Author Archives: ShawCPA

The Shaw Atlas – July 2018 Article

Don’t Give Up On Your Charitable Donations: They Survive and Thrive Under The New Tax Cuts and Jobs Act

Unfortunately, under the new Tax Cuts and Jobs Act (TCJA), as predicted by Howard Gleckman of Forbes, “The share of middle-income households claiming the charitable deduction will fall by two-thirds, from about 17 percent to just 5.5 percent.” This is attributed mainly to new restrictions on Schedule A deductions. Coupled with the nearly doubled standard deduction rate, this has pushed many Americans away from itemizing their deductions and, in turn, from claiming charitable deductions.

For this month’s article, we’re here to tell you that claiming charitable deductions can still be very viable. There are a few strategies that can get you above the newly increased standard deduction rate, all the while keeping your annual charitable donations to your community viable for your finances.

TCJA Boosts for Charitable Donations

As aforementioned, the TCJA did greatly restrict the number of deductions you can claim under Schedule A. This has pushed many middle-income Americans away from itemizing their deductions because the higher standard deduction rate is harder to surpass by itemizing deductions.

For example, the TCJA has capped the amount of state and local taxes (SALT) that are deductible to $10,000, which causes problems for high-wealth taxpayers and taxpayers in high-tax states such as California and New York. On top of this, the deductibility of mortgage interest rates has been capped to only the first $750,000 of debt for all mortgages taken out after December 14th, 2017. For instance, with median home values in Boulder now at $720,500 — up 6.1% last year and expected to rise another 4% next year — a new generation of homeowners could fall victim to this code change.

On a positive note, the the TCJA has boosted deductions for charitable contributions by raising the limit that can be contributed in one year. The limit has risen from 50% of adjusted gross income (AGI) to 60% of AGI. Boosting charitable donations is now an excellent option for the taxpayer that loses valuable Schedule A deductions, such as SALT and mortgage interest, to, once again, surpass standard deduction rate and continue itemizing. All the while, maintaining charitable donations to their community.

How To Make The Most of Your Charitable Contributions Under the TCJA

For many middle-income families, while the idea of boosting their charitable donations may sound ideal, it may not be entirely financially feasible. There are a couple of tax-strategic avenues that allow the taxpayer to maintain similar monetary contributions to charities while still increasing deductions.

Bunching

Bunching is a very simple but extremely effective solution to increase deductions. For instance, if you make a $1,000 donation to the Boys & Girls Club every year, but that still doesn’t put you over the standard deduction rate, you can skip a year and instead donate $2,000 the next year. You can also schedule to have this bunching year align with other payments, like property taxes, pushing your deductions past the standard limit and ultimately saving on your taxes.

Pros: If donations are aligned with other large payments (property tax, mortgage) you can make the most of your itemized deduction that year.

Cons: Charities could suffer from inconsistent donations

Donor-Advised Funds

Donor-Advised Funds work similarly to bunching, but can relinquish the guilt of only donating to your favorite charity bi-yearly. If you donate $1,000 to your church every year and don’t want to stop annual donations, you can put a large sum of future donations in a Donor-Advised Fund. For example, you can place $5,000 into the fund and schedule your annual $1,000 donation to be given straight to your church from the fund every year. Putting $5,000 in the donor-advised fund, even though it hasn’t yet been received by the charity, allows the $5,000 donation to be immediately deductible. Even better, you maintain full privileges of determining your grant to qualified charities and your assets can grow while in the fund.

Most large financial services companies like Fidelity and Charles Schwab will have options to set up donor-advised funds. There are, however, some fees associated with using these services. For instance, if you put $10,000 into Fidelity Charitable, Fidelity’s donor fund, the annual fees would be roughly $127. If you’re willing to absorb those fees the Donor-Advised route may be the most flexible solution, not only to donate your money, but also to gain the best deduction possible.

Pros: Money in fund is instantly deductible, assets in fund can grow, you maintain full privileges over charitable contributions, you can continue normal annual donations

Cons: Funds often come with annual fees  

Colorado Charitable Deduction

Even if you’re not going to itemize your deductions federally doesn’t mean you should give up on charitable contributions. In Colorado, even if you’re not itemizing federally for the tax year, you can still get a deduction from the state if your charitable contributions are greater than $500. So, on years you’re not bunching donations or claiming a donor-advised fund deduction, you can still capitalize on state level charitable deductions.

Colorado Child Care Contribution Tax Credit

For Colorado residents considering raising their charitable contribution, they should also consider the Colorado Child Care Contribution Tax Credit (CCCCTC) to get even more value out of your donation. The CCCCTC offers a tax credit of 50% for a qualifying monetary contribution to promote child care in Colorado up to $100,000. This means a contribution of $5,000 to a non-profit organization in Colorado that promotes child care, such as the Boys & Girls Clubs of Larimer County, will be offset by a $2,500 tax credit against your Colorado income taxes. Your contribution is also eligible to be claimed in full as a charitable deduction on your Schedule A federal tax returns in addition to the state returns for Colorado. Depending on your federal marginal tax bracket, as well as the impact of your itemized deduction situation, the amount of positive tax impact could be as high as 90% of the contribution. This means your theoretical $5,000 contribution would be offset with $4,500, by the federal government and Colorado state, in tax credit and deductions.  

Taxpayers Eligible for the Credit

  • Colorado Residents
  • Nonresident individuals that file Colorado tax returns
  • Estates
  • Trusts
  • C corporations

Examples of Eligible Organizations

  • Boys & Girls Club of Larimer County (or any Boys & Girls Club in Colorado)
  • Realities For Children
  • Teaching Tree
  • Mile High United Way

For more information about CCCCTC qualifying contributions and a list of other qualified charities visit the Colorado Department of Revenue website.

Pros: You can donate more than you would normally because your getting at least 50% of your contribution back and you don’t have to itemize federally to claim Colorado state charitable deductions and tax credit

Cons: Your favorite charity may not qualify for the credit

These options we’ve discussed above are great solutions to not only continue contributing to your favorite charities and community, but also to benefit under the new Tax Cuts and Jobs Act. With the deductible amount of charitable donations raised from 50% of adjusted gross income to 60% its more lucrative to donate then every before. Using donor-advised funds or bunching, in tandem with the Colorado Child Care Contribution Tax Credit, present incredibly viable opportunities to take make the most of your contributions. Some of these strategies might suit your needs better than others so it’s best to thoroughly review your options. If you have any additional questions, please call us to schedule a meeting and we’ll be happy to discuss how these changes may impact you or your organization.

The Shaw Atlas – April 2018 Article

Tax Cuts and Jobs Act: Important Changes to Deductions

In the third and final section of our three-part Tax Cuts and Jobs Act article series, we are going to discuss changes to marginal tax brackets, the standard deduction and personal exemptions, and make note of some suspended or modified deductions beginning in 2018.

Changes to Marginal Tax Rates

To start, marginal tax rates based on your taxable income have changed in 2018. The new rates are based on how you plan to file: individual, married filing jointly, married filing separately, head of household, or estates and trusts.

For taxpayers currently in the 28% or lower marginal tax brackets, the new rates will create a positive taxable impact. Additionally, the amount of income taxed in these brackets has increased. These taxpayers will need to pay less taxes on a higher amount of income. Score!

Those in tax brackets above 28% may experience an increase or decrease depending on their level of income.

