By Raymond C. Radigan
Year-end is always a special time. A time for resolutions and reflection—especially in a year as volatile and unprecedented as 2020.
The end of the year also provides a final opportunity to review and potentially optimize your estate and financial plans to ensure you are in the best possible position going into 2021. With the uncertainty and potential changes in tax policy, it is even more important to speak with your estate planning and/or tax adviser to get a head start. Consider the following issues when contemplating year-end planning:
Business Report: Focus On What You Can Control
BY Mickey Orta
The top two questions that financial professionals have been hearing from customers are: “What’s going to happen to my investments and financial plans depending on the results of the presidential election?” and “When will things get back to normal post-COVID?”
While these questions can’t be answered directly, that doesn’t mean we have to sit tight without taking any action.
It’s probably safe to say that 2020 has not unfolded in a way that any of us could have predicted.
Business Report: Gold Watch, Pension, Health Care For Life
By David Kopyc
The days of working for a company for 30 to 40 years and leaving with retirement security for life are over with. For most of us the future of retirement will not be the same as the one our parents had and personal responsibility is your path to retirement security.
The Pepsi Company originated the gold watch back in the 1940s. The concept “you gave us your time, now we are giving you ours,” made sense when people worked with a company for several decades.
Companies That Pay Estimated Taxes Can Find Ways To Avoid Penalties, Limit Exposure
By Christine Graf
As 2019 draws to a close, local tax professionals advise individuals who pay estimated quarterly taxes to review their annual income in order to determine if they will owe a penalty to the IRS.
Estimated tax payments are paid by business owners who operate partnerships, LLCs, sole proprietorships, and S corporations. Business income from these pass-through tax entities passes through to business owners on their personal income tax returns.
Those who operate pass-through tax entities are required to make estimated quarterly tax payments to pay income tax and self-employment tax on income that is not subject to withholding.
Business Report: Diversified Approach To Retirement Savings
Provided By Sherry Finkel MurphY Associate Wealth Management Advisor
For most people, saving for retirement means making steady contributions to a 401(k) until they hit a specific goal. However, a broader approach to saving and investing offers more options for building that nest egg.
Keep in mind that where you put your money is as important as how much you save. That’s because each savings strategy has tax considerations that can impact how much you’ll have when it’s time to take the money out. By keeping a mix of tax-free and tax-deferred sources of income, you’ll have the flexibility to withdraw funds strategically during retirement, based on tax and market implications.
Advisers Say Investors Should Not Panic Even When Stock Market Shows Signs Of Dropping
Courtesy Legacy Planning Partners
By Jill Nagy
“Keep calm. Stay the course,” advised financial advisor Dan Hazewski Sr. of Legacy Planning Partners in Glens Falls regarding investment in the stock market as the end of 2018 draws near.
“There is nothing abnormal going on,” he said on a day when late October’s falling stock market was recovering. “Volatility is a constant.”
“When the market was down, I went out and bought things for my clients. If you make good investment choices and you leave them alone, they’re going to grow,” he advised.
He said the economy is fundamentally sound.
“I don’t give credit to either Obama or Trump,” Hazewski said, “but to American ingenuity and creativity. Developments like technology, artificial intelligence, and robotics are driving our economy.”
He noted, however, that Obama did not get enough credit for “riding us through the storm” after the 2008 recession.
“The economy is as strong as it has ever been and the best thing to do at this point in time is nothing,” Hazewski urged. Where he sees the normal gyrations of the investment market, “pundits like to find reasons” for concern.
Business Report: Closing Out 2018 Finances
By Stephen Kyne
The end of another year is rapidly approaching, and just as you cross items off your checklist and prepare your home for the winter, it’s also important to complete maintenance items to prepare your finances to close-out 2018.
An often-overlooked task is to review your beneficiary declarations each year. Families grow, as new members are added, and shrink with death and divorce, which means that beneficiary and transfer-on-death declarations can easily become outdated and no longer reflect your true wishes.
Since these declarations are a matter of contract, they will overrule what your Will may say. So, even if you’ve updated your will to exclude an ex-spouse, but you left them as beneficiary on your IRA, your new spouse won’t be able to inherit those assets, but the ex will, and it can’t be challenged in probate.
Another piece of financial housekeeping is to begin to gather documents you’ll be needing just after the new year to prepare your taxes. Compile receipts for medical bills, tuition payments, child care and charitable contributions, among others.
While many of us will no longer be able to itemize deductions due to the new tax law, there are credits for things like child care and education expenses which you may still be eligible for. For those with large medical bills, or who have been particularly philanthropic this year, you may still be able to itemize, so it is important to have those receipts handy.
Business Report: Plan Now For Tax 2018 Taxes
By Judy A. Cahee
Managing your taxes is one of the most stressful aspects of being a small business owner. Waiting until the last minute will only make the process worse and can often result in a larger tax bill in the long run. Reduce your stress by planning in advance and implementing top tax saving tips now.
First and foremost, now is the time to contact your tax advisor and learn how the Tax Cuts & Jobs Act impacts your business.
Although the law was enacted in December 2017, many provisions are effective beginning with the 2018 tax year. A lot has changed. Don’t make the mistake of waiting until December to understand how the changes impact you or to identify tax planning moves that can reduce your tax bill.
Here are some key considerations:
Choice of entity review.
There are two major changes that impact whether the type of entity you own remains the best choice for tax purposes. Changing the classification of your business takes careful planning.
More Participating In NYS Insurance Plans
NY State of Health, the state’s official health plan Marketplace, announced a boost in participating employers in New York’s Small Business Marketplace (SBM) due to significant changes made earlier this year.
State officials said it’s now easier for small businesses to access the federal Small Business Health Care Tax Credit, and there are more health plans for employers to choose from through New York’s SBM.
In the first five months of New York’s re-vamped SBM, the number of participating small employers increased by over 300 percent and now exceeds 9,000.
“New York’s small businesses have the opportunity to provide employees with health coverage and potentially save money at the same time,” said NY State of Health Executive Director Donna Frescatore. “We’re trying to raise awareness about the tax credit and we’ve made it easier than ever for businesses to sign up.”
Small Business Owners Should Consider Accelerating Expenses, Delaying Receipts
Photo by Jesse Winters
By Jill Nagy
Despite uncertainty about the fate of the U.S. tax code, advice from accountants for year-end tax planning remains similar to what it has always been: Try to accelerate expenses and delay receipts.
If anything, the prospect of possible reductions in tax rates and the elimination of some tax deductions, gives greater credence to that advice.
“There are a lot of unknowns,” said James E. Amell, a CPA in the Queensbury office of Marvin & Co. He expects corporate tax rates to come down but predicts that the Republicans in Congress will not make radical changes.
“They want some durability in what they do,” he said. “They don’t want to see everything changed again when the control of Congress changes.”
Robert Ricciardelli, a CPA and partner at Whittemore, Dowen & Ricciardelli, also in Queensbury, agreed. “It looks like something is going to get done,” he said. “It is tough to plan.”
Defer income, he advised, “even more so than usual.”
Deferring income until 2018 also defers the taxes on that income, possibly into a year when rates are lower. “Hold off on some of you billing,” Amell said.