The knowledge you need

When suffering comes it can be a challenge to manage through it. Finding processes and methods for dealing with even the most challenging of circumstances, cancer, is not easy. Not only do patients often need complex medications to fight the disease, support and encouragement of friends and loved ones, but also medical supplies for the journey.

As Georgia nonprofits and other tax-exempt entities return from the holidays, it’s time to settle in and get re-focused on managing various service programs and delivering needed assistance. While the last few months may have been focused on year-end financial reporting, tax planning and budget preparation for 2020, there was an important change made in 2019 impacting how nonprofits file their tax returns.

Saving for retirement is something that every individual needs to tackle especially during the prime earning years. Ensuring there is enough money available to fund spending in retirement is a necessity since the benefits offered through social security are simply insufficient to the task. While it sounds logical, there are several obstacles that have made it more difficult for retirement savings to occur.

Section 199A, also called the qualified business income (QBI) deduction, gives owners of pass-through entities a deduction on their personal income tax returns for up to 20% of business income. This deduction can significantly reduce income tax burdens for those who qualify. Unfortunately, taxpayers’ deductions will be reduced if their taxable incomes are too high, and those who work in certain service industries may lose their deductions altogether. There is no perfect technique for avoiding this taxable income limitation but making additional charitable contributions may help.

Self-employed physicians, like many other business owners, are well into their second tax season following the principles outlined in the Tax Cuts and Jobs Act (TCJA). The qualified business income deduction (QBI deduction) – also known as Section 199A – continues to play an important role in year-end planning discussions. As the year ends, it is a good time to revise prior year’s QBI deduction strategies.

This is a special distribution taken from a 401(k) (or other plan types) to help the participant with an immediate and heavy financial need. The need can be directly attributed to the participant or be a need of the participant’s spouse, dependent, or in some cases non-spouse or non-dependent. A hardship distribution may not exceed the amount of the participant’s need but may include the amount needed to pay for penalties and taxes which may arise.

The answer to this important question will vary between companies and industries. There are some Atlanta companies that naturally face higher fraud exposure because of the type of business, how services are delivered and where the opportunity for fraud occurs. Whatever your industry, it’s important to understand your company’s risk profile and areas of opportunity for fraudulent activities.  While most focus on growing the company through strategic planning, new business development, customer service, and account management, it’s imperative not to overlook this important exercise.

Virtual currency, cryptocurrency, digital currency – whatever you call it, the government wants to tax it. On October 9, 2019, the IRS released a Revenue Ruling and an FAQ document that provides clarity on how cryptocurrencies should be taxed. The virtual currency landscape has transformed in recent years, and because the most recent guidance was released back in 2014, taxpayers were stuck not knowing what to report. Identifying how to treat these transactions will help taxpayers better understand their filing responsibilities and can help them incorporate cryptocurrencies into their year-end tax plans.

Earlier this month, the Financial Accounting Standards Board (FASB) announced they extended the effective dates for the new lease accounting standard. It had been rumored for months that the FASB would make this adjustment for non-public entities, and the day has finally come. Public entities struggled to overhaul their business processes in time to comply by their effective date of January 1st of this year, and non-public entities implored the FASB to help them avoid a similar result. The FASB heard these requests from industry groups, professional organizations, and private businesses nationwide and agreed to push back the effective date for non-public entities.

One area that many don’t pay much attention to until the end of the year is tax planning. It’s common to think about what steps can be taken to help reduce the company’s overall taxes before year-end. The good news is since the 4th quarter just started, there are many steps companies can now take to ensure they pay the least amount possible. There are some new opportunities courtesy of the Tax Cuts and Jobs Act of 2017 (tax reform) and a bevy of other strategies as well.