In order to envision the marginal tax bracket process, imagine each bracket to be like a bucket to fill; each bucket can only hold a certain amount of money and is taxed at a higher percent as income rises.

For example, let’s say your taxable income is $42,000 and you’re filing as a single individual. The changes in your marginal tax brackets between 2017 and 2018 would look like this:

The first bucket (which you must pay a 10% tax rate on) fills up to $9,525 of your income. The second bucket can hold up to $38,700 of your income, and since you have already paid taxes on $9,525 at 10%, the remaining amount for the second bucket becomes $29,175. This second amount is taxed at 12%. The third bucket can hold up to $82,500, but since your taxable income is only $42,000 in this example, this bucket will not be full. The remaining amount of your income that has yet to be taxed is $3,300, which will be taxed at 22% in the third bucket. In total, you will pay a sum of each bucket’s taxed value.

Here is a break-down of the math:

Taxable Income = $42,000

  1. $9,525 x 10% = $952.50
  2. $29,175 x 12% = $3,501
  3. $3,300 x 22% = $726

Total amount paid (marginal tax sum) = $5,179.50

If your income is higher, you will fill more buckets and pay a higher percent of taxes as that number increases (and vice versa with lower income). The bracket percentages have also changed for those married filing jointly, married filing separately, head of households, and estates and trusts.

Changes to Standard Deduction

In 2018, taxpayers will only be able to deduct from their Adjusted Gross Income (AGI) the greater of the standard deduction or sum of itemized deductions. This will determine taxable income. (Previously, you would deduct any personal exemptions from this total as well. See the section below on changes to the personal exemption rule).

In 2017, the standard deduction for single individuals and married couples filing separately was $6,350, and for married couples filing jointly was $12,700. In 2018, the standard deduction has increased to $12,000 for individuals and married couples filing separately and is now $24,000 for married couples filing jointly.

At first glance this seems like a win for taxpayers because you are able to subtract a much higher amount from your AGI and significantly lower your taxable income, especially if you did not itemize or your itemized deductions were below $24,000. However, each taxpayer’s situation will be different due to changes in allowed personal exemptions, which we discuss below.

Changes to Personal Exemptions

Prior to the Tax Cuts and Jobs Act, taxpayers were allowed to subtract personal exemptions from their AGI, which was a set amount for each individual on the tax return (i.e., taxpayer, spouse, and any dependents). In 2017, the personal exemption was $4,050 each. If you had a five-family household, for example, you’d be allowed to deduct $20,250.

Post-TCJA, personal exemptions have been eliminated, meaning the new exemption amount is zero. No personal exemptions can be deducted for anyone on the tax return. For some taxpayers this may significantly impact them negatively.

For example, a married couple filing jointly in 2017 with no dependents would have received a $12,600 standard deduction as well as a personal exemption of $8,100 ($4,050 per person). This gives them $20,700 in total deductions. In 2018, this same couple can now receive a standard deduction of $24,000, but cannot deduct any personal exemptions. In this instance, the couple benefits from the new law and receives $3,300 more in total deductions.

On the contrary, a family with four children in 2017 would have been able to receive a $12,600 standard deduction (married filing jointly) and would also have been able to deduct $24,300 ($4,050 per person) in personal exemptions, which is a grand total of $36,900. Now, in 2018, they are allowed a $24,000 standard deduction, but are no longer allowed any personal exemptions and thus lose out on $12,900 worth of deductions.

Essentially, the more dependents you have, the more negatively this new law will impact your possible deductions. However, if this applies to you, there are also modifications to the child tax credit that can help (see below*).

Important Suspended or Modified Deductions Beginning 2018

Child Tax Credit

2017: Taxpayers could claim a child tax credit of up to $1,000 per child under 17 years of age. The credit was available up to an income level of $75,000 for single filers, $110,000 for married filers, and $55,000 for married individuals filing separately. For every $1,000 over that income level, the taxpayer loses $50 worth of credit per child until fully eliminated.

2018: Taxpayers can now claim up to $2,000 worth of child tax credit per child under 17 years of age. This credit is available up to a $400,000 income level for married couples filing jointly, and up to $200,000 for all other taxpayers. As in the old law, for every $1,000 over that income level, the taxpayer loses $50 worth of credit per child.

* This child tax credit modification can help families with many dependents who have seen significant losses in their deductions due to changes in personal exemptions.

Personal Casualty & Theft Losses

2017: Taxpayers could claim an itemized deduction for uncompensated personal casualty losses, such as that of a fire, storm, shipwreck or other casualty as well as theft.

2018: Personal casualty and theft losses have been suspended except for those declared in a Federally-declared disaster area.

State and Local Tax Deduction

2017: There was no monetary limitation on the amount of property, sales, and/or income taxes that could be deducted.

2018: All property, sales, and/or income taxes combined are limited to a $10,000 deduction if you itemize. This will impact high wealth taxpayers and those in states with high property, sales, and income taxes.

Mortgage and Home Equity Interest Deduction

2017: You could have a mortgage of up to $1 million and an equity credit line of $100,000, both of which allow you to deduct interest paid on the loan.

2018: All mortgages are limited to deductibility of interest only if used for acquisition or improvement purposes, and are only deductible up to the first $750,000 combined. Interest on mortgages taken out for any other reason cannot be deducted.

Exception: The new $750,000 lower limit and acquisition and improvement requirement do not apply to home equity debt obtained before Dec. 15, 2017.

Alimony Deduction by Payor/Inclusion by Payee

2017: Following a divorce, alimony payments were considered deductible by the payor spouse and includable as income by the recipient spouse.

2018: If a divorce was executed or modified in 2018, alimony payments are no longer deductible by the payor spouse and no longer included in the recipient spouse’s income. The income used for alimony is now taxed at the rates applicable to the payor spouse.

Moving Expenses Deduction

2017: Taxpayers could claim a deduction for moving expenses due to acquiring a new job. The new workplace was required to be at least 50 miles farther from the taxpayer’s former residence than their former workplace.

2018: This deduction for new job moving expenses is suspended, with the exception of Armed Forces on active duty who move following a military order.

Miscellaneous Itemized Deductions

2017: Taxpayers were allowed to deduct miscellaneous itemized deductions if they were greater than 2% of the taxpayer’s AGI.

2018: This deduction for miscellaneous itemized deductions is suspended.

What we have discussed above are what we consider to be the primary changes that will affect most taxpayers. However, there are other changes that may impact your tax situation. Keep in mind, all of these changes will revert back to the laws in place prior to the Tax Cuts and Jobs Act after Dec. 31, 2025.

If you have any unanswered questions regarding these changes and how they impact you, please call us to schedule an appointment.

The Shaw Atlas – March 2018 Article

Tax Cuts and Jobs Act: Pass-Through Deduction

This month’s article details a rather complicated section of the Tax Cuts and Jobs Act, and we would like to break it down to its simplest form so you can rest easy knowing exactly how it relates to your business. Let’s discuss Section 199A of the law which covers the new 20% deduction for pass-through income from S Corporations, LLCs, partnerships, and sole proprietorships.

Right off the bat, if you receive pass-through income and your taxable income is less than $315,000, you automatically qualify to receive a special 20% deduction on the LESSER OF your qualified business income (QBI) or taxable income.

If this applies to you, you have all the information you need. That was easy, right?

Things get a bit more complicated as taxable income rises over $315,000, but here is an essential overview of the key aspects.

