A comprehensive estate plan ensures your wishes about your property will be honored. By spelling out exactly how your property will be transferred, it gives you peace of mind that your loved ones will be provided for in the years to come. If you own a business, your estate plan should also include any business succession plans.
A trust is a legal entity that holds assets for the benefit of another. You can place almost any kind of asset into a trust, including cash, stocks, bonds, insurance policies, real estate, and artwork. Learn more.
Professional trust planning is a critical component of estate planning. At JAK, we work closely with your attorney to provide you with a trust plan that makes sense for you and your family. JAK’s trust planning professionals and estate trust accountants can also help you evaluate the pros and cons of each type of trust, as well as provide trust tax preparation, tax compliance, and trustee consulting services.
The IRS requires individuals who earn income that is not subject to withholding, such as earnings from sole proprietors, partnerships and S-corps, interest, dividends, rents, and alimony, to pay quarterly estimated tax payments, also known as “estimates.” If these payments are on your to-do list, click here to read a few things you should know.
The IRS recommends the following guideline for keeping tax records:
- Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
- Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
- Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
- Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
- Keep records indefinitely if you do not file a return.
- Keep records indefinitely if you file a fraudulent return.
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
We’ve created this guide for you to reference as needed – especially if you are moving homes, undergoing renovations or spring cleaning!
- For estimated tax purposes, the year is divided into four payment periods. You may send estimated tax payments with Form 1040-ES by mail, or you can pay online, by phone or from your mobile device using the IRS2Go app. Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.
- Using the Electronic Federal Tax Payment System (EFTPS) is the easiest way for individuals as well as businesses to pay federal taxes. Make ALL of your federal tax payments including federal tax deposits (FTDs), installment agreement and estimated tax payments using EFTPS. If it’s easier to pay your estimated taxes weekly, bi-weekly, monthly, etc. you can, as long as you’ve paid enough in by the end of the quarter. Using EFTPS, you can access a history of your payments, so you know how much and when you made your estimated tax payments.
- Corporations must deposit the payment using the Electronic Federal Tax Payment System. For additional information, refer to Publication 542, Corporations.
We have created an online and printable estate organizing booklet for our clients. Click here to access the download. The estate organizing booklet guides you in recording and gathering the important information you need to have peace of mind.
Many types of trusts exist, and each has a specific purpose. The type you choose—as well as how it’s created—will depend on what you’re trying to accomplish. The three basic types of trusts are revocable, irrevocable and testamentary trusts. Click here to learn more about which each of these is and if they might be a fit for you.
A few tax amounts will depend on your filing status, income, and age. However, we’ve outlined the base amounts for 2020 here. We encourage you to reach out with any questions you have about contribution limits.
Yes, your company could benefit from the R&D tax credit if it qualifies. If your company is involved in any of the following activities, you may be able to claim the R&D tax credit:
- Developing an innovative, new-to-market product
- Engineering and designing a new product
- Designing product alternatives
- Evaluating product alternatives
- Designing, constructing, and testing preproduction prototypes and models
- Engineering activity to advance the product’s design to the point of manufacture
- Experimenting with new technologies
- Engineering to evaluate new or improved specifications/modifications in terms of performance, reliability, quality, and durability
- Developing new production processes during prototyping and preproduction phases
- Conducting research aimed at significantly cutting a product’s time to market
Business succession planning is more than just taking a step back from your business and setting a retirement date. Business succession planning s the process that helps you identify new leaders who can step in when you vacate your position. By planning in advance, you have more control over this critical transition. Find out more about business succession planning here.
As a business owner, you might consider an ESOP as a way to provide a valuable benefit for your employees. But this isn’t the only reason why an ESOP might make sense. If you already thinking of an exit strategy, you want to retain quality employees, you want to diversify your investment or gain a competitive advantage – then an ESOP might be right for your business. Read this blog post for an in-depth look at why an ESOP could be right for your business.
Ideally, you should start planning for the transition three to five years before you want it to happen, as this is how long it takes for someone to learn your job. This should also give you enough time to make any necessary changes to your financial reporting.
Yes! Deciding on a business entity type isn’t as glamorous as deciding colors for your logo, but it’s just as important. The entity you choose—whether it’s an “S” corporation, LLC, or sole proprietorship—comes with longstanding tax implications, both good and bad. Our tax consultants can help you evaluate the pros and cons of each one, so you can choose the most advantageous entity type for your business. Click here to learn more about starting your business.
We suggest contacting and having the following individuals on your team as you start a business:
Attorney – to assist with required business filings and general legal advice.
CPA – to assist with entity type selection, tax planning and preparation, accounting and bookkeeping, and business advising.
Payroll Provider – to assist with payroll deposits and filing requirements on a monthly, quarterly, and annual basis.
