by dmaadmin | Nov 21, 2024 | General Tax and Accounting Information, Tax Planning
What Happens If the TCJA Expires in 2025? With the recent US election and administration change on the way, many people are asking, “how might this impact our taxes?” Specifically, what might happen when the TCJA expires in 2025. What is the TCJA? The Tax Cuts and Jobs Act (TCJA) is a comprehensive tax reform law passed by the U.S. Congress in December 2017 and signed into law by President Donald Trump. The TCJA introduced sweeping changes to the U.S. tax system that affected individuals, businesses, and corporations starting in 2018. The TCJA is currently in effect through the 2025 tax year for most individual provisions. These provisions, including the lowered tax brackets, the increased standard deduction, and changes to itemized deductions, are set to expire after 2025 unless Congress takes action to extend them. Starting in 2026, the tax laws are scheduled to revert to their pre-2018 levels, which has many taxpayers understandably concerned about how this could impact their finances. Here’s what you need to know about potential updates and how they might affect you: A Look at Key Provisions Likely to Change Individual Income Tax Rates: The TCJA temporarily lowered tax rates for individuals, reducing the percentage of income taxed across all income levels. Without action, these rates are set to return to higher, pre-2018 levels in 2026. Incoming President Trump and House/Senate Republicans are expected to advocate for making these lower rates permanent, but the final decision will depend on Congressional negotiations. More updates are likely in 2025. The Standard Deduction and Itemized Deductions One of the most impactful changes introduced by the TCJA was...
by dmaadmin | Oct 22, 2024 | Accounting, General Tax and Accounting Information, IRS, Tax Planning
The last quarter of the year is exciting and can also be a bit daunting. The weather is cooling, leaves are falling, the holidays are approaching. And then there are all the loose ends to tie up in our businesses that can feel a bit stressful or overwhelming. But what if we told you it doesn’t have to be that way? By doing a little each day, you can set yourself up for success so that you can relax and enjoy one of our favorite times of the year. As we near the end of 2024, there are several tax updates to be aware of and prepare for. And don’t worry, it’s nothing that your tax professional can’t handle but do we kind and give them plenty of time to support. 😉 1. New BOI Filing Requirement (Beneficial Ownership Information): What’s changing: Starting in 2024, certain small businesses will need to file Beneficial Ownership Information with the Financial Crimes Enforcement Network (FinCEN). This regulation aims to prevent money laundering by requiring companies to disclose the personal information of their beneficial owners. Who it affects: Small businesses, especially LLCs, corporations, and partnerships created in the U.S. or registered to do business in the U.S., are impacted. Some businesses, like publicly traded companies and sole proprietors, are exempt—but check with your tax professional to be sure it is required for you or not. Action: Small businesses should ensure they’re in compliance by gathering the necessary owner information before filing deadlines to avoid penalties. Want more detailed information about BOI filing requirements? Check out this recent blog post full of resources...
by Blair Butters | Oct 27, 2023 | Accounting, General Tax and Accounting Information, Tax Planning
Do you ever feel like life is passing you by before you even realize it? Somehow, we’ve already made it to the last quarter of the year. Fall colors are in full bloom, temperatures are beginning to change (albeit slowly for some of us!), friends and family are starting to think about the holidays, and most business owners we know… well, they are hustling to hit goals before year-end! We know you have many items to attend to and that adding another area to dive into could cause overwhelm. Don’t fret! We’re here to help you to make the most of these final months and prepare for the coming year with some tips and guidance to help you prep-ahead for tax time. How to Prepare for the Last Tax Quarter of the Year The last quarter of the year is an important time for any business owner, especially when it comes to taxes. It’s a good time to dot your ‘I-s’ and cross your ‘T-s’, by making sure you are maximizing deductions, minimizing your liabilities, and planning ahead for the next year. This is also where having an established relationship with your tax professional will serve you most. Rather than waiting until tax time, be proactive and create an end of year plan together. Review your income and expenses. The first step is to review your income and expenses for the year so far and estimate what they will be for the rest of the year. Pro Tip: gather your financial statements, review your profit and loss statements and balance sheets so you can gain a better understanding of...