The first question you must answer is whether or not you qualify as a “specified service business.” As currently defined, this includes…

  • Accounting
  • Law firms
  • Health care
  • Financial services
  • Consulting, and
  • Brokerage services

Additionally, if your business is dependent on the reputation of you or your employees to generate revenue, you also fall under the “specified service business” category. It is important to note as well that architectural and engineering firms are exempt from consideration as specified service businesses.

From here, let’s break down the businesses into two subsections: Specified Service Businesses and Non-Specified Service Businesses, and discuss how the credit rules apply within each category.

Specified Service Businesses

As noted above, if you receive pass-through income and your taxable income is less than $315,000, you qualify for a 20% deduction on the lesser of your QBI or taxable income.

If your taxable income is anywhere between $315,000 and $415,000, you receive a partial deduction based upon a prorated calculation.

If your taxable income is greater than $415,000 you do not qualify for this special deduction.

Non-Specified Service Businesses

On the other side of the scale, if your business does not fall under the “specified services” net, there may be additional calculations you must make.

Again, as stated above, if you receive pass-through income and your taxable income is less than $315,000, you automatically qualify for a 20% deduction on the lesser of your QBI or taxable income.

Under the “non-specified service business” net, if your taxable income is between $315,000 and $415,000, you qualify for a deduction that is determined using a prorated calculation factoring in W-2 wages and qualified business property as discussed below.

If your taxable income is greater than $415,000, you must meet an additional standard related to W-2 wages paid to your employees and/or your qualified business property. In this scenario, you may deduct the LESSER OF

  • 20% of your QBI or taxable income, or
  • The greater of 50% of W-2 wages paid to employees or 25% of W-2 wages plus 2.5% of qualified business property

You may be thinking, wait…what? We know how you feel. To clear things up, let’s look at it again using an example.

Assume that your company has a QBI of $500,000 per year, taxable income of $420,000, the total amount of W-2 wages paid to employees is $150,000, and your qualified business property is equal to $1,000,000. This would mean…

    • 20% of your QBI (20% x 500,000 = 100,000)
    • 20% of your taxable income (20% x 420,000 = 84,000)
    • 50% of W-2 wages paid to employees (50% x 150,000 = 75,000), and
    • 25% of W-2 wages plus 2.5% of qualified business property
    • (25% x 150,000 = 37,500)
    • (2.5% x 1,000,000 = 25,000)
      • Which, together, equals 62,500

The first step is to determine which is the lesser value between your anticipated QBI deduction and your taxable income deduction. In this case, it would be the taxable income deduction at $84,000.

Next, calculate which is the greater value between 50% of W-2 wages ($75,000) and 25% of W-2 wages plus 2.5% of qualified business property ($62,500). We can conclude here that the greater value is 50% of W-2 wages at $75,000.

Following so far?

Now that we know which two values to compare, the final step is to take the LESSER OF these two deduction values (taxable income of $84,000 and 50% of W-2 wages at $75,000). The smaller value here is $75,000, and therefore would be the final overall value your business could deduct.

Clear as mud, right? We understand that Section 199A is a complicated element of the new tax law and we would be delighted to discuss how it applies to you. We recommend contacting Shaw & Associates (or your own financial advisor if you use a different tax preparer) to determine the impact of this law on your business specifically and how to proceed. Please give us a call or schedule an appointment—following tax season please—and we will be happy to help!

The Shaw Atlas – February 2018 Article

Tax Cuts and Jobs Act: Meals & Entertainment

There has been a great deal of information circulating recently about the Tax Cuts and Jobs Act. We aim to provide you with access to knowledge that will ensure you feel confident about these changes and how they may affect you or your business.

As we indicated, this article will be the first of a three-part series addressing the new tax law. To begin, there have been some important shifts in business deductions for meals and entertainment.

2017 Meals & Entertainment

Prior to the new tax law, meals and entertainment charges related to business could typically be deducted by 50%. Deductible meal and entertainment expenses under this category included meals consumed while traveling for business, entertaining customers for business purposes, and attending a conference, business lunch or meeting.

There were also expenses that could be 100% deductible if the meals were provided to the employee as a means of convenience for the employer. This includes providing an on-site cafeteria to minimize lunch breaks or make up for a lack of dining options near the office. A meeting held on-site during lunch hours was also 100% deductible.

2018 Changes

Under the Tax Cuts and Jobs Act, signed into law on December 22, 2017, many of the expenses that were once 50% deductible have since been eliminated. However, there have been significant differences in interpretations of this new law by experts, Currently what we know to be true is that entertainment expenses intended for current or potential clients, such as sporting events or a round of golf, are no longer deductible. Still unclear is whether or not meal expenses for current or potential clients will fall under the same category as entertainment. We are waiting for more clarification from the IRS on this subject, which we expect to be issued in 2018.

Additionally, expenses for employee meals at work have been reduced to a 50% deduction. Any charges made for these purposes between January 1, 2018 and December 31, 2025 will continue to be 50% deductible. Following December 31, 2025 they will not be deductible.

How to Record Meals and Entertainment in Your Books

In order for us to make the proper judgement when preparing your taxes until more clarification is given, we ask that you create and use the following accounts in your books for meals and entertainment expenses as of January 1, 2018:

  • Entertainment: includes golfing, skiing, sporting events, etc. (non-deductible)
  • Meals-travel: Any meal for business travel outside of the 50-mile geographic area of your business (deductible at 50%)
  • Meals-employer convenience: Meals for employees located on business premises (deductible at 50%)
  • Meals-other: (waiting for IRS clarification on deductibility)
  • Holiday, summer parties: All costs for such parties for staff including meals, supplies, site charges, etc. (deductible at 100%)

If you have any unanswered questions regarding this plan and how it impacts you, please call us to schedule an appointment for after April 17.

The Shaw Atlas February 2017

 

Welcome to The Shaw Atlas, the monthly newsletter from Shaw & Associates, CPAs & Financial Advisors. We look forward to keeping you abreast of ever-changing tax codes, providing you with money saving accounting tips and illustrating proactive strategies to help you achieve the financial life you envision.

 

Happy 20th Birthday!

Thank you to all of our clients, families, and friends for spending the last 20 years with us. We truly value all the people we have come into contact with over the years, and can’t wait to celebrate many more birthdays to come. 

 

 

 

Your Accountant’s Guide To Financial Fitness

Accountant in Fort CollinsBe sure to check out our blog for added information and entertainment from your local Fort Collins accounting firm. This month’s blog highlights the 8 ways to shape up your finances and get financially fit after the holidays. The financial management solutions we provide as your, go to, financial advisor can help you stay on track with your financially fit game plan. Check out the full blog here.

 

IRS News

Special Rules Help Many People With Disabilities Qualify for the Earned Income Tax Credit

WASHINGTON – The Internal Revenue Service wants taxpayers with disabilities and parents of children with disabilities to be aware of the Earned Income Tax Credit (EITC) and correctly claim it if they qualify.

The EITC is a federal income tax credit for workers who don’t earn a high income ($53,505 or less for 2016) and meet other eligibility requirements. Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

The EITC could put an extra $2 or up to $6,269 into a taxpayer’s pocket. Nevertheless, the IRS estimates that as many as 1.5 million people with disabilities miss out on this valuable credit because they fail to file a tax return. Many of these non-filers fall below the income threshold requiring them to file. Even so, the IRS urges them to consider filing anyway because the only way to receive this credit is to file a return and claim EITC.

