Rethinking Retirement blog graphic

Retirement Revised

If you have unsuccessfully tried to ignore the flood of warnings about how much healthcare, long term care and increased longevity will cost in retirement, you have company. While you shouldn’t ignore any information that can help you prepare, you need to examine the aspects of retirement that are most likely to affect your savings. Here are some common warnings, and ways you might want to respond to fit your situation.

Longer Lives

Longer lives require greater savings, but even with an average life expectancy increasing to around age 79, this number is an average and not your number. If you are relatively healthy and have good genes, you may live beyond the average. Healthier older people might also want to work longer, which helps to close any savings gap.

Inadequate Savings

Working beyond the normal retirement age of between 66 and 67 and contributing to a workplace 401(k) plan can increase your retirement funds in two ways: First, you add to, rather than deplete, your retirement balance while you work. And if you delay taking Social Security past normal retirement age, this benefit will grow significantly.

Expensive Healthcare

Yes, healthcare can be expensive. No, it won’t devour all retirees’ savings. Healthier lives can lead to fewer medical conditions. The federal government offsets some medical costs for most, and subsidizes other medical care. Plus, there’s always hope that a solution to expensive healthcare is on the horizon. In the interim, plan and save for future costs based on your unique medical history.

Other Strategies

When you understand your financial risks, you can plan accordingly. If you haven’t saved enough and you don’t want to continue working, you might downsize your home. Or consider a reverse mortgage if you want to age in place. If you live in a high-tax area, consider moving. Most importantly, talk to your financial and tax professionals to learn how different risks may affect your financial resources in retirement.

reduce seasonal business risk blog graphic

Reduce the Risk of Seasonal Business

Reducing Seasonal Business Risk

Many businesses, from farms and ski resorts to surf shops and landscapers, depend on seasonal employees to keep them successful. Seasonal businesses come with added risks because they don’t have the entire year to make up for a bad month or two.

Make a Plan

If you own a seasonal business, you can limit some risks by taking precautions. A few tips that can keep you humming through the slow times:

Branch Out

If, for example, your business is dependent on good weather, consider adding another facet to your business that isn’t weather-dependent.

Foster Relationships

It’s not easy having to hire an entire workforce each year. And many seasonal businesses hire teens and young adults, who may not be as dependable as you want. Why not try semi-retired people who look to work only when your business operates?

Know Your Target Market

Learn where your customers come from and whether they get their information via your website or social media, and then target your marketing efforts at them through these platforms.

Know Your Numbers

When your business revenue isn’t spread out, you need to pay extra attention to your income and expenses. That’s where a tax professional can help. You’ll also want to make sure your business is adequately insured.

Pieces To The Retirement Puzzle

Pieces To The Retirement Puzzle

Individuals may have singular needs, but past history and a few surveys show many retirees have a few common ones, too. Here’s a look at two of them.


Challenge: Most estimates put the cost of healthcare in retirement in the six-figure range. This isn’t as surprising as you might first think, considering soaring healthcare costs — even with insurance — and the likelihood of illness and injury as we age.

Solution: Prepare for this expense by having the right insurance, including Medicare Parts A, B and D once you reach age 65, unless you are covered by an employer-sponsored health plan. Part A covers hospital insurance, Part B covers outpatient health expenses and Part D is prescription drug coverage. You can combine all of these through Medicare Advantage plans or buy supplemental Medicare from an insurer to cover deductibles and other potential expenses.


Challenge: Taxes can deplete your disposable income unless you know what to expect.

Solution: There are varied ways to limit the impact of taxes. Consider tax-free withdrawals from a Roth IRA. Invest to keep up with inflation and changes in your tax picture. Also make sure you don’t run afoul of minimum distribution rules, which apply to most retirement vehicles but not to the Roth. Move or downsize if property taxes are too high.

Original article appears here

Tax Law Changes: New Meals & Entertainment Rules

Tax Law Changes: New Meals & Entertainment Rules

Did you know there are changes to the Meals & Entertainment Rules for business?

Under the new TCJA tax law, entertainment, amusement, or recreation expenses for clients and business associates  are no longer allowed as a business deduction?


The TCJA has changed the rules for deductions relating to entertainment expenses for clients. Starting January 1, 2018 entertainment, amusement, or recreation expenses for clients and business associates will no longer be a deductible expense. For example, monies spent to bring a client to a sporting event, concert, golf outing, etc. are no longer deductible, although the food and beverage costs that are separately stated from the entertainment are still entitled to the 50% deduction. The TCJA did not change the rule relating to expenses for recreational activities
primarily for the benefit of their employees (i.e. Holiday parties, annual picnic, etc.). These expenses are exempt from the entertainment disallowance rules, and are still 100% deductible. The rules regarding business meals are unchanged as well, and are still entitled to the 50% deduction. Because of this change in the law, there is now a great need to track meals separate from entertainment on your chart of accounts. The generic “Meals & Entertainment” account will now need to be broken out in order to receive the correct deduction.

If you have any tax questions, contact our office today.

money growth

Tax Harvesting

No one likes to lose money, but the good news is that certain investment losses may be tax-deductible, so this is a good time of year to get an idea about how your investments are performing.


Not all investment losses qualify for a federal tax deduction. First, you realize a capital gain or loss only by selling the investment. A paper loss on an investment that you continue to hold is not considered a loss for tax purposes, just as a paper gain isn’t a taxable event until you realize gains by selling the investment.

