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Blogs by Jane Lvovskiy


Tax Test: TCJA Edition

March 28, 2019 / by Jane Lvovskiy posted in Small Business Advice, Bookkeeping Services, Business Advice

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How did you do this tax season with the new Tax Cuts and Jobs Act? The answers (and your grade) are at the end.

1. If your small business constitutes a "pass-through entity," how much of your net business income are you allowed to deduct?

  1. 0%
  2. 10%
  3. 20%
  4. I'm not sure what a "pass-through entity" is, but it sounds unpleasant

2. You spent $1.1 million in 2018 to repair your warehouse roof and buy much-needed new equipment. How much of that is deductible under Section 179?

  1. All of it
  2. $1 million
  3. $500,000
  4. Um … tell me what Section 179 is again
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Tax-Season Test: The Sequel

April 16, 2018 / by Jane Lvovskiy posted in Bookkeeping Services, Brooklyn - Staten Island

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Did you take our tax-prep quiz last year? If so, you were probably a lot better prepared for tax time this year.

We've updated our test for 2018 — take it, and see how you do. The answers (and your grade) are at the end.

1. You made a $100,000 equipment purchase in October. What's the maximum amount of that cost you could deduct this year?

  1. 0%
  2. 50%
  3. 100%
  4. A $100,000 equipment purchase? I wish.

2. Now that you've filed your employment taxes for 2017, you can safely discard your records from:

  1. 2016
  2. 2015
  3. 2014
  4. 1973
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New for 2018: Less-Charitable Laws for Charitable Giving

March 6, 2018 / by Jane Lvovskiy posted in Bookkeeping Services, Brooklyn - Staten Island, Business Advice, Nonprofits

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Individuals and tax preparers need to be aware of a significant impact on charitable giving that likely will result from a provision in the Tax Cuts and Jobs Act (TCJA).

While the consequences of the law, passed in December 2017, might be unintended, they are no less real for taxpayers — especially for charities. Vikki Sprull, President and CEO of the philanthropic network Council on Foundations, projects the new law "will result in a decrease of $16–$24 billion in charitable giving every year."

Subtraction by Addition
The bad news for charities came about as a result of what was supposed to have been good news for taxpayers. Under TCJA, the standard deduction doubles to $12,000 for individuals and $24,000 for married couples.

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Are You Up to Date on New York State's Tax Changes?

September 14, 2017 / by Jane Lvovskiy posted in Brooklyn - Staten Island, Business Advice

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In April, New York Governor Andrew Cuomo announced the approval of a 2018 budget that included straightforward tax cuts for the middle class along with more complex fiscal measures. Let's unpack how those changes affect accounting professionals and tax preparers.

Sweeping Personal Income Tax Cuts
The tax cuts, also called the Middle Class Recovery Act, will eventually benefit 6 million New Yorkers. The cuts apply to two income brackets: those making between $40,000 and $150,000 a year and those making between $150,000 and $300,000 a year.

The lower bracket will see a reduction of 0.12% a year, reducing the rate from 6.45% to 5.5% by 2025. Those in the higher bracket will be see a reduction of 0.08% over the same time period, decreasing their rate from 6.65% to 6%.

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Do You Need Key-Person Insurance for Your Small Business?

August 24, 2017 / by Jane Lvovskiy posted in Brooklyn - Staten Island, Business Advice

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Just as life insurance can protect a family from financial distress if the head of a household dies unexpectedly, key-person insurance can help a small business survive the untimely death of its owner or a crucial employee.

In fact, key-person insurance is life insurance. The only difference is that instead of providing benefits to the deceased's family, the policy provides money to the deceased's place of business. What the business does with those death benefits depends on the circumstances.

Can Your Business Live Without You?
If you work strictly for yourself, the question of key-person insurance is moot. When you die, so does your business. (You should have a conventional life insurance policy to protect your family, however.) But if you have one or more employees, you ought to consider how your sudden death would impact them.

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Cash or Accrual Accounting: Which Is Best for Your Business?

June 1, 2017 / by Jane Lvovskiy posted in South Carolina, Brooklyn - Staten Island, Bookkeeping 101

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Before you can answer the question posed above, you need to understand the difference between the two types of accounting.

Essentially, cash accounting is just what it sounds like — a pay-as-you-go approach that documents your payables and receivables in real time, more or less. With accrual accounting, there's a lag between the time you receive your "accounts payable" goods or services and the time you actually pay for them; the same is true on the "accounts receivable" side of the ledger.

As long as it all comes out in the wash, does it matter which one you use? The answer often comes down to timing — and to IRS regulations.

Opt for Cash Accounting
Let's say you have a modest nail salon and follow the standard calendar tax year (Jan. 1 – Dec. 31) for your financial reporting. Most of your work consists of manicures or pedicures that cost relatively little, and your customers pay in full each time. You reorder supplies and replace equipment on a regular basis.

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Why Proper Bookkeeping for Trust Accounts Is Vital

April 11, 2017 / by Jane Lvovskiy posted in Bookkeeping Services, Brooklyn - Staten Island, Law Firm

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If you're an attorney, careless bookkeeping with trust accounts could ruin your career.

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How Did You Do This Tax Season?

March 28, 2017 / by Jane Lvovskiy posted in Bookkeeping Services, Brooklyn - Staten Island

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Time for an honest look at how you did this year in getting your tax paperwork to your CPA on time and in an organized fashion. Take the quiz below to see how you scored and how you can improve. The answers (and your grade) are at the end.

 

 

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How to Nail That Month-end Close

February 27, 2017 / by Jane Lvovskiy posted in Bookkeeping Services, Brooklyn - Staten Island

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Do you often find yourself scrambling to do a month-end close — and then later reopening your books to fix a bunch of errors? If so, it's time to re-evaluate your approach.

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