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Trump’s Proposed Tax Changes

Today, Treasury Secretary Steven Mnuchin and Chief Economic Advisor Gary Cohn outlined President Trump’s proposed tax changes. During the presentation, they summarized the president’s proposal to cut the number of income tax brackets to three, with respective rates of 35%, 25% and 10%.

Other proposed changes include a corporate tax cut to 15%, elimination of many tax deductions, as well as a removal of the estate tax and alternative minimum tax (AMT). These proposed changes align closely with the president’s campaign plan.

Though it was not indicated when legislation would be introduced on these proposed changes, Mnuchin expressed… Continue reading

Guide to Financial Statement Services

Guide to Financial Statement Services – Compilation, Review & Audit

As a business owner, there may be many reasons you may need to have your financial statements prepared by an independent licensed Certified Public Accountant. Whether you are a contractor looking to get licensed in your state; or whether you need financial statements for your bank, lender, investors or bonding company – you might be wondering what all the different types of financial statements are and what are their differences. There are three basic types of financial statements in which the underlying work involved and level of assurance provided varies… Continue reading

Last minute year-end tax savings strategies

If you’re like the rest of us in today’s faced paced world… you look up and find yourself having to do everything at the last minute. Well here are some quick last minute year-end tax savings strategies for you and your business.

Cash basis business owners:

  • Hold deposits to deposit after the year flips to defer income recognition
  • Prepay expenses, vendors, retainers, etc to accelerate deductions
  • Consider using a credit card to pay deductible expenses before the end of the year. Doing so will increase your 2016 deductions even if you don’t pay your credit card bill until after the… Continue reading

Using real estate to build wealth

How Trump used the Tax Code to build wealth and How You Should Too

Did you know that real estate is the only investment in the US that can be expensed? You can’t expense the purchase of stocks, bonds, or investments, however, you can expense your investment in real estate; and often times… do most of that expensing upfront. Note in the article, how The New York Times mentions how Trump used cost segregation to generate non-cash Federal tax losses.

Real Estate is also the only investment class where the government will give you part of the… Continue reading

Defined Benefit Plan

What’s the difference between a defined benefit plan and a defined contribution plan?

A defined-benefit plan guarantees a specific benefit or payout upon retirement. The contributions needed to meet this specified amount at retirement are tax deductible and can allow business owners to make large, tax deductible contributions into their own plans during their high income years. As individuals plan for retirement, it’s important to understand the difference between these two benefit plan types.

A defined-benefit plan guarantees a specific benefit or payout upon retirement, the benefit may be a set amount or may be calculated according to a formula… Continue reading

Are you in need of life insurance?

Hello friends. As the world gets more and more chaotic every day, I have been thinking about the recent passing of friends and family members. Not everybody wants to talk about life insurance, but we all will leave this world one day. Life happens, and we should all be prepared. Whether it’s funeral expenses or income protection for your family and loved ones, this is a conversation that you should have with your insurance advisor sooner rather than later. So are you in need of life insurance?

To talk to an independent licensed insurance advisor, contact us today!

info@gracpafirm.com

877-455-3055 x4

What are common business deductions?

Business expenses are the cost of carrying on a trade or business. Deductible business expenses (business deductions) are those that are ordinary and necessary which were paid (cash basis) or incurred (accrual basis) during the year. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.

Business deductions are usually tax deductible if the business operates to make a profit. Tax deductions are valid business expenses that you claim on your taxes. Claiming these business deductions saves you money by… Continue reading

Cancelled Debt Income

If it’s been a rough number of years for you recently, you’re not alone. Many Americans lost their homes to foreclosure following the 2008 financial crisis. Even today, many Americans are still facing foreclosure action or are unable to sustain paying their bills. If you experienced this, I am sure you are hoping the worst is behind you…. But to add insult to injury, if you went through foreclosure, had a short sale of your house or simply had a balance forgiven on a credit card, then you most likely will be receiving a 1099-C – Cancellation Debt Income form… Continue reading

How to determine S Corporation reasonable salary

S Corporation shareholders often come up with a plethora of questions when deciding what to pay themselves and trying to figure out their S Corporation reasonable salary as owners. As tax advisors, we often find ourselves answering most of these questions, especially when it comes to determining ‘reasonable compensation’.

The instructions to Form 1120S, U.S. Income Tax Return for an S Corporation, state “distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation.” Furthermore, the IRS states that “S… Continue reading

Early Distributions from Retirement Plans

Early Distributions from Retirement Plans: What to know

Whether it’s a 401(k) or IRA; if you need to access your qualified retirement funds prematurely, you will likely pay a stiff penalty.

If you take a distribution from your retirement plan early (meaning before the day you turn 59 1/2) you will generally have to pay a 10% early distribution tax above and beyond any regular income taxes you may owe on the withdrawal, which is included in your taxable income. That extra 10% might be called a tax, but in reality it is just an early withdrawal penalty. In fact,… Continue reading