To qualify for EITC, the taxpayer must have earned income. Usually, this means income either from a job or from self-employment. But taxpayers who retired on disability can also count as earned income any taxable benefits they receive under an employer’s disability retirement plan. These benefits remain earned income until the disability retiree reaches minimum retirement age. The IRS emphasized that social Security benefits or Social Security Disability Income (SSDI) do not count as earned income.

Additionally, taxpayers may claim a child with a disability or a relative with a disability of any age to get the credit if the person meets all other EITC requirements. Use the EITC Assistant, on IRS.gov, to determine eligibility, estimate the amount of credit and more.

People with disabilities are often concerned that a tax refund will impact their eligibility for one or more public benefits, including Social Security disability benefits, Medicaid, and Food Stamps. The law is clear that tax refunds, including refunds from tax credits such as the EITC, are not counted as income for purposes of determining eligibility for benefits. This applies to any federal program and any state or local program financed with federal funds.

The best way to get the EITC is to file electronically: through a qualified tax professional; using free community tax help sites; or through IRS Free File.

Many EITC filers will receive their refunds later this year than in past years. That’s because a new law requires the IRS to hold refunds claiming the EITC and the Additional Child Tax Credit (ACTC) until mid-February. The IRS cautions taxpayers that these refunds likely will not start arriving in bank accounts or on debit cards until the week of Feb. 27. Taxpayers claiming the EITC or ACTC should file as soon as they have all of the necessary documentation together to prepare an accurate return. In other words, file as they normally would.

The IRS and partners nationwide will hold the annual EITC Awareness Day on Friday, Jan. 27, 2017 to alert millions of workers who may be missing out on this significant tax credit and other refundable credits. One easy way to support this outreach effort is by participating on the IRS Thunderclap to help promote #EITCAwarenessDay through social media. For more information on EITC and other refundable credits, visit the EITC page on IRS.gov.

 

Shaw & Associates Happenings

Kevin is a grandpa!

Charlotte Virginia Yadon was welcomed into the world at 10:10 a.m. on December 14, 2016

 

Cassy Nittmann, Office Manager

 

Happy 5 Year Anniversary, Cassy!

Congratulations to Cassy Moorhead, Bookkeeper, for your 5 years of service.

 

Accountant in Fort Collins

8 Ways To Shape Up Your Finances From Your Accountant In Fort Collins

Accountant in Fort Collins As your accountant in Fort Collins. We can help you stay on track with your financially fit game plan. We are almost a month into the New Year. The Holidays have ended and maybe your new year’s resolutions have too. Do not let that stop you from getting fit financially.

Here are eight classic ways to work on your financial management solutions that will keep giving all year.

  1. Create a budget. Mapping out your financial journey can be the best way to make sure you get where you are going. Start your plan by creating a budget. Be sure to add room for vacations and play time. If you have a guide, it will be easier to stay on track. There are plenty of free templates and apps to assist you.
  2. Pay yourself first. This concept seems so easy, yet it is so important. To pay yourself first means to put your money into savings and retirement first. When you create your budget you should allot for savings and retirement. However, if you don’t pay these first it is very easy to find ways to spend the money before it gets into the savings and/or retirement accounts. If you pay yourself first you won’t be tempted to spend the savings.
  3. Design a timeline to save for big purchases. A timeline gives you a visual for those big purchase savings. This can help you see how much you have put toward a goal or purchase in increments. This gives you greater satisfaction and incentivizes the save. What will you put on the timeline?
  4. Save for emergencies. This is a given but not always seen as valuable. As your accountant in Fort Collins, we want to ask. Should you start saving for the vacation and big purchases; and do you really need to save for the unknown? YES! Without a doubt, if you have emergencies covered you will actually be able to go through with the other expenses you have planned. Generally, you would start with a minimum of three months’ expenses. Having a core fund available is going to help you feel secure and allow for all of the other investments to happen. The plan you build in step one should start after the three months savings are in place. When you have three months out in expenses, you will not be living paycheck to paycheck or under stress. You are prepared to live your most fit financial life.
  5. Diversify. Spread money across investment accounts (stocks, bonds, mutual funds CDs), do not put it all in one place. With modern technology, there are some fun ways to invest. The new platforms such as crowd funding let you invest in new companies. Talk to your local agent to help you invest, divest, and grow your funds in various ways. This can be lucrative and interesting as an investor which we suggest as your accountant in Fort Collins.
  6. Insurance and estate planning – liability insurance, disability insurance. These are vital to health and fitness. These core-planning exercises will secure your future. The most important aspect of estate planning is having a will. If you have not drawn up a will, now is the time. For insurance planning you can evaluate your assets and make sure, they are each covered and secure. Please talk to your financial planner about these critical areas.
  7. Minimize your tax burden. Make sure you keep good records of all of your financial and tax transactions., Consider creating a tax folder to better organize your taxes. This is important so that your tax accountant in Fort Collins can minimize your taxes. The less taxes you pay the more you are able to save.
  8. Pay them in full – credit cards, student loans, and car payments. This can keep your credit score in the best condition for the year. You will be able to live the life you want if you keep your accounts in good standing.

We realize you cannot do this alone. These are easy steps to take, but you may need help. Reach out to one of our “personal financial trainers” at our Fort Collins accounting firm for your financial fitness guide. Get started with a better financial you in 2017!

If you have any questions call us at : 970.223.0792.

Your Fort Collins Accounts and Loveland Accountants.

November 2016 Newsletter

The Shaw Atlas

Welcome to The Shaw Atlas, the monthly newsletter from Shaw & Associates, CPAs & Financial Advisors. We look forward to keeping you abreast of ever-changing tax codes, providing you with money saving accounting tips and illustrating proactive strategies to help you achieve the financial life you envision.

20 Years Ago…

Client Spotlight

Community Events

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20 Years Ago…

Twenty years ago, Shaw & Associates made its debut.  While sitting in a meeting, we started to wonder what was happening 20 years ago.  Well, we found a few things that we found interesting and hope you do also.

The biggest changes we could find is technology. 

  • Today we have technology at our fingertips.
  • Floppy disks were used to save information.
  • If we wanted the internet, we had to use our phone line. Do you remember that annoying sound it would make while trying to connect? 
  • When you would talk about the cloud, it was the big puffy white thing in the sky and not where all of our information is stored.
  • Blog wasn’t even a word that was created yet and neither were the jobs of today which are Blogger, Virtual Assistant, and SEO Specialist.
  • As for gaming, Nintendo 64 was released as well as the first 3D game, “Quake”.
  • Cell phones were becoming a bit more portable, but they were still big and clunky and only used for calling.
  • If you needed to be reached, you had a pager in which you would usually find the nearest phone booth. When is the last time you have seen a phone booth? 
  • Phones now are known more for their features such as texting, cameras, apps, and organizers.
  • Twenty years ago, we were not able to see our photographs as soon as they were taken. You actually had to buy film, take them in to be developed and not to mention we could not edit them before processing.  We did not have the instant gratification that we do now.

The ease of access that we have to information has changed drastically too. 

  • We had to call the movie theatre to find out what was being shown and at what times.
  • If we needed to do anything dealing with the bank, we had to physically go there.
  • To listen to the greatest tunes, we had the infamous Walkman and with that you also had the good old fanny pack!
  • Most households had a Readers Digest laying around.
  • Also, if you were meeting someone at the airport or dropping someone off, you could walk with them straight to the gate. You could even park at the end of the runway, just to watch the planes take off and land.

