Category Archives: Newsletter Archive

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.

 

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

eff828bf-a4bd-47d6-a307-86ce8824a601

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

ells_jason_high-res_png

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

doc1

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!

Expensing vs. Capitalizing & 20 Things We Love about Accounting – February 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.

Expensing v.s Capitalizing

Kevin’s Korner – 20 Things We Love about this Business

Anniversary – Marcy Palm

Community Events

Expensing vs. Capitalizing

Kevin Shaw, CPA

Shaw & Associates, CPAs

In late 2015, the Internal Revenue Service made a small change to the new repairs and maintenance regulations that has a significant impact on small businesses. After intense lobbying from the American Institute of Certified Public Accountants, the IRS agreed to change the amount that a non-audited company can establish as a de minimus amount of capital assets that can be directly deducted from $500 to $2,500. This means any single capital asset that is less than $2,500 does not have to be capitalized and can be deducted as an operating expense. For example, if you buy five computers for $5,000, but each one is less than $2,500, the entire purchase can be expensed. This is a very positive step from an income tax perspective.

Interestingly, however, this has created a bit of an administrative headache for our clients that live in a county that has a business personal property tax. Generally, the de minimus amounts that counties establish for taxing business personal property are far less than the $2,500 that IRS has established. For instance, in Larimer County, the county de minimus amount is $350. Thus, businesses in Larimer County have to establish a system that allows them to deduct the amounts that the IRS allows to be deducted, but still track those items so that the business personal property tax declarations are correct.

We are recommending that our clients do the following:

  • First, create a written policy that states all assets under $2,500 will be expensed.
  • Second, continue to record any asset between $350 and $2,500 as a capital asset in their books, just like any asset greater than $2,500. At the end of the year, as part of the income tax preparation process, we will record a journal entry to reclassify the total amount of all the assets under $2,500 to an expense account. 

This will mean that all of these assets will still be recorded in one account to provide the information needed to properly update the county business personal property tax declaration statement, but still allow the client to expense these assets for income tax purposes.
Finally, and most important, since assets under $2,500 will not be on a federal depreciation schedule, it is important that the client annually review the county’s property schedule to make sure they identify any assets that they no longer possess. Remember, as long as these assets are on the schedule, the county may assess a property tax. In the past, we would confirm with the client what assets to remove from the federal depreciation schedule, which would also be used to update the business personal property declaration. Now, since the assets less than $2,500 won’t be on the federal depreciation schedule, the county schedule will need to be reviewed.

Of course, a good change such as the IRS change, can still have other ramifications. If you have any questions do not hesitate to contact us at (970) 223-0792 or send an email to info@kevinshawcpa.com.

Kevin’s Korner

In celebration of our 20th year in business and the upcoming Valentine’s Day holiday, I thought it would be fun to share the 20 things my staff loves about working in this business. Check out the list at the link below!

  1. Our clients
  2. Our team
  3. Having the opportunity to make a difference in peoples’ lives
  4. Being able to take the complex and translate it to more common language
  5. Our hard-working yet light-hearted work environment
  6. Jeans for charity days
  7. Constant opportunities to learn new things
  8. Our flexible boss who always makes the staff feel valued as part of the team (the staff got bonuses for this comment)
  9. The high level of attention to detail that this work involves (it allows us to nurture our meticulous personalities)
  10. The fabulous non-profits we get to work with
  11. The variety of industries of our business clients: from real estate developers to veterinarians to historic gun engravers
  12. Our beautiful office
  13. The longevity of many of our client relationships, and getting to know many of them personally and consider them our friends
  14. Being a part of helping businesses take off and succeed
  15. The opportunity to work with so many people in our community
  16. The flexibility in where, when, and how each of us work
  17. There is a high demand for the work we do
  18. Being able to work in such a wonderful and vibrant business community as Fort Collins
  19. The feeling of educating and empowering someone to better understand and manage their business
  20. April 16th!

Anniversary – Marcy Palm

IMG_3272

We would like to extend our best wishes to Marcy Palm on celebrating her 11 year anniversary of service with Shaw & Associates. We’ve always been impressed with Marcy’s enthusiasm and dedication for her work.

