Category Archives: Current News

401K

Your Tax Accountant in Fort Collins Shares 401(k) Pointers

As far as retirement plans go, the 401(k) plan is among the most common and most popular. If you work for a company of any size, it’s likely you can participate in one. While it’s fairly easy to get signed up and then put the plan on “autopilot” so to speak, take it from your tax accountant in Fort Collins: you’ll get more out of it if you understand how it works.

Key Considerations for your 401(k)

Keep this information in mind as you manage your 401(k) and start putting away money for your retirement:

  • You get a tax break for your contributions. The money you put into your 401(k) reduces your current year tax liability. Along with the fact that you are saving for retirement, this makes it a great win-win.
  • There are contribution limits. One of the most important numbers associated with your plan is how much you can put into it each year. For most people, striving to hit that limit is a good idea. The number is subject to change, so be sure your information is current.
  • There is no upper age limit for contributions. As long as you are employed by a company that has a 401(k) plan, you can continue to make contributions. With some other plans, you have to stop making contributions in the year you turn 70 ½.  
  • Companies often match your contribution, up to a point. This benefit from your employer is essentially free money! If your company will match a contribution up to, say, six percent of your salary, it’s a good idea to be sure you’re contributing at least six percent so that you get the full match.
  • There is a “catch-up” option for older workers. Workers over the age of 50 can contribute more than those 49 and younger. Talk with your tax accountant in Fort Collins about whether you should take advantage of this option.
  • Congress made important changes to 401(k) rules in 2006. Most 401(k) plans now have a Roth component that allows individuals to invest some or all their 401(k) contributions into a Roth 401(k). The maximum amount that you can contribute is almost three times that of a Roth IRA and, unlike Roth IRAs, there are no income limitations.
  • Self-employed individuals can really super-fund their retirement plans by adopting a 401(k) for their business. Depending on a variety of circumstances, a self-employed individual could contribute up to three times the normal contribution limits compared to someone that is a W-2 employee.
  • There are penalties for early withdrawals. In most cases, you will be penalized if you take money out of your plan before reaching age 59 ½. And the penalty is in addition to standard income tax.
  • A growing number of companies auto-enroll employees. Check with your HR department to see if that’s the case where you work. Since most people have no reason not to participate in a 401(k) plan, this isn’t really a bad thing!
  • Investment options within a 401(k) may be limited. Your employer probably has a set number of plans offering a select group of investments, so you don’t have the freedom you would if you simply went off on your own and made investments. However, most people are happy knowing that financial experts are keeping an eye on the company’s plans and by extension, their plan.
  • There may be significant fees for managing your account. Investment companies may charge fees for overseeing your account. Be sure you know what those fees are, as they can add up over time.


The More You Know…

Learn all you can about your 401(k) account so that you can maximize your savings. If you’ve got questions about retirement, Shaw & Associates, your tax accountant in Fort Collins, is happy to help! Contact us today and let’s talk about your strategy.

Retirement

Demystifying Retirement Plans from Your Fort Collins Accountant

Demystifying Retirement Plans from Your Fort Collins Accountant

Vanilla, chocolate, or strawberry? Shaken or stirred? Americans love to have options. But, when it comes to funding retirement, the number of choices available can lead to confusion and frustration. Furthermore, it can result in a total lack of action to get one or more retirement funds started, which hurts your chances of retiring with the lifestyle you are envisioning. So, as a trusted Fort Collins accountant, we are sharing a quick overview on the major types of retirement funds that you can use as a foundation for making informed decisions.

The Many Ways to Set Money Aside

To encourage people to save for their retirement years, the government has created several different retirement fund categories that meet different needs. Below is a general summary of some of the most common options. However, before you choose one or more of them, we encourage you to talk with a Fort Collins accountant like Shaw & Associates. We can help you get clarity on your financial objectives and ways to achieve them, which includes explaining the contribution and withdrawal restrictions with each type of account.