by Blair Butters | Apr 11, 2023 | General Tax and Accounting Information, Tax Planning
Invoicing, paying bills, bank reconciliations, credit card reconciliations…bookkeeping. This data takes time to collect, process, and balance each month—time that could be spent on projects and tasks that move the needle in your business. Many may choose to keep bookkeeping in-house, taking money that could be spent on employees that would ultimately further the company’s mission. By outsourcing bookkeeping to a firm like DMA Tax and Accounting, businesses gain peace of mind, and much more. Here are five reasons to consider outsourcing your bookkeeping: It helps you save money. Outsourcing a bookkeeper who is knowledgeable and efficient will cost less than hiring a full-time in-house bookkeeper and gives your company the opportunity to allocate additional funds to hiring or growing your operations. Outsourcing saves time. By hiring out, you can shift the time spent in the books to more important, money-generating tasks. Outsourced bookkeepers are more efficient and are more likely to have in-depth knowledge of the latest bookkeeping programs and software. They can assist business owners with the systems already in place to obtain the most complete financial information or review your current system and provide suggestions to make it easier for you and save additional time. Reduce errors and maximize accuracy for tax filings. Having an expert in your back pocket to pay bills, perform bank and credit card reconciliations, invoice, and perform all other bookkeeping functions of your business will ensure your filings are up-to-date, accurate, and meet current standards. Our bookkeepers at DMA provide onsite bookkeeping for added convenience, are experts in QuickBooks, and are supported by our two CPAs on staff if you have...
by Blair Butters | Dec 27, 2022 | General Tax and Accounting Information, Tax Planning
It’s beginning to look a lot like … end-of-year project wrap-ups, holiday gatherings and celebrations, and time off to rest and reset for the new year. Before you log off, there are a few things to do as a small business owner to button up 2022 and prepare for your tax filing. Crossing these items off your list will bring peace of mind and give you more time to focus on those 2023 goals as soon as the ball drops. Here are four things you can do before the end of the year to make tax time less stressful: 1. Update your payroll records or hire out This is the time to verify all employee wages, benefits, and deductions. Be sure to double-check employment tax rates that tend to change annually. You or your payroll specialist should also make sure all paychecks, year-end bonuses, and payments have been recorded. 2. Gather or prepare financial documents for your accountant Year-End Balance Sheet: This statement includes assets, liabilities, and owner’s equity of your business. The Balance Sheet can help you determine if you may want to look at working on collecting receivables or paying down debt in the coming months. Year-End Income Statement: Here, you’ll see the comparison between earnings and spending throughout the year and will determine a company’s net income for the year. The sheet should have a clear list of revenue in one section and a list of expenses and losses in the other. Subtracting the expenses and losses from the revenue will show the net income. The Income Statement results can help you determine where to cut...
by Blair Butters | Oct 20, 2022 | General Tax and Accounting Information, Tax Planning
As the leaves begin to change and our focus shifts to Q4 goals, now is the perfect time to take a closer look at your business. Performing an end-of-summer business check-up can provide important insights into what you may want to change before the end of the year, or how to prepare for 2023. When reviewing the areas of your business that can determine its overall health, there are a few places you can dig deeper: Gather/Analyze Financial Statements Review your profit and loss statement, income and cash flow statements, and balance sheets so you can gain a better understanding of your company’s financial status. When you review your profit and loss (P&L) statement, you may also want to consider the following: If your business was profitable, determine if you have any needs for new equipment or upgrades, or improvements to property. Purchasing fixed assets and placing them in service prior to year-end may reduce your net income, which may reduce your tax liability. Bonus depreciation and Section 179 depreciation are tax incentives that allow you to claim a larger deprecation deduction in the year when a piece of equipment or certain improvements are placed in service. Talk with your accountant to see if bonus depreciation or Section 179 elective depreciation is available on potential equipment purchases or improvements. To take advantage of this incentive, we recommend speaking with your accountant now. In most years, those decisions could be made later in the year, but with supply chain issues in recent years you will need to make equipment purchase decisions earlier in the year so that your vendors...
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