Her talent and abilities have earned her the title of Accounting Manager, where she mentors our staff and clients on a day-to-day basis. Marcy truly deserves her success, and with such efforts we are sure she will continue to earn more in the future. Congratulations on your anniversary and we look forward to the next 11 years with Shaw & Associates!

Community Events

Denim Day Charity- Project Self-Sufficiency

Every quarter Shaw & Associates picks a charity to donate to with “Denim Day”, where employees donate $5 every time they wear jeans to the workplace. This quarter we are excited to be supporting Project Self-Sufficiency and the work they do to help single parents realize their dreams for financial independence. To learn more about this great organization, please visit their website.

Boys & Girls Clubs of Larimer County- 2016 Youth of the Year Breakfast

Growing GREAT Futures!

Thursday, February 18, 2016
7:00am – 8:30am at the Embassy Suites Loveland Hotel & Conference Center

Please join the Boys & Girls Clubs of Larimer County at the 2016 Youth of the Year Breakfast to celebrate their outstanding Boys & Girls Clubs members.

Interested in sponsoring? Please contact Jenna Riedi at 970-372-4270 or jriedi@bgclarimer.org

OpenStage- The North Plan

Hapless Carlton Berg is a mid-level bureaucrat from the U.S. State Department with a price on his head. After a ruthless faction seizes power in Washington, the unlikely hero flees to the Ozarks town of Lodus with the new regime’s top secret Most Wanted list.

The North Plan opens Saturday Feb. 20th and plays through Saturday March. 19th. Please contact our office for free tickets to attend!

Celebrating 20 Years & Protecting Americans from Tax Hikes Act of 2015- January 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.

Celebrating 20 Years in Business

Kevin’s Korner- Protecting Americans from Tax Hikes Act of 2015

Anniversary- Susan Graham 5 Years

Community Events

Celebrating 20 Years in Business

Shaw & Associates is embarking on our 20th year in business starting this month! We have always been fortunate to be surrounded by greatness, because we live in a wonderful place and serve exceptional people every day; so it means a lot for us to be recognized for the great work we do. While it’s hard to believe that soon 20 years in this business will have passed, it’s also very exciting to imagine what the future has in store. Please be on the look-out for additional information related to our 20th year anniversary throughout the year and we look forward to another successful 20 years in business!

Kevin’s Korner

Congress and the President have finally acted and removed some of the guesswork that we all have been performing regarding tax planning. On Friday, Dec. 18th 2015, the Protecting Americans from Tax Hikes Act of 2015 was signed into law and extends, and even makes permanent, several tax provisions that had expired at the beginning of 2015. Although the details of the bill are extensive, there are a few highlights that are most applicable to our clients.

Several tax deductions and credits were made permanent, and retroactive to the beginning of 2015. These include:

  • Research & Development credit
  • Increased Section 179 expensing limits for business tangible property (this remains at the 2014 limit of $500,000 per year, rather than the $25,000 limit originally scheduled for 2015)
  • Eligibility of certain real property for Section 179 expensing
  • The American Opportunity tax credit for $2500 of higher education expenses for eligible students
  • Deduction of certain unreimbursed educator expenses for teachers, principals, and other school employees
  • Deduction of state and local sales taxes as an alternative to deducting state and local income taxes.

This bill also extends the 50% bonus depreciation for certain business tangible property through 2017, and a phased-down amount through 2019.

Additionally, the bill includes a few other noteworthy provisions. These all are effective for 2016 forms that are issued in 2017, and include:

  • The 1098-T that is issued by the universities to report higher education expenses is required to report amounts paid rather than amounts billed (this is helpful to taxpayers as the credit or deduction is based on amounts paid not amounts billed).
  • Forms W-2, W-3, 1099-Misc., and 1096 will be due to the IRS by January 31st. Historically, these forms have been required to be issued to the recipient by January 31st and the government by February 28th; now they will all be due by January 31st.
  • W-2’s will not report the recipient’s full social security number (a truncated version will be used) due to increased cases of identity theft and fraud.

As usual, if you have specific questions on any of these items, please feel free to contact us at info@kevinshawcpa.com.

Anniversary- Susan Graham

IMG_3230Congratulations to our Senior Staff Accountant, Susan Graham, as she celebrates her 5th anniversary with Shaw & Associates this month.

