Cameron, Moberly & Hamrick, CPA

Cameron, Moberly & Hamrick, CPA


IRS urges ‘Paycheck Checkup’ for key groups; tax withholding may need adjustment

IRS YouTube Videos:

Paycheck Checkup -- English

IRS Withholding Calculator Tips -- English

Do I Need to Fill Out a New W-4? -- English

Certified Public Accountant

Operating as usual


Some of your medical expenses may be tax deductible, but only if you itemize deductions and have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage. The Tax Cuts and Jobs Act (TCJA) could make bunching such expenses into 2018 beneficial for some taxpayers. At the same time, certain taxpayers who’ve benefited from the deduction in previous years might no longer benefit because of the TCJA’s increase to the standard deduction. Contact us to learn more.


In today’s tightening job market, to attract and retain the best employees, small businesses need to offer not only competitive pay, but also appealing fringe benefits. Those that are tax-free are especially attractive to employees. Examples include many types of insurance (health, disability, long-term care, life) and assistance plans (dependent care, adoption and educational), subject to certain limits. The tax treatment of some benefits, such as moving expense reimbursements and transportation benefits, has changed under the TCJA. Contact us to learn more.


As we approach the end of the year, it’s a good idea to review your business’s expenses for deductibility. At the same time, consider whether you’d benefit from accelerating certain expenses into this year. There’s no master list of deductible business expenses in the Internal Revenue Code (IRC). Some deductions are expressly authorized or excluded, but most are governed by the general rule of IRC Sec. 162, which permits businesses to deduct their “ordinary and necessary” expenses. Also, the TCJA reduces or eliminates many deductions. Contact us to learn more.


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Some common deductions for businesses are meal (generally 50%), vehicle and travel expenses. Deductibility depends on a variety of factors, but proper documentation is one of the most critical. Following some simple steps can help ensure your deductions will pass muster with the IRS. First, keep receipts, canceled checks or similar documentation. Also, track the business purpose of each expense (and don’t wait until year end or an IRS audit). Finally, if you reimburse employees, require them to provide such documentation. Contact us for more information.


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Does your business reimburse employees’ work-related travel expenses? If you do, you know that it can help attract and retain employees. If you don’t, you may want to start. Changes under the TCJA make such reimbursements even more attractive to employees: Employees are no longer allowed to deduct such expenses. Travel reimbursements also come with tax benefits, but only if you follow a method that passes muster with the IRS. To learn more, contact us. We can help you determine whether you should reimburse such expenses and which method is right for you.


If you’re age 70 1/2 or older, you can make direct contributions (up to $100,000 annually) from your IRA to a qualified charity without owing any income tax on the distributions. This break may be especially beneficial now because of TCJA changes that affect who can benefit from the itemized deduction for charitable donations. While you might be able to achieve a similar result from taking the RMD, contributing that amount to charity and taking an itemized deduction for the donation, fewer taxpayers benefit from itemizing under the TCJA. Contact us for details. fac


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Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2018. OCT. 15: If a calendar-year C corp. that filed an extension, file a 2017 income tax return. OCT. 31: Report income tax withholding and F**A taxes for Q3 2018 (unless eligible for Nov. 13 deadline). DEC. 17: If a calendar-year C corp., pay fourth installment of 2018 estimated income taxes. Contact us for more about the filing requirements and to ensure you’re meeting all applicable deadlines.


They say cash is king. Well, one way to ensure there’s always a king in the castle is to maintain a cash reserve. But what’s the optimal amount? There’s no simple answer. Your bank’s liquidity covenants are a good place to start. To take it further, identify various liquidity metrics and compare them to industry benchmarks. Believe it or not, many companies suffer from hoarding too much cash. Maybe the best way to find the right balance between excessive and insufficient liquidity is to create financial forecasts for the next 12 to 18 months.


For investors, fall is a good time to review year-to-date gains and losses. Doing so can help you determine whether to buy or sell investments before year end to save taxes. You also need to consider the TCJA. While it didn’t change long-term capital gains rates, it did change the tax brackets. For 2018 through 2025, these brackets are no longer linked to the ordinary-income tax brackets for individuals. So, for example, you could be subject to the top long-term capital gains rate even if you aren’t subject to the top ordinary-income rate. Questions? Contact us.


