Year-end tax planning for 2010 presents new challenges for individual taxpayers like you to reduce or defer your federal income tax liability. Although it is generally beneficial to defer income and accelerate expenses, with tax reform on the horizon, the focus shifts to balancing overall tax rates in 2010 and beyond. As you know, the Obama administration has proposed an increase in the income and capital gains tax rates for 2011. Additionally, over $1 trillion in tax cuts enacted in 2001 (EGTRRA) and 2003 (JGTRRA) are scheduled to sunset after December 31, 2010. Unless Congress acts to extend or modify these provisions, the impacted rates, deductions, and credits will revert to pre-2001 levels in 2011.
The rate increases proposed by the current administration would affect single individuals with income exceeding $200,000, and married couples with incomes greater than $250,000. If you fall within these parameters, the traditional year-end planning strategy of deferring income into next year may not be effective in 2010. Higher income taxpayers are more likely to benefit by accelerating 2011 income into 2010 and deferring losses to 2011 and later years to escape higher rates. If you think you will be in a higher tax bracket in 2011, you may want to:
• Accelerate income, including bonuses if possible, into 2010
• Defer selling capital assets at a loss until 2011 and later years
• Move some assets into tax-free instruments, like municipal bonds, that are not subject to federal tax
• Take capital gains in 2010 while the top rate is still 15 percent
• Accelerate billings and/or provide incentives for clients or customers to make payments in 2010 (for self-employed cash-basis taxpayers)
• Take taxable retirement plan distributions before 2011 (for taxpayers over age 59-1/2)
• Bunch itemized or business deductions into the 2011 tax year
• Consider paying all of the tax owed on a Roth IRA conversion in the 2010 tax year
However, if you anticipate being in a lower tax bracket in 2011 as compared to 2010, you may want to take advantage of the complete elimination of phase-outs for personal exemptions and itemized deductions that is available for the 2010 tax year only. If you have been affected by these limitations in the past, you may be able to take advantage of this opportunity, but you should carefully review all of your options beforehand.
For more information regarding year end tax planning, please contact Simons Bitzer & Associates at (317) 782-3070.
Thursday, November 11, 2010
Friday, October 1, 2010
Small Business Jobs Act of 2010-What does it mean for you?
Congress has passed a small business jobs bill (the Small Business Jobs Act of 2010) with valuable individual and business tax incentives. Many of the $12 billion tax incentives are temporary so taxpayers
have only a short window in which to take advantage of them. Others are permanent but require careful
planning to maximize your tax benefits. Below we highlight some of the tax incentives and revenue raisers in the new law.
Although the new law is labeled a "small business bill" it actually is much more. The new law includes a
number of provisions targeted to small businesses and investors in small businesses, such as 100 percent exclusion of gain on qualified small business stock, an increase in the amount allowed as a deduction for start-up expenditures, and more. Other provisions may benefit businesses of all sizes, such as extended bonus depreciation and extended and doubled Code Sec. 179 expensing. Many individuals will benefit from a new rule allowing rollovers from elective deferral plans to Roth designated accounts, along with other retirement savings incentives. Self-employed individuals benefit from a temporary deduction for health insurance costs in computing self-employment income.
To ensure passage of the bill, supporters had to find revenue raisers to pay for the tax incentives. The
largest revenue raiser designed to force greater disclosure of taxable income is a new information reporting requirement for rental property expenses, which is projected to raise $2.5 billion over 10 years. The new law also increases information return penalties. An additional revenue provision places curbs on the cellulosic biofuel producer credit, and another shifts corporate estimated taxes in 2015.
The new law is much more than a small business bill, although many small businesses and their owners will benefit greatly from its provisions. Many provisions within the new law are broad-based and far-reaching. Moreover, many of the tax incentives are temporary, requiring prompt
action to take full advantage of them.
Please contact Simons Bitzer & Associates for additional information. We can help you design a tax strategy to maximize your benefits from the new law. Visit www.SimonsBitzer.com to read a more detailed explanation of these changes.
have only a short window in which to take advantage of them. Others are permanent but require careful
planning to maximize your tax benefits. Below we highlight some of the tax incentives and revenue raisers in the new law.
Although the new law is labeled a "small business bill" it actually is much more. The new law includes a
number of provisions targeted to small businesses and investors in small businesses, such as 100 percent exclusion of gain on qualified small business stock, an increase in the amount allowed as a deduction for start-up expenditures, and more. Other provisions may benefit businesses of all sizes, such as extended bonus depreciation and extended and doubled Code Sec. 179 expensing. Many individuals will benefit from a new rule allowing rollovers from elective deferral plans to Roth designated accounts, along with other retirement savings incentives. Self-employed individuals benefit from a temporary deduction for health insurance costs in computing self-employment income.
