Sunday, January 4, 2015

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review: Money-saving Tax Tips

It may seem a little early to think about filing taxes, but doing a few quick things now can make it easier when April rolls around.

Tiffany Crawford, tax supervisor at Rea and Associates, Inc., said it's important that people start tax planning in the last few days of the year, if they haven't already.

"We begin tax planning as soon as April 16th for many of our clients," Crawford said in an email. "There are many reasons for this, but the most important one is having enough time to implement the tax savings opportunities that make sense."


There's still time before the New Year to save money when paying taxes later.

Crawford said each taxpayer's situation is different, but "there are many ways to save tax dollars available to taxpayers each year."

Contributing to a retirement plan, making a charitable donation or making sure you have health insurance may save some bucks in the long run, said Randy Kaup, Certified Public Accountant with Moorman, Harting and Co., in Coldwater.

People can contribute up to $5,500 to an IRA, which is tax deductible, he said, or maximize a contribution to an employer's retirement account.

Contributing to a retirement plan or making a charitable contribution before the clock strikes midnight on Dec. 31 can reduce the amount of income that's taxable, Kaup said.

The new health insurance law also requires people to indicate whether or not they have health insurance on their tax forms or pay a fine of $95 or 1 percent of household income, Kaup said.

Crawford recommends talking to a professional about the best way to "make certain that you are taking advantage of every deduction and tax credit available to you."

She added that reviewing the prior year's return can help as well.


Another important tip Crawford offered is staying organized.

"A lot of my clients have a filing system of some sort," she said. "It doesn't need to be anything complicated; I see a lot of manila file folders labeled '20XX Taxes' each year."

Bob Sielschott, Certified Public Accountant and senior partner at Sielschott, Walsh, Keifer & Regula CPAs, Inc. in Lima, emphasizes good record keeping when it comes to taxes.

"Capture the material during the year, so you can compile it when it's time," he said.

The "material" to capture is tax documents from employers. Crawford said it's important to know which ones to expect from your employer, though they are usually the same type as the year before, she said.

"One of the major things they need to do is be very, very careful about watching their mail in January and early February," Sielschott said.

Important documents such as 1099s, Social Security forms, mortgage forms and more come in the mail, and sometimes people can misplace them, he said.

Those aren't the only documents to keep track of, he said. There are also receipts from charitable donations, mileage logs and child care information, Sielschott said.

The hope is that preparing now, before the new year, will help save time and money when people begin the process of filing taxes.

"It's all about record keeping," Sielschott said.

Tuesday, December 30, 2014

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review finds companies with tax abatements meeting requirements

MONROE - A recent review of companies that have received tax abatements from the city of Monroe found that they are all in compliance with the requirements, such as job creation, outlined in the agreements.

City Council Tuesday approved a resolution accepting the annual review of the city’s 16 community reinvestment areas, tax increment financing districts and residential improvement districts that certifies that all were in compliance to maintain their various tax abatement designations.

The Butler County Tax Increment Review Council is required by state law to review each agreement to determine if the property owners are in compliance with each of those tax exempted properties. Some require the creation of a specific number of jobs or other requirements to stay in compliance. The TIRC review submits a review to City Council to continue, modify or cancel each agreement and the law further requires council to approve the review within 60 days. The TIRC review was completed in November and on Tuesday council adopt a resolution to approve the review.

Among those areas approved for continuance were in the Monroe Logistics Center, IDI, Corridor 75, and the Monroe Commerce Center.

Liquor control hearing motion declined

Council opted not to request a hearing before the state Liquor Control Commission on a request for a D-5 permit being sought by Main Street LLC, the business taking over the space of the Red Onion.
A D5 permit will allow for spirituous liquor for on premises consumption only, beer, wine and mixed beverages for on premises, or off premises in original sealed containers, until 2:30 a.m.
Officials said the restaurant will reopen sometime in January.

