Collaboration with your Arizona accounting firm should be a part of your process when making business decisions. You should feel your accounting firm listens and helps you make strategic moves to grow your company. Your firm should have insights into expanding your business and guidance for avoiding obstacles. Only an accounting firm with experience directing other growing companies can help your company.
Signs You Have Outgrown Your Accounting Firm
The following signs may mean you have outgrown your accounting firm:
+ You need more help in many business areas to be better positioned to grow.
+ You feel you can improve efficiency and security.
+ You have problems consolidating information.
+ You have difficulty accessing data from anywhere at any time.
+ You need help getting your systems to talk to each other.
+ You do not mind paying more for knowledge and guidance.
+ You need additional help beyond administrative tasks.
+ You are concerned your current firm is keeping you looking backward, instead of aiding in your company’s growth.
Your accounting firm should identify strategies for achieving your goals and invigorate your desire for success. Does your current firm mention spending the majority of their time managing the sheer volume of paperwork that flows in and out of its practice on a daily basis, such as payables, receivables, and employee payroll? Perhaps, you have heard your accountants refer to themselves as a crossing guard directing traffic, hoping everyone makes it across safe and sound. You see this scenario as a call for help, but what you need is a firm that automates management of running its business so it can spend more time serving your company. You want a partner that focuses on helping your company reach new levels.
What is Your Plan?
Consider the following features a new accounting firm may offer:
+ An integrated approach to working with your company so you can be more efficient.
+ Less reliance on paper billing to balance money coming in and going out.
+ Intuitive platforms that automate processes with payment scheduling.
+ A full line of services to deal with financial complexity.
+ Document management, smart archiving of records, and digitizing forms.
+ Greater security and faster retrieval of documents.
+ Applications that are user-friendly.
Are you ready to create an action plan for your company’s strategy? Contact us today to discuss your next steps.
The IRS eased its new limits on state programs that let taxpayers trade donations for tax credits, issuing a clarification that allows some business owners to bypass the new $10,000 cap on the state and local tax deduction.
In August 2018, the government sharply limited that option for individuals when it issued new rules that cracked down on attempts by New York, New Jersey, and Connecticut to help their residents bypass the $10,000 cap. Those states had passed laws that used tax credits to turn nondeductible tax payments into deductible charitable contributions.
The August rule from the IRS had shut down that tactic by requiring taxpayers to subtract the value of the state and local tax credits from the amount they deduct as a charitable contribution. It reduced most of the federal tax benefit from pre-existing programs in states such as Arizona, South Carolina, and Alabama that enable taxpayers to claim tax credits for donations to private-school scholarship programs and other groups.
School-choice groups in Arizona, South Carolina, and Alabama complained about the August rules, arguing that their pre-existing tax breaks should not be pinched as part of the limits on the newer programs.
Clarification to the rule shows those programs could still be attractive to business owners seeking lower taxes, providing a potential path for some tax-credit programs to survive or expand. To qualify, instead of claiming deductions for charitable contributions that would have to be reduced by the size of the tax credit, businesses could claim the contributions as ordinary, deductible business expenses.
The change matters little to corporations, which do not face the $10,000 cap on state and local tax deductions. However, owners of partnerships and other businesses whose owners pay their business income taxes through their individual returns are subject to the $10,000 cap. By using the state tax-credit programs and the clarification, they could essentially turn nondeductible state taxes into deductible business expenses.
Treasury Secretary Steven Mnuchin stated, “The IRS clarification makes clear that the longstanding rule allowing businesses to deduct payments to charities as business expenses remains unchanged under the Tax Cuts and Jobs Act. The recent proposed rule concerning the cap on state and local tax deductions has no impact on federal tax benefits for business-related donations to school choice programs.”
For the deduction, a business would have to claim that its payments are directly related to the business and they are ordinary and necessary business expenses.
According to David Gamage, an Indiana University law professor, the limit would prevent most business owners from taking advantage of these programs. His guess is that a non-trivial number of taxpayers will be able to manufacture such reasons that are at least borderline plausible, and the IRS will have trouble policing. He stated, “But for states that want to redesign their programs, it should not be too difficult to design programs that large numbers of business-entity taxpayers should be able to qualify for.”
Before making any changes or assuming you can get a break, be sure to contact us for the latest guidance.
What accounting issue does every business leader need to be aware of heading into 2019? In addition to the Tax Cuts and Jobs Act of 2017, new changes in lease accounting, due in January 2019, will affect every public and private company in Arizona. Most business leaders are not ready for these accounting game-changers and should consult their accountant for details. See more from Randy G. Brammer, CPA, CCIFP, Audit Partner, and Michelle L. Flynn, CPA, Tax Partner, as featured in Az Business.