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Claiming an education credit? Don’t forget the timing rules

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The American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) include timing rules for expense payments that you need to know if you plan on claiming either on your 2018 tax return.

Know what year to pay school expenses

You can claim the AOTC or LLC in the taxable year in with which the qualified school expenses are paid.

For example, if you paid tuition expenses in 2018 with loan money, you can claim the credit on your 2018 federal income tax return. Keep in mind that this rule specifically states the education credit is claimed in the year the loan money is disbursed, not when the loan is repaid.

If the loan money is sent directly to your school, the expenses are treated as paid on the date the school credits it to your account. If you’re not sure of the date the loan money was credited to your account, the rules say you treat the expenses as paid on the last day for payment prescribed by the school.

Tax tip: Ask the school to provide a student financial account statement to help you claim the credit in the correct year.

Speak to our team for more information about education credits and other tax breaks for education. Schedule a complimentary call today: http://www.bas-pc.com/schedule

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Your 2019 Social Security benefits recap | Accounting Services New Jersey

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The Social Security Administration (SSA) made a 2.8 percent increase to monthly Social Security and Supplemental Security Income (SSI) benefits for 2019. Take a look at some of the most significant changes as you create and update your financial plan for 2019:

2019 Social Security benefit highlights

  • Up to $132,900 in wages will be subject to Social Security taxes (up $4,500 from 2018). This amounts to $8,239.80 in maximum annual employee Social Security payments.
  • Retirees under full retirement age can earn up to $17,640 before Social Security benefits are reduced, and up to $46,920 the year they reach full retirement age.
  • The estimated average monthly benefit will be $1,461 per month in 2019 for all retired workers receiving Social Security retirement benefits. This is an average increase of $39 per month.
  • The Social Security and Medicare tax rates do not change from 2018 to 2019 (7.65 percent for employees and 15.30 percent for self-employed).

Supplemental Security Income

SSI is a benefit for people who have disabilities, who are blind or who are 65 and older, and have limited income and resources. The benefit is $2,000 for single people and $3,000 married people. Children who are blind or have disabilities may also get SSI.

A full-time student who is blind or has a disability can still receive SSI benefits as long as earned income does not exceed the monthly and annual student exclusion amounts ($1,870/monthly and $7,550/yearly).

If you have questions about how your Social Security benefits affect your 2019tax plan, don’t hesitate to contact our team of experts. Schedule time today: http://www.bas-pc.com/schedule

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Layoffs imminent? Include these 4 steps in your plan

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Before you take this step, however, it makes sense to consider alternatives. Ask yourself whether expense reductions can be accomplished using less drastic means. For instance, a freeze on hiring, promotions,or pay raises may reduce costs to an acceptable level. Asking employees to pare down their work hours is another option.

If these options do not reduce costs to an acceptable level, a layoff scenario may be unavoidable. Nevertheless, it pays to proceed with caution.Here are a few things to confirm before you start staff reductions:

  • You know what the company will need going forward. Focus on positions and departments, not individual workers. Hacking away indiscriminately is a sure way to damage your company’s prospects further.
  • You have a legitimate business reason for laying off employees. This might include declining sales, loss of a key contract, or burgeoning supply costs. Ensure that discrimination plays no part in staff reduction.
  • You have written personnel policies that describe when and how your company will conduct layoffs. If you haven’t established such rules, don’t wait for a business downturn to document them.Check any employment contracts to make sure provisions aren’t violated, including an employee’s right to severance pay.
  • You have a communication plan for your staff. Regularly communicate with your staff, preferably well in advance of any layoff action. Keeping employees informed about business realities can mitigate hard feelings and allow them to adjust, if necessary, to employment apart from your company.

For more financial advice, please schedule a meeting with our team and we’d be happy to help you: http://www.bas-pc.com/schedule.

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5 ways to get smart when giving | Payroll services New Jersey

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You probably participated in many charity events and fundraisers during the holiday season. If you plan to give again during 2019, here are a handful of charitable donation strategies to consider if you want to boost your deductions:

  1. Audit-proof your claims. The IRS imposes strict substantiation rules for charitable donations. In fact, you’re required to keep records for all monetary contributions, no matter how small. The best approach is to obtain written documentation for every donation.
  2. Charge it. The deductible amount includes charitable gifts charged by credit card before the end of the year. This covers online contributions using a credit card. So,you can claim a current deduction for donations made as late as Dec. 31.
  3. Give away appreciated stock. Generally, you can deduct the fair market value (FMV) of capital gains property owned longer than one year. For instance, if you acquired stock 10years ago for $1,000 and it’s now worth $5,000, you can deduct the full $5,000. The appreciation in value isn’t taxed.
  4. Sell depreciated stock. Conversely, it usually doesn’t make sense to donate stock that has declined in value, because you won’t receive any tax benefit for the loss. Instead, you might sell the stock and donate the proceeds. This entitles you to a capital loss on your return, plus the charitable deduction.
  5. Clear the storage space. The tax law permits you to deduct charitable gifts of used clothing and household goods that are still in “good used condition or better.”Don’t be so quick to discard items that can be donated to charity.