Laid-off firefighter has a new home

Zachary Bernard received his badge and helmet as he was introduced to council.

Bernard was one of 11 Middletown firefighters who were laid-off due to budget constraints. Tuesday was his first day with the Monroe Fire Department and Fire Chief John Centers said he expects Bernard to become an asset to the department.

“I’m really excited in coming to Monroe and I’m looking forward to a long career here,” Bernard said.

He is also certified as an emergency medical technician and as a hazardous materials technician.

Sunday, December 28, 2014

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review - Tax Strategies Scan: More Year-End Tips

Our weekly roundup of tax-related investment strategies and news your clients may be thinking about.

5 year-end tax tips for clients: As the year draws to a close, investors should keep in mind their financial obligations to avoid certain consequences such as tax penalties, according to U.S. News & World Report. Mutual fund owners could face a huge tax liability from returns accumulated before the fund was purchased. For seniors, the deadline for making minimum distributions for retirement plans becomes Dec. 31 after the initial year of taking such distributions. -- U.S. News & World Report

How to avoid capital gains tax on stocks: I just did it, and your client can, too: Long-term capital gains tax rates vary depending on the tax bracket, with taxpayers in the 10%-15% tax bracket paying no tax at all, according to Motley Fool. Those who are in the 15% tax bracket have a taxable income of $36,900 for singles, $73,800 for joint filers, and $49,400 for heads of households. To avoid paying long-term capital gains tax, taxpayers need to have a taxable income that won't exceed these figures, and may keep their income low by taking tax deductions, such as the standard deduction, personal exemptions, and the Child Tax Credit. -- Motley Fool

How to lower your client's tax bill: Clients are likely to face big capital gains tax as stocks soared this year, but they may reduce their tax by deferring their income and accelerating deductions, says Robert Willens, a CPA and president of Robert Willens. They may also consider donating the securities instead of selling them and donate the money, so they won't pay capital gains and still take a deduction amounting to the security's fair value, Willens says. Harvesting losses by disposing of assets with dwindling value is also another way for investors to lower the tax bill. -- Barron's

When your clients pay a higher tax rate: Rich people pay higher tax rates as their investment income undergoes double taxation, according to Forbes. Despite having lower taxes than labor income, investment income is still taxed in the corporate level, which makes tax burdens higher. -- Forbes

Year-end charitable tax tips: Taxpayers can donate tangible property or cash to charities to reduce their tax bills, according to Forbes. To get tax deductions, donations in the form of household items should be in good used condition or accompanied by a qualified appraisal, cash donations need to be proven by a written receipt from the charity or a bank record. Tax deductions for charitable gifts may be obtained by itemizing these donations on Schedule A of Form 1040. -- Forbes

7 smart year-end tax moves to prepare for 2015: Clients are advised to check if there are last-minute tax deductions and to take a financial inventory before the year ends to prepare for the tax season in 2015, according to Forbes. They also need to determine their effective tax rate, account for all Roth conversions, and act on any withholding issues for next year. Clients can also reduce their tax bill if they incurred investment losses, and use the remaining amount in their flexible spending account before Dec. 31. -- Forbes

9 rules for tax-smart charitable giving: People who intend to give to charities need to remember a few things to get tax benefits when filing their tax returns in April, according to Time Money. They are advised to itemize tax deductions instead of taking the standard deduction, donate to a legitimate charity, and make sure they make the donation by Dec. 31. They also need to have a receipt of the donation, make sure the donated goods are in good condition and valuated accordingly. If they opt to donate highly appreciated investments, they won't pay taxes on capital gains and deduct the full market value of these investments from their tax bill.  -- Time Money

More related topic issue and information? Just visit Westward Advisors. Westward's expertise is in designing, implementing and managing insurance-based tax and estate plans for high net worth individuals and owners of private companies. For more update, follow us on Twitter.

