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Archives for January 2019

How to Hire the Right Accountant

January 31, 2019 by BGMF CPAs

hire a CPAChoosing an Accountant Who Puts Your Goals First

There is an endless supply of do-it-yourself accounting software, tax preparation tools and websites, and the sheer volume of options can lead you to believe the process of handing this function of your business or tax situation is simple.

However, a DIY approach only works if you are satisfied with paying more than necessary and questioning whether your business is making money or not. Tax preparation software handles all of the basics, importing income and considering common tax deductions. Accounting in itself is challenging and it’s important to ensure your financials are accurate to know how to make proper decisions.

Unfortunately, when it comes to careful application of less-common tax-reduction techniques, these programs simply can’t compete with a skilled tax professional.

Our most successful clients utilize our Springfield, OH CPA firm to the fullest based on their individual and business needs. Robert Kiyosaki (Author or Rich Dad Poor Dad) said, business and investing are team sports and surrounding yourself with a quality team of professionals will assist you in achieving your goals.

Trying to save money upfront, majority of the time, will cost you in the long run.

Six Reasons to Hire a Highly-Qualified Accountant

As you know from your experience in business settings, companies that focus on their core mission are more successful. Devoting internal resources to creating excellent products and services, while outsourcing peripheral functions like IT and HR, makes it possible to innovate and deliver best-in-class solutions.

Focusing on your core mission is just as critical when it comes to taxes and accounting. The time you would spend trying to track down tax and financial information is better applied elsewhere, and you are likely to pay more in the end anyway. Cleaning up accounting and tax matters is more time consuming and costly to you.

These are six ways your accountant will free up resources for you to use in ways that will further your personal mission:

  • The tax code is constantly changing, and deductions that were available last year may not be appropriate today. Conversely, expenses you couldn’t deduct in previous returns may now be permitted. A skilled accountant stays on top of these changes and applies them to your situation, so you don’t have to complete extensive research.
  • Much of the tax code is spelled out and clarified based on specific cases. Unless you are following industry developments day in and day out, you are likely to miss all but the most significant decisions. Your accountant has years of experience with filing returns, and continuing education is required in every state. You can be sure that these professionals understand what works – and what doesn’t.
  • Experience also helps when it comes to developing your long-term tax savings strategy. Accountants have watched businesses grow and change, and they know how to get results. Their expertise in complex decisions like choosing a business entity or whether to consider cost segregation can be invaluable.
  • Different types of income are taxed at varying rates, and do-it-yourself filers often assume there is nothing that can be done to change their circumstances. Talented accountants know better. With the help of a skilled professional, it may be possible to move income from high-tax categories to low-tax categories, which can mean significant savings. .
  • Assisting with accounting and financial reporting matters ensures an expert review enabling you to focus on other strategies. Each day, week or month you will confidently know where you stand from a financial aspect.
  • Finally, timing is always important in the financial world, and that holds true when it comes to your tax strategy. Accountants have a deep understanding of the economy’s ebb and flow, and they notice patterns that have played out over the course of their careers. They use this experience to advise on when and how to apply tax strategies for maximum savings.

Learn more about why and how to choose the right accountant for all of your tax, accounting and consulting needs by clicking here!

Filed Under: Accounting Tagged With: find an accountant, hire an accountant, hiring a cpa

The New Estate Tax – Time to Revisit Your Plan?

January 11, 2019 by BGMF CPAs

Estate TaxesTongue-in-cheek conversations love to make jokes about death and taxes as being the two only certain things in life. Well ironically, on the surface anyway, the new, colloquially termed “death tax” flies in the face of this popular “accepted truism” – well, almost.

Stripping the latest Estate Tax Law (effective January 2018) down to its nuts and bolts, we see that any single taxpayer who calculates his or her assets to be under $11.2 million can cast all worries to the wind – at least for the next 8 years. Thinking a little wider, a married couple has a clear runway if their estate is valued under $22.4 million. After that, the terrain gets decidedly more uninviting, allowing the IRS to potentially grab a flat 40% of estate value above the restated threshold.

Let’s be clear, room under the newly raised tax barrier has been improved by some 100% versus where it was in 2017 (i.e. it was $5.4 million and $10.8 million for a single-payer and married couple, respectively), which in anyone’s language is no mean concession. It was a bumper move make no mistake, and possibly a first decisive step in the Trump Administration’s determination to eradicate death taxes altogether. However, this particular tax item has been around for donkey’s years and its stubborn reluctance to leave the stage forever, and in every way, is simply not happening.

Statistically speaking there is no doubt the case can be made for the new threshold (all but) killing death taxes. Last year, and for some time before that, 2 in every 100 tax-paying families (a reliable estimate) were caught up in the estate tax net. The 2018 proclamation whittles it down to 1 in every 1000.

When paradigm shifts like this hit the ranks of the rich, especially the uber-rich, there are invariably a number of curved balls being launched in different spots. One of these affects families now facing estate valuations between the new and old yardsticks. More often than not an irrevocable trust is somewhere in the mix from years back, and this means it has built-in inflexibility. The thing is, it becomes one big head-scratcher when one tries to re-introduce assets back into the estate (to take advantage of the higher limit) extracted from a structure that’s purposely designed to be rigid.

Another one takes aim at the time-aged estate plans that have combined themselves with generation-skipping transfers and gifting options. The chances are that the new laws have moved the goalposts to a place not all that appealing to either the surviving spouse or the children/grandchildren. This flows straight into the next bump in the road – spending money on revising an estate plan that looked good for so many years. No longer is this cost tax deductible, but considering what’s at the stake here the $2000 – $10,000 tax accountant’s fee may be the best money you spend in 2018.

Some tax authorities are slamming the new Estate Tax as ill-planned and lacking foresight. The big fly in the ointment is the sunset clause, which taxpayers close to the new or old estate value tax limits should pay attention to. Things are touch-and-go when you consider that that there’s probably a huge assessed tax difference (in the multi-millions) between the surviving spouse dying in 2026 or just one year later. Throw in the intermingling of the estate tax with gift tax and generational skipping and it puts all these items on the proverbial chopping block. Some estate plan moderation at the very least is on the cards, and perhaps a complete renovation in cases.

If ever there was a time to make an appointment with your tax team to look at estate planning, it’s now. The variables that are pushing and shoving the comfort zone back and forth have to be addressed in the most emphatic way. Our professional experts are geared and ready to get into your corner and make any needed transition as painless as possible.

Learn more about BGMF CPAs trust and estate tax services and how we can assist you through this complex process.

Filed Under: Estates & Trusts Tagged With: estate plan, estate tax

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