Cliff's Notes

Beware the Tax Man … Q4 is Here!

Did a tax advisor tell you that you made too much money and have to pay the government “real money”. You got got smacked for being successful. Well, this may be your last chance to do it right. Hopefully, you will have to write a check because you had a good year, but who’s name is on the check is the question. If you haven’t scheduled your Q3 review I suggest you do it today. You also need to know how your business will be effected by the impending changes in tax reform.

Tax Reform … It’s coming and you should prepare now for next year or figure out what to do if it is retroactive to the beginning of this year. One thing for certain is that federal money will not be giving freely to states and that means that the states will have to find the lost revenue in other places or begin trimming services. Trimming services is political suicide so don’t expect that to happen. The federal attempt to plugging up some of the holes in the ship (the low hanging fruit) may start with the investment tax credit.

The Investment Tax Credit … Was put in place to stimulate factory production by allowing the buyer to claim several years of depreciation on certain durable goods in a given tax year if those items are used to conduct business . The US congress needs to reauthorize this special rule (IRS Sec. 179) every year and if not done by December 31st the deduction will go away in 2018. Everyone needs to reinvest in their business so it is important that you have this conversation with your tax advisor. The federal government’s tax package will also have a dramatic effect on the States.

The States Low Hanging Fruit … The Consumer Use Tax is a large part of the states lost revenue. In NJ as a general consumer you are required to report all tax liability after exceeding the $500.00 ceiling. That allows for around $7000.00 in out of state purchases. However, a NJ business of any kind is liable after $1.00. The hard part is understanding what is considered non-taxable in the state being as there is no published list. Any seller that collects state sales tax assumes the non-taxable liability. It is important that you discuss the Use Tax requirement with your tax advisor.

Your Tax Advisor … If you are reading this publication the chances are that you own a business or are involved in running one. A quality tax advisor (accountant) is essential in running a business. If your accountant just crunched numbers and tells you what you owe, your probably leaving real money on the table. Quality consultants in all areas of business can be expensive so do your due diligence and ask question. Accountants are not expenses, they are investments and should produce a measurable ROI.

ROI (Return on Investment) … When running a business every thing you do, every check you write, every new patient you spend time with is an investment. The monetary return over an annual time frame needs to be measurable or the investment may not be worth the time or energy. I have seen clients change accounting services because they were too expensive. Maybe they just never utilized services or maybe services were never offered, either way both effect the ROI. One of the most common mistakes a business owner makes is to giving into emotion and the fear of change. A quality leader will invest time in gathering information and making difficult informed decision.

Informed decisions … Making informed decision is essential for success. Please feel free to contact me with any questions or concerns.

 

October 17, 2017 Posted by Cliff's Notes Blog | Uncategorized | Leave a comment