Manage Your 2014 Tax Bill with Summertime Tax Planning
Filed Under Blog, Blogroll, Uncategorized · Tagged: Accountant, accounting, Jack Craven, john craven, John F Craven CPA LLC, Media CPA, midyear, midyear tax planning, summertime, tax, tax planning
Midyear planning is critical to individuals, as well as businesses. There’s enough of the year behind you to establish a track record and enough time ahead to make changes that matter.
Summer: the season for sun, sandals, and tax planning. Kick back in your lounge chair and review the following suggestions for easing your 2014 federal income tax bill.
- Elective contributions – the ones you ask your employer to withhold from your paycheck – reduce current-year taxable income.
- Compare the amount you’re presently depositing in your account to the maximum allowed, and make adjustments now to spread the impact over the rest of the year.
- The maximum 401(k) contribution for 2014 is $17,500.
- If you’re 50 or older this year, add an additional $5,500.
2. Open an education savings account.
- There is not a federal tax deduction for contributions to a 529 education plan. However, if you are currently setting aside money to pay for your child’s college espenses in a taxable account, you could open a 529 plan instead.
- Earnings on plan assets grow tax-deferred and can be tax-free when withdrawals are used for qualified education expenses.
3. Reset basis with capital loss carryfowards.
- Would you benefit from selling an appreciated stock and using your loss carryforward to shelter the income?
- Planning point: Reacquiring the stock immediately after selling at a gain doesn’t incur the wash sale rules. At the same time, you get an increased basis to offset future gains.
4. Hold off on retirement plan withdrawals.
- In the early years of retirement, withdraw funds from taxable accounts in the most tax-efficient manner possible.
- For example, you could sell long-term stocks with a high basis first. The current tax saving is complemented by a longer-term benefit: continued tax-deferred growth in your retirement accounts
5. Plan for required minimum distributions.
- What do you intend to do with the funds you’re required to take from retirement accounts once you reach age 70½?
- Tax-efficient investing strategies can reduce the tax on the income you earn on the distributed amount.
- Another suggestion: Using the funds for charitable donations can offset some of the tax from the distribution.
6. Shift Income.
- Broaden your tax-planning focus to include family members.
- For instance, say your parents or children are in a lower tax bracket than you are. Employing them in your sole proprietorship can provide net tax savings.
7. Gifting offers similar benefits.
- You no longer pay tax on the income from the gifted asset while the income tax paid by the recipient may be minimal or deferred. (Be aware of the kiddie tax.)
- For 2014, gifts under $14,000 qualify for the annual gift tax exclusion.
8. Track passive activity losses.
- Make sure you’re on track to meet the active or material participation rules for your real estate rentals and other passive activities.
- The requirements vary, but generally you must be involved in the activity in a material way, and you must have evidence proving your involvement, such as a logbook.
9. Know the alimony rules.
- If you are already paying alimony or finalizing a divorce that will result in alimony, be sure you’re following the rules so you can claim a deduction.
- Among other requirements, payments must be made to a former spouse in cash under a divorce or separation decree, and must cease upon the recipient’s death.
10. Preserve Deductions.
- You’ve heard it before: Recordkeeping is essential.
- Examples of tax breaks that may be disallowed if you cannot provide proof include: charitable contributions, gambling losses, vehicle costs, and travel and entertainment expenses.
- If you neglected to start tracking these expenses at the beginning of the year, get going now.
11. Check dependent status.
- Keep your college student qualified as your dependent by monitoring the “support” test.
- The rule: Generally, your child cannot provide over one-half of his or her own support during the year.
- Other relatives may qualify as your dependents, including parents in nursing homes.
12. Check payments.
- Update your withholding or estimated tax payments in light of life changes such as marriage, divorce, or starting a new business.
- Overpaying your 2014 tax reduces your available cash flow.
- Underpaying your 2014 tax can lead to penalties and interest.
13. Review health insurance subsidies.
- Review your eligibility for the advance premium tax credit
- Premium tax credit – a refundable credit that reduces the premium you pay for a health policy purchased on a government exchange.
- If you elected to have the credit applied to your premium and your 2014 income is higher than you expect, you may have to pay back all or part of the credit.
Combine business, pleasure and tax breaks on summer trips!
Filed Under Blog, Blogroll, Uncategorized · Tagged: Accountant, CPA, John F Craven CPA LLC, pleasure with business, summer business, tax break, tax write off
Summer is almost here and I have begun thinking about my summer vacation. Should we go to the beach, the mountains or the west coast?
Do you plan on mixing pleasure with business on a trip this summer? There’s no problem from a tax perspective as long as you follow a basic precept: The primary purpose of the travel must be business-related. Otherwise, you’ll forfeit valuable tax deductions.
On the other hand, if you stick to the tax itinerary, you can write off most of your travel costs – even though you’re spending part of the time on personal pursuits. The key is to record significantly more “business days” than “personal days” on the trip.
Example: John Green, a self-employed individual, flies cross-country on Monday to make a presentation to a client. He is in business meetings Tuesday through Thursday. On Friday, the client inks the deal. John decides to spend the weekend playing golf and lounging by the pool. He flies home the following Monday.
The round-trip airfare costs John $1,500. He also incurs $1,400 in lodging ($200 a day) and $800 in meals ($100 a day) during his eight-day trip.
On these facts, John spends six days on business – the two days traveling count as business days – and only two days on pleasure. So the trip qualifies as business-related travel. He can deduct the entire airfare as well as five days’ lodging and 50% of the meals attributable to his business stay. Result: John deducts a total of $2,800 ($1,500 airfare, $1,000 lodging and $300 meals).