Some not so great things that happened twenty years ago…

  • The Unabomber was arrested in Montana
  • The Summer Olympics were bombed in Atlanta
  • OJ Simpson Trial began

For entertainment and celebrity news…

  • The movies that year were Independence Day, Twister, Jerry Maguire, Scream, and Space Jam.
  • The Song of the Year was Macarena (you know you just sang that in your head) and the Spice Girls had their first hit, Wannabe.
  • And, Justin Bieber was only two years old! Soccer-mom was introduced to the world for the first time.

As for world news…

  • Our President was Bill Clinton 
  • First female Secretary of State was appointed, Madeline Albright.
  • Even though she wasn’t born until 1997, Dolly the sheep was cloned.
  • The biggest divorce of that time was Prince Charles and Princess Diana where she even had her title, Her Royal Highness removed.

Sporting events included…

  • The Olympics being hosted in Atlanta, Georgia.
  • Our ladies soccer and softball teams took Gold during their sports debut at the Olympics.
  • Professional teams that won their titles: The Dallas Cowboys won the Super Bowl, The New York Yankees won the World Series, The Chicago Bulls won the NBA Championship, and our very own Colorado Avalanche won the Stanley Cup.

Kevin Shaw, CEO

Shaw & Associates, CPA’s and Financial Advisors

 

Client Spotlight

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Jason Ells, CCIM
Vice President

Commercial real estate is an elusive topic for many.  While commercial real estate professionals operate under the same state license as residential agents, our world is infinitely more complex; dealing with extensive lease agreements, standard and non-standard purchase agreements, due diligence, entitlements, water rights, tax deferred exchange guidelines, cash flow underwriting, institutional financing and more.  The perception at large is that a commercial real estate professional is tasked with finding your business the right location, but for the top agents in our industry that accounts for only 10-20% of the assignment.  As always, the devil is in the details.

I have had the privilege of working with clients from a wide array of industries, from multi-family developers to fast casual restaurants, manufacturing companies to Fortune 500 insurance and financial service providers.  Their common link is that they all have a specific and detailed need for commercial real estate in the northern Colorado market, and they are all far too busy running their companies to give this need the attention it requires.  It is for these clients that I am able to add the most value.  With 15 years of experience, the designation of a Certified Commercial Investment Member (CCIM) and the ability to leverage the global platform of Cushman & Wakefield my team is uniquely positioned to consult with you and your business to identify specific needs, evaluate potential solutions and execute on your real estate strategy.  Whether evaluating the relocation of your business, strategically positioning an asset for sale or underwriting a new commercial real estate investment opportunity, outlining a high-level strategy right up front will save both time and money. Kevin and I are happy to work through this initial evaluation with you and help get you started on the right foot.

Of course a critical component to developing your real estate strategy is evaluating the financial and tax consequences or advantages that go along with it.  I have worked with Shaw & Associates for many years, both personally and as a member of my professional team, advising clients on their unique situations.  Shaw has done an outstanding job of assisting with investments, partnerships and business operations, and continues to demonstrate the highest level of expertise as we continue to examine new opportunities.  Thanks to Kevin and his team for playing such a vital role in assisting and supporting my clients and I as we continue to grow!

Community Events

OpenStage Theatre – The Flick


Sam is a 35-year-old-man who has worked at the movie theater forever. Rose is a 24-year-old sexually magnetic, emotionally messy, young lady who prides herself on being the only one who knows how to operate the projector. Avery, the newest employee, is a very sensitive 20-year-old who still lives at home, and is less than enthusiastic about his future. As they clean the aisles of the empty movie theater, these three don’t collide in a big way, but the awkwardness and confusion between them creates a rich and nuanced portrait of what it is like to be a human communicating with other people. With keen insight and a finely-tuned comic eye, The Flick is a hilarious and heart-rending cry for authenticity in a fast-changing world.

Show runs from November 3rd to December 3rd.

Get your tickets today!

Location: Lincoln Center Magnolia Theater- 417 W Magnolia St

 

9 Care Colorado Shares Food Drive

Join us on November 12th for 9 Care Colorado Shares at the North College Fort Collins King Soopers for the 9Cares Colorado Shares Food Drive 2016!

1842 North College, Fort Collins, CO 80524

 

Realities for Children Charities Official Day – November 10th

RFCCLogofinalSouthBuilding

November 1st both the Fort Collins City Council and Loveland City Council are issuing an official Proclamation that November 10th will be known as the Realities For Children Charities ‘Path to Healing For At-Risk Children Day’. This is an exciting proclamation in recognition of the Homebase Facility and what it will provide in the healing process for the children we and our Affiliate Youth Agency partners serve. Donate a Brick Today and be part of this Path of Healing in our community!

“Path to Healing Day” to signify the importance of helping the at-risk youth in our community. Learn more and donate now at www.RealitiesHomebase.com

 

 

Year End Tax Planning – October 2016

The Shaw Atlas

Welcome to The Shaw Atlas, the monthly newsletter from Shaw & Associates, CPAs & Financial Advisors. We look forward to keeping you abreast of ever-changing tax codes, providing you with money saving accounting tips and illustrating proactive strategies to help you achieve the financial life you envision.

Year End Tax Planning

Client Spotlight

Community Events

Year End Tax Planning

Kevin Shaw, CEO

Shaw & Associates, CPA’s and Financial Advisors

Another year is rapidly coming to an end!  This is the time of the year that many of our clients are setting appointments to get a better idea of what their projected tax burden for the year is going to be and to identify areas where they can minimize their taxes.  I like to use our October newsletter to encourage early tax planning, since once the year is over there are few opportunities to take steps to lower your current taxes.  In this regard, I am going to identify a couple of the more common strategies you can consider, but since everyone’s tax situation is different you may want to meet with your tax advisor before the end-of-the-year to create a plan tailored to your situation.

