INTUIT MERGING ACCOUNTS (QBO, INTUIT ONLINE, QUICKEN, ETC): [Post:04/11/18]
Whether or not you can continue to take any deduction depends on whether you’re considered a service or non-service business.
If you own a service business, you’ll phase completely out of the pass-through deduction once you surpass 4415k. Accountants, actuaries, attorneys, doctors, etc., making over $415,000, will not see a 20% deduction. (The exceptions are architecture and engineering firms, who are exempted from the service definition for purposes of this deduction.)
NON SERVICE BUSINESS
Once you reach the upper income limit, you can still take a deduction, but it will be the lesser of two calculations:
20 percent of your qualified business income, or
The greater of:
50 % of your W-2 wages or
25 % of your W-2 wages plus 2.5 % of your qualified property cost (i.e.cost of certain real estate or equipment).
MIXED SERVICE & NON SERVICE BUSINESS
This has not been clearly defined. For example, what if you run flooring installation company and you also selling flooring in your showroom? This would be considered both a service and non-service business. So don't make any solid plans around the tax definition that you THINK applies to you. Wait for guidance.
Entertainment Expenses. Entertaining clients is no longer considered a deductible expense. Entertaining your staff is still a deduction. Office holiday parties are still 100 percent deductible.
Business Interest. Interest expense on loans use to be 100% deductible. Now, a business can only write off interest expenses that are equal to 30 percent of its adjusted taxable income. So if you have no taxable income, you won't be able to deduct the interest. There are exceptions for businesses with gross receipts under $25 million.
Net Operating Loss (NOL) Deduction. In the past, if a business recorded a loss, it had the option to use those losses to either reduce any taxes paid in the past two tax years, or to reduce any future taxable income for the next 20 years. Under the new tax law, that NOL can only be carried forward, and is limited to 80 percent in any given year AND 20% THE FOLLOWING YEAR.
EXAMPLE: Your business records a NOL of $100,000 in 2017. But in 2018, you end up making $100,000. You can use your NOL to reduce your taxable income for 2018, but only 80 percent of it, or $80,000. That means in 2018, your taxable income would be reduced to $20,000. Whatever you didn’t use of your NOL can be carried over to future years, so your business could apply that remaining $20,000 NOL to its 2019 tax return.
Most of the 2018 business tax law changes will benefit business owners. Please make an appointment this summer to go over some new strategies.
TRANSIENT ACCOMMODATIONS TAX INCREASES BY 1%: [Post:01/12/18]
+ Multi-monitor capability
+ Search field, in Chart of Accounts
+ Cash or Accrual side-by-side analysis
+ Payroll reminders on the main screen
NEW CORPORATE TAX RATE IS LOWER: [Post:05/24/18]
SOLE PROPRIETORS, PARTNERSHIPS, S-CORPS (AND LLC’S) GET A 20% DEDUCTION
TYPE OF BUSINESS YOU OWN, SERVICE OR NON-SERVICE
+ Report automation New since 2017!
+ Report features are easier to use New since 2017!
+ Pro version comes with 3-user access New since 2017!
+ Download bank and credit card transactions New since 2017!
Here you will find commonly asked questions, financial advise, tips, and inspiring words of encouragement from Lisa Wells, the CEO of Personal Accountant Inc.
With each of these entities, the income tax responsibilities falls to the owner on his/her owner personal income tax return. We call this a pass-thru entity. Depending on your taxable income, you can qualify for a FULL CREDIT or PRO-RATED CREDIT of up to 20% of your net income. Here are the thresholds:
+ SINGLE W/ TAXABLE INCOME UP TO $157,000 >>> 20% CREDIT
+ SINGLE W/ TAXABLE INCOME FROM 157k – 207k >>> PRORATED CREDIT
+ MARRIED W/ TAXABLE INCOME UP TO $315K >>> 20% CREDIT
+ SINGLE W/ TAXABLE INCOME FROM 315k – 415k >>> PRORATED CREDIT
The new corporate tax rate is a FLAT 21 percent and will continue past 2025. Previously the rates were 15, 25, 34 and 35 percent, dependent on income. The 15% will not be missed, because most C Corporations have net income higher than $50,000. Corporate AMT tax is gone for good.
Most of you are already aware that Intuit Online Payroll is updating their security and prompting all clients to change their User IDs and Passwords. For many you this has already created problems and you have been temporarily locked out of your payroll. We have been in contact with Intuit and they have advised that we have our clients contact their Dedicated Team for the new login system migration.
The number is 844-391-9894. If you encounter any problems with your login or changing your User ID or password, please give them a call and they will help you. Thank you for your understanding.
HERE'S WHAT'S NEW FOR QUICKBOOKS 2018.WE HIGHLY RECOMMEND UPGRADING: [Post:09/19/17]
Please be advised that the Transient Accomodations Tax has increased by 1% effective Jan 1. Make the adjustment in your QuickBooks File or other accounting files to the tax line item. The change is a 1% increase for "hotel/transient" accommodations.
Personal Accountant Inc (Visit our office)
Personal Accountant Inc
94-428 Mokuola St., Ste 103
Waipahu, HI 96797
Ph: (808) 674-0700
Fx: (808) 674-0800