CPA Blog

Make a 2015 contribution to an IRA before time runs out

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Published: Tuesday, 15 March 2016 08:31

Written by Phillip Strickler, CPA.CITP

Tax-advantaged retirement plans allow your money to grow tax-deferred — or, in the case of Roth accounts, tax-free. But annual contributions are limited by tax law, and any unused limit can’t be carried forward to make larger contributions in future years. So it’s a good idea to use up as much of your annual limits as possible. Have you maxed out your 2015 limits?

April 18 deadline

While it’s too late to add to your 2015 401(k) contributions, there’s still time to make 2015 IRA contributions. The deadline is April 18, 2016. The limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on December 31, 2015).

A traditional IRA contribution also might provide some savings on your 2015 tax bill. If you and your spouse don’t participate in an employer-sponsored plan such as a 401(k) — or you do but your income doesn’t exceed certain limits — your traditional IRA contribution is fully deductible on your 2015 tax return.

Evaluate your options

If you don’t qualify for a deductible traditional IRA contribution, see if you qualify to make a Roth IRA contribution. If you exceed the applicable income-based limits, a nondeductible traditional IRA contribution may even make sense. Neither of these options will reduce your 2015 tax liability, but they still provide valuable opportunities for tax-deferred or tax-free growth.

We can help you determine which type of contributions you’re eligible for and what makes sense for you.

© 2016

Your accounting software should be a many-splendored thing

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Published: Friday, 04 March 2016 11:13

Written by Phillip Strickler, CPA.CITP

You’ve probably heard the song, “Love is a many-splendored thing.” Well, your company’s accounting software should be, too. That is, you’ve got to make sure your system does all of the bigand little things necessary to efficiently and accurately track your financials.

It’s not only about revenue

Annual revenue doesn’t always dictate what software you should acquire. Some $50 million a year businesses will do just fine using a less expensive accounting software package, while some $5 million businesses will require a much higher end product. The key is to thoroughly review your accounting processes, tax-reporting requirements, transaction volumes, staff’s abilities and management reporting needs.

The future matters as much as the present

Another important factor: your company’s growth rate. If you’re growing 20% or more per year, you must have an accounting package that can grow with you. Otherwise, converting to a new accounting system every couple of years will be a painful and expensive process.

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What’s your charitable donation deduction?

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Published: Friday, 26 February 2016 13:18

Written by Phillip Strickler, CPA.CITP

When it comes to deducting charitable gifts, all donations are not created equal. As you file your 2015 return and plan your charitable giving for 2016, it’s important to keep in mind the available deduction:

Cash. This includes not just actual cash but gifts made by check, credit card or payroll deduction. You may deduct 100%.

Ordinary-income property. Examples include stocks and bonds held one year or less, inventory, and property subject to depreciation recapture. You generally may deduct only the lesser of fair market value or your tax basis.

Long-term capital gains property. You may deduct the current fair market value of appreciated stocks and bonds held more than one year.

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5 ways to cut costs and improve cash flow

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Published: Wednesday, 17 February 2016 11:45

Written by Phillip Strickler, CPA.CITP

When business owners start to feel the choking effect of a slow cash flow, they often blame their customers. “Why aren’t we getting paid on time?!” But it’s important to remember that cash flow is affected by a variety of elements. For example: Operating expenses and overhead can have a significant impact. Here are five often-missed ways to cut costs and improve cash flow:

1. Review your rent or mortgage. Can you negotiate a lower rent with your landlord or refinance your mortgage? Also look into whether you may not need as much office space if you’ve begun to allow many employees to telecommute.

2. Implement energy efficiency improvements. You’d be surprised by how much of a difference little changes can make to lower your utility bills. For example, draw the shades in the summer and adjust the thermostat a few degrees. Or look into whether it’s time to make an upfront investment in better windows or HVAC equipment.

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