you take the next steps, like properly preparing your tax return.

Summary

Now that you know what to do if you missed the tax deadline recently, contact us to get started. For more helpful tax tips and other financial news, continue to read our blogs.

28 04, 2023

The Benefits of Year-Round Tax Planning for Business Owners

2023-04-21T11:40:06-05:00April 28, 2023|0 Comments

We know you just filed your 2022 taxes, but that doesn’t mean you should stop thinking about them! Taxes should be a part of your business’ strategy year-round in order to maximize your gains and minimize your losses. Let’s take a quick look at the benefits of year-round tax planning for business owners.

Helps mitigate your liabilities.

Creating a tax plan is essential for business owners in order to mitigate their liabilities, largely for those transactions that are taxed. By doing this and giving yourself time to prepare for taxes, you will see many benefits, including:

  • Avoiding common mistakes
  • Maximizing tax relief
  • Reducing your payable taxes by deducting your expenses from earned income
  • Having greater control over when you pay your taxes

An example of poor tax planning is taking in a large amount of revenue before the end of the year that could potentially move your business into the next tax bracket. Instead of paying more taxes because of the increased revenue, good tax planning would have your business receive that money at the start of the new year.

Keeps you up to date on tax laws.

Having a tax plan also helps you stay updated on tax laws and any changes. Since the pandemic, tax requirements and deadlines are constantly changing for businesses. A tax plan allows you to understand what’s changed and lets you reassess your strategy.

When you have a good understanding of current tax laws, you won’t risk infringement with new or updated regulations. You will also be able to minimize the number of errors on your return. By doing this, you won’t have as much worry about an audited return or owing more money.

Enables growth.

The benefits of year-round tax planning for business owners don’t just stop there. Strategic tax planning also allows you to understand your business and its financial health. That means you can make sound financial projections and investments.

With the help of proper tax planning, you can maximize the deductions your business is eligible for. In turn, your business can save money and fund future business ventures.

Summary

Now that you know these major benefits of year-round tax planning for business owners, are you ready to get started with your business tax plan? Then contact the Todd Greene team to learn how to build wealth and grow your business with confidence.

Finally, continue reading our blogs for more financial tips and industry news.

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