The IRS has issued the new W-4 form for 2019. This is an ideal time to do a Paycheck Check-up, to ensure you’re having the right amount of funds withheld each pay period.
If you have any questions about your specific situation, please consult with your tax advisor. If you do not currently have a tax advisor, we welcome the opportunity to serve you. Please call 215-723-4881 or contact us online.
Are you thinking of starting your own business? Then plan on attending the aptly-named “Starting Your Own Business” class presented by Canon Capital’s Brent Thompson as part of the Souderton Area School District’s Community Education program.
This four-hour class takes place in two, two-hour sessions 7:00 – 9:00 p.m. on Tuesday, February 26 and Thursday, February 28, 2019.
During the class, Brent will cover:
Bring any questions you might have to class. Cost is $30.00. Register with SACE online (from the left sidebar of the page select “Evening School,” “Life Planning & Organizing,” and then “Starting a Business.”). View the full program catalog here (Please note, the catalog shows this class as happening in two separate, two-hour sessions. It is one full course presented in the four hours of the two evening sessions.)
We are settling in at our new office, located at 484 Harleysville Pike, Harleysville, PA 19438. We are awaiting final signage and landscaping. In the meantime, please use the photo in this blog and the directions below to help you travel to our new location. Please note: the main entrance is on the side of the building; not the street-facing entrance.
Directions from Routes 113 & 63
Directions from Routes 113 & 73
We look forward to your first visit to our new space, with all four of our business units — CPA, Payroll, Technologies, and Wealth Management — waiting to serve you.
Moving Day has arrived! Please note the following regarding our access and availability January 23-28, 2019 as we move our Hatfield and Souderton offices to our new Harleysville location:
Wealth Management
The Wealth Management office is currently in the process of moving. Staff will be accessible via phone and email.
Accounting, Payroll, & Technologies
These business units will begin moving Thursday, January 24. The Souderton office will be accessible until the end of business on Thursday, January 24. Staff will be accessible via phone and email.
There may be delays in communication during this time as we transition to the new location. We are planning that Monday, January 28, 2019 will be our first official day of business in our new location:
484 Harleysville Pike
Harleysville, PA 19438
Click for directions.
Our telephone number (215-723-4881) remains the same.
Thank you.
Are you a business owner curious about what the new developments will mean for your 2018 return? Then join us Tuesday, January 29 as we, along with QNB Bank and the Indian Valley Chamber of Commerce, share the latest updates, including:
Register with the Indian Valley Chamber of Commerce online or via phone at 215-723-9472 by January 22, 2019.
The full impact of the Tax Cuts and Jobs Act of 2017 will be realized with the filing of 2018 returns. Be prepared by consulting our 2018-19 Tax Planning Guide. Stay up to date with the most recent tax news and the latest facts, with relevant information for individuals, investors, and business owners.
This resource is available to you right now. It is the first item listed on the Useful CPA Links and Resources page of our website.
If you have any questions about this or any other element of your tax planning, we are glad to be of service. Call 215-723-4881 or contact us online.
Work continues on the new building in Harleysville. We’re looking forward to the New Year, when we anticipate moving in and all four of our business units serving you from under one roof. Stay tuned for continued updates.
On Saturday, December 1, 2018, we continued our annual tradition of providing a water station as participants in the Generations of Indian Valley Annual Reindeer Run complete the unforgiving hill of Main Street Souderton. Our own Sarah Hughes (who finished in first place in her category) and Brian Erkes participated alongside the rest of the reindeer antlered, ugly sweater-wearing runners and walkers. We even spotted Batman! However, they couldn’t top our water station volunteers; Canon Capital’s Mike Witter was joined by The Grinch and the big man himself, Santa Claus. The Reindeer Run benefits the programs of Generations of Indian Valley, including their Meals on Wheels service.
View the complete photo gallery on our Canon Capital Facebook page and the Generations of Indian Valley Facebook page.
