Asset Depreciation in Health CarePosted on December 11th, 2017
One of the most overlooked elements of accounting in the healthcare industry is depreciation. There are several different items within medical practices that have deductible wear and tear. Keeping proper track of the ever-changing value of these items will help your practice thrive in an expensive, competitive field.
Computers and Software
Every modern office needs computers. The healthcare industry is no exception. As more doctors and dentists transition towards digital radiography and electronic patient records, their staff will require more computers to effectively serve their community’s health needs. The software the computer runs on will eventually become outdated e and require replacement.
Computers and the software they use can be depreciable assets. The cost of updates and replacements must be closely tracked in order to avoid overpaying on your tax return. You may be able to depreciate these if your circumstance allows for it.
Medical Office Furniture
Furniture that is central to your ability to run a business can be depreciable. Dental chairs and doctor’s benches are no exception. These cornerstones of a medical practice can stay sturdy and comfortable for years, if not decades. However, like any other type of furniture, they will eventually break down and require replacement.
To determine if the furniture in your operatory can be depreciated, schedule a consultation with our Winter Garden CPA is recommended.
Buildings: Addition vs. Repair
Hospitals and doctors who own their own facilities can often misunderstand whether repairing or improving their building affects depreciation. This confusion can have an undesirable impact on the business’ tax return, leading to either overpayment or an increased risk of an IRS audit.
The difference is that adding to the building is depreciable while repairing it is not. For instance, if the roof of an independent practice has a leak that can be fixed, the cost of repair is merely a standard business expense. However, if the roof is too old to be considered safe and must be replaced, the cost of taking out the old roof and adding a new one can be subject to depreciation.
Contact Us for Business Tax Returns
Locksley A Cameron, CPA provides business tax return preparation in Winter Garden and the surrounding communities. For more information on how we support your tax preparation needs, call our firm today and schedule a consultation.
Tips for Managing your Financial Wealth after RetiringPosted on November 27th, 2017
Living Expenses and Income
For retirees, it’s crucial to consider the expense of maintaining a standard of living, and potential disturbances to your income. Protecting your fiscal health after retirement requires a dedicated plan that incorporates your many needs. Do you wish to travel extensively? Or support family through their education?
Budget your daily expenses thoroughly, from groceries and medicine to car maintenance. With a dedicated financial planner, this process is simplified. Whether you’re about to retire or are looking to save more as a retiree, thinking ahead can guard against sudden expenses.
Those who wish to expand their financial well-being have many options to consider. Opening a brokerage account to investing in stocks, bonds or IRAs, or utilizing your workplace retirement plan can help you achieve your savings goals. The key is to invest intelligently. Choose a diverse range of accounts, from stocks to long-term savings accounts. Although this process may be overwhelming, you have plenty of resources when you utilize a financial adviser
Retirees may wish to diversify resources in multiple accounts and portfolios or liquefy assets for more efficient use. With cash or savings in several locations, you benefit from additional financial security.
This allows you to establish beneficiaries, or to protect your financial resources from courts in the case of a medical incident. Your estate strategy is dependent on the value of your portfolio and earnings. Estate planning is not strictly for the wealthy but rather anyone who wishes to secure a legacy for their children. From donating income to charities, to building up a cushion for assisted living care, you have options to consider when organizing your estate.
Contact Locksley A. Cameron, CPA to help plan your Financial Future
Financial planning isn’t just for those starting out — it can be for retirees too. We help people achieve their financial visions in Winter Garden. Call us today for expert advice!
Filing Taxes as a Married CouplePosted on November 13th, 2017
As a married couple, whether you’re newly wedded or have been for years, you have the option to file jointly or separately on federal income tax returns. Choosing the best method depends on tax credits you may be qualified for. Having a conversation with your spouse or partner about future goals like children, buying a home, or existing tax debt, can play a huge role in determine the best filing method.
