Commonly Missed Tax Deductions
Oct 03, 2013
It’s nearing the end of the year and you know what that means… tax time! Most Americans are well aware of the more popular tax deductions and the need to keep charitable contribution receipts. However, there are a few lesser-known deductions that always take our clients by surprise. Here’s a list of the most commonly missed deductions:
Home Office: Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly as your principal place of business, as a place to meet or deal with patients, clients or customers in the normal course of your business or in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
Casualty Losses: Generally, you may deduct casualty and theft losses relating to your home, household items and vehicles on your federal income tax return. Some restrictions apply.
Mortgage Refinancing: The IRS allows for a ratable deduction of the points paid during refinancing.
Educator Expenses: If you are an eligible educator you can deduct up to $250 of any unreimbursed expenses you paid or incurred for books, supplies, computer equipment, etc that you use in the classroom.
Financial and Tax planning: The Internal Revenue Service will let you deduct certain investment expenses you incur on your taxable investments and any fees incurred during tax preparation and planning.
Capital Losses: Up to $3,000 in stock, mutual fund and other capital investment losses can be deducted on your personal return every year.
Child and Dependent Care Expenses: Individuals who pay for day care expenses for their children or disabled adult dependents may be eligible for a federal tax credit of up to 35% percent of the cost of daycare.
Transportation Deduction: If you work at two places in one day, whether or not for the same employer, you can deduct the expense of getting from one workplace to the other. Some restrictions apply.
Moving Expenses: Taxpayers that qualify may fully deduct the costs of moving. To qualify they must meet a 3 part test set by the IRS.
This is only an overview of some of the possible deductions that taxpayers fail to consider. There are many, many other deductions available and all of the deductions mentioned have restrictions attached to them (some are listed and some are not). For more information on these deductions you can contact your tax advisor.
Courtney Elgin, CPA
Categories: Uncategorized
Social Media: There Could Be Gold? (Part 2)
Oct 01, 2013
Social Networking Best Practices
Whether you are new to social networking, or a seasoned veteran, it’s important to:
Make a Commitment. Social networking, like most marketing tools, requires a commitment to time and possibly finances — perhaps even cultural change within your organization — in exchange for successful results.
Be Visible. Make sure that your image remains consistent between the various social networking sites. Develop a communications plan that keeps your agency visible, but that does not overwhelm your online following.
Listen First, Respond Second. Once your program is established, monitor the social buzz daily to keep a pulse on both current and potential supporters. Much like a dinner party, you must listen before you respond. Then, once you have a clear picture of what is being said online, you can determine a course of action.
Keep it Local. Supporters and prospective supporters alike may be more likely to donate to — or volunteer for — charitable organizations that are within driving distance. Keep this in mind as you develop and refine your social networking plan.
Make it Easy. Remember to make it simple for people to find you. Add social networking information to business cards as well as your agency’s Web site.
If your organization hasn’t yet gotten its feet wet in the world of social networking, it may be time to rethink your marketing strategy. Establishing a presence on social networking sites can be particularly effective when it comes to heightened public awareness for your agency and for identification and targeting of potential supporters. In addition, finding ways to tie social networking initiatives into community fundraising or resource raising efforts can create a win-win situation for everyone involved.
Categories: Uncategorized
Social Media: There Could Be Gold? (Part 1)
Sep 26, 2013
Could Your Organization Benefit from Social Networking?
Traditional media outlets such as newspapers, radio, and television, have long served the purpose of delivering one-way messages, like not-for-profit advertising. Social media, by contrast, uses Web-based platforms to not only deliver your message, but to allow recipients to participate.
You’ll find a number of technologies under the umbrella of social media, including e-mail, instant messaging, blogs and social networking Web sites. In fact, sites like Facebook, Twitter and LinkedIn have now surpassed traditional search engines when it comes to reaching some segments of the public.
The end result? Social media is not only changing the way your supporters access news and information, but how they make donation decisions. If your organization has not yet embraced the power of social media, it might be time to take another look.
Social Networking Web Sites
Separate from our professional lives, many of us have a profile on at least one social networking Web site. That’s why many organizations, commercial and tax-exempt, are employing this innovative new marketing tool. Not-for-profit agencies are no exception.
Adopting these technologies, however, involves more than creating a profile or fan page for your organization. To really be effective, it requires a shift to a culture of transparency. And, it is this window into your agency that makes it more important than ever for your message to be consistent at every point of contact with current and prospective supporters.
How Social Media Puts Your Group Out Front
Establishing a presence on social networking sites can give your agency a competitive edge in several ways, including:
1. Image Enhancement. Profiles, fan pages and participation in groups all serve to build awareness about your organization’s image. They also provide an opportunity to interact with current supporters as well as begin the relationship-building process with prospects.
2. Open Communication. Social media, including social networking, is based on the principle of two-way communication. Your agency can benefit from both the positive experiences and negative feedback that customers voluntarily share. Not only can you address these customer concerns publicly, but you then have the chance to make any necessary improvements. You have the unique opportunity to make lemonade out of lemons.