We recently shared the changes brought to Meals and Entertainment expense deductions as a result of the Tax Cuts and Jobs Act. Since first sharing that information, the IRS has issued additional guidance on these deductions.
Under this interim guidance, issued October 3, 2018, meals for entertaining clients, prospects, and the like remain 50% deductible, meaning taxpayers may deduct 50% of an otherwise allowable business meal expense if:
Taxpayers may rely on this guidance pending the issuance of proposed regulations by the IRS.
If you have questions or would like to set up a tax planning session, contact us online or call 215-723-4881.
The Tax Cuts and Jobs Act was passed by Congress in November of 2017 but did not take effect until the beginning of this tax year (2018). It brings enough significant change to the tax code to prompt the question, “Should I choose a different structure for my business to take full advantage of this new law?” Our answer: “Yes, No, Maybe.”
Fortunately, those are the only three choices. Unfortunately, these otherwise simple choices become more complicated when associated with the tax code. As you can probably imagine, one size does not fit all when it comes to tax planning. It never did. And, with the Tax Cuts and Jobs Act, one size doesn’t even fit one size anymore.
For instance, if you’re a business owner whose company is structured in any way other than a C-corporation, you might be aware of the new “Qualified Business Income Deduction.” With the Qualified Business Income Deduction, you get to deduct 20% of your flow-through business income on your personal tax return and pay tax on 80% of the business income. Sounds simple, right? This section of tax law has more restrictions and limitations – we’ll call them “weeds” – than Round-Up could ever hope to control, but we’ll keep the explanation that simple to gain a general understanding.
If your business is a Sole Proprietorship with no payroll and no assets that nets $200,000 – absent of any “weeds” – you get a whopping $40,000 deduction and pay tax on only $160,000 of your net income. Since a sole proprietorship does not differentiate between the business and the owner, the owner is entitled to take the full $200,000 “out of the business” without any tax consequences.
Ah, but now here comes a “weed.” Corporations are required to pay salaries to the owner for the money they take out of the business. Partnerships must classify the money the owner takes out for services as “guaranteed payments.” Both salaries and guaranteed payments do not qualify for the 20% deduction mentioned above.
Therefore, if the Corporation or Partnership has the same $200,000 net annual income, and they pay a salary (Corporation) or guaranteed payment (Partnership) of $80,000, then what remains eligible for the 20% deduction is the $120,000 bottom line business income. So, a business organized as a Corporation or Partnership, doing the same exchange for services as a Sole Proprietorship, netting the same annual income, will only qualify for a $24,000 deduction. The only difference between the three? Their business entity structure. And so, one size – each one is a business — isn’t truly one size under the Tax Cuts and Jobs Act.
By now you’re probably thinking, the best recommendation would be to structure your business as a Sole Proprietor if your business type allows for that to make sense. Yes, but, what happens when the business is even more profitable than $200,000 per year? Let’s say that in 2019, you net $500,000 (before salaries or guaranteed payments). That’s when the “weeds” really take over, and their explanation would require a dissertation, not a blog post. Take our word for it. With such an increase in income, under the Tax Cuts and Jobs Act, the Sole Proprietor, and Partnership businesses would not qualify for any deduction. And yet, an S-Corporation that is the same business, providing the same services, netting the same income, would qualify for a $62,500 deduction.
So, not only is “one size fits all” a thing of the past. “One size” isn’t even “one size” from year to year. What happens when your Sole Proprietorship profit is low one year and high the next? You can’t switch business entities each year based on projected income. So, based on the current realities of the tax code, what is the wisest move for a business owner? Absent any other information, the recommendation would be to do business as an S-Corp.
This new tax code will affect every business in the United States, regardless of size or entity structure, which is how we arrived at our initial answer to the question, “Should I change my business structure under the Tax Cuts and Jobs Act?” is “Yes. No. Maybe.”
Let’s find out what entity will be right for you. Contact us online or call 215-723-4881 to schedule a consultation.
