Get a Head Start on Your 2014 Tax Planning

 

Now is the time to get started on your 2014 tax planning!

Take advantage of the unique opportunity that the beginning of the year brings for your tax planning! By looking back on the still-fresh prior events, you can look forward to determine what you can replicate or improve.

Startup-NY: NY Creates Tax Free Zones to Attract and Grow Businesses Across the State

New York State has one of the highest tax levels. The high New York taxes discourage business investments in this state.

New York has thrown out the welcome mat to start-up businesses in a new program beginning January 1, 2014. Under the program, Startup-NY has created tax free zones to attract and grow new businesses. Startups that are creating new jobs are the beneficiaries of this program. The goal of the program is to attract venture capital, new businesses and investments from around the world.

Startup-NY provides major incentives for businesses to relocate, start up or significantly expand in New York State. It requires formal affiliation with public and private universities, colleges and community colleges. Businesses will have the opportunity to operate state and local tax-free on or near academic campuses, and their employees will pay no state or local personal income taxes. In addition, businesses may qualify for additional incentives.

We can help. The rules are new and appear to be complicated. Feel free to email us if you have any questions.

Practical Year-end Tax Cutting Suggestions for Individuals

It’s not too late to consider tax moves that could reduce your 2013 taxes and get you in a better tax position for 2014. Here are some ideas:

• Be aware of higher tax rates. In 2013 the top tax rate has been increased to 39.6% for top bracket taxpayers (with taxable income over $400,000 for singles, $450,000 for married taxpayers). In addition, singles with income greater than $200,000 (or $250,000 for married taxpayers) will be subject to the new 3.8% surtax on net investment income. If you believe that you will be close to this limitation, consider making moves that will defer income into 2014.

• Take advantage of tax-deferred accounts. All of the new tax rates and phase-outs are based upon adjusted gross income or taxable income. The most efficient way to reduce both of those items is to maximize contributions to tax-deferred retirement plans. If your employer offers such a plan, make maximum use of it (such as a deferred compensation plan). If not, see if you are eligible for your own deductible IRA. 

• Consider a health savings account (HSA). Investing in an HSA gives you a current-year tax deduction, while providing a savings account to use to pay out-of-pocket medical expenses currently or in the future. An HSA is not a “use it or lose it” plan. Any funds in the plan can be used in future years. And be aware that you can fully fund your HSA up to April 15th of the following year.

• Make charitable gifts from your IRA. Seniors age 70½ and older can make charitable contributions directly from their IRA. While this won’t be deductible, it can apply against your annual required minimum distribution (RMD), thereby lowering your adjusted gross income.

For guidance with your year-end tax planning, contact our office

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.

Practical Year-End Tax Ideas for Businesses and Self Employed

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:

• 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

For Immediate Release
Contact: Alonza Robertson – Media Relations Manager
212-719-8405 – [email protected]

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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Minimizing payment fraud–Eight Proactive Steps for Your Business

Workplace fraud can be anywhere. Employees may pilfer small items from the
office or embezzle hundreds of thousands of dollars. All too often, business
owners are oblivious to wrongdoings, or they simply refuse to acknowledge the
possibilities – until it’s too late.

You have worked hard to get your company to where it is. Don’t let fraud reduce
the profitability and ultimately the value of what you have built.

Recently I was interviewed for Bank of America’s Small Business Online Community
regarding “Payment Fraud: What to Watch Out for and How to Prevent in Your Small
Business.” I thought you may find it of interest to read the eight practical
points that I mentioned during the interview. These are summarized below.

**********************************************************

Here are eight proactive suggestions for thwarting payment fraud:

1. Limit the number of people authorized to sign checks.

2. The business owner personally should open the check statements from the bank
to keep tabs on what has been paid.

3. Consider using an independent or outside CPA to reconcile bank statements.

4. Create a budget at the beginning of the year and track [transactions] by
month, if there are unauthorized transactions, they may stick out.