3. Target Marketing. Establishing a presence on social networking sites can help you identify, and subsequently target, potential supporters. While the need for advertising through traditional media outlets may not be eliminated, the ability to target marketing communications reduces overall costs and provides a greater return on your marketing investment.
Tapping into social networking analysis tools may also assist with targeted marketing efforts. You may learn, for example, through online discussions that one service your agency provides is more likely to draw volunteers and supporters than other services you have been promoting. For example, if your agency deals with rescue animals, perhaps your community is more responsive to advertising that features dogs rather than cats. You can get real mileage out of that information that will help to develop your marketing message. Just go easy on overt advertising on social networking sites, or your efforts could backfire.
Categories: Uncategorized
Ohio Tax Law Updates!
Sep 24, 2013
Hear ye, hear ye! For all of you Ohio taxpayers, have you heard about the Amended Substitute House Bill 59 (HB 59) that was signed into law on June 30, 2013? No? Don’t worry you are not alone.
One notable change that this bill brings is a reduction to Ohio income tax rates, which is music to our ears! The overall income tax base rates and amounts are reduced by 8.5% in 2013, an additional .5%, or 9% in 2014 and then to a total of 10% in 2015. We will have another blog about the impact this will have on employees withholdings.
One of the biggest changes resulting from this bill is starting in taxable years beginning on or after 1/1/13, an individual filing an Ohio income tax return will be allowed a deduction amount to 50% of their Ohio small business income up to $250,000! Income from the taxpayer’s partnership, s-corporation, rental activity, or single member entity will be used to determine this deduction. An important thing to note is this deduction is not for an taxing school districts, only Ohio. More information will be coming from the bill on how to calculate this deduction.
There is also a change related to non-resident individuals involved in a pass-through entity. If that pass-through files an Ohio composite return and pays Ohio income tax, the individual can now file an Ohio return and claim the refundable credit for taxes the entity paid on the investor’s behalf.
Some other changes to come from the bill:
- Means testing for $20 personal exemption credit. Note: Will only be available to taxpayers with taxable income less than $30,000.
- Ohio earned income tax credit may be available to those filers who were also eligible for the federal earned income credit.
- Beginning in 2014 there will be an expanded definition for the deduction of military retirement pay.
- Any amount of $1 or less will not be refunded or owed on a tax return.
There are a lot of changes coming to Ohio in the next few years, so please make sure you keep up on them and make sure you understand how they affect you as an Ohio taxpayer. This is particularly important considering the time of year as we look towards year end planning.
By: Tara West, CPA, CMA
Categories: Uncategorized
What Exactly is an Operations Review?
Sep 19, 2013
Does your accounting function have a weak link?
Whenever I meet new people and they discover I am a CPA, they generally ask me about tax returns. I have to stop them dead in their tracks and tell them I like to stay as far away from tax returns as possible.
My job is consulting related. I work with businesses to determine their accounting efficiency which often times involves an operations review. These jobs are the highlight of my workday. When I reference the term “Operations Review” as part of the backbone of my job, most other CPA’s and business owners are not familiar with what I am referencing.
When was the last time you asked yourself, or an employee, “Why did you do a specific task a certain way?” Most likely the answer is, “that is how I was trained.” Better yet, how many times have you been faced with NOT KNOWING how an employee performs his or her job, or what is being done on a day-to-day basis?
Often, businesses do not review their processes regularly if they even have formal processes. In many situations, I find that the process has evolved and is “home grown” to meet the changing needs of the Company and if there happen to be processes, they are not updated to reflect changes in the economy, industry, software or company staffing.
The purpose of an Operations Review depends upon the organization. The scope of the engagement is altered based on the existing sophistication and needs of the Company.
PHASE ONE is to identify the existing processes in the Accounting function. – WHO is doing WHAT? – WHAT other PROCESSES do they INTERFACE with? – Are the current processes DOCUMENTED? – Are their JOB DESCRIPTIONS?
PHASE TWO is to fill in the GAPS – Provide DOCUMENTATION where there is none – DISCUSS potential changes and expectations to those employees affected – PROVIDE references to BEST PRACTICES to align your processes for maximum efficiency
PHASE THREE is to IMPLEMENT and MONITOR – Develop a detailed implementation PLAN for those changes needing to be made – Assign ACCOUNTABILITY – Monitor on an ongoing basis
What are the benefits to your company ? • Reduces training costs • Transparency in job function and accountability • Ensures consistent results to internal and external customers • Reduces errors • Increases value of the business • Brings focus to employee and provides performance as well as measurables that managment needs • Increases efficiency of operations and streamlines procedures • Lowers turnover and related costs due to clear and defined job expectations
In my experience, 100% of the time, the engagement identifies those individuals within the accounting function who are the weak link. The one(s) who are prohibiting the performance of the overall department. That is half the battle, aligning the procedures with best practices is the other half. Is it time to have your accounting function evaluated?
By: Jennifer Kinzel, CPA, CMA
Categories: Uncategorized