You’ve worked hard and your employer rewards you with a holiday bonus. While you greatly appreciate it, it leaves you asking yourself, “What are the tax implications of this gift?” Shaw & Associates, your tax accountant in Fort Collins has the answer!
Here are the questions we are most frequently asked about holiday bonuses:
- Are holiday bonuses taxed? Yes, they are considered a “supplemental wage” and are taxed. Be aware that if a bonus isn’t processed by your employer in the same way that your regular paycheck is (and therefore reported to the IRS), you must report the bonus when you file your taxes.
- Are bonuses taxed at a different rate? No, they are not. The amount withheld from your check is at a rate the IRS requires and may be different than the withholding rate on your regular paychecks. The bonus will be taxed on your tax return at whatever your marginal tax rate is. Shaw & Associates, your tax accountant in Fort Collins, can explain in more detail.
- Is money received in the form of a gift card subject to tax? Yes, you must report the amount of the card when you file your taxes.
- Can I avoid paying taxes on my bonus? Just as with your standard income, your bonus can provide a tax advantage if you do things with it like put it into a retirement account, donate it to a registered charity, make a mortgage prepayment, make “green” home improvements, etc.
- Do employers pay taxes on holiday bonuses? Yes, they pay payroll taxes on the amount given.
It’s important to note that due to the current discussions in Congress around changing the tax laws, it may be to your advantage to delay a bonus until next year when rates are expected to be lower.
Making the Most of Your Much-Deserved Reward
If you’ve got specific questions about what to do with a holiday bonus, your trusted tax accountant in Fort Collins can help. Contact Shaw & Associates today to ensure you’re able to keep as much of that gift as possible.
For many people, Social Security will play an important role in their retirement financial plan. However, with fairly regular tweaks to the program, it’s important to stay current on the latest updates, especially as you begin to approach retirement age. Here are a few things to be aware of from Shaw & Associates, your Fort Collins CPA:
- The age for full retirement benefits increased slightly in 2017. The full retirement age, which had been 66, was bumped to 66 and two months for those born between January 2, 1955, and January 1, 1956, to include people eligible to apply for early retirement this year. The age will increase by two months every year for the next five years, until it reaches 67 years old.
- Retirees receive a small cost of living adjustment. Following two years in which low inflation meant no cost of living adjustment, Social Security beneficiaries are being promised a 0.3 percent increase this year.
- High earners and the self-employed will pay more. These workers will experience a tax hike in 2017 as Social Security raises its maximum taxable earnings level.
- Earnings limits are up for those who work after retirement. People who opt for early retirement but keep working can earn a little more without having their benefits reduced.
Staying Current on Social Security
These are just a few of the recent changes to Social Security. If you have questions about how the program’s benefits will impact your financial future, don’t hesitate to contact Shaw & Associates, your Fort Collins CPA.
Successful businesses are always looking for ways to make their operations more efficient and cost effective. One of the areas where that is easy to do is bookkeeping. As a trusted Fort Collins business accountant, we know that companies sometimes struggle to stay on top of their books. These organizations can benefit in many ways from outsourcing their bookkeeping, including:
- An easy transition. The transition to having an accountant take over the management of your books is quick and painless.
- Frees staff for other projects. With a Fort Collins business accountant handing your accounting, you can have your financial team address other important projects that have been on the back burner.
- A cost-effective alternative to hiring. Sometimes your choice is between hiring more permanent staff to handle your bookkeeping or outsourcing the work. In those cases, outsourcing is often the more budget-friendly option.
- Access to the latest in tools and best practices. It’s an accountant’s top priority to be aware of the latest business processes and to have the most current accounting software. So, by working with them, you tap into those resources.
Put Your Bookkeeping Challenges to Bed!
Are you looking for a Fort Collins business accountant to help with your bookkeeping? Shaw & Associates has the experience and expertise to help you make a seamless transition to stress-free, outsourced accounting. Contact us today to learn more about our services.
Are You Spending Unnecessary Time Managing Your Own Books?
Accurate accounting and bookkeeping are critical to the success of every company — large or small. So, the line item in your budget for the help you need to keep your financials accurate and up-to-date is a critical investment. That said, some companies prefer a DIY approach, and quickly find they are spending too much time managing their business accounting.
You Deserve Outstanding Service and Incredible Value with Fort Collins Business Accounting that Keeps Your Best Interests in Mind
That nagging feeling that perhaps you should be spending less time on your accounting and bookkeeping and/or getting more for your money, may mean you should evaluate your options. Taking the leap to hire a professional to support your business’ bookkeeping on a consistent basis can be daunting, but once you find Fort Collins business accounting that brings you a return on your investment, you will never want to go back.
At Shaw & Associates Fort Collins business accounting, we provide a variety of services with a level of flexibility that many find unique in our industry. For example, we:
- Work closely with business owners and managers to zero in on their precise accounting needs. Then we craft a customized plan to meet those requirements with no “extras” added. What you need is exactly what you get.
- Work to understand your industry. You want to work with an accountant that learns all they can about what you do.
- Focus on the best way for business owners to manage their financials. The accuracy and efficiency of their operations are our top priority. If we can provide ongoing guidance, we’re happy to, but ultimately our goal is to help a company get the assistance it needs at an equitable price.
- Train internal staff to maintain books accurately. With many of our clients, we provide oversight as needed while enabling them to handle most tasks themselves.
- Provide value by giving you the insight you need to maximize deductions and take advantage of financial opportunities that you may be missing.
The result of our consultative approach is that each business we work with gets what it needs from us when it needs it.
As a trusted provider of Fort Collins business accounting, our objective isn’t to maximize the value of your business so you can focus on what you do best. Contact us today.
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.
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.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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?
- 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.
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.
- 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.
- 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.
- 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.
- 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.
- 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 >
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:
- 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.
- 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.
- 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.
- 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.
- 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.
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!