  1. Accelerate Deductions & Delay Income – Since most individuals and many small businesses are cash-basis taxpayers, the timing of when you pay for tax deductions and when you receive income can have a significant impact on your final tax bill. The general rule of thumb is to accelerate payment of items that could create tax deductions and to delay receipt of income that would increase taxes. You would be surprised at how simple some of these can be such as paying your mortgage due January 1st in December, prepaying property taxes, paying for college tuition in December instead of in January, accelerating business deductions, etc.  You could also delay receipts of bonuses, if your employer would agree, or delay collection on customer receivables.  The important thing is to not make these decisions until you fully understand your tax situation.  If, for instance, 2016 is a low income year as compared to what you believe will be a higher income year for 2017, you may actually want to do the opposite, accelerate revenues and delay deductions, to push more of the income into the current year when your marginal tax bracket is lower.
  2. Long-Term Capital Gains – This is one of my favorite strategies and can generate significant tax savings. Many people do not realize that if you are in the 15%  marginal tax bracket or lower, any long-term capital gains from the sale of securities, real estate, etc., are taxed at 0% until the 25% marginal tax bracket is reached.  A married couple filing jointly with taxable income (after itemizing deductions and personal exemptions) below $74,900 have their long-term capital gains taxed at 15% or lower. As a simple example if you have gross wages of $50,000 and itemized deductions and personal exemptions of $20,000, your taxable income is $30,000.  You could generate $44,900 of long-term capital gains and pay no taxes on these gains.  If you have an investment portfolio, you should definitely look at this every year.
  3. Medical Deductions – Since medical deductions are only deductible if in excess of 10% of your Adjusted Gross Income (AGI), a good strategy could be to “bunch” your medical expenses into one year as opposed to spreading them out over several years. If you incurred significant medical expenses in 2016 and will exceed your floor, you would want to consider accelerating medical procedures into 2016.  Medical expenses include dental, eye doctor, chiropractors, etc. Conversely, if you had very few medical expenses to date in 2016, you may want to defer as much as you can to 2017 when there may be an opportunity to bunch.  As a quick example, if your AGI is $50,000, your medical floor is $5,000. If you have already reached that floor or are close, you would accelerate 2017 medical deductions to make them deductible in 2016.  If you wait, you could have $5,000 of medical expenses in both years and none of it deductible due to AGI limits in both years.
  4. Retirement Plans & College Savings – This is an area that really impacts your long-term financial goals and objectives. One of the most frequent questions we get is whether to make contributions to a retirement plan and, if so, what kind.  This is truly specific to the individual and there are so many different scenarios that impact the decision.  Some of the questions relate to comparing the short-term benefit of a current tax deduction from contributing to a Traditional or SEP IRA vs. the long-term benefits of not paying taxes on withdrawals of Roth contributions or earnings.  There are other things to consider as income limitations can put you into a situation where you are paying a penalty for making contributions when you should not have.  And, if you are self-employed or own a business, you may have options to save a significant amount of taxes each year by saving for retirement.  You also have the chance to save for your children’s or grandchildren’s education and get tax benefits.   Maybe this is even the year it makes sense to make a Roth IRA conversion to save tax money in the long run.  Although the decision to make some of these contributions can be delayed until the April 15th tax deadline, others need to be acted on more quickly.  It is better to address this early so that you do not find yourself missing opportunities or trying to make decisions under a tight tax deadline.

These are but a few of the many areas we discuss with our clients.  The more complex your tax situation is (own businesses, rental real estate, have stock options, etc.) the more important it is to have a tax planning meeting with your tax adviser.   If you believe we can be of assistance, please contact Laura at (970) 223-0792 or email laura@kevinshawcpa.com to schedule your appointment.

Client Spotlight

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Specialty Auto Body was acquired by Brian and Linda Gunderson on January 1st 1997. We are a small auto body repair shop with 5 employees, located on east Mulberry St in Ft Collins. Brian works at the shop on a daily basis, keeping things running smoothly and making sure our customers are being taken care of. Linda works at home doing the bookkeeping.

Our customers are not just another repair job for us, we like to get to know them and try to go above and beyond for them, including working with insurance companies to get their claim handled in a timely manner. We repair and re-paint the areas of their vehicle that have been damaged in an accident and our goal is to make the vehicle look better than it did before the accident. We rely on repeat customers and referrals by customers and insurance agents for our business, and we stay very busy without a lot of advertising.

We help to support many non-profits and charities throughout each year, including: Cat Rescue, Girl Scouts, Ft Collins Housing Authority, Youth baseball, The Tyler Mayle Scholarship Safe Shelter of St Vrain, and many others.

We have been trusting Shaw & Associates for 12+ years. Working with Kevin, Marcy and the rest of the team has been a very pleasant experience and they always work hard on our business and personal taxes. As we finish up our 20th year in this business we reflect on the good and bad times we’ve been through, but getting our taxes done by Shaw & associates has been one of the best decisions we have made.

Brian and Linda Gunderson

Community Events

OpenStage Theatre – Ultimate Beauty Bible
Every modern woman knows how important her friends are, especially when facing relationship drama, work stress or health issues. Danielle, a thirty-something beauty editor at Crimpmagazine, has just received some bad news and needs her friends now more than ever. Co-editors at Crimp, Lee and Tiffany, think they know just how to cheer her up – lipstick, chocolate, wine and a one-night-stand. High fashion and real life collide, creating a precarious balance – like a model in seriously high stilettos.

Show runs from October 14th to October 29th.

Location: Center for Fine Art Photography- 400 N College Ave

 

nlNight Lights
The NightLights Tree, erected each holiday season at First Presbyterian Church (531 S. College Ave) and lit in a free community celebration on December 1st is made up of over 30,000 blue LED lights. 

The blue color represents the international color of child abuse awareness and prevention and each light represents a donation of $100 by a business, individual or group to help a child. The “big blue tree” has become a holiday icon in Fort Collins over the past 19 years. 

For more information about the event or to give a NightLight, visit:

www.GiveaNightLight.com

A Fatal IRA Rollover Error & Goes Funeral Care – July 2016

The Shaw Atlas

Welcome to The Shaw Atlas, the monthly newsletter from Shaw & Associates, CPAs & Financial Advisors. We look forward to keeping you abreast of ever-changing tax codes, providing you with money saving accounting tips and illustrating proactive strategies to help you achieve the financial life you envision.

New Rule – IRA Rollovers

Client Spotlight – Goes Funeral Care

Community Events

New Rule – IRA Rollovers

Kevin Shaw, President

Shaw & Associates, CPAs

As we draw closer to being halfway done with the 2016 year, we begin to understand how individual choices can severely impact one’s tax situation. While researching articles on industry rules and changes, I came across an article from Financial-Planning.com, highlighting the effects some clients could potentially experience if they do not follow the new version of the once-per-year IRA rollover rule. I wanted to share the article below as I believe it is important to educate all IRA clients on the seriousness of violating this rule. If you have an IRA, please take time to read this article to understand how to avoid being penalized during tax time.

A FATAL IRA ROLLOVER ERROR

By Ed Slott

“Some clients’ 2015 tax returns are being hit with costly penalties because of a new ruling about the once-per-year IRA rollover rule.

Only one 60-day IRA-to-IRA rollover can be done per year (365 days) by an individual, regardless of how many IRAs he or she holds.

A strict new version of the once-per-year IRA rollover rule has been in effect since Jan. 1, 2015, but some advisers are still making costly errors. Some clients, too, are completely unaware of the new rule. The fallout is happening now after the filing of clients’ 2015 tax returns. This was the first year that a second ineligible IRA rollover would trigger an unwanted tax bill and related possible tax penalties.

Unlike some other tax mistakes, running afoul of the once-per-year IRA rollover rule is a fatal error. It cannot be fixed. IRS does not have the authority to provide any relief on this error.

As a result of a now-landmark Tax Court ruling (Alvan L. Bobrow, et ux. v. Commissioner, TC Memo 2014-21, Docket No. 7022-11, Jan. 28, 2014) and follow-up guidance from IRS in Announcement 2014-32 (issued on Nov. 10, 2014), a stricter interpretation of the rule applies.

In the past, the IRS believed the rule applied separately to each IRA, but that is no longer the case. The new IRS publications make it clear now that the rule applies in the aggregate to all IRAs and Roth IRAs.

It is worth noting at the start what actions these rules do not apply to. Most important, they do not apply to direct transfers from one IRA to another. This is why a direct transfer is the preferred method to move clients’ IRA funds.

The once-per-year IRA rollover rule also does not apply to rollovers from other types of plans to IRAs, to rollovers from IRAs back to plans or to Roth conversions.