Contact us if you have question about how to maximize your charitable donations: http://www.bas-pc.com/schedule.

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3 big ways the tax code helps natural disaster victim

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When natural disasters occur, many people are often left with damaged or destroyed homes and businesses. Some lose everything they own. If you are affected by a disaster that is declared by the president to qualify for federal assistance, there are several provisions in the tax law that may provide relief:

  1. Extended tax deadline and interest abatement. The IRS is authorized to postpone the deadlines for filing returns and paying taxes for up to 120 days in a federally declared disaster area. Also, the IRS will not charge interest that would otherwise accrue for the extension period.
  2. Faster refund. Taxpayers suffering losses in a federal disaster area have a choice of which tax year to deduct the casualty loss. You may deduct it on the return for the year the loss occurs, or it can be claimed on your prior year’s tax return. Amending your prior year’s return may give you a refund of much-needed cash sooner than waiting to deduct the loss on your current year’s tax return.
  3. Tax-free gain. If the insurance payments you receive exceed the tax basis of your property, you will end up with a casualty gain. Casualty gains in federally declared disaster areas receive special tax treatment. Read more…

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Seasonal spender or credit card addict? | Bookkeeping services NJ

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It’s not a big surprise if you found yourself reaching for your credit card more often around the holidays. The National Retail Federation projected that consumers would spend an average of $1,007 on gifts, decorations,and candy this season.

However, if you’ve noticed your plastic habits don’t fluctuate throughout the year, it could mean you’re living beyond your means … and you may be heading for financial disaster.Here are some ways to tell that you need to get your spending habits under control:

  • Your credit card balances keep growing. If you’re only tackling minimum payments, you’re not going to see your credit card balance go down. To start digging yourself out of a financial hole, try paying double the minimum payment amount. Then keep doubling it. Your goal should be to pay the total balance on your credit card each month.
  • You’ve got a lot of rotating plastic. Have you taken out a cash advance on one credit card to pay off another, then applied for another card when the first comes due?Stop. Instead, make a list of your credit cards and balances and start working backwards. If you opened two new cards last year, work to eliminate the balances of those two card cards in 2019. Then move on to the next two, and so on.

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Private companies: How to go up against the big guys

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At the point when enormous box stores come to town, in what capacity can an independent venture effectively contend? That is an intense inquiry. While one answer doesn’t fit all cases, certain systems have demonstrated powerful for some organizations. Think about these thoughts:

Contend individually terms. As an independent company, it’s far-fetched you’ll have the capacity to contend with bigger contenders based on cost alone. Give your clients an option that is other than deal costs.

Gain by your points of interest. Build up close bonds with clients, and give administrations custom fitted to their individual needs. In the event that you possess a tool shop, for instance, you may give free conveyance and get together to a few things. The key is to create inventive approaches to fulfill your clients’ needs and hold their steadfastness.

Contract (and keep) the best workers. Private ventures can be extraordinary work environment. By giving inside and out preparing and a pleasant workplace, your representatives will for the most part furnish a proportional payback by treating clients well. On the other side, we’ve all met staff individuals at across the nation chains who were scatterbrained or out and out impolite. Independent ventures can’t bear to overlook objections or permit poor client benefit. Try not to give one representative a chance to make an awful notoriety for your business.

Grow your wellsprings of income. Perhaps you possess a coffeehouse and a notable espresso organization is moving in. Try not to quit! Add taking into account the administrations you offer. On the off chance that a bigger contender comes to town, you may lose some piece of the pie, however new wellsprings of income can counterbalance those misfortunes.

Separate your item or administration. Perhaps you give fresher deliver in light of the fact that it’s developed locally. Or on the other hand maybe you offer claim to fame things that alternate folks don’t convey. Tell your clients about these distinctions, and they’ll come to you when something uncommon is required.

Keep in mind, there will dependably be room in the commercial center for organizations — regardless of whether enormous or little — that give quality items at a sensible cost and cordial educated administration. For more business exhortation, plan a gathering with our team : http://www.bas-pc.com/schedule.

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