  • 401(k) plan. Named for the part of the tax code that governs them, this is a company-sponsored retirement plan into which employees can make tax-deductible contributions. Often companies will “match” that contribution in order to receive a tax deduction for themselves. The amount that you can contribute each year is set by the government based on factors including your age. There are penalties for removing money from a 401(k) plan before you reach retirement age.
  • Traditional IRA (individual retirement account). This type of account was created in 1975 and is the first government-sponsored retirement savings tool to provide tax advantages as an incentive for putting money aside. The amount paid into a traditional IRA, up to government-set limits, can be deducted from your annual income. As with a 401(k), there are penalties if you remove money from a traditional IRA before retirement age.
  • Roth IRA. This type of IRA is different from a traditional IRA in two primary ways. First, you cannot deduct contributions from your taxes. Second, contributions grow tax-free rather than just tax-deferred, meaning your withdrawals are not taxed. People or married couples above certain income levels cannot contribute to Roth IRAs.
  • 403(b) and 457 plans. These retirement funds are similar to 401(k) plans but are only available to employees of educational and nonprofit organizations. So, the annual contribution limits are the same as for 401(k) plans.
  • Simple IRAs and Simplified Employee Pension Plans (SEPs). These plans are primarily for people who are self-employed or who work for small businesses. Again, there are limits to contributions and penalties for early withdrawal.

The Right Plan for Your Retirement Goals

Everyone has unique needs and goals relating to retirement. Working with a Fort Collins accountant like Shaw & Associates can help you clearly define your objectives and select the retirement plan or plans that will help you have the lifestyle you want after you stop working. Contact us today to find out how we can help you get on track for enjoying your golden years.

Starting a business

Your Fort Collins Business Accountant Shares 10 Things to Think About Before Starting a Business

You’ve made the decision to follow your passion and start a business. Congratulations! No doubt you are eager to start making progress toward launching your new venture. As a leading Fort Collins business accountant, we like to remind people that there are things you can do to maximize your chances for business success. One is to give some thought to 10 key considerations early on in the process.

Key Considerations for Launching a Business

Here are 10 things you should consider as you look to turn your business dream into reality:

  1. The specifics of your product or service. Even the best business ideas often start out without a great deal of definition or detail. It’s important that you have gotten very specific about your concept before moving forward. You should also do extensive research to see who your competitors are. This will help you differentiate your idea from theirs.
  2. How you’ll structure your business entity. From a legal perspective, businesses can take many forms, each with its own advantages. Be sure to talk with your Fort Collins business accountant or a lawyer about what makes the most sense in your situation.
  3. Your team. What kind of expertise will you need to make your business successful and who can best provide it? Hiring decisions are critically important, especially with a new company.
  4. Your business plan. In order to be successful, you need to have a step-by-step process for developing your idea and bringing it to market.
  5. Company finances. How do you intend to fund this venture? You need a solid plan for creating and maintaining forward momentum. This is especially true since you can’t expect to be generating significant revenue right out of the chute.
  6. Your target market. In order to maximize the effectiveness of your marketing efforts, you need to have a very clear picture of who it is that will purchase your product or service.
  7. Your branding and marketing. To help people recognize and remember your company, you’ll need a distinctive logo, an informative website, descriptive marketing materials, etc.
  8. Your launch strategy. It’s critical that you announce your offering in a way that resonates with your target audience. You never get a second chance to make a first impression, as they say.
  9. Your business agility. Sometimes it is necessary to make slight (or even major) deviations from your initial concept in order to adapt to changes in your market. Are you prepared to do that?
  10. An exit plan. Even if you anticipate being involved with your business for many decades, you should have a plan for how to make your exit when the time comes.

Putting Your New Business on a Positive Trajectory

Kevin Shaw says he can relate when people come to him about starting a business saying they are doing so because they don’t want to answer to a boss anymore. However, he encourages them to consider that they are now going from a single boss to possibly hundreds of bosses, depending on how many customers they have. He shares that starting a new business can be extremely daunting and is not for everyone. But, when you succeed it can very rewarding and satisfying, and he’s always happy to provide insight where he can.

The steps above are a great framework to get you started. But as you prepare to launch a new venture, remember that there are plenty of resources available to help you. Working with a Fort Collins business accountant like Shaw & Associates on the monetary aspects can give you the confidence that your business will have a solid financial foundation. Contact us to learn about our services and how we can assist you.

Shaw Fort Collins CPA accounting helping business owner

5 Reasons to Outsource Your Accounting: A Little Insight From Your Favorite Fort Collins CPA Firm

While accurate and timely accounting practices are critical to the success of any company, they typically aren’t functions that many business owners are equipped to handle on their own. However, the perceived expense typically dissuades them from getting outside help. As a Fort Collins CPA Firm that has helped hundreds of businesses navigate the overwhelming world of small business accounting, we thought we would help clarify when it makes sense to get accounting assistance.

There are many benefits of working with a Fort Collins CPA Firm. Here, we’ve outlined a few advantages designed to support your business’s growth.