To ensure passage of the bill, supporters had to find revenue raisers to pay for the tax incentives. The
largest revenue raiser designed to force greater disclosure of taxable income is a new information reporting requirement for rental property expenses, which is projected to raise $2.5 billion over 10 years. The new law also increases information return penalties. An additional revenue provision places curbs on the cellulosic biofuel producer credit, and another shifts corporate estimated taxes in 2015.
The new law is much more than a small business bill, although many small businesses and their owners will benefit greatly from its provisions. Many provisions within the new law are broad-based and far-reaching. Moreover, many of the tax incentives are temporary, requiring prompt
action to take full advantage of them.
Please contact Simons Bitzer & Associates for additional information. We can help you design a tax strategy to maximize your benefits from the new law. Visit www.SimonsBitzer.com to read a more detailed explanation of these changes.
Monday, September 27, 2010
Dayspring Homecoming Celebration...'80's style!
Even during challenging economic times, it is hard to believe that on any given night over 1,500 children are homeless in our city. Homelessness hurts, especially the children.
But, there is a place of hope. Dayspring Center provides emergency shelter, clothing, and three nourishing meals-a-day for homeless families with children in central Indiana. Families turn to Dayspring Center as a last resort; some to escape domestic abuse, others have experienced financial collapse, medical problems, or other crises that caused them to lose their home. Dayspring Center is a place where parents and their children get the help they need for a better life, a new beginning. Since our doors opened 23 years ago, Dayspring Center has been a place of comfort for over 11,000 homeless children and their parents.
The team at Simons Bitzer is pleased to be associated with this wonderful organization, both professionally and personally. This October we will be running the Silent Auction check-out during the center's important fall fundraiser: Dayspring Homecoming Celebration 2010...80's style!.
Click here to watch a video about this wonderful organization. To learn more about the celebration, contact Raegan Potter at rpotter@simonsbitzer.com.
But, there is a place of hope. Dayspring Center provides emergency shelter, clothing, and three nourishing meals-a-day for homeless families with children in central Indiana. Families turn to Dayspring Center as a last resort; some to escape domestic abuse, others have experienced financial collapse, medical problems, or other crises that caused them to lose their home. Dayspring Center is a place where parents and their children get the help they need for a better life, a new beginning. Since our doors opened 23 years ago, Dayspring Center has been a place of comfort for over 11,000 homeless children and their parents.
The team at Simons Bitzer is pleased to be associated with this wonderful organization, both professionally and personally. This October we will be running the Silent Auction check-out during the center's important fall fundraiser: Dayspring Homecoming Celebration 2010...80's style!.
Click here to watch a video about this wonderful organization. To learn more about the celebration, contact Raegan Potter at rpotter@simonsbitzer.com.
Monday, September 13, 2010
Celebrating 15 Years of Assisting Customers
Simons Bitzer & Associates, a local public accounting firm, was pleased to celebrate their 15 year anniversary by hosting a ribbon cutting conducted by the Greater Greenwood Chamber of Commerce. The celebration was held at their office on September 10th from 11:30-1:00 with the actual ribbon cutting commencing at 12:00 p.m. Tony Nguyen, founder of the Indiana Asian Chamber of Commerce, posted video from the event on YouTube. Click here to watch: http://www.youtube.com/iacc2020.
Marking this momentous occasion in the firms’ history, Simons Bitzer & Associates has established a scholarship fund at the IU Kelley School of Business Indianapolis.
“Your generous commitment is essential to the success of Indiana University,” said President Eugene R. Tempel. “Because of the dedicated support of thoughtful donors like you, the university is positioned to offer new technologies, maintain cutting edge research facilities, and attract world renowned faculty.”
Since 1995, the team at Simons Bitzer & Associates has focused on providing accounting services to small and medium-sized businesses in Central Indiana. The firm has been recognized for our honest and direct approach as we realize the importance of our role in our customers’ businesses and financial plans. We strive to serve the needs of each of our customers with the utmost professionalism and forthright communication, building relationships not just associations. Our customers appreciate our team’s approach and willingness to roll up their sleeves, working beside them on every level of project development and execution.
“I started my own firm 15 years ago with the goal of assisting business owners improve their performance, drive shareholder value and create a competitive advantage. Barb (Bitzer) and I, along with our team, are dedicated to helping our customers meet their dreams and goals by improving efficiencies and maximizing their profitability,” said Greg Simons, principal and founder.
Marking this momentous occasion in the firms’ history, Simons Bitzer & Associates has established a scholarship fund at the IU Kelley School of Business Indianapolis.