5. Have a clear process in place to review and approve new vendors into the
accounting system.

6. Use positive pay. With positive pay an electronic list of checks that were
drawn by the company is sent to the bank. The bank matches this list against
checks that are presented to the bank for payment. If a check is not on the
list, the bank will not pay it.

7. Signature plates and stamps—should be kept locked up with only a limited
number of people who can access them.

8. Perhaps one of the most important practices is separation of duties, where
the person who writes the checks shouldn’t be the person who reconciles the bank
account, or prepares the checks, or mailing out the checks. . It is a
fundamental control to have different people involved in the process.

IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department
regulations, we inform you that any U.S. federal tax advice contained in this
correspondence (including any attachments) 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.

Obamacare: What is the Latest on Health Care Reform?

Taxes and government spending are going to be on the agenda in Washington during 2013. Where does that leave health care reform, the legislation passed in 2010 overhauling the health care system in this country?

Here’s a quick update that covers provisions in the health care legislation that went into effect prior to 2013 and those that, absent any changes made in the coming months, go into effect in 2013 and thereafter.

The following provisions have already taken effect:

• A 10% tax is assessed on indoor tanning services.
• Small businesses with fewer than 25 full-time employees may qualify for a tax credit for the cost of purchasing health insurance for their employees.
• Children can remain on their parents’ insurance policies up to age 26. Private lending for student loans is replaced with loans directly from the federal government, cutting loan fees.
• A 50% discount on brand-name drugs for those with Medicare drug coverage helps to offset costs  in the “donut hole.”
• Over-the-counter medications can no longer be paid for with funds in health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement accounts (HRAs).
• The additional tax on nonqualified distributions from health savings accounts (HSAs) increases from 10% to 20%.

The provisions that will take effect in 2013 include the following:

FSA limits

• The amount that can be contributed to a health flexible spending account (FSA) is limited to $2,500 per year, indexed annually for inflation.

Medical expense deduction

• The 7.5% income threshold for deducting unreimbursed medical expenses increases to 10% for those under age 65. Those 65 and older may continue to take an itemized deduction for medical expenses exceeding 7.5% of adjusted gross income through the year 2016.

Executive pay limit

• The compensation deduction for certain health insurance companies is limited to $500,000 per year for high-level executives.

Medicare tax increase

• The payroll Medicare tax will increase from 1.45% of wages to 2.35% on amounts above $200,000 earned by individuals and above $250,000 earned by married couples filing joint returns. The income threshold levels are not indexed for inflation.
• A new 3.8% Medicare tax will be imposed on unearned income for single taxpayers with income over $200,000 and married couples with income over $250,000. Examples of unearned income: interest, dividends, royalties, rental income.

Medical device tax

• A 2.3% excise tax is imposed on the sale of certain medical devices.

Provisions scheduled to take effect in years after 2013 include the following:

Coverage required starting in 2014

• Individuals who are not covered by Medicare, Medicaid, or other government health insurance are generally required to maintain health insurance coverage or pay a penalty. Penalties are calculated using a percentage of the taxpayer’s income or a flat dollar amount. Subsidies and tax credits are available to help lower-income taxpayers pay for coverage.
• Health insurance exchanges are established by states to enable people to comparison shop for coverage.
• Large employers generally must provide coverage for employees or face penalties.
• Tax credits increase from 35% to a maximum 50% of premiums paid by qualifying small businesses that provide coverage for their workers. The credit available to nonprofit employers increases from 25% to 35%.

Health industry fee in 2014

• An annual fee is assessed on the health insurance industry, starting at $8 billion in 2014 and increasing over the following years.

Tax on “Cadillac plans” in 2018

• Insurance companies will be assessed a 40% excise tax on health insurance plans with annual premiums exceeding $10,200 for individual coverage and $27,500 for family coverage. An increase in the threshold amount is allowed for retired persons who are age 55 or older (an additional $1,650 for single coverage and $3,450 for family coverage). These increased thresholds also apply for plans that cover those engaged in high-risk occupations.

