With the most extensive overhaul of the U.S. tax code in more than three decades having now been passed by both Houses of Congress, and officially signed by President Trump to enact it into law, tax reform is here. These changes will require businesses and individuals to re-evaluate their long-term tax strategies starting in the 2018 tax year, but also means taking immediate year-end tax planning strategies for the final days of 2017 into consideration.
A while back I held a Lunch & Learn presentation at our office in Knoxville, relating to controlling accounting costs. I know…I bet you didn’t know that was possible! Well, this is the 21st century, and it is definitely possible.
A Brief History of Traditional Professional Service Billing Practices
For many years, financial professionals have billed by the hour. Someone might charge $200 per hour for however long it takes to get it done. But, what does this method of billing lack? It certainly lacks any incentive to be efficient or effective in achieving the result. If you’re going to pay me $200 per hour, then what is my incentive to get to the end result quickly and without sacrificing quality for preparing, let’s say, a tax return? Not much. The only risk I run if I take my sweet time to prepare the tax return is that you are unhappy with a high bill. Your risk in being billed in this manner is that I could be inefficient and cause your accounting fees to rise as a result of my inefficiency or lack of urgency, either of which is or should be unacceptable. Acceptable use for this method of billing would include when you are being represented by a professional in front of a government body (think IRS) or for face-to-face meeting time. There are other similar services, but these are the two most common examples of a service that cannot readily be quantified and would be billed by the hour.
It’s officially summer!
Fun for time on the beach and fun making mid-year tax moves.
With five months left in the tax year, it’s the perfect time to make some tax moves that could reduce your 2017 tax bill. Here are five easy ones to take care of in July.
A couple of weekends ago I had the pleasure of heading down to the Farmer’s Market on Market Square in downtown Knoxville. It’s been awhile since I’ve been and it really seemed much larger than I remembered. There are definitely more stands of all kinds to visit and now there are FOOD TRUCKS!
Time. It’s the one universal thing we all share, no one person gets anymore or any less. Every night at midnight we are given 24 hours, how we treat them is what makes us diverse.
You know the saying “Time is on my side” well for me time is never on my side. I never have enough of it and I usually try to steal it, let me explain. I always set my clocks 10 minutes ahead, same with my alarms. I say alarms because I set one for just about everything. Picking up kids…alarm is set 10 minutes before it should be so I can be extra ready, waking up…same thing, alarm is set with a 10 minute “cushion”. Heck the ring tone for my alarm is the theme song for the 80’s classic Back to the Future, “Back in Time”, by Huey Lewis and the News.
A few years ago, I attended the Winning is Everything conference put on by the Advisory Board in Las Vegas, NV. A fitting place for a conference about winning! There are so many topics to consider when choosing a conference, and I end up attending several a year to stay up with professional trends, pronouncements and the latest in technology for my profession: Accounting, of course. Though truth be told, I don’t consider myself much of an accountant in the traditional sense. Not to worry, I’m not having a crisis of identity. I just believe that there is a better description out there for what I do and what we do as a firm.
We’re going back in time with this one, I’m looking at Super Bowl XLVIII in 2013 between the Denver Broncos and the Seattle Seahawks. The Seahawks came out on top with a whooping 43-8 score. I’m not generally a big sports fan. I don’t keep stats or play on fantasy leagues. But I DO come from a college town–Knoxville, home of the Tennessee Volunteers, and most of Knoxville loves to follow Peyton Manning. I am no exception. When he is on his game, whether you love or hate him, he is unstoppable. There is no denying it. The night of Super Bowl XLVIII he and most of his team were not on their game, or they were thrown off their game, or, even worse, they threw themselves off of their own game.
I’m going to take the middle-of-the-road approach here and say it was a combination of all three. What was interesting to watch, as long as I could bear to watch, was just how quickly the morale and energy left the Broncos. They were so low even Life Alert couldn’t pick them up.
On May 18, 2016, President Obama and Secretary Perez announced the publication of the Department of Labor’s final rule updating the overtime regulations, which will automatically extend overtime pay protections to over 4 million workers within the first year of implementation.
As employers have been scrambling to review job descriptions and salaries before the December 1, 2016 deadline, a US Court judge puts the Department of Labor’s rules on hold. A group of states filed a lawsuit stating that the Department of labor’s OT rule overstepped the government’s authority.
I’ve heard this phrase many times over the years: “All growth starts with the truth.” It is such a simple concept. Be honest about where you and your business really are, and decisions can be made that truly make a difference. Whether those decisions ease a pain or propel you to the next level, if you aren’t really honest with yourself, or your team, about where you really are right now in reality, then any change instituted may not have the intended impact. And, in fact, could have negative repercussions for you or your business.
Especially where you have a multiple owner scenario or an entrenched management team, the truth is sometimes hard to come by. Why? Well, there are always egos that have to be checked, but beyond that it comes down to perception vs. reality. Each person’s perception is their own reality, and many times those perceptions do not align. So, it takes some real digging to get perceptions aligned to what the real reality is.
When a business pays non–employee compensation aggregating to $600 or more to a single payee in a tax year, the business must file a Form 1099-MISC to report the payments to the IRS. Similarly, employers must report wages paid to employees on Forms W-2. Copies of these forms (called payee statements) must also be supplied to payment recipients.
Before a law passed last year, Forms 1099-MISC and W-2 were required to be filed with the IRS and the Social Security Administration (SSA) by the last day of February or by March 31 if filed electronically. Now, the due dates have been accelerated.