Further, the rule does not apply to nonspouse IRA beneficiaries, because they can never do a 60-day rollover anyway. Nonspouse IRA beneficiaries can move inherited IRA funds only using direct transfers. A spouse can do a rollover, but after a spouse’s death, spousal rollovers should also be done as direct transfers.

INDIRECT ROLLOVERS

Thus, the once-per-year rule applies only to indirect rollovers of one IRA to another IRA (or Roth IRA to Roth IRA), often called 60-day rollovers. A 60-day rollover means that the funds were withdrawn by the IRA owner via a check made out to him personally. By contrast, a direct transfer involves a trustee-to-trustee movement, in which the money moves directly from one IRA to another without anyone touching the money in between.

IRS Announcement 2014-32 makes it clear that a check made out to the receiving IRA will qualify as a direct transfer and is not subject to the once-per-year IRA rollover rule. But a check made out to the IRA owner will not qualify for this exception because he or she can cash this check.

The rule now states that only one IRA-to-IRA rollover can be done per year from all IRAs held by an individual, including SEPs, Simple IRAs and Roth IRAs. Note that one year means 365 days, not a calendar year.

Here’s an example: Bob withdraws $50,000 from his IRA on Aug. 5, 2016, and rolls it to another of his IRAs on Sept. 10, 2016 — well within the 60 days. Assuming Bob has not done any other IRA to IRA rollovers during the 365 days before Aug. 5, 2016, then this is a good 60-day rollover. No problem here.

But that is Bob’s one allowed IRA rollover. He cannot do another 60-day rollover from any of his other traditional IRAs, SEP, Simple or Roth IRAs until after Aug. 5, 2017.

If he does, that will be an ineligible rollover and taxable to the extent of pre-tax funds withdrawn and subject to the 10% early distribution penalty if Bob is under age 59 ½ and no exception to the 10% penalty applies.

The action could also be subject to a 6% excess IRA contribution penalty if the ineligible rollover is not timely removed. That would require the filing of Form 5329 to report the excess IRA contribution, if not removed by Oct. 15 of the year after the year the IRA contribution was made for.”

Is your head spinning? As you can see, violation of this new rule can create costly penalties for clients during tax time. It is important to remain educated and seek advice; as it is not a mistake the IRS can fix. If you would like more information or have specific questions on any of these items, please contact me at Kevin@kevinshawcpa.com or (970) 223-0792 ext. 1

Client Spotlight – Goes Funeral Care

Goes Logo CMYKWe, Chris and Stephanie Goes, started Goes Funeral Care in late 1996 with prayerful optimism and with the belief that we could offer funeral service our way – small, honest, intimate and reasonably priced and could still do all things that the larger funeral homes could do. We added our own crematory in 2000 and additional staff in 2013.

Recently, we went through some updates to our facility coupled with some expansion of offices and specialized rooms to better serve our client families. Goes Funeral Care offers cremations, memorial services, celebratory events, and traditional funerals. We also offer pre-funeral planning with payment plans, and would be considered the area’s expert in Green Burial having been a part of Fort Collins’ creation of a green burial section at their Roselawn Cemetery. Funerals are one of those things kept in the background of most people’s minds. When you are ready to discuss what will happen one someone dies, we are here to compassionately listen and guide you in your loving memories. We like to think of ourselves as the little engine that could and that our business is a ministerial extension of our personal values.

We have used Kevin as our business and personal accountant from the very beginning and remember when he was in an office at his home and drank Tab like a fiend; we guess to keep going because he was a one-man operation. We feel Kevin and his staff at Shaw & Associates are always on the cutting edge of accounting, current of any laws, are very knowledgeable, and are a pleasure to work with. They support small business and non-profits in our community. As both Goes Funeral Care and Shaw and Associates celebrate 20 years of business in 2016, we would like to say thank you to the community as well as to the friendship we have had with the best little accounting business in town – Shaw & Associates.

Community Events

Business After Hours Tradeshow – THANK YOU!

We would like to thank our wonderful clients BigOTires,Hurr Sprinkler & Landscape, afc9e2e3-05a3-4388-9a94-a08bb73daf21
and Northern Coloradoan Catering for sponsoring some great giveaways at our booth at The Annual Business After Hours Tradeshow. If you were one of the selected winners from the drawing held, 0bde263a2328862b3044d5f861aeed2dplease be sure to mention that you stopped by our booth!BigO Team Logo _PwrStripeRR (1)

Tax Season Recap & Realities for Children Homebase Facility – May 2016

The Shaw Atlas

Welcome to The Shaw Atlas, the monthly newsletter from Shaw & Associates, CPAs & Financial Advisors. We look forward to keeping you abreast of ever-changing tax codes, providing you with money saving accounting tips and illustrating proactive strategies to help you achieve the financial life you envision.

Tax Season Recap – A Look Back At The 2016 Busy Season

Realities for Children Homebase Facility

Community Events

Tax Season Recap – A Look Back At The 2016 Busy Season
It’s in the Rear View Mirror—Finally!

Marcy Palm

Shaw & Associates, CPAs

Although we realize tax season impacts our lives much more than it does yours, we are happy to report we survived another tax season! Actually, not only did we survive it, but it was one of the smoothest tax seasons that those of us who have been doing this for a while can remember. Much of that can be attributed to the fact that we have very cooperative clients, and we have gotten into a rhythm with many of you that helps make the process go fairly smooth. However, we always strive to make it better, so that we can constantly improve our client service and try to maintain our staff’s sanity. So we thought we would share some ideas about how we can make the tax preparation process smoother, and things you can do, as our clients, to help us provide you with better service.

Plan, plan, plan

As either a business owner, or as someone whose personal return we prepare, planning ahead almost always pays off. We frequently learn about changes to a client’s tax situation when preparing the tax return; when it is too late to possibly improve the tax impact for the client. Many of you already do a great job of getting tax planning appointments scheduled with us in the last quarter of the year, please keep it up! Additionally, if you become aware of something during the year that will be different or complex, please get in touch with us then (before the transaction is completed is even better in case there are tax-savings steps that you can incorporate into the transaction). Some examples include:

  • Sale of real estate other than your primary residence (especially if it is a like-kind exchange, partial vacation home, rental property, etc);
  • Sale, purchase, or disposal of a significant amount of business assets or of a business vehicle;
  • Starting or discontinuing a business, whether it is a corporation, LLC, or sole proprietorship;
  • Implementing, or considering implementing, a new retirement plan;
  • Ownership changes of your business (adding or buying out partners or shareholders).

Additionally, we process a significant amount of data between mid-January and mid-April each year. Because of that, we are limited in both the amount of time, and of brain power, that we can dedicate to each return and each client. However, we work year-round. Often there is preliminary work that we can perform before tax season that will save time and money, and increase accuracy. We generally have lower rates outside of tax season for certain types of work that we would bill at higher tax rates if the work is done between January 1st and April 15th. Many of these issues also require research of tax laws, which can happen more efficiently when we are not in the heat of tax season. Finally, many of these types of transactions can be made more tax-efficient with proper planning before year-end, because then we have the flexibility to implement in the current year, or postpone until the next year, depending on the optimal tax benefits.

Advance planning is going to become especially important for the 2016 tax year due to a major IRS deadline change. Starting with the 2016 tax year, the deadline to file a Form 1065 (for Partnership and LLC returns) has changed from April 15 to March 15, with a possible extension to September 15. This will cause a significant shift in our tax season processing schedule and will make advance planning even more crucial.