  1. Cost savings. For many companies, the cost of paying a salary and providing benefits to an employee simply outweighs the advantage of having them on staff. When you outsource your accounting, you pay only for the services you need when you need them.
  2. Time savings. Of course, one of the biggest benefits of having a relationship with an accounting firm is taking the time you used to spend on bookkeeping and focus it on improving company operations and business growth.
  3. Access to an expert accounting team. Most providers have multiple people on staff who can assist you with your accounting needs. As a result, by signing up to work with a Fort Collins CPA firm like Shaw & Associates, you have access to a whole team of experts.
  4. The newest technology. It is in the best interest of CPAs to stay ahead of technology that will help your business maintain compliance and access financial information to support effective decision making. So, in working with them, you get to take advantage of the tools and software that the experts use.
  5. Instant scalability. As your company expands, you aren’t faced with having to hire more accounting staff. Instead, you simply contact your accountant and let them know you’ll be needing additional assistance and they take it from there!

Technology Makes Outsourcing Easier than Ever

Robust technology and cloud computing have truly bridged the gap between businesses and their service providers, making accounting support and the sharing of information seamless and secure. And when you get help that gives you a competitive advantage, a Fort Collins CPA Firm like Shaw & Associates becomes much more than a service provider; they become an indispensable member of your team. Contact us at Shaw & Associates to learn how we can assist you. Read more about our accounting services >

Shaw and Associates - childcare tax deduction

Fort Collins Tax Accountant Shares 5 Tax Deductions You May Not Know About

For many Americans, tax season has passed and they have either written their check or are looking forward to receiving a refund. But take a piece of advice from a Fort Collins tax accountant: now is the time to be thinking about deductions. Trying to remember the expenses you may have had in the last year as you scramble to get ready to submit your taxes to your accountant is a no-win proposition. You’re bound to forget something. So, we encourage you to start thinking about them now.

These Things are Deductible? Who Knew!

As you are dutifully jotting down your tax deductions throughout the year, keep in mind these things, which many people are unaware of:

  1. Health insurance premiums. For most taxpayers, medical expenses have to exceed 10 percent of your adjusted gross income to be deducted. If you are self-employed and responsible for your own health insurance coverage, however, you might be able to deduct 100 percent of your premium cost.
  2. Sales tax. You are allowed to deduct sales tax or state income tax from your federal income tax return. If your state doesn’t have income tax, this can be a significant deduction. Even if your state does have an income tax, claiming the sales tax deduction may be to your advantage. This can be true if you’ve made a large purchase like a car.
  3. Childcare costs while volunteering. In order to encourage volunteering, the government will allow you to deduct the cost of a babysitter if you are using their services while you are volunteering for a recognized charity.
  4. Self-employed Social Security. If you are self-employed, you have to pay roughly 15 percent of your income for Social Security and Medicare. That amount would otherwise be split between you and an employer. The good news is that as your own employer, you get to deduct half from your taxes.
  5. Unusual business expenses. There are many things that you might not have thought of as “business-related expenses” but really are. For example, if you’re a lifeguard, you may be able to deduct the cost of sunscreen. Talk with your Fort Collins tax accountant about the specifics of your job.

These are just some of the lesser-known tax deductions. To determine all the deductions you’re entitled to, talk with us at Shaw & Associates, your Fort Collins tax accountants.

2017 Tax Accountant In Fort Collins

Shaw & Associates – Your Tax Season Professionals

April 18th is when you need to mark your calendar as the tax deadline for 2017. If your taxes are getting a little time consuming or a bit complex, it may be time to consider the best tax accountant in Fort Collins, Shaw & Associates.

Did you know we offer three types of tax planning services as a Fort Collins accountant? We offer tax planning & consulting, tax preparation & compliance as well as IRS representation should you need it.

Our tax planning & consulting services allow you to have access to the changes in tax laws & regulations before you have to file your annual income taxes. Having our expert tax professionals assisting you and helping guide you through this process can make tax planning & consulting a breeze!

Next up we offer tax preparation & compliance for those of you who feel frustrated when preparing your own taxes. Our goal is to help you get the tools, guidance & expertise needed to make tax preparation as painless as possible.

Lastly, we offer IRS representation should you ever get the uncomfortable letter in the mail. We have significant experience in dealing with various tax authorities at the local and national level and want to help you should you need it. We know the nuances of dealing with the IRS and can make it as painless & stress free as possible for you.

