December 23, 2017

Review of new tax law

Below is LFC review of the new tax law recently signed into law by the president.  Some of the more significant aspects of the law are:
  • Corporations will have their tax rate cut from 35% to 21%
  • Top marginal income tax rate for individuals will be lowered from 39.6% to 37%
  • State & local property taxes, income taxes, and sales taxes will be deductible up to $10,000.  It will be some combination of these three taxes that will be allowed.
  • A pass-through deduction on earnings - those businesses that are pass-through (LLCs, S-Corporations, partnerships, sole proprietorships) will be able to deduct 20% of operating income 
  • Medical expenses are now deductible above 7.5% of AGI.  Current law was at 10% of AGI (this available for 2 years).  
  • Credit for children under 17 is raised to $2000 from $1000. 
  • Tax changed:  10%, 12%, 22%, 24%, 32%, 35%, & 37%.  Brackets expanded to have more income taxed at the lower rates.

The IRS will be making adjustments to the tax tables they use for withholding taxes.  This will occur in late January or early February.  If you are a W2 employee, you should consider making changes to your W4 after the tables change to accommodate these new laws.

Please contact LFC for all of your 2018 tax planning needs (W4 assistance, estimated tax payment calculations).

October 24, 2017

Year-end planning 2017

LFC would like to encourage small business owners & individual taxpayers to begin year-end tax planning as soon as possible. Whether you run a business or are a W2 employee, there are many things one can do before the year ends.

Go to the LFC  website to schedule a time to meet:

October 9, 2017

Payroll Services from LFC

Payroll services are available to businesses in the following ways:

1.  A third-party service - processes all paychecks and tax payments on behalf of small businesses.  

2.  Payroll software inbedded in financial software.  QuickBooks Desktop financial software program has an add-on for payroll processing that is fully integrated with the accounting system.

3. Payroll services via the web - QuickBooks Online payroll works as an independent website that provides payroll processing for which the data can be exported easily to QuickBooks financial software.

Third-party services do provide ease of processing since companies are simply responsible for providing hours for each payroll, and then enter data into their financial software via journal entries.  These services provide convenience but they can be costly.

The other two processes, as offered by QuickBooks, are a hands-on, cost-effective approach for small businesses.  And, they are easy to use.  QuickBooks Desktop Payroll and QuickBooks Online Payroll are offered as a subscription-priced product.  All taxes and governmental reports can easily be filed electronically.

LFC provides payroll solutions using QuickBooks products.  Please contact our office if you need to beginning with a payroll system or if you are interested in converting to the QuickBooks system from an existing system.

October 8, 2017

LFC Subscription Program

LFC offers subscription plans for individuals and small businesses by providing packaged services on a pre-paid basis.  These plans include:

Individual Plans

  • Cost:  $20/month
  • Includes 5 hrs of accounting/consulting services for the year at a discounted rate of $48/hr (vs $60/hr normal rate - 20% discount)
  • 15% discount on tax return for the year

The services provided would include:

  • W4 analysis
  • Year-end tax planning
  • Email & Telephone correspondence
  • Tax preparation
  • Research time on accounting/tax issues 

Business Plans

  • Cost based on pre-paid hours purchased for a month at $50/hr 
  • Fees due on the 1st of each month
  • Advanced payment can be used for wide range of services

Services provided under business subscription plan include:

  • QuickBooks Set-up
  • Remote Access troubleshooting
  • QuickBooks Training
  • General bookkeeping services

Any hours not used in a particular month can be carried over to future months to be used for services listed above.  Additional hours incurred during a month beyond the number of prepaid hours purchased will be billed and paid before the next prepayment is made at the rate of $50/hr.

If you are interested in starting a subscription plan with LFC, please contact the office.

October 3, 2017

Year-end tax planning 2017

With the 2016 tax season wrapping up (extension deadline of 10/15/17 approaching), now is a good time to begin thinking about year-end tax planning for the 2017 tax year.  Some important tax items to consider if they occurred during 2017:

1.  Received a large bonus or will receive a year-end from your employer
2.  Sold stock for a large gain
3.  Change of filing status (married to single, single to married, married to widower/widow, etc)
4.  Child born
5.  Child turned 18 in 2017 (loss of child credit)
6.  Taxpayer or dependent became a college student
7.  Began taking care of an elderly parent
8.  Started a business
9.  Sold a business

These are just some things to keep in mind for tax planning before the end of the year.

Keep in mind, taxes are paid by taxpayers through withholding taxes from paychecks and through estimated tax payments if self-employed or you have income not subject to withholding such as pensions, interest, or dividends.   If you need help assessing whether you will need to make estimated tax payments, please contact LFC office for assistance.

The 4th quarter estimated tax payment is due 1/15/18.