At tax time

There are a few recurring actions (or lack of) that we’ve noticed that can impact our tax preparation process and the completion times. How can you help?

  • Complete our tax questionnaires. We understand our tax questionnaires are pretty long and detailed, and many of the items do not apply to all clients. However, we do work hard before each tax season to revise these questionnaires to make sure that all questions are important, and that it is as concise as possible. Receiving a completed tax questionnaire improves the efficiency and accuracy of our preparation process. It also helps identify situations you may not be aware of and could possibly save you taxes. We always send these questionnaires in an email the first week of January, so if you are assembling your tax documents for us and missed that email, Kayla would be happy to send it to you again.
  • Read our tax emails thoroughly. We send out many details in January of every year, including tax questionnaires, deadlines to submit your documents for on-time filings, and pertinent announcements for that year. It is crucial that you read these thoroughly and perform any actions requested. Additionally, as tax season progresses, we send out details on extensions and deadline reminders.
  • Answer our tax preparers’ questions completely. We give all clients the choice of how they would like to be contacted with questions (this is on the first page of our tax questionnaire), and most of you choose email, which we prefer as well so that we have good records for our files. We realize we are more thorough than many firms, and that is because we pride ourselves on preparing accurate returns and in providing the highest level of client service. However, our questions are relevant to the preparation of your return, and are all important to be answered. We get numerous responses to our email questions with only some of the questions answered, or answers such as “I don’t know”. While it is fine to not know an answer (or to ask us for clarification in understanding the question), in most cases we have to eventually get an answer before we can move on, and we can’t create answers for you. And in most cases “use the same as last year” is not a valid answer. The more times we have to respond to get a question answered, the longer it takes to prepare your return (meaning the higher your bill from us), and the more delayed in completing the return).

When you receive a draft to review

  • We have been noticing that we receive many questions of why things are different from the prior year (in other words “why is my refund lower than last year?” or “why do I owe more than I did last year?”). We include a two year comparison schedule with the client copy of the tax return that shows side-by-side comparison of many key line items to the prior year. We are going to move this schedule up in page order so that it is very close to the beginning of your draft copy, and that can help in answering a lot of those questions you may have.
  • Reviewing your draft timely and asking any questions you may have definitely helps move the process along. If we have many clients who wait to review their draft until close to a big deadline date, it is very difficult for us to properly answer your questions and complete all the necessary administrative steps to finalize all pending returns. 

Again, thank you for all you do to help us with a task you undoubtedly do not enjoy! We value our clients and truly look forward to being in touch with you at least once a year. If you have feedback or ideas for us on how to improve our service or processes, please let us know. Enjoy your summer, and remember to be in touch with us with any questions you may have, throughout the year.

Realities for Children Homebase Facility – Donate a Brick

Homebase brick_pledge card-1For 21 years Realities For Children has been serving the unmet needs of children that have been abused, neglected and at-risk in Larimer County. Serving over 4,000 children each year and uniting the great work of 31 Affiliate Youth Agencies to see that the best overall continuum of service is provided and that no child in need is forgotten. As an organization they have set the industry standards in Fiscal Efficiency, Collaboration and Community Involvement. And they continually strive to fortify Emergency Services – The Healing Process and Breaking the Cycle of abuse and dependency. It is this dedication to improve stability, the healing process and support to their partner agencies that has led them to spearhead the Realities For Children Homebase Facility and Youth Campus.

In providing this centrally located Homebase facility they will enhance Realities For Children Charities services in providing a one stop location for Back To School Supplies, Warm Winter Clothing, Santa’s Toy and Bikes For Tykes distributions that is equally accessible to all 31 Affiliate Agencies County wide. Offering the facility necessary to host safe and secure youth activities that provide cathartic and therapeutic opportunity for change, and offer the facilities and campus space that is needed by so many of these valuable Affiliate Agencies to strengthen their ability to heal along the path.

Realities For Children Charities works daily with nearly every service organization that provides for at-risk youth locally, and is in the unique position to meet this genuine need that the Homebase facility and campus will provide. Through a special opportunity for land, facilities and a business network of over 200 partners Realities For Children are able to secure, improve and provide over 8,000 square feet of Facility Space and 4 acre youth Campus to make this needed County wide Homebase a reality for an unprecedented $900,000. We are asking you to consider becoming a Homebase Donor to help support and empower the most vulnerable members of our community for generations to come.

SouthBuildingTo further exemplify the importance of this program, The Richardson Foundation is generously offering a dollar for dollar matching gift challenge of every dollar donated until this Campaign is met! That means every dollar anyone donated is instantly doubled in reach and service!

We are excited to share the opportunity to become part of this legacy of service by offering you the opportunity to Donate a Brick on the Path of Healing that will be featured at the entry to the Homebase facility. Businesses, Families, Organizations and Individuals alike are invited to be part of the Healing Path for children in our community that have been abused, neglected or are at-risk. Each Brick on the path is a $1,000 tax deductible donation toward the Homebase Facility and Youth Campus. Each Brick may be engraved with up to 3 lines of 17 characters on each line. They may dedicated to your family, in your business name or in memory of a loved one.

For more information about the Realities For Children Homebase Facility and to donate online please visit www.RealitiesHomebase.com or Call Realities For Children Charities at 970-484-9090

Donation Checks can be mailed to:
Realities For Children Charities – 1610 South College Avenue – Fort Collins CO 80525 (Please note Homebase in the Memo section.)

Shaw & Associates are proud to be Business Members and Supporters of Realities For Children and to be able to share this opportunity with each of you to help us build a Homebase for our communities Children in need.

Community Events

Business After Hours Tradeshow – Stop by our Booth!

BigO Team Logo _PwrStripeRR (1)afc9e2e3-05a3-4388-9a94-a08bb73daf21
0bde263a2328862b3044d5f861aeed2dThe Annual Business After Hours Tradeshow proudly sponsored by Fort Collins Marriott will be held on Thursday, May 26. Please take the opportunity to stop by our booth to enter to win prizes such as free oilchanges, fertilizer applications, and other fun prizes offered by some of our amazing clients. We can’t wait to see you all there!

Denim Day Charity – The Matthews House

950503b0-04b0-4f01-a5b0-af1e909477a2Every quarter Shaw & Associates picks a charity to donate to with “Denim Day”, whereemployees donate $5 every time they wear jeans to the workplace. This quarter we are excited to be supporting The Matthews House and the work they do to help empower young adults and families locally. To learn more about this great organization, please visit their website.

Food Bank of Larimer County –  Front Range Rally

711bdaa2-fa0d-476e-af60-4467bff55b13The Front Range Rally is a festival celebrating Colorado’s richculture of craft brewing and the emergence of a growing cadre of quality mobile food vendors. Plan to attend on Saturday May 28, 2016 at the Loveland Food Share, 2600 N. Lincoln, Loveland, CO for an afternoon of food, beer, music, fun and community.

OpenStage Theatre – Taming of the Shrew

Teb895865-302a-4ee6-b31f-6c63bc3395f9he question is still debated: just who is taming whom in Shakespeare’s uproarious comedy? In fair Padua, the merchant Baptista announces no one will betroth his charming daughter Bianca until her older sister Katharine is wed. Taming of the Shrew opens Saturday June 4th and plays through Saturday July 2nd. Please contact our office for free tickets to attend!