When you realize investment losses, offset them with investment gains. For example, let’s say you sell some investment losers for a $5,000 loss in 2018. You know this by subtracting what you sold the investment for from what you paid for it, called the basis. Then you sell a few winning investments that give you $4,000 in taxable gains. Subtract your loss from your gain, and you get a total loss, in this case, of $1,000.


Not all capital gains and losses are treated the same. Long-term capital gains are on investments you hold for at least a year, while short-term investment results are realized when you sell an investment you owned for a shorter time period.

You also need to be aware of the annual $3,000 capital loss deduction limit. Losses over this amount may be carried forward to the next year’s tax return.


Work with your accounting professional to make sure you can take advantage of tax-loss harvesting, as well as any other tax break the IRS offers. Also, some investments that are temporary losers may become long-term winners, so keep your long-term investing goals in mind before deciding whether to sell any investment.

originally printed in Client Line Newsletter

more income tax changes

More About Tax Changes

Income Tax Changes 2018 and Beyond

While most taxpayers are now aware of lower federal tax brackets and other changes in the Tax Cuts and Jobs Act of 2017, some may be unaware of less publicized provisions of the new law. These tax changes feature a little goods news, and a bit of bad news.


Bad news first. Previously, you could deduct a variety of miscellaneous itemized expenses if they were more than 2% of your adjusted gross income. This provision is gone, which is bad news for people who spend significant money on uniforms, professional development and anything else job-related that employers don’t reimburse. Teachers, though, at least get to keep a $250 deduction for classroom and development expenses.

Other deductions that are gone include advisory fees, tax preparation costs and job search expenses. Also significant for homeowners in high-tax states is how much they may deduct annually for state, local, sales and real estate taxes. The limit is $10,000.


If you still itemize, one piece of good news is that starting in 2018, there are no longer income limitations as to who can itemize. Those taxpayers who want to give more of their income to qualified charities are in luck. The cap on charitable contributions as a percentage of adjusted gross income increased from 50% to 60%.

The Alternative Minimum Tax exemption increased from $84,500 to $109,400 for married taxpayers filing jointly and from $54,300 to $70,300 for single taxpayers. The exemptions also phase out at much higher numbers than before.


One final huge plus for those with significant assets is the doubling of the federal estate tax exemption to $22.4 million for couples and $11.2 million for individuals. While on the subject of estates, also remember that the annual gift tax exemption per person rose from $14,000 in 2017 to $15,000 this year, indexed for inflation. Talk to your tax professional to learn more.


Original article published in Client line

pass through income.

What is Pass-Through Income Tax

One of the highlights of the Tax Cuts and Jobs Act of 2017 is the new treatment of pass through income.

What is Pass Through Income Tax?

Pass-through income is business income that is “passed through” and taxed at a taxpayer’s individual income tax rate. This contrasts with the treatment of a business structured as a C corporation, whose income is taxed at a corporate tax rate.


New federal law now allows taxpayers to deduct a portion of pass-through business income on their tax returns. Joint filers with income up to $315,000 (and single filers up to $157,500) can deduct 20% of this type of taxable income starting in 2018. The deduction is more complicated for tax filers above that threshold, because it’s limited to the greater of 50% of the business’s W-2 wages or another calculation that includes the cost of acquired property — or 20% of their business income, if that’s less. The deduction phases out between $315,000 and $415,000.


Any sole entrepreneurship or business structured as a limited liability company (LLC), partnership or S corporation.


The tax savings this pass-through provision offers taxpayers won’t necessarily apply to state taxes, which may continue to use different formulas to determine your state tax liability.

Talk to your tax professional to learn more.

Valuing Your Business

Valuing Your Business -How much is your business worth?

How do you determine the value of your business?

If you had to sell your business today, would you know how much it is worth? Would you know how much your business is worth if you needed a loan? How about the value of your business so you can take on a partner?

Talk to the Experts

Understanding the dollar value of a company is crucial to business owners, who may have an outsized portion of total wealth tied up in their companies. But the process can seem daunting to the uninitiated.  Begin by talking to a tax professional who is experienced in this area, or consider hiring a valuation expert with credentials from the American Society of Appraisers, the Institute of Business Appraisers or the National Association of Certified Valuators and Analysts.

Tangibly Speaking

While there are a variety of valuation approaches, they all quantify tangible assets. This is basically a company’s net worth, which includes ownership of physical assets such as machinery, equipment and work space. As with personal net worth, you would also subtract liabilities, including outstanding loan balances and depreciation.

Intangible Assets

While calculating the value of tangible assets is relatively straightforward, determining the value of intangible assets might take more doing. Intangible assets include things like copyrights, patents, licensing, franchise agreements, and goodwill and are important when valuing your business.


Ultimately, reputation can make or break a company’s long-term prospects, and goodwill includes the components that affect that reputation. Goodwill includes your company’s standing among customers and peer firms. It can include the quality and experience of your workforce and relationships with suppliers.

Establishing Value

Add both tangible and intangible assets to your firm’s balance sheet, which lenders, partners and future buyers may use to determine its value. It can show you areas like inventory purchases where you can increase value, or it can identify areas such as liquidity ratios that might detract from value. Talk to us to learn more.

Client Line Newsletter Original Article is here