Thursday, December 25, 2014

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review: Tax Tips for New Parents

When I say kids are expensive, I’m not telling you anything you don’t know. But man, they are expensive. Once you accept that, you may want to shift your paradigm. Since you already committed to this parenting racket, you might as well make the most of it.  And financially speaking, that means tax breaks. Here are X deductions that you should be sure not to miss this tax season:

Child Tax Credit You can claim up to $1,000 for every kid under 17 in your household. This sum is phased out when married couples’ adjusted gross income exceeds $110,000 and $75,000 for single parents. 

Don’t make this mistake: Be sure to file for a Social Security number as soon the baby is born. The hospital should have the paperwork.

Earned Income Tax Credit If you have three or more kids and earned less than $46,997 as a single person, or $52,427 as a married couple in 2014, you can take this credit. If you have one or two children you may also qualify if your income is very low. The maximum credit is $6,143.

Child care for kids aged 13 and younger, qualified child care, day camps and before- and after-school programs qualify for the dependent care tax credit. This means that most families can deduct up to 35 percent of the costs for care, for a maximum of $3,000 for one kid, or $6,000 for two or more family members.

Don’t make this mistake: Collect the tax ID or Social Security number of any care providers.

Flexible spending accounts Take advantage of your employer’s flexible spending account for both health care and dependent care. The maximum you can shelter is $5,000 for qualifying dependent care. Don’t make this mistake: Remember to spend down any FSA account and get reimbursed for expenses before any deadlines. Medical expenses if you had excessive medical expenses (not counting insurance premiums), you can deduct total family health care expenses exceeding 7.5 percent of your adjusted gross income. This means that if your 2014 adjusted income was $100,000 and you spent $8,000 on your and your family’s medical expenses, you can deduct $500. Don’t make this mistake: Collect receipts for all medical expenses throughout the year, including dental care and any prescribed therapies (including prenatal yoga and prenatal vitamins). Consider scheduling elective procedures before year’s end.

Adoption costs if you adopted a child and the process was finalized in 2014, you are eligible for up to $13,190 per child in federal tax credits. 

College contributions did you start a college fund? Most states offer tax deductions for residents who invest in their state-sponsored 529 college savings plans. Deadline for taking the deduction in 2014 in most states is Dec. 31 of this year.

If the birthdate is 2014, claim that kid! Even if your baby popped out at 11:59:59 on Dec. 31, deduct away.

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review has designed and implemented insurance plans for hundreds of high net worth Canadians. We developed The Life Step Process as a way for accountants and lawyers to help their clients grow and protect wealth, and manage the estate in the most tax efficient way possible. Gather more information, you can visit us at Tumblr Page and Blogspot Page. You can follow us as well to the following page said.

Monday, December 22, 2014

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review: 5 Investing Resolutions for 2015

Consider rebalancing your portfolio in anticipation of the new year.

With the holiday season upon us, we should make time to reflect on the past year and think about our financial goals, milestones we hope to reach in 2015 and how we can better prepare for retirement.

It’s also important to remember tax season is around the corner. Therefore, now is also a great time to review your investments and your saving and spending behaviors. Next, you can determine resolutions that may be right for your financial situation.

As you plan your 2015 resolutions, here are five tips to consider that may help you enhance your investing and retirement planning strategies.

1. Give your portfolio a tuneup. Now is a great time to review portfolio holdings and performance, and to determine how to maintain an investing strategy to help reach your goals. Take a look at your investments. Does your portfolio align with your risk tolerance? You can find online tools through brokerages to help you understand your portfolio’s gains and losses. Investors can create a diversified portfolio with multiple ETFs, for example. Using dollar-based investing, you can streamline the asset allocation process.

2. Maximize retirement contributions. According to ShareBuilder's Financial Freedom Survey, released in March, which conducted 1,008 interviews of adults 18 and older from Feb. 13 to Feb. 16., 57 percent of working Americans are concerned they won’t save enough money in time for retirement. By taking advantage of your employer’s retirement plan, you can work toward growing your retirement nest egg.

