Year-Round Tax Strategies for Business Owners

Getting ready for tax season may not be on the top of your list, but planning ahead can save you a lot of stress. Here are four practical steps you can take now to make next year’s tax filing much smoother. 1. Stay Organized. Start by tracking your expenses regularly. Whether you use an app or a simple spreadsheet, keeping your financial records organized is key. Set up a filing system—physical or digital—that works for you to store receipts, bank statements, and tax forms. Additionally, set calendar reminders for important tax deadlines to ensure you never miss one. 2. Plan Deductible Purchases. Consider making deductible purchases before the year ends. Depending on your situation, expenses related to education, home office setup, self-employment, or medical costs could lower your tax burden. Make sure these purchases are made before December 31st to take advantage of any deductions for the current tax year. 3. Maximize Retirement Contributions. Take full advantage of retirement contribution limits. For 2024, you can contribute up to $23,000 to a 401(k) or 403(b) plan and $7,000 to an IRA. If you're 50 or older, you can make additional catch-up contributions. Increasing your retirement contributions reduces your taxable income, which could be especially helpful if you're close to moving into a higher tax bracket. 4. Check Your Credits. Be sure to check if you qualify for any tax credits. The IRS offers several, including: Education Credits: If you or a family member is in school, you may be eligible for credits to offset tuition costs. Energy-Efficient Home Improvements: If you've installed energy-efficient windows, doors, or appliances, you might qualify for a tax credit. Clean Vehicle Credits: If you’ve purchased an electric or hybrid vehicle, there’s a chance you could receive a tax credit. Tax planning doesn't have to be stressful. By taking these simple steps now, you can ensure you're better prepared when tax season arrives. If you need help organizing your finances or want to discuss your tax situation further, schedule a consultation with Thomas P. Gogarty Jr. CPA. We're here to help you make the most of your tax strategy!

Closing out the year can be a challenging experience for business owners. The good news is that you can avoid some of this stress and potentially save money by following these 10 steps before year-end. 1. Ensure Bank Accounts Are Current Reconciling your bank accounts regularly ensures you stay on top of your cash flow and keeps your records accurate. This helps prevent missing potential deductions and maintains complete financial records. 2. Collect Open Receivables Review any outstanding receivables. If certain accounts are unlikely to be collected, consider writing them off. This cleans up your receivables and ensures you aren't paying taxes on income you haven't received. 3. Identify Old or Obsolete Inventory Assess your inventory for any items that are no longer sellable. Writing off these items can reduce storage and insurance costs and clean up your inventory records. 4. Dispose of Unused Assets Check your property, plant, and equipment list for items you no longer own or have disposed of. This review can reveal additional write-offs or income from sales. 5. Include All Unpaid Bills Scan your accounts payable to ensure all unpaid bills are included. Missing invoices could mean missed tax deductions. 6. Account for All Payroll Benefits Verify that all bonuses, retirement contributions, and taxable fringe benefits are included in your payroll. This avoids the need to amend tax filings and ensures accurate records. 7. Review General Ledger Accounts for Errors Look through your general ledger for any posting errors. Correcting these errors ensures all expenses are accounted for and potential deductions are not overlooked. 8. Record All Debt Accurately Make sure any loans or financed purchases are accurately reflected in your books. Check payment allocations to ensure all deductible interest payments are included. 9. Log All Credit Card Purchases Record all credit card transactions in your general ledger to avoid missing deductions. This is particularly important for online purchases. 10. Consider Year-End Purchases If you expect a profit, consider making additional purchases, such as equipment or supplies, before year-end to offset your taxable income. Taking these steps to prepare your books and records for year-end can save you time and stress. Schedule a consultation with us if you need tax planning help or have other tax-related questions.

