taxes Archives - Killingsworth Spencer, LLC

Is a Roth IRA better than a traditional IRA or 401(k)?

kwscpa2023-09-12T17:23:16+00:00

Have you ever heard of the expression, “Would you rather pay taxes on your seeds or your crops?” Let’s put it another way, would you rather pay taxes at the beginning of your retirement plan investment or the end of a twenty-to-forty-year investment cycle? My name is Rebekah Littleton, MAcc a Senior Staff Accountant at Killingsworth Spencer CPAs. In this article, I want to point out the key differences between a Roth IRA account and a traditional IRA, or 401(k) retirement plan. In a Roth plan, there is no tax savings with your contribution; however, gains within the account are not [...]

Is a Roth IRA better than a traditional IRA or 401(k)?kwscpa2023-09-12T17:23:16+00:00

Loans to and from your business

kwscpa2023-08-30T13:49:14+00:00

Due to our current economic climate, clients are asking our advice about the taxable consequences and best practices to borrow funds from their own companies. Shareholder loans “from” a corporation Loans “from” your business may not be the best way to distribute money to avoid paying income taxes. The IRS has placed strict rules on this practice, in that the loan could be taxed as a capital gain to you personally. Judy Bernhard, CPA here, and I am the Resident Tax Manager with Killingsworth Spencer CPAs. The items to have in place in taking a shareholder loan include a loan document [...]

Loans to and from your businesskwscpa2023-08-30T13:49:14+00:00

Take hold of the 4th quarter now and make the year all come together before it’s too late

kwscpa2022-10-04T18:05:38+00:00

Business owners are pulled in many different directions each day. The business must be nurtured for it to grow and remain strong and healthy. Successful business owners also realize they cannot take this journey alone. They must surround themselves with a great team where everyone is aligned for success. One of the greatest challenges business owners must face is to have access to critical financial information in real time to make good decisions. This information comes from having a talented team of advisors who work in concert to help the owner gain access to knowledge. Killingsworth Spencer CPAs sees its role [...]

Take hold of the 4th quarter now and make the year all come together before it’s too latekwscpa2022-10-04T18:05:38+00:00

Work Opportunity Tax Credit

kwscpa2022-09-28T16:46:50+00:00

Recently, the IRS released updated information on the Work Opportunity Tax Credit. This federal tax credit is equal to 40% of up to $6,000 in wages paid, or a maximum of $2,400 to targeted groups of individuals who have faced significant barriers to employment. The Tax Credit includes ten categories of workers to hire: Qualified Needy Families Certain Veterans Ex-felons Designated Community Residents Vocational rehabilitation referrals Summer youth employment Food stamp recipients Supplemental Security Income recipients Long-term family assistance recipients, & Qualified unemployment recipients Most employers have had a difficult time hiring employees in this Covid economy. Killingsworth Spencer CPAs can [...]

Work Opportunity Tax Creditkwscpa2022-09-28T16:46:50+00:00

Credit Shelter Trusts

kwscpa2022-08-16T01:16:25+00:00

Janet & Dan just prepared a Credit Shelter Trust Tax Return for the surviving spouse, Stella, of our deceased client, John (her husband). This Credit Shelter Trust was created through John’s estate plan via his will. Lynn Spencer here from Killingsworth Spencer CPAs with another important tax tip. A Credit Shelter Trust is sometimes referred to as a By-Pass Trust because it is set aside to make use of the estate tax exemption available to a decedent and bypasses being included in the estate of the surviving spouse. The surviving spouse and/or others can receive income from the assets in the [...]

Credit Shelter Trustskwscpa2022-08-16T01:16:25+00:00

Business Travel

kwscpa2022-07-28T12:47:20+00:00

Business travel is becoming more costly than in years past, but the related deductions can offset the expense. These are available when employees or the owner must travel away from their tax home or main place of work for business reasons. The travel period must be substantially longer than an ordinary day’s work with a need for sleep or rest to meet the demands of work while away. The expenses must be ordinary and necessary, not lavish or for personal purposes. These deductions include the cost of travel via an airplane, train, bus, or car, taxi and Uber; shipping of baggage [...]

Business Travelkwscpa2022-07-28T12:47:20+00:00

100% Bonus Depreciation Expiring Soon

kwscpa2022-07-22T18:47:38+00:00

Lynn Spencer here again with Killingsworth Spencer CPAs and another important tax tip. The 100% bonus depreciation deduction goes away on December 31, 2022. Business owner’s looking to buy a large new vehicle, for example, have likely heard there is a big tax write-off for purchasing a vehicle over 6000 pounds. Buying a large vehicle in 2022 will “fuel” a large tax deduction, but there are some caveats. The vehicle must be used for more than 50% business. This is a one-time huge deduction, but with cautions in future years. Once this method is used, the business owner cannot use mileage [...]

100% Bonus Depreciation Expiring Soonkwscpa2022-07-22T18:47:38+00:00

IRS has updated the business mileage deduction for 2022

kwscpa2022-07-11T15:22:31+00:00

In recognition of recent gasoline price increases, the IRS made a special declaration (IRS Announcement 2022-13): For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate at the beginning of the year. For business vehicles, using mileage at the IRS rate is an option in lieu of tracking actual costs like payments, gasoline, depreciation, and maintenance. Killingsworth Spencer’s CPAs work these numbers with each client each year and generally see mileage as the better and easier-to-track deduction, but we may see a swing to actual [...]

IRS has updated the business mileage deduction for 2022kwscpa2022-07-11T15:22:31+00:00

Moving Expenses post TCJA

kwscpa2022-05-04T14:17:08+00:00

“We’re hiring” signs are everywhere in Georgia. Georgia’s unemployment #s are very low, and there are twice as many jobs than there are seekers. One way to fill an open job is to hire from out of state. Who pays for the move? Employees are no longer allowed to deduct job-related moving expenses, (unless they are military). Employers will likely pay for the move, but there is a risk that the new hire doesn’t stay long enough to recoup the expenses. One way to mitigate is to have the new hire sign an agreement to pay the employer back for all [...]

Moving Expenses post TCJAkwscpa2022-05-04T14:17:08+00:00

Beware the Ides of March

kwscpa2022-03-12T18:29:09+00:00

There is a little background as to how the Ides (around the middle) of March ties directly into why we pay our taxes on March 15th and April 15th each year in the United States. In Caesar’s day, the Ides of March was the date on the calendar when ALL tax debts with the emperor and the state must be settled. When the income tax was enacted by Congress in 1912, the first due date for all tax settlements was March 1st, 1913. It was changed to the Ides of March in 1918 for both personal and corporate income taxes and [...]

Beware the Ides of Marchkwscpa2022-03-12T18:29:09+00:00