Beginning in 2015, employees will be able to contribute up to $18,000 annually to their 401(k) plans. Determine how much you can comfortably contribute. If possible, you may want to max out your 401(k) contributions and your employer match if you have one. If you can swing it, setting aside the full amount can be a great way to maximize your long-term investments.

3. Think about putting that holiday bonus to work. Examine your personal financial situation, and determine how you can best use the additional funds from a work bonus or holiday gifts. You may want to consider starting an investment portfolio, building an emergency fund or using that money to help a reach milestone like a down payment for a car or home.

Once your account is established, you could continue to grow it through automatic contributions. Programs, including ShareBuilder’s automatic investing plan, enable you to invest a set dollar amount on a regular basis and at a low cost. Becoming accustomed to putting away money on a regular basis is a critical first step – and it may build over time. Read the full article here..

Saturday, December 20, 2014

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review: Top 5 Tips to Get Your Company Funding Fit

2015’s a hair’s breadth away. As you start next year’s planning, here are 5 things you can do to give yourself the best chance of securing new investors in your business – either debt or equity.

1. Have your financials in order
The first thing any investor is going to ask for is your historic financials, so you should have them ready and in a useable format. At Lighter Capital, we like to see 24 months of historic financials for both the P&L and the Balance Sheet. Some investors may require less, but at the minimum, I would suggest having the quarterly financials for the last 12 months ready. You should know that any institutional lending source is going to require that you produce monthly financials so this is something to think about as you head to market.

- The easiest way to determine if your financials are ready to be seen by an outside financing source is to have someone with an accounting background take a quick look at them. This can be as simple as asking your tax accountant to review, and now is a good time to ask them before they get slammed by year-end tax returns. They’ll let you know if you are doing anything blatantly wrong from an accounting prospective. I won’t sweat the small mistakes but if you have negative revenue or assets that could be a liability, they can help you make those changes easily. If you run into bigger issues, you might want to consider getting outside help from a CPA or controller, like our friends at Early Growth Financials.

- There are a few different types of accounting methodologies: cash, accrual, and modified accrual. It’s good to understand the pros and cons of accrual and cash accounting of each methodology before choosing one to implement. For example, a common error we see with accrual accounting is that many entrepreneurs only make adjustments at year-end, where this methodology actually requires monthly adjustments. This makes for a confusing P&L. For small business, it’s easier to just do cash accounting if you can understand it, and it helps you become very familiar with your company’s cash situation. Don’t feel that you have to use accrual accounting because that is GAAP standard. Lots of investors deal with different types of accounting methodologies, so they can read whatever statements you give them as long as they are accurate.

2. Projections – know where you’re headed
As we enter the New Year, it’s good to have a sense for where you’re going and projections help you get there. The most helpful projections are not the ones that just take a growth percentage and apply it on a monthly or quarterly basis, but the ones that are based on your pipeline and historic performance.

- Things to keep in mind include seasonality: are you a seasonal business, and if so, do your projections reflect it? Do you have some big customer wins projected over the next 12 months and when do you expect them? Do you have big payments to vendors or debt sources? Be sure to include them in the projections, including any adjustments needed to reach these goals and how they’ll be layered in over the next year (i.e. additional employees, larger commissions for sales, advertising and technology spend, and product development plans, etc.).

- As if that wasn’t enough to consider in your projections, you might want to think about having two sets — a tortoise and a hare. Your ‘hare’ scenario is a high growth shoot-to-the-moon scenario for equity investors and the ‘tortoise’ is a more stable, plodding scenario for debt investors.

- If this seems like a lot, a basic set using growth percentages and margins works well and at least gives your investors a place to start when evaluating the outlook for the next year.

3. Explain your customer base
Everyone will want to know something about your customers. If you put together a basic chart (like the one below) for your top 10 customers, you’ll help fend off 90% of potential questions.