As students head off to college this month, it's essential to understand the valuable education tax credits and deductions available to help manage the financial burden. At Thomas P Gogarty Jr CPA, we believe in empowering our clients with knowledge to make the most of these opportunities. Here’s an overview of the key education tax credits and deductions you should know about. American Opportunity Tax Credit (AOTC) The American Opportunity Tax Credit (AOTC) allows you to claim a credit of up to $2,500 per student per year. The best part? Up to $1,000 of the AOTC is refundable, meaning you can receive it even if you owe no taxes. However, this credit is only available during the first four years of post-secondary education. Eligible expenses include tuition, books, and fees, but do not cover room, board, or amounts reimbursed by a scholarship. Lifetime Learning Credit (LLC) The Lifetime Learning Credit (LLC) offers up to $2,000 in credits. Unlike the AOTC, the LLC is entirely non-refundable, meaning it can reduce your tax liability but won't result in a refund if your tax bill is zero. The LLC can be claimed for more than four years, providing greater flexibility for those pursuing continuing education or part-time studies. Student Loan Interest Deduction If you are paying interest on a student loan, you may be eligible to deduct up to $2,500 of the interest paid during the tax year. To qualify, you must be legally obligated to pay the interest, so if you took out the loan for your child, you must be a signer or co-signer to deduct the interest. Income and Filing Status Considerations It's important to note that your income and filing status can affect your ability to claim these education credits and deductions. Understanding these nuances can be complex, so professional advice is often beneficial. Education credits and deductions can significantly reduce the financial stress of higher education. For personalized assistance in navigating these opportunities, or if you have other tax-related questions, reach out to us at Thomas P Gogarty Jr CPA. We’re here to help you make the most of your educational investment. Feel free to share this information with anyone who might benefit, and don’t hesitate to contact us with any questions.

Tax audits can be a daunting prospect, but understanding the process can help alleviate concerns. At Thomas P Gogarty Jr CPA, we want to provide you with a clear overview of what happens during a tax audit and how infrequent they actually are. Here's what you should know: 1. Infrequent Audits Rarity: Audits are relatively rare occurrences. Most taxpayers and businesses are not audited each year. Automated Matching: The IRS performs automated matching to ensure that all your income reported on tax forms is included on your return. You might receive a letter to fix a mismatch problem, but this is different from an audit. 2. What Happens During an Audit Notification: You will receive an official notice from the IRS or relevant tax authority informing you that your tax return has been selected for an audit. This notice will outline which specific aspects of your return are under review. Documentation: You'll be asked to provide supporting documentation, such as receipts, invoices, bank statements, and other records that substantiate the income, deductions, and credits you claimed on your return. Communication: Throughout the audit process, you may need to communicate with the tax authorities or their representatives to address any questions or provide additional information. Resolution: Once the audit is complete, the tax authority will issue a final determination. If there are discrepancies, you may owe additional taxes, penalties, or interest. However, if your return is found to be accurate, no further action will be necessary. You also have the right to appeal the decision if you disagree with the results of the audit. 3. Audit Timing Timing: Audits can happen at various times of the year, often depending on the type of audit and the tax authority involved. For Businesses: Audits may occur throughout the year but are most common during or after the tax filing season. For Individuals: Audits can take place year-round, with a higher concentration after tax season and throughout the summer months. 4. Random Audits and Targeted Reviews Random Audits: The IRS and other tax authorities may conduct random audits. Risk Factors: Specific returns might be selected based on risk factors or target certain industries or tax issues. We hope this information helps alleviate any concerns you may have about audits. Remember, our team at Thomas P Gogarty Jr CPA is here to support you in the unlikely event of an audit and to ensure tax compliance year-round. Schedule a Consultation/Meeting with us today to discuss any audit-related matters or specific questions you may have. We're always here to assist you.

As we look ahead to 2026, it's crucial to grasp the forthcoming alterations to the estate tax exemption under the sunset provisions of the Tax Cuts and Jobs Act (TCJA). While it might seem distant, preparing now is imperative, considering the potential impact on your financial strategies. Navigating the Current Terrain Currently, individuals can benefit from a substantial lifetime estate and gift tax exemption of around $13.61 million. This allowance facilitates significant tax-free gifts during one's lifetime or posthumously. However, come 2026, this exemption is scheduled to revert to its former level of $5 million, adjusted for inflation to an estimated $7 million. This adjustment significantly curtails the opportunity for tax-free gifting. Anticipating Potential Repercussions The reduction in the exemption threshold for 2026 may result in substantial tax liabilities for those whose estates surpass the lowered limit. Heirs could potentially face significant tax burdens as a consequence. Taking Proactive Measures: Minimizing Tax Implications While the impending change may seem daunting, it also presents an opportunity for proactive measures. Leveraging the current exemption level, we can strategically redistribute wealth to mitigate tax implications in 2026. This could involve employing gifting strategies, utilizing educational or medical exclusions, or establishing trusts. Additionally, it's essential to consider the potential impact of the 2024 presidential election, which could introduce further alterations to tax laws, thereby complicating the 2026 sunset scenario. Guidance Every Step of the Way As these changes draw nearer, rest assured that we are here to provide expert guidance. Estate planning isn't just about numbers; it encompasses your goals and the legacy you wish to leave for your loved ones. Take Action Today In light of these impending changes, we encourage you to take proactive steps to safeguard your financial future and that of your loved ones. If you have any questions or wish to discuss strategies tailored to your specific circumstances, please don't hesitate to reach out to us. Thank you for entrusting us with your financial well-being. We look forward to assisting you in navigating these important transitions.