Susan is not only a valued member of our team, she is also a wonderful friend and colleague. During her 5 years with the company, Susan has excelled in efficiency and organization while preparing a variety of client tax returns. She has also been a strong and reliable resource for all things related to taxes and bookkeeping services for our staff and clients.

Thank you, Susan for your continuous hard work and dedication to the company. We look forward to another 5 years with you!

Community Events

OpenStage- Outside Mullingar

Freckled and fierce, Irish lass Rosemary nurses a childhood grudge against her slow and socially awkward neighbor Anthony in this Tony-nominated play about a generations-old land dispute. Outside Mullingar opens Saturday Jan. 9th and plays through Saturday Feb. 6th. Please contact our office for free tickets to attend!

The Arc of Larimer County- Cross-Disability Parent Group

A group of parents sharing the experience of raising children, or caring for adult children, with disabilities. Join us for dinner/drinks/company at Nordy’s BBQ & Grill (4360 St Cloud Dr, Loveland, CO 80538) on Jan. 19th from 6:00pm-7:30pm. Questions: Contact Cari Brown at cbrown@arclc.org or 970-204-6991 x23.

Food Bank of Larimer County- Empty Bowls

As a major fundraiser for the Food Bank, Empty Bowls raises awareness by reminding us that thousands of our neighbors face empty bowls on their tables throughout the year.

Empty Bowls will be hosted at the Hilton Fort Collins on Thursday Feb. 4th from 5:30pm-8:00pm. Tickets to the event are $50/person; $95/pair. There are also sponsorship opportunities available starting at $250. For more information visit the Food Bank of Larimer County website.

Business Year-End Strategies & Bike Fort Collins- December 2015

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.

Business Year-End Strategies

Client Spotlight- Bike Fort Collins

Community Events- Colorado Gives Day

Business Year-End Strategies

Marcy Palm
Accounting Manager

Business owners, are you ready for year-end?  You know we are going to be asking you many questions over the next few months.  To make sure your year-end is quicker and easier this year, here are some things you can do in advance to get ready.

Auto usage: Have you been tracking your business auto mileage all year?  Now is the time to get your records in order and to fill in any gaps you may have.  At tax time, we will need to know the following information per each vehicle that you use for business:

  • Year/make model
  • Business miles 2015
  • Total miles 2015
  • Purchase or sale documents for any autos you may have bought, sold, or traded during 2015.

Remember, however, the IRS requires you to have much more data in your records than just these items (you just don’t have to give the detail to us).  If you need a refresher of what all you should be tracking related to auto usage, click HERE.

Reconciliations:  Make sure all your account reconciliations are up-to-date and are clean.  This includes all bank accounts, credit card accounts, and loan accounts that you have in your books.  After completing any reconciliation in QuickBooks, you should look to see if there are still old items on your reconciliation screen that have not cleared.  This could be due to, for instance, actual checks that have not yet been cashed by the recipient, or it could indicate actual data entry errors which likely will require some adjustments.  And, since many banks and credit card companies offer online statement access, you don’t have to wait to receive that last statement in the mail to get this step completed in early January.

Accounts Receivable and Accounts Payable: Generate an “A/R Aging Summary” report and an “A/P Aging Summary” report in QuickBooks and scan each to make sure they look accurate.  Two particular things to look for are items in the > 90 column that are old and either incorrect or require an increased level of attention, and negative balances that likely are incorrect.

Review your Balance Sheet: Generate a “Balance Sheet Previous Year Comparison” in QuickBooks.  In the “As of” field at the top of the screen, enter 12/31/15.  Review all asset and liability account balances and make sure they make sense.  Every line on the balance sheet ties to something, so, for example, if you see an inventory asset account, the balance should tie to a physical count you completed at or very close to year end.  If your bank, credit card, and loan accounts are reconciled and the uncleared items cleaned up (see Reconciliations paragraph above), then those balances should be accurate.  For some accounts, such as fixed assets, I like to look at the $ Change column.  Keep in mind the Balance Sheet is a snapshot of your financial position as of a certain date.  If you have been purchasing equipment or other business assets for years, glancing at one large number on the Balance Sheet may not have meaning for you, but if you look at the $ Change, you can see how much you have added since the prior year end, which may be more meaningful.