Click here to read our blog post on what to do before starting your business.
The IRS defines the QBI as follows:
Many owners of sole proprietorships, partnerships, S corporations and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called Section 199A – for tax years beginning after December 31, 2017. The deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned through a C corporation or by providing services as an employee is not eligible for the deduction. For more information on what qualifies as a trade or business, see Determining your qualified trades or businesses in Publication 535
We suggest meeting with the advisors at JAK if you have any questions about your business tax deductions.
The team at JAK not only has great internal resources, but great external resources to help you with your business operation needs. We have worked along side many of these professionals for several years and decades. If you have a need, reach out to your JAK contact and we will put you in touch with the professional we see fit.
Financial forecasting is a tool that companies use to establish a plan regarding whether it is heading in the right direction. Although budgeting and financial forecasting are often used together, distinct differences exist between the two concepts. Budgeting quantifies the expectation of revenues that a business wants to achieve for a future period, whereas financial forecasting estimates the number of revenues that will be achieved in a future period.
Once you’ve decided you want to establish an ESOP, there are five main steps to follow:
- Talk to a knowledgeable ESOP consultant
- Perform an ESOP feasibility analysis
- Organize your records
- Prepare projections
- Create your team
To learn more, click here to read a details blog post on the above steps. Or go here to set up an appointment with a JAK expert.
Self-employed taxpayers are allowed an “above the line” deduction (a deduction directly from gross income) for 100% of the cost of providing medical and dental insurance for themselves and their families. S Corporation stockholders who own at least 2% of stock are considered self-employed for these rules.
Please note that the IRS has issued commentary indicating that if these benefits are not treated properly, the greater than 2% shareholder would not be entitled to applicable deductions on their tax return.
We’ve put together information and guidance here.
The short answer: It depends. If you simply need someone to enter day-to-day transactions into your accounting system, a bookkeeper is likely your best bet. But if you need someone to interpret and analyze your financial data, a business accountant is almost certainly the answer. Still unsure of which financial professional is right for your business? This blog post outlines a few questions to consider when making the call.
The Certified Construction Industry Financial Professional (CCIFP) is someone who has voluntarily met the required certification criteria with regard to education, experience, and a demonstrated understanding of the industry’s body of knowledge. A CCIFP values and maintains the highest possible standards of knowledge, competence, and ethical behavior – as high as any other profession on which businesses and the public rely. Click here to learn more about how JAK serves the construction industry.
Facing an audit can be daunting. Here are three suggestions:
- Establish an organized filing system
- Reconcile accounts soon after year-end
- Complete your auditor’s checklist
An audit can be a scary thing for businesses! In summary keep these things in mind:
- Expect the audit to happen by mail or in-person
- Work with and not against the auditor
- After the audit, relax!
We encourage you to read more about what to expect here.
Yes. Whether you’re a general contractor and/or subcontractor, you need an accountant who understands the nuances of construction expenses accounting. To provide you with the expertise you need, we turn to our in-house Certified Construction Industry Financial Professional (CCIFP)—the only industry-recognized certification for financial professionals who specialize in the unique business of construction. Learn more.
Yes! We work with clients all around the great state of Minnesota. Give us a call to see how we can help you!
A CPA (certified public accountant) is a trusted financial adviser who has passed the rigorous CPA Exam and met work experience requirements before being licensed. These requirements for licensure ensure CPAs maintain the highest standard of knowledge and ethics when operating in financial positions. CPAs can be:
By Cheryl Ellefson, CPA, MBT, CFP® It’s a universally accepted truth: Giving brings joy to both the giver and the recipient. So, when it comes to gifting your estate to family members, why wait unt...
By Logan Kalis, CPA When it’s time to transition your business, you have several options to consider. One that’s becoming more and more popular, especially for business owners who would lik...
By Andy Knutson, CPA One of the many relief measures of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was to loosen the rules surrounding 401(k) loans, withdrawals, and required m...
By Ethan Cummings, CPA Even the most well-planned project can become chaotic. When this happens, it can feel like you’re getting pulled in a thousand different directions. One minute you’re answer...
Could Transitioning to an ESOP Jeopardize Your Company’s Status as a Disadvantaged Business Enterprise (DBE) or Other Preferred-Status Certifications?
By Amy Crouzer, CPA Preferred-status certifications, such as a minority-owned or women-owned business designations, are designed to increase economic opportunities for historically disadvantaged group...
Case Study: How a Construction Subcontractor Improved Profitability by Simply Bridging a Knowledge Gap
By Andy Knutson, CPA In 2017, we worked with a construction subcontractor that had struggled with profitability in recent years despite many project successes. The company’s bonding agent, who was c...