Advantages of Filing Jointly
There is an array of tax credits applicable when filing jointly. The IRS allows joint filers the largest standard deductions, as well as immediate deductions of their income immediately. Joint filers can earn a large amount of income and still qualify for certain tax breaks, despite being in a higher income bracket. If you file jointly, your standard deduction will be higher, unless you itemize.
As joint filers, you qualify for the following:
– Federal income tax credits
– Lifetime learning education tax credit
– Credit for adoption expenses
– Child and dependent care tax credit
If you live in a state that grant partners equal ownership over any income earned or property purchased during the marriage, this may push you into a tax bracket that leads paying more in taxes.
Why Should You File Separately?
In some cases, filing separately may save money on your tax return. If you or your spouse has large out-of-pocket medical expenses to claim, the IRS allows a deduction amount of 10% of your adjusted gross income, making it easier to claim expenses separately.
You can also protect yourself from inaccurate tax information reported by your spouse, or if your spouse refuses to file a joint return (or to file in general). If you and your partner earn the same amount, filing separately may be a better alternative. However, before filing separately, it’s important to keep in mind other deductions and credits that are part of the joint filing.
Consequences of Filing Separately
– Only receive a standard deduction, half of that in which you’d receive if filing jointly.
– Limited to a smaller IRA contribution deduction
– Capital loss deduction limit is $1,500 compared to $3k on a joint return
What to Consider Before Choosing a Filing Method
Establishing a filing system for important financial documents makes planning and filing taxes easier.
Get all qualified paperwork — W-2s, 1099s, medical and child care expenses, charitable contributions, business expenses, capital gains/losses — together before you start filing. Preparing for the process is essential for a smooth filing session, especially with the assistance of a CPA.
Which Way Should You File?
If you’re unsure which method will work best for you, you can try both across separate tax years. h. By having the net refund or balance due from each method in front of you, you can choose the one that best meets your goals. Don’t forget to consider your state return, as taxes saved on this return can make up for any net amount lost on the federal return, or vice-versa.
It’s best to visit our Winter Garden CPA to truly understand what would save you the most on your taxes, whether to file jointly or separately. Locksley A. Cameron, CPA can go through all of your eligible deductions with you.
Restaurant Deductions you Need to Take Advantage ofPosted on October 30th, 2017
Restaurants and food service businesses can apply for extensive deductions that reduce their tax liability. From food purchases to remodeling expenses, owners in the restaurant and foodservice industry have dozens of opportunities to legally reduce what they owe. Our firm, Locksley A. Cameron, CPA, understands that restaurants, catering businesses, and even food trucks need to save every penny to build success. Next time you do your taxes, consider the following possible deductions:
Work Opportunity Tax Credit
The IRS has extended this tax credit, which offers significant deductions for certain groups of individuals. If you employ, veterans, teenaged workers, and food stamp recipients, your business is eligible to receive credits. Designed to encourage the hiring of underemployed groups, these deductions allow you to obtain thousands of dollars.
Credits for Equipment or Renovations
Running a food business is expensive, and keeping the kitchen updated requires equipment purchases and renovations. When you take a loan out to remodel or update appliances, you can deduct taxes for the year the purchase was made or work was done. Tax can also be deducted as assets depreciate in value. Selecting depreciable purchases, such as a new stove system or service vehicle, can provide return on investment as the item loses value. The IRS has established a safe harbor method of accounting for businesses in the foodservice industry, allowing for a larger abatement of tax.
Caterers and Food Trucks
Mobile food businesses and caterers can save more on their taxes by deducting travel costs. You generally have two options in cases like these, deducting from the actual mileage driven, or the maintenance required to upkeep the vehicle. You can also receive deductions for entertainment, food testing, advertising, food competitions, and donations to charities aiding with a natural disaster.
Here is a short list of additional deductions you take:
• Employee Benefits
• Employee Tips and Income
• Food and Beverage Costs (including condiments and meals served to employees)
Get Professional Accounting and Tax Assistance for your Restaurant in Winter Garden
At our firm, we help restaurants and other food service providers benefit from eligible deductions. With our personal attention to your individual needs, we support a more secure bottom line. Contact us today and schedule a consultation.