If you have customers that represent more than 10% of your annual revenue, expect some type of follow-up questions from interested investors who might ask to see copies of the contract, request reference checks, and review historic churn in your customer base.

4. Service / Product Elevator Pitch
Now that you have the boring (or if you’re me, exciting) financials portion out of the way, you’ll need to explain what your company does. Try to make your product pitch concise and easy for people to understand. In Lighter Capital’s 10-minute online application, we call it the elevator pitch and we limit it to 500 words. After you have investors hooked, you can get into more details like the market (i.e. “the white space”) and the details of your service or product and why it is unique.

5. White Space – highlight your competitive difference
You have to present where you sit within the marketplace. How is your product or service different from the others out there and why? Telling someone that you are the next Facebook or Instragram isn’t really the best explanation of your positioning, and honestly, most people are just going to roll their eyes and say, “Sure you are.” Instead, present the lay of the land, demo your product, tell your customer stories, and focus on the problem your product is addressing or solving. Be truthful with your plan! At the end of the day, investors who want to invest in your business also want to invest in you. So demonstrating your inspiration and ability to execute the plan will help differentiate you from your competitors. Continue reading…

Thursday, December 18, 2014

Westward Group for Tax and Estate Planning Advisors Tokyo Paris Review: 5 Year-End Tax Tips for Investors

On top of holiday preparations and celebrations in December, there are some year-end financial tasks that require attention. Many of those tasks on the financial to-do list have a tax component – specifically, avoiding unnecessary taxes on your investments, or worse, incurring a penalty.

Here are some reminders of tax consequences to consider before the new year rolls around:

1.Watch taxes on mutual funds. Mutual fund managers regularly sell securities to rebalance or accommodate shareholder redemptions. That creates capital gains for shareholders, even those with an unrealized loss on their mutual fund investment. This is particularly true for actively managed mutual funds, which have greater turnover than index funds.

But even if you are the owner of a mutual fund with overall gains, you may have a tax consequence for gains that occurred before you purchased it.
2. Don’t forget about required minimum distributions. By April 15 of the year after you turn 70½, you are required by the Internal Revenue Service to take a minimum distribution from qualified retirement plans, such as a traditional individual retirement account.

However, after that first year, your deadline for taking your distribution becomes Dec. 31. If you forget to take the distribution, you face an IRS penalty of 50 percent. In other words, if your distribution amount is $5,000, you would be hit with a $2,500 penalty. That’s on top of the taxes you already pay on the distribution.

3. Don’t let tax considerations get in the way of your investing goals. While it’s imperative to have a tax strategy, always keep your investing objectives front and center. Jeanie Wyatt, CEO and chief investment officer at South Texas Money Management, headquartered in San Antonio, says decisions about when to buy or sell investments are often obscured by worries about tax consequences. 

“In those situations, where people don't sell because they are going to have a tax cost, that can be a bad decision,” she says. “You really have to know that the investment decision is No. 1 and the tax consideration is No. 2.”

4. Be cognizant of short-term capital gains consequences. A short-term capital gain is realized by the sale of a stock held for one year or less. These gains are taxed at the same rate as an individual’s ordinary income.

A short-term gain can be reduced by a short-term loss. As much as $3,000 per year can go toward reducing taxable income. Additional losses may be carried forward into subsequent years to offset $3,000 in ordinary income or capital gains.

5. Plan for future tax increases. Having a strategy for 2015 and beyond is crucial, says Beau Henderson, founder and CEO of the RichLife Group in Gainesville, Georgia. “One of the thieves that can steal your rich life is the real threat of future tax increases,” he says.

People who have accumulated a sizable nest egg in their qualified retirement accounts will likely face a hefty tax bill when they start taking distributions. Henderson says effective planning today could potentially mean a lower tax bill down the road. “What if instead of pulling money out at a 35 percent tax rate, when you actually need to retire, it's taxed at 60 percent? That would affect your plan,” he says.