As tax season rolls around, it's an opportune moment for commercial real estate investors to reassess their strategies and ensure they're making the most of their investments. At Thomas P Gogarty Jr CPA, we understand the complexities of real estate investments and the tax implications that come with them. Our goal is to guide you through the myriad of tax deductions, credits, and strategies that can enhance your portfolio's performance while minimizing tax liabilities. Proactive Tax Strategies for Real Estate Investors 1031 Exchange The 1031 exchange is a standout strategy for investors looking to sell their commercial property and reinvest in another. This tax code provision allows you to defer capital gains taxes, providing a pathway to grow your portfolio without the immediate tax bite. It's an essential tool for those aiming for continuous portfolio expansion. Opportunity Zones Investing in designated Opportunity Zones can yield significant tax benefits. By channeling investments into these economically distressed areas, you can potentially defer or even reduce capital gains taxes, contingent on how long the investment is held. This initiative not only offers tax advantages but also contributes to the revitalization of underdeveloped communities. Deductions and Credits: Maximizing Your Tax Benefits Depreciation Deductions Commercial real estate ownership allows for depreciation deductions, enabling investors to deduct a portion of the property's cost annually. This can lead to substantial reductions in taxable income, despite the property possibly appreciating in value. Cost Segregation Studies This strategic analysis can accelerate depreciation deductions by identifying and segregating property components with shorter depreciation lives. The result? Enhanced cash flow and reduced tax obligations upfront. Interest Expense Deductions The interest paid on loans for purchasing or improving commercial properties is generally deductible. This provision can significantly decrease your tax bill, particularly for properties financed through mortgages. Tax Credits Investments in certain commercial real estate projects may qualify for tax credits, such as for historic rehabilitation or renewable energy. These credits directly reduce your tax liability, incentivizing specific types of investments. Property Tax Deductions Commercial real estate owners can deduct property taxes paid on their investments. Unlike the limitations placed on residential property taxes, commercial real estate enjoys greater freedom in this area. The Importance of Professional Guidance Navigating the tax landscape requires not just diligence but expertise. Engaging with a knowledgeable tax professional or CPA ensures that you're leveraging the most advantageous strategies tailored to your specific situation. At Thomas P Gogarty Jr CPA, we're committed to connecting you with top-tier advisors who can guide you through the complexities of real estate taxation. Looking Ahead Real estate investing offers a wealth of opportunities for savvy investors. By employing strategic tax planning and consultation with professionals, you can optimize your investments for both growth and tax efficiency. If you're intrigued by the possibilities of 1031 exchanges, Opportunity Zones, or other commercial real estate ventures, we're here to assist. Our team is dedicated to providing the insights and support you need to navigate your investment journey successfully. For personalized advice and to explore how we can assist you further, contact Thomas P Gogarty Jr CPA today . Let's make this tax season a stepping stone to greater investment success.