Trust Management: Planning for Elder Care CostsPosted on October 12th, 2017
The cost for elder care, whether for yourself or a loved one, can eat through life savings quickly, especially when sudden health changes force family members to act quickly. Establishing a trust can help you avoid paying out of pocket, or making hasty decisions about insurance coverage. Take the first step toward protecting your own financial future, or that of your parents or family members who are advancing in years.
What does a Trust Do?
A trust protects your resources and ensures they are either passed on to the right people or managed properly, no matter what happens. Leaving a family member or professional in charge of assets legally secures your resources for specifically designated needs. Trusts also help individuals manage significant savings, property ownership, or investments.
Elder Care and Easier Living
Healthcare can be expensive making it difficult to afford medical attention or living costs for older family members. It’s important to create a trust management strategy, to afford services and protect your finances for all family members. Insurance does not always cover the expense of full-time care at home or in a nursing facility, requiring financial planning and the establishment of a trust to help you navigate this difficult time. Planning ahead permits greater savings on taxes. Trust owners may even be able to avoid probate.
Trustees who have assumed power of attorney understand the difficulties of supporting care for their parents or family members. To relieve this burden, turn to professional accountants, who accurately and efficiently manage finances for daily needs. Whether paying for rent at a nursing facility, or budgeting food and medication costs, accountants are skilled in making sure all is paid for, helping your loved one live each day more easily.
Plan for the Future with Professional Trust Services in Winter Garden
Locksley A Cameron, CPA is experienced in establishing trusts and strategizing for the future. We recommend best options for each client, including how to manage assets and finances for their family or elders. We work with clients to build a trust that fits their long-term goals. Contact us today for a consultation.
Understanding Improvements and Repairs in Real EstatePosted on September 29th, 2017
Differentiating and taking advantage of improvements and repairs can be essential for businesses in the real estate industry. While certain changes to an investment can constitute an itemized deduction for a single year’s tax liability, depreciable assets help reduce tax expenses for an extended period of time. At Locksley A. Cameron, CPA, we provide real estate enterprises, such as property investment firms, with comprehensive tax and business planning services to keep their operational costs manageable.
We have made this guide to explain how repairs and improvements are defined and how they can affect your immediate and long-term tax liability.
Repairs for Your Property
Repairs are taken only as deductions and are usually one-time purchases that do not change the value of the property. For example, if a tenant were to break a hole in the wall while moving furniture, the cost of patching the wall would be considered a repair. There has been no inherent improvement in the value of the property and the repair does not extend its expected useful life.
While beneficial in the short term, deductions from repairs can only be taken in the same year that they were made. Additionally, should you hit the deduction limit for the year, these repairs will not serve to increase the value of the property or help to lower your tax.
Improvements and Changing Value
Unlike repairs, improvements are changes that inherently increase the value of your property or enhance its expected useful life. The renovation of a kitchen would be considered an improvement. The individual costs incurred by each aspect of the renovation would be depreciable expenses and allow a property owner to lower their liability for years to come. In addition, real estate businesses can make use of accelerated depreciation to save greater amounts in a smaller period of time.
Betterment, Adaptation, or Restoration
One of the easiest ways to identify whether an expense will qualify as a repair or an improvement is to see whether it fits the condition of BAR. BAR is an acronym that stands for Betterment, Adaptation, or Restoration.
Betterment implies that the property has been improved, whether it corrects a defect that existed before the property was acquired, results in material addition, or improves its inherent quality.
Adaptation adjusts the property so it may be used for a different purpose than when it was originally put in use.
Restoration is the rebuilding of a property to recreate efficient operating condition or the replacement of a key component of the property.
If you are a real estate business owner looking to take advantage depreciation or other tax planning strategies, contact our Winter Garden CPA today!