LMGW First Annual Ugly Sweater Contest

New Staff Accountant Yesica Morales has been unanimously voted as LMGW’s Ugly Sweater Contest winner. Congratulations to Yesica.

10 Tax-Saving Strategies for 2016

2016 has been an interesting year. We suspect for many of us it has or will invoke much change. As the end of 2016 nears, it’s time to consider the impact tax will have on your business and life. As your tax advisor, we want to share these essential tax saving strategies with you.

The “Trump Effect”

In light of the November election and highly likely changes to the tax code in 2017, there are a few additional tax strategies to consider in addition to some of the normal “tried and true” methods. We won’t know the full impact of the pending political influence but until we do, here are ten essential tax saving strategies for you to consider.

Accelerate deductions

Traditional tax planning has always focused on accelerating deductions to obtain a current tax benefit. This strategy takes on even more significance as tax rates are expected to go down for many individuals and businesses based on the Congressional proposals being floated around. For taxpayers in the top tax bracket of 39.6%, we are looking at a maximum rate of 33% in 2017 and beyond. Additionally, limitations or caps on itemized deductions are being proposed. Moving deductions forward to 2016 from 2017 could result in a nearly 7% savings over waiting until 2017, or more. Read more

2016 Recap: Tax Provisions for Businesses

Whether you file as a corporation or sole proprietor here’s what business owners need to know about tax changes for 2016.

Standard Mileage Rates
The standard mileage rates in 2016 are as follows: 54 cents per business mile driven, 19 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $52,000 (adjusted annually for inflation) in 2016.

In 2016 (as in 2015 and 2014), the tax credit is worth up to 50 percent of your contribution toward employees’ premium costs (up to 35 percent for tax-exempt employers). For tax years 2010 through 2013, the maximum credit was 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. Read more

Employee or Independent Contractor–Which is it?

If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees.

Why It Matters

The Internal Revenue Service and state regulators scrutinize the distinction between employees and independent contractors because many business owners try to categorize as many of their workers as possible as independent contractors rather than as employees. They do this because independent contractors are not covered by unemployment and workers’ compensation, or by federal and state wage, hour, anti-discrimination, and labor laws. In addition, businesses do not have to pay federal payroll taxes on amounts paid to independent contractors.

Caution: If you incorrectly classify an employee as an independent contractor, you can be held liable for employment taxes for that worker, plus a penalty. Read more

Choosing a Retirement Destination

With health care, housing, food, and transportation costs increasing every year, many retirees on fixed incomes wonder how they can stretch their dollars even further. One solution is to move to another state where income taxes are lower than the one they currently reside in.

But some retirees may be in for a surprise. While federal tax rates are the same in every state, retirees may find that even if they move to a state with no income tax, there may be additional taxes they’re liable for including sales taxes, excise taxes, inheritance and estate taxes, income taxes, intangible taxes, and property taxes.

In addition, states tax different retirement benefits differently. Retirees may have several types of retirements benefits such as pensions, social security, retirement plan distributions (which may or not be taxed by a particular state), and additional income from a job if they continue to work in order to supplement their retirement income.

If you’re thinking about moving to a different state when you retire, here are five things to consider before you make that move. Read more