My CPA Tips


THE TAX MAZE: MEALS AND ENTERTAINMENT DEDUCTIONS

Tax MazeThe tax changes for 2018 impact meals and entertainment. You may want to get help to steer through the tax maze. Although some details are still unclear, many are well-defined. You will want to check with a professional to be sure. You might want to review a few of the guidelines for the new laws:

  • Charitable events tickets are no longer deductible.
  • Business entertainment is no longer deductible. If you take a client to a concert, a basketball game or a movie, you cannot take the cost as a deduction. However, if you purchase food as part of the outing and it is itemized in your receipt, that is still 50% deductible.
  • Meals within your company for employees at meetings or for the convenience of the employer are still deductible at 50%. So are business league meals
  • Employee travel meals are also still deductible at the same percentage.
  • Holiday parties and other social activities are 100% deductible.
One of the gray areas is whether you can still deduct 50% for meals taking a client to lunch. Since this is still unclear, it is important that you have proper documentation. This includes the amount you spent, the date and place, business purpose and business relationship as well as the persons involved. Now more than ever it is important to have a CPA help you file your taxes. Les Merritt, CPA and Certified Financial Planner, has been working with business people for decades to navigate the tax maze Contact Les Merritt and his staff to set an appointment. Call them at (919) 269-8553 today and prepare to file for 2018. Remember this is a great time to get started since meals and entertainment is just one change in the tax laws this year. This tax season the maze is even more complex and professional advice is critical.  

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HIDDEN TAX OBSTACLES IN YOUR PORTFOLIO?

The leaves are beginning to change and fall from the trees. There’s a nip in the air and the sweltering days of summer appear to be behind us. With these changes it may be time to look at your investments. That might include making adjustments to avoid the hidden tax obstacles in your portfolio. We are now in the fourth quarter, and this may be a good time to begin activities to leverage your tax obligations for the year. Have you spoken to your financial planner recently? How will your investments affect your tax obligations and can you do anything to offset that? Now is the time to look at your situation so you can take action early. With the holidays around the corner, we are entering a busy time. Many people ignore taxes until the new year. That might be too late to make necessary adjustment to reduce your tax liability. One of the advantages of using the same person for your taxes and your investing is that he or she can see your whole fiscal landscape. There may be subtle connections between these two aspects of your financial status. Les Merritt, CPA and Certified Financial Planner (CFP), has been helping clients on both fronts. He and his staff can help make any needed adjustments before the end of the year. Even if you have a different CFP, Les knows the impact of investments and can direct you or your planner to take actions before the end of the year. Before the holidays get into full swing, contact Les at (919) 269-8553 to get ready for 2019. Don’t let tax obstacles in your portfolio surprise you next year.

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HELP THROUGH THE TAX MAZE

Tax MazeWe have now arrived in the tax maze and you may need help finding your way through it. Since we are halfway through the year, business owners should be planning for the changes. The Tax Cuts and Jobs Act, passed last year, brought about many.  One of the changes to tax deductions in 2018 can benefit small business owners. Pass-through owners who qualify may be able to deduct up to 20% of their net business income from their income taxes. Businesses must meet a number of requirements to qualify for these deductions. The new regulation can be more complex for some businesses. Pass-through businesses include sole proprietorships, partnerships, S corporations, limited liability companies (LLCs) and limited liability partnerships (LLPs). Your company could be taxed on only 80% of its income and that’s a savings worth knowing about. This is where a Certified Public Accountant (CPA) can help you. Understanding these new rules and their implications on your business is what a good tax preparer studies and why his or her help has great value. This is just one of a multitude of changes in how taxes will be calculated for this year. To navigate through this new tax maze, consider hiring a CPA. Les Merritt is a CPA and Certified Financial Planner (CFP). His company has been helping clients take advantage of the latest tax deductions for decades. He and his knowledgeable staff are trusted throughout central North Carolina. Les Merritt is also a Dave Ramsey Endorsed Local Provider (ELP). The ELP designation is not easy to earn. Dave Ramsey only endorses the most skilled and caring professionals and then they are held to a higher standard of excellence. Contact Les Merritt today to prepare for the 2018 tax maze. Call (919) 269-8553 today to set an appointment.

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UNTANGLING SPAGHETTI

spaghetti carbonaraThe new tax reform bill passed and modified in 2018 has increased the complexity of tax preparation with numerous changes. Finding your way through might be a bit like untangling spaghetti noodles in an Italian dish. Among the items that have changed are many of the deductions that are allowed. Some of the rules will create tax advantages; others may increase your tax liabilities when you file next year. One of the most notable changes is alterations of the tax brackets and rates. The standard deduction is now $12,000 for an individual or a married person filing individually, $18,000 for a head of household and $24,000 for married couples filing jointly. Another change affects Child Tax Credit. You will be allowed $2,000 per qualifying child refundable up to $1,400. The unless your medical and dental expenses are 7.5% or greater than Adjusted Gross Income(AGI) you will not be able to take this deduction. AGI is your total income minus allowable deductions. Other deductions that have been changed are:

  • Home Mortgage Interest
  • State and Local Tax deductions
  • Charitable donations.
  • Casualty and Theft Losses
  • Job Expenses and Miscellaneous Deductions
Some of the allowable deductions have very specific requirements and you must understand the tax code for these before using them. Now more than ever is the time to be sure you have a qualified CPA to work on your taxes and with all the changes, you need to begin planning today. Set up a meeting with your tax advisor so that you are ready when you file your next tax return. If your time and money are important to you, have a CPA like Les Merritt prepare your taxes. You can avoid the frustration and lost hours and feel confident that your returns are done correctly, especially in light of the new spaghetti regulations. Get smart and contact Les Merritt at (919) 269-8553 to set up an appointment take advantage of the new tax code.

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