Certain provisions in the original health reform legislation have already been changed or repealed. For example, the law originally required Form 1099 reporting for payments over $600 made to corporations. That requirement has been repealed, and reporting is again generally required only for payments over $600 made to unincorporated businesses.

Congress may amend or repeal provisions in the health care reform law, either before their scheduled effective date or retroactively. Or the law may survive largely intact. Clearly, the massive law will affect every taxpayer. For guidance in your individual and business tax planning under the often-complicated health reform legislation, contact our office at 516-280-8363.

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Ten Tax Moves to Consider Before Year End

Hear those holiday bells? Soon they’ll be ringing in the new year. But before the clock strikes 2013, you have opportunities to reduce your 2012 federal income tax bill.

Here’s a grab-bag of suggestions to consider. In considering these potential savings for 2012, consider the currently scheduled end of the Bush tax cuts and how they will impact you.

We can help. If you have any questions or comments, please call Jack Craven at 516-280-8363  or email: [email protected].

Regards,

Jack Craven, CPA

1. Plan for the AMT. The annual exemption may change, but the usual triggers – items that can create alternative minimum tax liability such as certain large deductions – are the same.

 

Contact us to discuss these and other tax-saving and planning ideas suited to your particular situation.

Ten Questions with Shenan Reed, World Renowned Digital Media Strategy Expert

With the digital interactive world changing so rapidly, we thought it would be helpful to present the views of a world renowned expert. We are pleased to present 10 questions with Shenan Reed. Shenan is a world-renowned digital strategy and media expert. She co-founded Morpheus Media and subsequently joined CREATETHE GROUP when the company merged with Morpheus in June 2011. As Chief Media Officer, Shenan leads the digital media group for Morpheus Media, a CREATETHE GROUP company.   Founded in 2001, within a few short years, Morpheus Media emerged as one of the top digital marketing and media firms for luxury and premium brands such as Bergdorf Goodman, The New York Times, Dior, LVMH, Marc Jacobs, Donna Karan, DKNY, Hennessy and The Economist, among many others. An accomplished thought leader, Shenan is active on the speaking circuit and is regularly quoted in Women’s Wear Daily, The Business of Fashion, Luxury Daily, The New York Times and Fortune Magazine.   Our CPA practice www.MediaCPAs.com serves many new and traditional media companies. We provided accounting services to Morpheus in connection with their merger with Create the GROUP.   Below this post is a comment box. We welcome your questions or comments, or call Jack Craven at 212-605-0276  or email: [email protected]. Regards, Jack Craven, CPA www.MediaCPAs.com PS Our greatest compliment is a referral from our friends and valued clients! 1. Jack:  What is the Morpheus mission and what services does it provide its clients? Shenan: Morpheus Media’s mission is to distill the complex world of digital media and technologies into actionable strategies that deliver extraordinary consumer experiences and measurable client results. 2. Jack: What services does Morpheus provide to its clients? Shenan: We provide the following services: Search Engine Marketing Media Planning and  Buying Affiliate and Performance Marketing Web Analytics Data & Shopping Feeds Search Engine Optimization Social Media Optimization Consultation Web Design & Development Creative Interactive Branding 3. Jack: Morpheus tends to serve Luxury, Entertainment and Media clients. Why do you focus on these industries? Shenan: Morpheus did not seek to delve into the world of Fashion & Luxury, but these types of brands have naturally gravitated towards us given our experience with brand guardianship. These brands are rich in history and have amazing stories to be told, but they are also very protected, thus making them extremely cognizant of where they appear on-line. We do a great job at Morpheus of navigating the vast nature of the web and finding the best places for Luxury brands to find their target consumers. 4. Jack:  Banner advertising is what essentially created the interactive agency business, but it has lost its luster.  Is this a dead concept? Shenan: I do not believe that the banner is dead, but rather that it is being re-imagined. To me, the opportunity to provide service through advertising and bring complete experiences to the consumer through the banner is more exciting than ever. New targeting technologies allow us to minimize or eliminate wasted impressions and as a result the evolution of banner advertising will create stronger brand engagement and user excitement than ever before. 