Review your P&L: Generate a “Profit & Loss Previous Year Comparison” in QuickBooks, and make sure in the “Dates” field it says This Fiscal Year-do-date.  Review this report to make sure it makes sense.  Are the amounts reasonable compared to the previous year?  If not, as the business owner, do the variances make sense to you based on what you know about your business this year?  Are there negative balances or other items that don’t make sense?  You can drill down on any amounts in the current year or prior year column by double clicking on the amount to see the detail behind the numbers.

1099’s:  Whether you prepare the 1099’s internally, or whether we prepare them for you, now is the time to make sure your records are complete and organized.  A form 1099-Miscellaneous is required to be issued in January to any non-corporation vendor to whom your business paid greater than $600 in 2015 for services or rents.  Remember, an LLC is not a corporation.  Now is the time to make sure you have collected all necessary vendor tax ID numbers and that you have these expenses recorded appropriately in your books.  For more information on 1099’s, click HERE.

These can be complex topics that could fill many pages; the above is just intended to be a summary to get you started.  If you would like more information about any of these items or assistance from us in getting ready for year-end, please contact us.  We are always happy to help.

Client Spotlight- Bike Fort Collins

67f27b73-348f-4112-a9ed-c02aa4b67bf9

 

Did you know that Fort Collins is on top of THREE Bike-Friendly lists as designated by the League of American Bicyclist?

 

  • Bike Friendly Community – Fort Collins is one of five communities in the entire U.S. to receive a “platinum” rating for bike friendliness – the highest rating possible
  • Bike Friendly University – CSU just received the highest bike friendly designation, among only three other colleges and universities in the country.
  • Bike Friendly Businesses – Fort Collins is tops in the nation for having the most Bike Friendly businesses designated in one town – we have about 40 participating so far!. A Bicycle Friendly Community, Business, or University welcomes bicyclists by providing safe accommodations for bicycling and encouraging people to bike for transportation and recreation. A bicycle-friendly place makes bicycling safe, comfortable, and convenient for people of all ages and abilities.

Bike Fort Collins (BFC) is the region’s primary bike advocacy non-profit and we’ve had a hand in all things bike in NoCo for over a decade. From advocating for safer streets, to educating kids and adults about safe cycling, to fun events celebrating our unique bike culture, Bike Fort Collins is the community hub that gets people riding, gets cyclists involved as volunteers and advocates, and makes our infrastructure safer and more inviting for new cyclists. This positive feedback loop is great for our neighborhoods, our bodies, and our wallets.

Our partnership with Shaw & Associates has been instrumental during  our recent significant growth. Shaw & Associates understands the needs and responsibilities of a nonprofit board overseeing an organization and has been particularly helpful in guiding our diverse board to master financial literacy. We are grateful for the experience and knowledge Shaw & Associates provides BFC throughout the year and we know we can always count on them to take care of the detail so we can concentrate on what we do best: advocate for safe and enjoyable cycling!

Follow us on Facebook at facebook.com/BikeFortCollins, check out our website at bikefortcollins.org, where you can subscribe to our newsletter, and consider joining and volunteering to support our ongoing work.

Community Events

Colorado Gives Day

For the sixth year, Community First Foundation and FirstBank are partnering to present Colorado Gives Day on Tuesday, December 8, 2015. Colorado Gives Day is an annual statewide movement to celebrate and increase philanthropy in Colorado through online giving.

Please consider giving your tax-deductible donation to one of the many local organizations we sponsor on an annual basis from the list.

Identity Theft & Client Spotlight- November 2015

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.

Identity Theft

Client Spotlight- Big O Tires

Kevin’s Korner

Community Events- Denim Day & OpenStage

Identity Theft

Kevin Shaw
Shaw & Associates, CPA

You may have recently heard about an uptick in identity theft via filing of fraudulent tax returns using stolen social security numbers. At Shaw & Associates we have also been noticing an increase in these types of returns. Although we only had four in the 2014 tax filing season, this is still double over the previous year. Unfortunately we believe this problem will probably get worse before it gets better.

An identity thief generally uses a legitimate taxpayer’s identity and Social Security number to fraudulently file a tax return and claim a refund. This is usually done early in the tax filing season. The victim typically finds out about the fraud after he or she files a tax return and is informed by the IRS that the return has been rejected because the Social Security number has already been used to file a tax return for the same tax year. The IRS then delays processing the refund until it can determine who the legitimate taxpayer is.