“Your generous commitment is essential to the success of Indiana University,” said President Eugene R. Tempel. “Because of the dedicated support of thoughtful donors like you, the university is positioned to offer new technologies, maintain cutting edge research facilities, and attract world renowned faculty.”
Since 1995, the team at Simons Bitzer & Associates has focused on providing accounting services to small and medium-sized businesses in Central Indiana. The firm has been recognized for our honest and direct approach as we realize the importance of our role in our customers’ businesses and financial plans. We strive to serve the needs of each of our customers with the utmost professionalism and forthright communication, building relationships not just associations. Our customers appreciate our team’s approach and willingness to roll up their sleeves, working beside them on every level of project development and execution.
“I started my own firm 15 years ago with the goal of assisting business owners improve their performance, drive shareholder value and create a competitive advantage. Barb (Bitzer) and I, along with our team, are dedicated to helping our customers meet their dreams and goals by improving efficiencies and maximizing their profitability,” said Greg Simons, principal and founder.
Monday, August 30, 2010
Monday, August 16, 2010
Promote KPI Data Within The Team
Over the last several weeks, we have been discussing the characteristics that make up a good Key Performance Indicator. Now that we know how to create a KPI, let's discuss collecting the data for and managing your new monitoring system.
It can be very useful in promoting company policy and getting buy-in to make sure team members see some of hte data that is being gathered. This can be done in the form of a scoreboard for example. This chart or handout can show the numbers that drive business profitability-sales, Cost of Good Sold,etc.-and the KPIs for the critical success factors in each area. Some companies even include the team's bonus evaluation forecast based on the up-to-date KPI indicators. This can prove to be a highly motivating measurement tool.
Providing the scores and explaining the situation is one way of keeping them focused on the jobs that really need doing and encouraging them to move the KPI's in the right direction.
Of course you may desire to do some training around this. Some team members may not be familiar with such terms as "operating efficiency", "turnover", or "gross margin" without some type of explanation. After they become familiar with the terms, and have the data made available to them, you can ask them to discuss ideas on improving the situation.
For more information about knowing what to do with the KPIs once developed, please contact a Simons Bitzer team member at (317) 782-3070.
It can be very useful in promoting company policy and getting buy-in to make sure team members see some of hte data that is being gathered. This can be done in the form of a scoreboard for example. This chart or handout can show the numbers that drive business profitability-sales, Cost of Good Sold,etc.-and the KPIs for the critical success factors in each area. Some companies even include the team's bonus evaluation forecast based on the up-to-date KPI indicators. This can prove to be a highly motivating measurement tool.
Providing the scores and explaining the situation is one way of keeping them focused on the jobs that really need doing and encouraging them to move the KPI's in the right direction.
Of course you may desire to do some training around this. Some team members may not be familiar with such terms as "operating efficiency", "turnover", or "gross margin" without some type of explanation. After they become familiar with the terms, and have the data made available to them, you can ask them to discuss ideas on improving the situation.
For more information about knowing what to do with the KPIs once developed, please contact a Simons Bitzer team member at (317) 782-3070.
Monday, August 9, 2010
KPIs Should Allow for Correction
We have been discussing the traits that make up a good set of Key Performance Indicators. Today, we'll round out the conversation with the fourth and final characteristic of a good KPI. It should point to the activities you might need to alter if things in your business start to veer off track. To recap, KPIs are the measures of the processes and financial markers that are critical to the success of your business. You know you are on track to achieving your objectives when they are moving in the right direction. You also know that you have an issue to address when they move in the wrong direction.
Your KPIs ought to point to just what is contributing to the problem so you can make changes in a timely manner. For example, you may decide you have a problem with cash flow, but is it die to slow paying customers, poor internal cash management processes, not enough sales, or some combination of those? To determine this, you will actually need to drill down just a bit further by creating a system of sub-system KPIs. When it comes to targeting areas needing correction, it is necessary to take this more granular approach to track in detail what is going on in individual areas.
For more information about establishing and monitoring a set of Key Performance Indicators for your business, please contact a Simons Bitzer team member at (317) 782-3070.
Your KPIs ought to point to just what is contributing to the problem so you can make changes in a timely manner. For example, you may decide you have a problem with cash flow, but is it die to slow paying customers, poor internal cash management processes, not enough sales, or some combination of those? To determine this, you will actually need to drill down just a bit further by creating a system of sub-system KPIs. When it comes to targeting areas needing correction, it is necessary to take this more granular approach to track in detail what is going on in individual areas.
For more information about establishing and monitoring a set of Key Performance Indicators for your business, please contact a Simons Bitzer team member at (317) 782-3070.
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