13Nov
The pros and cons of a Roth IRA conversion
Uncategorized

Roth IRAs offer some important tax advantages over traditional IRAs.For example, qualified Roth IRA withdrawals are tax-free for federal purposes. And, unlike with traditional IRAs, you don’t have to start taking required minimum distributions from Roth IRAs after reaching age 70 1/2, so the assets can grow tax-free indefinitely. This article explains that the quickest way to get a significant sum into a Roth IRA is by converting a traditional IRA to Roth status but a conversion won’t be beneficial for every taxpayer. It also notes that a Tax Cuts and Jobs Act provision could make Roth IRA conversions riskier from a tax perspective.

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08Nov
Dig out your business plan to plan for the year ahead
Uncategorized

Like many business owners, you probably created a business plan when you launched your company. But, as is also often the case, you may not have looked at it much since then. Now that fall has arrived and year end is coming soon, why not dig it out? Reviewing and revising a business plan can be a great way to plan for the year ahead.

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17Oct
3 keys to a successful accounting software upgrade
Technology

Technology is tricky. Much of today’s software is engineered so well that it will perform adequately for years. But new and better features are being created all the time. And if you’re not getting as much out of your financial data as your competitors are, you could be at a disadvantage.

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12Oct
Know your tax obligations before hiring household help
Uncategorized

babysitter working with a toddler

There are several reasons for hiring household help, including child or elder care or general cleaning and yard maintenance. However, when a person hires outside help, he or she becomes an employer. Thus, that person has specific tax obligations, such as withholding and paying Social Security and Medicare (FICA) taxes and possibly federal and state unemployment insurance. This article examines the tax-related responsibilities associated with hiring outside help.

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09Oct
Are LLC members subject to self-employment tax?
Uncategorized

Ambiguity in the tax code and regulations has led many limited liability company (LLC) members to take an aggressive position regarding self-employment (SE) tax. They claim that their distributive shares of LLC income — after deducting compensation for services in the form of guaranteed payments — aren’t subject to the tax.

Recently, however, the IRS has been cracking down on LLC members it claims have under reported SE taxes, seeking back taxes and penalties, with some success in court. Considering these developments, it’s a good idea for LLC members to review their treatment of SE tax. (For the purposes of this article, LLCs also refer to limited liability partnerships and professional limited liability companies.)

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09Oct
Tax Tips
Uncategorized

These brief tips explain that home equity loan interest may still be deductible post–Tax Cuts and Jobs Act (TCJA), detail two changes the TCJA made to business losses, and discuss whether a qualified personal residence trust is still relevant today.

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24May
Sending your kids to day camp may provide a tax break
Taxes

When school lets out, kids participate in a wide variety of summer activities. If one of the activities your child is involved with is day camp, you might be eligible for a tax credit!

Dollar-for-dollar savings

Day camp (but not overnight camp) is a qualified expense under the child and dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2018, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.

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21May
If charitable giving is part of your estate plan, consider a donor-advised fund
Charitable Giving

Do you make sizable gifts to charitable causes? If you’re fortunate enough to afford it, you can realize personal gratification from your generosity and may be able to claim a deduction on your tax return. But once you turn over the money or assets, you generally have no further say on how they’re used. You can exercise greater control over your charitable endeavors using a donor-advised fund (DAF).

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16May
IRS Audit Techniques Guides provide clues to what may come up if your business is audited
IRS Issues

IRS examiners use Audit Techniques Guides (ATGs) to prepare for audits — and so can small business owners. Many ATGs target specific industries, such as construction. Others address issues that frequently arise in audits, such as executive compensation and fringe benefits. These publications can provide valuable insights into issues that might surface if your business is audited.

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14May
A review of significant TCJA provisions affecting small businesses
Business Ownership

 

Now that small businesses and their owners have filed their 2017 income tax returns (or filed for an extension), it’s a good time to review some of the provisions of the Tax Cuts and Jobs Act (TCJA) that may significantly impact their taxes for 2018 and beyond. Generally, the changes apply to tax years beginning after December 31, 2017, and are permanent, unless otherwise noted.

Corporate taxation

  • Replacement of graduated corporate rates ranging from 15% to 35% with a flat corporate rate of 21%
  • Replacement of the flat personal service corporation (PSC) rate of 35% with a flat rate of 21%
  • Repeal of the 20% corporate alternative minimum tax (AMT)
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Hancock & Dana, PC
Certified Public Accountants and Business Consultants
12829 West Dodge Road, Suite 100
Omaha, NE 68154

Phone: 402.391.1065
Fax: 402.334.9498

Email: info@hancockdana.com