How do thieves obtain Social Security numbers?

They may hack into victims’ computers or the unsecured websites and networks of businesses, or they might steal wallets or purses, rummage through trash or steal statements from mailboxes. Sometimes, criminals make phone calls claiming to be from businesses that need information. Other times, they buy information from informants who have access to Social Security numbers at their jobs.

There’s no way to fully shield yourself from tax-related identity theft but there are steps you can take to minimize the chances — or at least to identify a possible theft early to reduce the damage:

  1. Don’t give out your Social Security number to businesses or medical providers just because they ask for it. Provide it only when required. The Social Security Administration advises consumers to “ask why your number is needed, how it will be used and what will happen if you refuse.”
  2. Protect your financial information. Shred documents with personal identifying information.
  3. Don’t provide information in response to email or text messages. Don’t give personal information over the phone unless you initiated the contact or you know whom you’re dealing with. Don’t carry your Social Security card or documents with your number on them. Keep these in a safe place at home.
  4. Don’t respond to phishing schemes. The IRS doesn’t get in touch with taxpayers by email or text message to request personal information. An initial contact from the IRS about your tax return comes in the form of correspondence through the U.S. mail.
  5. Protect personal computers by using firewalls, anti-spam/virus software and updated security patches.
  6. Regularly change passwords for online accounts.
  7. Check your credit report at least every 12 months for any suspicious activity.

What should you do if you are a victim of Identity Theft?

Respond immediately if you receive an IRS letter or notice stating that another return has been filed with your information or that you received wages from an employer other than your actual one. You may be asked to confirm your identification on the IRS website through the Identity Verification Service (IDVerify) or by phone at the IRS toll-free number provided in the letter. You should also prepare and submit an Identity Theft Affidavit on IRS Form 14039.

Once you have filed the Identity Theft Affidavit, the IRS will process and issue you a separate pin number to use when e-filing your future tax returns. Unfortunately, this process can take up to nine months to complete which is why it is important to submit your Identity Theft Affidavit immediately after discovering your information has been compromised. Also, it is important to note that you will be issued a separate pin number every year. Thus, you need to make sure that you get this information to your tax preparer as soon as you receive it in the mail.

The IRS has taken some steps in an attempt to alleviate the problem but much more needs to be done. Some steps include sending a letter to the taxpayer when they see a return that they think may be fraudulent before issuing a refund. They have also have started sending refund checks to taxpayers instead of direct depositing to bank accounts for those returns that appear to be suspicious assuming the correct taxpayer would question why they were receiving this refund. It is important not to cash this refund check if it does not represent your actual refund.

If you have any questions or concerns about your personal situation please do not hesitate to contact me at kevin@kevinshawcpa.com or call me at (970) 223-0792.

Client Spotlight- Big O Tires

IMG_4919Jim Lautzenheiser recently opened his 3rd Fort Collins Big O Tires location on Timberline. It also just happens to be the largest Big O Tires store in northern Colorado. Just like the name Big O Tires suggests, this new location exemplifies big as in BIG in concept, BIG in service and BIG in amenities!

Not wanting to make the customers feel like there were walking into a garage, this store was built for optimum customer service. It has two waiting areas where customers won’t actually mind spending time in! Taking into consideration that everyone needs to stay connected these days, one area includes a WiFi bar to cater to our professional customers taking a break in their busy day. It’s a place where they can use their laptops and smartphones while their vehicle is being worked on. The second waiting area is a Relaxation Lounge. It’s also equipped with WiFi where customers can relax on comfortable seating while catching up on emails and social media, and also enjoy free snacks and beverages.

A TV screen allows the customer to watch the technicians service their vehicle offering them confidence and ease while they wait. This location has 8 bays. Each one has flush mounted alignment racks for ease of aligning high performance vehicles and a storage area that holds over 2,000 tires at any time! And due to the rapidly increasing number of electric car owners in Fort Collins, this store has its own electric car battery charger on site.