As you can see, we offer plenty of services as a tax accountant in Fort Collins and are capable of helping you with your personal or professional finances this tax season. So if you are in the decision making process about which Fort Collins accountant you should use, make sure to choose Shaw & Associates!

Fort Collins CPA

Shaw & Associates – Your Fort Collins CPA & Accounting Firm

At Shaw & Associates, we believe in our community and that is why we are proud to serve as a Fort Collins Accounting firm that you can be proud of. Our founder has been a Fort Collins CPA since 1997 and Mr. Shaw has been a Certified Public Accountant since May of 1983 as well.

We know that most people only think about accounting when bills are due or during tax season. But our team thinks about this every single day and we are focused on making sure that the services we offer provide you the peace of mind and expertise you need to navigate any financial situation you find yourself in at the moment. We know that tax season can be stressful and that is why we want to make it as easy as possible for you to navigate. You can’t put a price tag on peace of mind and that is what we try to provide for you.

As a Fort Collins Accounting firm, we have supported multiple groups in the community that give back to the citizens of Fort Collins. We love being supportive of the Boys & Girls Club of Larimer County, The Food Bank of Larimer County and the OpenStage Theatre & Company to name a few. We believe that what we offer is more than just being a Fort Collins CPA. We believe that civic engagement is as important as the quality of service you offer and that is why we love living and working in Fort Collins. We consider ourselves a part of this city and that is why we believe in doing the best work possible for those who choose to work with us.

So this tax season, be sure to pick up your phone and call us at 970.223.0792 if you have any questions. You can also reach us online at http://www.kevinshawcpa.com or visit our office at 1044 West Drake Road, Suite 201, Fort Collins, CO 80526.

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.

Even When It Comes to Taxes, There Are a Few Silver Linings

6a00d8345157c669e201bb07c6d527970d-640wiIn the middle of an avalanche of returns and tax preparation, we have to take time for some levity. Working 60 hour weeks can drain the whole team, so we try to find the silver lining, and look at what makes us love our jobs, why we love our clients, and concentrate on a few things that make tax season in April, really, not so bad. As we embark on 20 years in business, we thought it would be fun to share 20 reasons that you can think more positively about taxes. Take a look, and feel free to send your own reasons our way (if you can think of one or two).

  1. The weather in Colorado tries, in fits and starts, to transition to some more spring and summer-like behavior. It’s that dose of the unexpected that keeps us on our toes, looking at whether we need to grab our shorts or snowshoes to get to work.
  2. We get to see more of our clients. Some of them we only see once a year during tax season, so it’s an opportunity for us to say hello, catch up, and hear how everyone is doing. If you haven’t come to say hello to us, please do.
  3. And everyone gets to see a lot of each other – we’re always grateful for our team of bright and fun-loving individuals that make coming to work enjoyable.
  4. In April, we can see the light at the end of the tunnel. After the 15th, you’re off the hook (we tend to stay busy with extensions, but most people are less stressed) for another 12 months. Although we always recommend that you start planning early. Preferably January.
  5. Spring time is the time to start planning summer vacations. We’re definitely thinking about what to do with our comp time after all the aforementioned extensions are filed and taken care of.
  6. Tax season does help you appreciate the things your taxes pay for – paved roads and schools are part of what make Fort Collins such a wonderful community to live in.
  7. Even though most of us are up to our eyeballs in paperwork, we know that everyone else is going through the same thing. Welcome to this exclusive club called being an adult!
  8. You can start spending your money uncontrollably again, safe in the knowledge that tax season is gone for another 12 months. But we would always recommend taking the opportunity to come talk to us about responsible financial planning, so you can make it rain in 20 years.
  9. Our clients feel safe in the knowledge that they have a CPA that’s working hard to get their taxes in on time and making sure that everything is present and correct.
  10. If the positivity isn’t working for you, tax season is a great time to find something new to curse about, or come up with really creative, compound curse words.
  11. Taxes pay people and build the infrastructure to build pipes to carry our poop away, and it’s hard argue with that.
  12. Okay … so maybe 20 reasons to see the positive side of taxes is a bit of a stretch, but what isn’t hard for us is to share how excited we are to celebrate our 20 years in business with you.

When it comes to April 15th, we are reminded of what really matters for making our business a success: YOU! Next time you come by, let’s cheers to our 20 year anniversary together, because we wouldn’t be celebrating tax season, or any other season for that matter, if you weren’t a vital part of our team.