In an ever-changing regulatory environment, it’s crucial for businesses to stay ahead of new requirements that could impact their operations. Starting in 2024, a significant regulatory update in the form of Beneficial Ownership Information (BOI) reporting will come into effect. This mandate aims at increasing transparency and curbing illicit activities by requiring detailed disclosures about the beneficial owners of corporations and limited liability companies (LLCs). Thomas P. Gogarty Jr. CPA is committed to guiding businesses through these new reporting obligations to ensure compliance and operational integrity. What is Beneficial Ownership Information (BOI)? The BOI reporting requirement is designed to shed light on individuals who have significant control or ownership stakes in businesses, directly or indirectly. This initiative targets enhancing the transparency of business ownership structures to prevent misuse and promote accountability. Essential Information for BOI Reporting Businesses subject to this new mandate will need to compile and report comprehensive information about their beneficial owners, which includes: The legal names, dates of birth, home addresses, and identifying numbers (from licenses, state IDs, or passports) of beneficial owners. A current image of the owners' identification documents. The reporting company’s legal and trade names, jurisdiction of incorporation or formation, and taxpayer identification number. Beneficial owners holding a FinCEN identifier can provide this instead of the detailed personal information. Filing Deadlines to Keep in Mind It's imperative for businesses to adhere to the following BOI reporting timelines to maintain compliance: Existing Companies: The window for filing is from January 2024 to January 2025. This applies to most S corps, C corps, and LLCs, except those qualifying for exemptions. Newly Established Companies: These entities are required to file within 90 days of their formation. Updates: Businesses must report any changes to the provided information, such as address changes, name changes, or updated identification documents. Partnering with Thomas P. Gogarty Jr. CPA for BOI Reporting While the BOI reporting is distinct from our usual suite of tax and accounting services, we're is here to assist your business in navigating this new requirement efficiently. Please be aware that our availability for BOI reporting assistance is limited during the tax season from February through April, so early engagement is recommended. We encourage businesses to delve deeper into the BOI reporting requirements and to reach out for our expert assistance in managing this process. Our goal is to support your business in achieving compliance with minimal hassle, allowing you to focus on your core operations. Thank you for your partnership with Thomas P. Gogarty Jr. CPA. We are eager to support your business through the BOI reporting process and beyond, ensuring your continued success in the dynamic business landscape.

Thomas P Gogarty Jr CPA delves into the critical topic of casualty losses caused by federal disasters. This blog post aims to inform those affected by disasters, or residing in disaster zones, about the tax implications and necessary steps to navigate these challenging times. The Reality of Casualty Losses Casualty losses, particularly in federally declared disaster areas, can have significant financial impacts. Understanding the tax implications and available relief options is crucial for affected individuals to recover and rebuild. Tax Implications of Casualty Losses The IRS offers specific tax reliefs for casualty losses in federal disaster areas. These reliefs can help mitigate the financial burden by providing tax deductions for losses not covered by insurance. Steps to Claim Casualty Losses Documentation: Gather and maintain detailed records of the loss, including photographs and descriptions. Insurance Claims: File claims with insurance and keep records of settlements or denials. Filing Tax Returns: Understand the specific forms and deadlines for claiming casualty losses. Seeking Professional Help: Consult a tax professional for accurate filing and maximizing your relief benefits. Staying Informed: Keep up with IRS updates and changes related to casualty losses. Long-Term Planning and Recovery Beyond immediate tax relief, it's important to consider long-term strategies for financial recovery and planning. This includes reassessing insurance coverage and building a robust emergency fund. Expert Guidance from Thomas P Gogarty Jr CPA With expertise in tax implications of casualty losses, Thomas P Gogarty Jr CPA provides invaluable guidance for those affected by federal disasters. Their services ensure that individuals navigate these complex situations with clarity and confidence. Casualty losses in federal disasters present unique challenges and tax implications. Armed with the right information and professional guidance from experts like Thomas P Gogarty Jr CPA, affected individuals can navigate these difficulties more effectively, ensuring they receive the necessary support and relief.

The IRS has recently announced substantial revisions to the Form 1099-K reporting requirements that directly impact many taxpayers and tax professionals. As your trusted advisors, we are dedicated to ensuring you stay informed with the latest updates. The initial plan, set in 2021, aimed to mandate payment platforms such as PayPal and Venmo to issue Form 1099-K to individuals who received over $600 within a tax year, slated for enforcement in 2023. However, based on valuable feedback received, the IRS has made significant adjustments to this regulation. Here are the key takeaways from these recent modifications: The $20,000 Rule for 2023: Instead of the previously proposed $600 threshold, the IRS will continue applying the existing criterion for the tax year 2023. This means that you'll receive a 1099-K form if you exceed 200 transactions totaling over $20,000. Incremental Changes from 2024 Onwards: Starting from the 2024 tax year, the IRS plans to introduce a higher reporting threshold than initially outlined. If your payments through these platforms surpass $5,000 in 2024, anticipate receiving the 1099-K tax form in early 2025. Subsequently, for the 2025 tax year, the threshold will revert to $600. While this news streamlines the tax filing process for many, it's imperative to note that all taxable income should be reported, regardless of whether you receive a 1099-K form. We understand the significance of staying abreast of these regulatory changes. Rest assured, we are continuously monitoring these developments and will provide updates as necessary. As we approach the conclusion of 2023 and gear up for 2024, we are here to support you in navigating these changes with confidence. Should you require further assistance or have any questions, please don't hesitate to contact us.