Kevin’s Korner

Many of you may not be aware that there are about 70 tax deductions/credits/benefits that are not a permanent part of the tax code. They come before Congress every year or two to be renewed. You may also not be aware that these have all expired at the beginning of 2015 and have not yet been renewed. Although they are usually renewed (with some individual ones allowed to expire) this is obviously up to the whims of Congress. Unfortunately, this is a particularly volatile year in Washington.

First, it is now presidential election season which brings its own challenges. Also, there has been significant turmoil in the House of Representatives with the majority Republican leadership resigning, putting the time frame of these into limbo. Thus, although anticipated to be extended, it may be last minute (or even after the end-of-the-year), which causes significant issues in planning.

Many of these tax deductions/credits/benefits are business related and many are applicable to your personal tax return. Some of the more prominent ones are:

  • Section 179 expensing of business assets up to $500,000 (currently only $25,000)
  • R&D credits
  • Expensing of sales taxes
  • Certain charitable contributions
  • Mortgage insurance deduction
  • State and local sales tax deduction

Stay tuned for updates on this through the end of the year.

Community Events

Denim Day Charity- Crossroads Safehouse

Every quarter our staff chooses a different charity to donate to for the privilege of wearing jeans to the office. This quarter we have selected Crossroads Safehouse as our 4th quarter “Denim Day” charity. For more information about this organization or to make a tax-deductible donation, please visit their website. www.crossroadssafehouse.org

OpenStage- Superior Donuts

From the Pulitzer-Prize winning author of August: Osage County comes a sticky sweet comedy about a has-been hippie in a decrepit Chicago donut shop and his ragtag band of regulars. Superior Donuts opens Saturday Oct. 31st and plays through Saturday Nov. 28th. Please contact our office for free tickets to attend!

2015 Tax Planning & Office Happenings- October 2015

 

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.

2015 Tax Planning

Office Happenings

Kevin’s Korner

2015 Tax Planning

Kevin Shaw
Shaw & Associates, CPA

I know it is hard to believe but 2015 is rapidly coming to a close. This is the time of the year that many of my clients are setting appointments to get a better idea of what their projected tax burden for 2015 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 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, 2015 is a low income year as compared to what you believe will be a higher income year for 2016, you may actually want to accelerate revenues and delay deductions the reverse to push more of the income into the current year when your marginal tax bracket is lower.

2. Medical Deductions – Since medical deductions are only deductible if in excess of 10% of your Adjusted Gross Income (AGI), a good strategy is to “bunch” your medical expenses into one year as opposed to spreading them out over several years. If you incurred significant medical expenses in 2015 and will exceed your floor, you would want to consider accelerating medical procedures into 2015. Medical expenses include dental, eye doctor, chiropractors, etc. Conversely, if you had very few medical expenses to date in 2015, you may want to defer as much as you can to 2016 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 2016 medical deductions to make them deductible in 2015. 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.

3. 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 are 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 additional taxes. If you have an investment portfolio, you should definitely look at this every year.

4. Roth and Traditional IRAs – 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 an IRA and, if so, whether to contribute to a Roth IRA or a Traditional IRA. 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 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. Although the decision to make these contributions can be delayed until the April 15th tax deadline it is better to address this early so that you do not find yourself 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 advisor. If you believe we can be of assistance, please contact Kayla at (970) 223-0792 or email kayla@kevinshawcpa.com to schedule your appointment.

Office Happenings

  • Coralynn Mae Moorhead was born on August 21st at 2:26 am weighing 6lbs & 14 ounces. Please help us in welcoming baby girl Cora to the world. Congrats Cassy!
  • We are pleased to introduce a new addition to our team here at Shaw & Associates! Join us in welcoming Jessica Ryan as she takes on the position of Senior Accountant. Jessica comes to us from a background in tax preparation as well as having her Masters in Accountancy from CSU.

Coralynn Mae Moorhead

Coralynn Mae Moorhead

Jessica Ryan

Jessica Ryan

 

Kevin’s Korner

Birthdays are a time for celebration and reflection. As another year comes and goes, I realize how lucky I am to have so many friends and family. I want to take time to say thank you to all the clients that took time out of their day to wish me happy birthday and make me feel special. It truly was amazing for so many of you to think of me during this milestone birthday. Cheers to another 60 years!

12036423_1200971169929411_6602249343067909095_n