Once upon a time, some parents attempted to save tax by putting investments in the names of their young children. To discourage such strategies, Congress created the “kiddie” tax, which has gradually become more far-reaching. Now, under the TCJA, the big, bad kiddie tax is more dangerous than ever. For 2018, an affected child’s unearned income beyond $2,100 generally will be taxed according to the brackets for trusts and estates. As a result, in many cases, children’s unearned income will be taxed at higher rates than their parents’ income. Contact us for details.


If you own a vacation home and both rent it out and use it personally, classification as a rental property might save tax. Expenses attributable to a rental property aren’t subject to the TCJA’s tightened limits on itemized deductions for property tax and mortgage interest, and losses may be deductible. A rental property generally is one you use for 14 days or less, or under 10% of the days you rent it out, whichever is greater. Adjusting use between now and year end can ensure it’s classified as a rental property. Contact us for details.


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Does your business reimburse employees’ work-related travel expenses? If you do, you know that it can help attract and retain employees. If you don’t, you may want to start. Changes under the TCJA make such reimbursements even more attractive to employees: Employees are no longer allowed to deduct such expenses. Travel reimbursements also come with tax benefits, but only if you follow a method that passes muster with the IRS. To learn more, contact us. We can help you determine whether you should reimburse such expenses and which method is right for you.


If your small business doesn’t have a retirement plan and has 100 or fewer employees, consider a SIMPLE IRA. Offering a retirement plan can provide your business with valuable tax deductions for its contributions and help attract and retain employees. As the name implies, a SIMPLE IRA is easy to set up and maintain. Eligible employees can defer up to $12,500 in 2018 (plus a catch-up of up to $3,000 for those age 50 or older). The deadline for setting one up for this year is Oct. 1, 2018. Contact us to learn more about SIMPLE IRAs and other retirement plan options.


The pieces of tax legislation garnering the most attention these days are the Tax Cuts and Jobs Act signed into law last December and the possible “Tax Reform 2.0” that Congress might pass this fall. But what happens with “extenders” legislation is also important. It affects whether the above-the-line deduction for tuition and related expenses, the mortgage insurance premium deduction and the exclusion from gross income for mortgage loan forgiveness will be available for 2018. Contact us with questions about these breaks and whether you can benefit.


Classifying a worker as an independent contractor frees a business from payroll tax liability and responsibility for withholding income taxes and the worker’s share of payroll taxes. But if the IRS reclassifies a worker as an employee, your business could be hit with back taxes, interest and penalties. When assessing worker status, the IRS typically looks at the level of behavioral and financial control the business has over the worker and the relationship of the parties. Fortunately, there are strategies for minimizing your exposure. Contact us to learn more.


To avoid interest and penalties, you must make sufficient income tax payments long before your April filing deadline through withholding, estimated tax payments or both. The third 2018 estimated tax payment deadline for individuals is Sept. 17. If you don’t have an employer withholding tax from your pay, you likely need to make estimated tax payments. But even with withholding, such payments can be necessary if you have more than a nominal amount of income from self-employment, investments, alimony, awards, prizes or other sources. Contact us to learn more.


While donations to charity of cash or property generally are tax deductible (if you itemize), donations of time or services aren’t. But you potentially can deduct out-of-pocket costs associated with volunteer work, such as supplies, uniforms, transportation and even travel. To be deductible, the costs can’t be reimbursed or be “personal, living or family” expenses. And they must be directly connected to the services you’re providing and be incurred only because of your volunteering. Additional rules apply; contact us with questions.


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“Going green” at home can reduce your tax bill in addition to your energy bill, all while helping the environment. To reap all three benefits, you need to buy and install certain types of renewable energy equipment in your home. For 2018, you may be eligible for a tax credit of 30% of expenditures for installing qualified solar electricity generating equipment, solar water heating equipment, wind energy equipment, geothermal heat pump equipment and fuel cell electricity generating equipment. Additional rules and limits apply. To learn more, contact us.


In observance of Independence Day, our office is closed July 4. Enjoy a safe holiday!


Here are some key tax-related deadlines for businesses and other employers during Quarter 3 of 2018.
JULY 31: Report income tax withholding and F**A taxes for Q2 2018 (unless eligible for Aug. 10 deadline). File a 2017 calendar-year retirement plan report or request an extension.
SEPT. 17: If a calendar-year partnership or S corp. that filed an extension, file a 2017 income tax return. If a calendar-year C corp., pay third installment of 2018 estimated income taxes. Contact us for more about the filing requirements and to ensure you meet all applicable deadlines.


