Category: Newsletters

Nuts and Bolts of Depreciation – there are a few ways to record depreciation on your tax return.

Unemployment, Side Gigs and Tax – the pandemic has been front an center most of the year and it may have tax implications for you.

Improve Customer Service to Wow Your Clients – taking your customer service up a notch can reap huge benefits

December 2020 Client Profile

End of Financial Year Tune Up – reviewing where you stand financially before year end means you take advantage of tax-saving opportunities and start financially strong.

Track Your Dollars – tracking your expenses will help you take control of your financial life.

December 2020 Questions and Answers

December 2020 Short Bits

AUDIT DECLINE

The IRS is auditing fewer returns. In 2019, it audited only 0.4% of individual returns. That’s about one out of 250 returns. The bulk of all IRS audits are done by mail and focus on narrow issues. In 2019, taxpayers claiming the earned income tax credit saw increased audit rates. About 1.2% of these filers were audited.

COUNTING COUNTS

Every 10 years, the Census Bureau counts the number of people living in the country and its territories. Why do they do this? It helps determine the amount of federal funding your local community receives for things like firefighting, highway construction and school lunches. It also determines how the seats in the House of Representatives are divided among the states.

MORE WORK

A recent survey by the Pew Research Center suggests that granting women the right to vote helped gender inequality but there is more work to do. Seventy-seven percent believe sexual harassment presents a huge obstacle to women being equal with men. Other obstacles include different societal expectations between genders, not enough women in positions of power and workplace discrimination including lack of equal pay.

DEDUCTIBLES INCREASE

According to a new study from EBRI’s Center for Research on Health Benefits Innovation, health insurance deductibles continue to increase. The study showed that salaried individuals have higher deductibles than hourly individuals. Additionally, the study finds that union members have lower deductibles than those not in unions. HSA-eligible health plans had the highest deductibles, but HMO/EPO plans had the largest increase in deductibles.

Cora and her husband have three children under the age of 15. She has witnessed her parents’ health deteriorating and is stressed knowing she will be responsible for their care. How can she prepare for the inevitable?

Cora should start by investing time now to prepare. She should talk with her parents to get a complete picture of their financial and legal affairs. Do they have wills, long-term care or life insurance policies?

How about medical directives or powers of attorney? If not, Cora should consider getting these now instead of waiting until a health crisis. Having to handle these administrative tasks along with her grief may lead to unintended consequences.

If one parent is a veteran, the local Veteran Affairs office may have options for elder care and assistance.

Is downsizing right for her parents? Selling their empty nester home can yield a significant cash windfall and up to $500,000 of gain is excluded from tax, assuming eligibility tests for ownership and residency are met.

_{Client Profile is based on a hypothetical situation. The solutions we discuss may or may not be appropriate for you.}

The COVID-19 pandemic disrupted everything from education to business as we know it. Here are some considerations as you continue to run your small business during these challenging times.

VIRTUAL VS. IN-PERSON

With stay at home orders, lockdowns and temporary closures, your employees had to work remotely to keep business running relatively smoothly. Now that it’s been several months, determine whether it makes sense to keep employees remote. Recent research* indicates that nearly half of employees feel more productive when working from home. Of course, you’ll want to implement measures to ensure your employees remain productive. One bonus of not being tied to a physical office is that it widens your pool for future job applicants. That means you could attract top talent who live in another city or state.

OFFICE OF THE FUTURE

Even with remote employees, you may find that you still need an office; albeit a less expensive smaller one. For employees with jobs that don’t allow for remote work, de-densifying will be key. Ensure employees are adequately separated or alternate days that they come in. Be sure the office is sanitized regularly. Safety first. And if employees need meeting rooms to visit with clients, when videoconferencing isn’t an option, maybe reconfiguring your office space to include more meeting rooms is necessary.

BEHAVIOR CHANGES

More people are shopping online and staying home. Maybe now’s the time to create your online store to allow customers to order your products. Or offer curbside pickup for local customers. Providing multiple options for customers to buy will increase revenue and help build brand loyalty. Also, now might be the best time to implement a digital marketing strategy. With more people spending time online, enhancing your social media presence or delivering relevant content can pay off.

^{* https://www.mckinsey.com/business-functions/organization/ our-insights/reimagining-the-office-and-work-life-after-covid-19}