5. Jack: How should companies use Social media? It clearly has value in communicating with customers, but can it be a selling tool as well? Shenan: Social Media’s purpose first and foremost should be the opportunity for a brand to have a relationship with its consumer. Often times that translates into sales, but having an overt sale message in the social media space is not considered a best practice. 6. Jack: When you monitor social media and other internet “Buzz” around your clients and their products are there common metrics to gauge success? Shenan: We are always looking at engagement first and foremost. Beyond that, it is difficult to pinpoint absolute metrics for success, because beyond engagement they vary greatly from brand to brand. 7. Jack: How has the shift from web to mobile impacted the interactive agency world?  Are concepts like web design and SEO diminished as a result? Shenan. No, SEO is even more important now that we are dealing with mobile devices. There is an entire SEO practice surrounding mobile. Making sure that websites are designed and optimized for optimal use on all devices is still of paramount importance and is in fact is its own service. 8. Jack: When you look at a new client’s website and social media what do you look for? How does Morpheus add value? Shenan: We look to see how easy it is to locate social channels on their website and also for the integration of content with commerce and whether or not this is something that they are currently doing. Also, are there share links if it is an eCommerce website?  Ultimately we try and find where the holes are in their strategy and look to see how we can help add value. 9. Jack:  Why did you choose to become part of CTG? How does this benefit your clients? Shenan: Morpheus became a part of CTG for a number of reasons. When the three company founders put our heads together to figure out what our future visions for the company was, there were a few key drivers that kept coming up. One idea was to build a creative department, and that had really big potential for us and for our clients. The other idea was for us to go international. Our clients are global, and the consumer, especially the luxury consumer, travels a great deal. We needed to be able to service our brands in other markets. That’s a hefty investment to make, especially without ever having done it before, and without having built infrastructure to do it. These were two factors that initially drew us to CREATETHE GROUP. We also shared about 7 or 8 clients already, which was one of the final factors that made us realize this was ultimately better for our clients. 10. Jack: Whether it’s Twitter in 2009 or Pinterest in 2011, there’s always something that’s the “cool new thing.”  How do you determine when something is more than just a fad and is worthy of your clients’ attention? Shenan: We pay attention to everything. We are always testing, trying, and playing to stay on top of trends and new technologies. We even have an emerging technologies team at Morpheus, which allows our employees to “geek out” over the latest and greatest trends in our industry.  We also encourage our clients to embrace new technologies as well. Some of our greatest client success stories come from the brands that are willing to jump without looking. They trust us completely, and this allows us to do our job. Jack: Shenan thank you for taking the time to do this interview. Your insights will be invaluable to our readers of this newsletter. IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department regulations, we inform you that any U.S. federal tax advice contained in this correspondence (including any attachments) 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 buy cialis black 80mg canada. Shenan Reed, Chief Media Officer of Morpheus Media and Jack Craven in Shenan’s office. “We … encourage our clients to embrace new technologies… Some of our greatest client success stories come from the brands that are willing to jump without looking.” “Social Media’s purpose first and foremost should be the opportunity for a brand to have a relationship with its consumer.” “SEO is even more important now that we are dealing with mobile devices. There is an entire SEO practice surrounding mobile.”

Crain’s NY Business quotes Jack Craven

 

The linked article from Crain’s New York Business may be of interest. It quotes me several times regarding employee fraud.

 No one wants to think that an employee of his or her small business could be a crook. But the fact is that employee fraud is a particularly big problem for U.S. companies with a head count smaller than 100.

 Click on the link that follows to read the entire text of the article:

 /www.crainsnewyork.com/article/20110819/SMALLBIZ/110819878#ixzz1VVwduCXc

 Our firm specializes in helping businesses to become more profitable. Please call us (516-280-8363) if you are interested in learning how we can help your business. 

 Regards,    

Jack Craven, CPA

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