Entertainment – No Business Deduction in 2018

Entertainment-Expenses-How-Will-Your-Business-be-Impacted

Under the Tax Cuts and Jobs Act, beginning in 2018, the costs of entertainment expenses are no longer tax deductible. With the old tax law, 50% of entertainment was an acceptable tax deduction for businesses.

Entertainment expenses are for the experiences and events that some businesses have offered clients in the past. Typical entertainment might be 18 holes on the golf course, front row seats at a concert, tickets to sports games or a weekend ski trip.

Business related meals with clients are still 50% deductible. Some businesses may choose to have more dinners, and less experiences/events with clients. Be careful of your choice. Some extremely expensive restaurants with live music, might be considered as entertainment rather than a business meal.

Some businesses may find ways to get around this. Promotional events are deductible as a marketing expenses, so you might see companies brand outings with more advertising, to qualify for the deduction. Tax Tip: The business sales pitch should last the entire duration of the event, rather than just a limited time. 

 

Audit Representation-Partner With a Pro

greedy man with money cartoonIt pays to Partner with a Pro for Audit Representation! I have two clients who recently retained my audit representation services, and are now celebrating their savings!

I was able to help Client 1 by reducing their penalties by 50%, for issues resulting from them attempting to self-prepare their tax returns. They now see the advantage of partnering with a Pro.

Client 2 received a “NO CHANGE TO YOUR RETURN” letter from the IRS, as a result to the audit response I prepared. They had all necessary receipts and tax details, resulting from my consulting with them in how they needed to keep their self-employed business books. They are thankful they partnered with a Pro!

I work hard to keep current on all updates to IRS Audit Representation, by carefully choosing continuing education classes each year, by the best in the industry. My client’s success defines my success.

 

 

Where’s My Refund?

Tax Refund

If you are looking for your federal tax refund you will want to view the IRS FAQs on Refunds, on the IRS site. The IRS states most refunds are processed in less than 21 days.

Best Use of Tax Refund

greedy man with money cartoonClark Howard has good ideas to share on how to use your tax refund and make it work best for you. He also recommends you adjust your withholding this year so you are not letting the government have a tax free loan from you. Watch this video to learn more from Clark Howard who always has our backs!

Make Your Tax Refund Count by Clark Howard

Tax Freedom Day – April 19, 2018

man carrying bag of money for taxes cartoonThe average American works the first 109 days of the year, earning enough money to pay their tax bill in full. Thanks to the tax reform, we will work three less days to pay our taxes in 2018 than last year. That is three days of income you get to keep in your pocket.

This year, our tax freedom day is April 19, 2018. Tax Freedom Day marks the day we begin working for ourselves and not Uncle Sam. Enjoy your holiday!

statue of liberty american flag

Check Your Paycheck

I recommend all employers require their employees to complete a new W-4 form for federal withholding taxes and to make this information available to them. 

The IRS encourages everyone to use the Withholding Calculator to perform a quick “Paycheck Checkup”. This is important because of the recent tax law for 2018. Paycheck Calculator

There are several reasons to check your withholding:

  • You protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year.
  • With the average refund exceeded $2,800, you may prefer to have less withheld up front and receive more in your paychecks.

The IRS has a Withholding Calculator to assist taxpayers to complete the new W-4 form that has been revised for the new tax law. The calculator will ask you to estimate values of your 2018 income, the number of children you will claim for the Child Tax Credit and Earned Income Tax Credit, and other items that will affect your 2018 taxes. This process will take a few minutes.

  • Gather your most recent pay stubs.
  • Have your most recent income tax return handy; a copy of your completed Form 1040 will help you estimate your 2018 income and other characteristics to speed the process.
  • Keep in mind that the Calculator’s results will only be as accurate as the information you provide.  If your circumstances change during the year, come back to this Calculator to make sure that your withholding is still correct.
  • The Withholding Calculator does not ask you to provide sensitive personally-identifiable information like your name, Social Security number, address or bank account numbers. The IRS does not save or record the information you enter on the Calculator.

IMPORTANT NOTE: This Withholding Calculator works for most taxpayers. People with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax, expected to be updated in early spring. This includes taxpayers who owe self-employment tax, alternative minimum tax, the tax on unearned income of dependents or certain other taxes, and people with long-term capital gains or qualified dividends.

WITHHOLDING CALCULATOR

To Change Your Withholding:

  • Use your results from this Calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate, and
  • Submit the completed Form to your employer as soon as possible. Withholding takes place throughout the year, so it’s better to take this step as soon as possible.

Special Note for 2019:  If you follow the recommendations at the end of this Calculator and change your withholding for 2018, the IRS reminds you to be sure to recheck your withholding at the start of 2019. This is especially important if you reduce your withholding sometime during 2018. A mid-year withholding change in 2018 may have a different full-year impact in 2019. So if you do not file a new Form W-4 for 2019, your withholding might be higher or lower than you intend. To help protect against having too little withheld in 2019, we encourage checking your withholding again early in 2019.

If you have additional questions about your withholding, consult your tax advisor.

25 Year Old Can Retire a Millionaire

How can a 25 year old who makes $32,000 a year, retire as a Millionaire? Check out these numbers in the article by Clark Howard. Most Millennials have doubts about this working as a retirement plan. The numbers work through the power of compounding interest. Saving for Retirement

 

 

 

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