Year-End Tax Preparation

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On December 22, 2017 The Tax Cuts and Jobs Act was signed into law. Most of the changes associated with this law took effect January 1, 2018 and will have a material impact on Long Island business owners and individuals beginning with their 2018 Tax Returns.

Changes are numerous and apply to:

  1. Individual and Corporate Tax Brackets

  2. Itemized and Standard Deductions, including limits on state and local tax deductions

  3. Changes to Flow Through Entities (S-Corp, LLC, Schedule C, Schedule E)

  4. Other Individual Changes, including Child Tax Credit and Alternative Minimum Tax

REAL LIFE EXAMPLES

Taxpayer A

Single, NYPD Officer, Lives on Long Island, Homeowner (subject to 1127 Tax), Not Subject to AMT in 2017 / 2018

                                      2017                2018

AGI                              $83,902           $83,902

Itemized Deductions   $33,549           $19,091

Exemptions                 $  4,050           $         0

Taxable Income           $46,303           $64,162

Income Tax                  $ 7,290            $10,035

Taxpayer B

Married w/ 2 Children, Both Teachers, Live in California, Homeowners, Subject to AMT in 2017

                                      2017                2018

AGI                              $264,057         $262,734

Itemized Deductions   $ 57,872          $ 39,858

Exemptions                 $ 16,200          $          0

Taxable Income          $189,985          $222,376

Credits                       $         0            $   4,000

AMT                           $    3,058          $          0

Income Tax                 $  43,138          $ 37,949

Before the year is out it important to speak to a CPA to ensure you are making the best year-end decisions for you and / or your business. Please feel free to contact On Your Team at 631.828.1935 to schedule a free consult with one of our CPAs.

Business Insurance - Importance of a Proactive Agent

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Most businesses spend thousands of dollars per year to protect themselves.  General liability, professional liability, workers comp, business autos, and more.  While no one enjoys paying for insurance, it does provide peace of mind...or so it should if your business is properly insured. 

Insurance premiums are driven by many factors, including type and location of business.  Two additional factors that often have a direct impact on premiums are a company's gross sales and the value of business personal property (BPP). BPP includes inventory, equipment, furniture, etc...  Essentially, if you can flip the building upside down and the item would fall out, then it is most likely BPP.  

Why are we focusing on gross sales and BPP? While the type and location of a business don't often change, gross sales and BPP do.  If these two key metrics are not updated annually, your business may not be properly insured.  If your gross sales declined or the value of your BPP has dropped, your business is probably over-insured.  Over-insured is code for throwing away valuable money.  Alternatively, if your gross sales increased or the value of your BPP is growing, your business may be under-insured, putting your business at risk.     

So what does this all mean?  If you can't recall the last time you spoke to your insurance agent about the performance of your business, it may be time to find a new one.