On the surface, the TCJA’s new, flat 21% income tax rate for C corporations may make choosing C corp structure for your business seem like a no-brainer. After all, 21% is much lower than the 37% top rate that applies to pass-through entities (such as partnerships and S corps). But C corps can still be subject to double taxation. And pass-through entity owners may be eligible for the TCJA’s new 20% qualified business income deduction. The best entity type for your business depends on its unique situation and your situation as an owner. Contact us to learn more.


As some business owners begin to consider retirement, they just can’t identify a suitable successor. One potential solution is a long-term deal that gradually cedes control to an outside buyer. The process typically begins with the owner selling a minority stake, followed by a tryout period to assess compatibility. If all goes well, the minority stakeholder may offer a takeover bid. Buyers look to long-term deals to manage risk and avoid outside financing. Meanwhile, the seller can feel more comfortable in retirement knowing his or her business is in good hands.


Congratulations Washington Capitals - 2018 Stanley Cup winners! #ALLCAPS


Thinking about retiring to another state? Consider state and local taxes. A state that has no personal income tax may appear to be the best option. But if you don’t also factor in property, sales and estate taxes, you could be hit with unpleasant tax surprises. Also look at what types of income a state taxes. Some don’t tax wages but do tax interest and dividends. Others offer tax breaks for retirement plan and Social Security income. And keep in mind the TCJA’s new $10,000 limit on the federal deduction for state and local taxes. Contact us to learn more.


Has your small business procrastinated in setting up a retirement plan? You might want to take a look at a SIMPLE IRA. SIMPLE stands for “savings incentive match plan for employees.” If you decide you’re interested in a SIMPLE IRA, you must establish it by no later than October 1 of the year for which you want to make your initial deductible contribution. (If you’re a new employer and come into existence after October 1, you can establish the SIMPLE IRA as soon as administratively feasible.)
Pros and cons
Here are some of the basics of SIMPLEs:
They’re available to businesses with 100 or fewer employees.
They offer greater income deferral opportunities than individual retirement accounts (IRAs). However, other plans, such as SEPs and 401(k)s, may permit larger annual deductible contributions.
Participant loans aren’t allowed (unlike 401(k) and other plans that can offer loans).
As the name implies, it’s simple to set up and administer these plans. You aren’t required to file annual financial returns.
If your business has other employees, you may have to make SIMPLE IRA employer “matching” contributions.
Contribution amounts
Any employee who has compensation of at least $5,000 in any prior two years, and is reasonably expected to earn $5,000 in the current year, can elect to have a percentage of compensation put into a SIMPLE. An employee may defer up to $12,500 in 2018. Employees age 50 or older can make a catch-up contribution of up to $3,000 in 2018.
If your business has other employees, you may have to make SIMPLE IRA employer “matching” contributions.
Consider your choices
A SIMPLE IRA might be a good choice for your small business but it isn’t the only choice. You might also be interested in setting up a simplified employee pension plan, a 401(k) or other plan. Contact us to learn more about a SIMPLE IRA or to hear about other retirement alternatives for your business.


Business owners with children who are students in their teens or early 20s can save taxes by hiring them for the summer. Read more on our website blog -


When school lets out, kids participate in a wide variety of summer activities. If one of the activities your child is involved with is day camp, you might be eligible for a tax break! Day (not overnight) camp is a qualified expense under the child and dependent care credit, which generally is worth 20% of qualifying expenses, up to $3,000 for one qualifying child and $6,000 for two or more. Eligible costs for care must be work-related, and additional rules apply. Contact us for help determining your eligibility for this credit and other tax breaks for parents.


We honor the memory of service members and their families who have sacrificed to protect the freedom we enjoy.


This summer are you going on a business trip in the U.S. and tacking on some vacation days? Are you a business owner or self-employed? You may be able to deduct some of your expenses. Transportation costs to and from the business activity location may be 100% deductible if the primary reason for the trip is business. Out-of-pocket expenses for business days are generally fully deductible. Examples include lodging, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Additional rules and limits apply. Contact us with questions.


In many parts of the country, summer is peak season for selling a home. If you’re planning to put your home on the market soon, don’t neglect to consider the tax consequences. The TCJA preserves the home sale gain exclusion, so if you’re selling your principal residence, you can exclude up to $250,000 ($500,000 for joint filers) of gain, as long as you meet certain tests. A loss generally won’t be deductible, but if part of your home is rented out or used exclusively for your business, the loss attributable to that portion might be. Contact us with any questions.



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Fairfax, VA

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