Note that any personal expenses, such as green fees at the golf course, are nondeductible. Also, if family members accompany you on a trip, you can’t deduct their expenses, but your travel may still qualify as business-related.
Of course, this is just a brief summary of the pertinent tax rules. To review the tax requirements for your travel plans, check with us before you hop on board.
Watch Jack Craven on AriseTV!
Filed Under Blog, Blogroll, NY Tax incentives, Startup New York, Uncategorized · Tagged: AriseTV, Jack Craven, Startup-NY, Xchange
Startup New York is a program that offers tax-free incentives to start up companies in New York State. Jack Craven has been interviewed on AriseTV’s business news show Xchange to discuss this program.
Watch Jack as he discusses the program in more detail.
The rules are new and appear to be complicated. But We can help.
PS We love working with Startups!
Please feel free to contact us at (212) 605-0276 or jfcraven@MediaCPAs.com. We are happy to help with any questions that you may have.
Practical Year-End Tax Ideas for Businesses and Self Employed
Filed Under Blog, Blogroll, Income tax planning, Tax planning, Uncategorized · Tagged: CPA income taxes, Tax cutting for businesses and entrepreneurs
If you are self employed, a start up media entrepreneur or a business owner of any sort, it’s not too late to make moves to reduce your 2013 income and self employment taxes. Here are a couple ideas:
It is not too late to reduce your 2013 income taxes
- Purchase business equipment. Up to $500,000 (scheduled to be reduced significantly to $25,000 in 2014) in business equipment purchases can be expensed this year, rather than being expensed over a number of years. Additionally, there is also a 50% bonus depreciation allowance (that will not be available in 2014) if your purchases exceed the $500,000 limit. 2013 might be the last year to maximize your equipment purchase deductions to such an extent.You may need the latest Mac or PC, for example. This is great benefit to any company with profits that can be offset or reduced.
- Deduct health insurance. If you are self-employed, you are allowed to claim 100% of the amount paid for health insurance for yourself, your spouse, and your dependents as long as you follow certain conditions.
- Consider credit card purchases. If you want to purchase equipment or supplies for your business before the end of the year, but you are cash-strapped, consider using your credit card. Your deduction occurs this year when the purchase is made, not next year when the credit card charges are paid. Many startups finance themselves through credit card purchases. Beware, this can add a level of risk to your startup.
- Create a retirement plan. It’s not too late to create a retirement plan for yourself and your employees if you have them. The plans can be simple to set up and administer, such as a Simplified Employee Pension (SEP) plan. A 401(k) plan could be established even for a one-person business. While some of these plans must be established by the end of the year, most can be funded up to the extended due date of the tax return.
- Use the new “streamlined” home-office rules. Ocassionally, self-employed taxpayers declined to claim the home-office deduction because it was so complicated to compute. For 2013, the deduction is streamlined, allowing for a deduction of $5 per square foot, up to a maximum of 300 square feet or $1,500. This is last on my list because $5 per square foot, although simple to understand is just a fraction of the cost per square foot in NYC and surrounding areas.
For guidance with year-end tax planning for your business, please contact our office.(516-280-8363)
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department regulations, we inform you that any U.S. federal tax advice contained is not intended or written to be used, and cannot be used for the purpose of (i) avoiding penalties that may be imposed under the U.S. Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
Jack Craven elected as NYSSCPA Director-At-Large
Filed Under Blog, Blogroll, Board of directors, NYSSCPA, Uncategorized · Tagged:
For Immediate Release
Contact: Alonza Robertson – Media Relations Manager
212-719-8405 – arobertson@nysscpa.org
Jack Craven elected as NYSSCPA Director-At-Large
NEW YORK – (June 4, 2013) – The New York State Society of Certified Public Accountants (www.NYSSCPA.org) elected Jack Craven, CPA of New York, as director-at-large at its 116th Annual Election Dinner and Meeting held at the New York Marriott Marquis on May 16. Craven is the president and founder of John F. Craven, CPA, LLC, http://mediacpas.com; in New York and Garden City, Long Island.
A member of the Society since 1974; Craven is a member of the NYSSCPA’s Nassau Chapter. He is a current member of the Media and Publishing and the Bankruptcy and Financial Reorganizations committees. His previous committee service includes the Media and Publishing Committee (Chair) and the CPA Journal, Chief Financial Officers, SEC Practice, Firm Coordinators, and Bankruptcy and Financial Reorganizations committees.
Craven earned his Master in Business Administration specializing in corporate finance from New York University, Stern School of Business.
In addition to the NYSSCPA, Craven is chairman of Bevnet.com Inc. and is a board member and audit committee chairman of the Theodore Roosevelt Council (Nassau County) of the Boy Scouts of America.
In addition to Craven, the NYSSCPA also installed 15 other new members to its Board of Directors at Thursday’s dinner including J. Michael Kirkland, CPA, a director at Deutsche Bank; as president.
ABOUT THE NYSSCPA
The New York State Society of Certified Public Accountants is one of the largest state accounting organizations in the nation with more than 29,000 members encompassing all areas of public practice, government, education, business and industry. Incorporated in 1897, the Society fulfills its mission through its 15 chapters around the state of New York; more than 60 technical and administrative committees, and a 39-member Board of Directors. Visit nysscpa.org for more information.
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Jack Craven, CPA 
