There’s plenty to discuss today, so let’s get into it…
Estimated taxes for the 4th Quarter are due January 15, 2025
If your Adjusted Gross Income is less than $150,000 then your deposits for Income Tax must be the lessor of either 100% of the prior years Income Tax, or 110% of the current year’s Income Tax. The amount deposited may include tax deposits that are a result of payroll deductions, estimated tax deposits, or holdovers from non-refunded prior year returns.
One of the substantial changes this year was an increase in penalties across the board. Make sure that your Federal Tax Deposits are made timely, and if possible, in excess. The worst thing that will happen is that you’ll get the excess back.
If you were required to make estimated tax deposits on either your federal or state return, those deposit slips would have been included in the 2023 return. Please use them. If you cannot locate a copy, we’ll be happy to furnish another.
Capital Gains on the Sale of an Asset
If a material asset has been sold such as Real Estate, Autos, Equipment, Furniture, or Marketable Securities, and it resulted in a gain, it may be subject to Capital Gains Tax. Any tax due will depend on the length of time held before the sale, whether it was held personally or by the business, and depreciation that was already deducted.
Please provide the following information on the sale of a capital asset and/or security.
1 – Date of Purchase
2 – Description of Asset Sold
3 – Original Cost of Asset
4 – Date of Sale
5 – Sale Price
6 – Sales Expenses / Commissions Paid
7 – Improvement Costs For The Asset
If applicable, please also provide…
1 – Accumulated Depreciation as of Date of Sale
2 – Closing Statement
3 – Reinvested Dividends
Personal Use of Company Auto
The IRS requires that the personal use of a company vehicle be included in the wages of the employee. Please provide the following information for each employee who uses a company vehicle for their personal use:
1 – Name of Employee
2 – SS#
3 – Description of Vehicle used (Model, Make and Year)
4 – Cost of Vehicle
5 – Total Miles Driven for Year
6 – Personal Miles Driven for Year
Officer Life Insurance Premiums
Generally, officer life insurance premiums are non-deductible at both the entity and
personal level. Exceptions to this rule include life insurance policies for ownership where the company is the beneficiary and policies that fund Buy-Sell Agreements.
Employee Life Insurance Premiums
Company paid life insurance premiums in excess of a $50,000 benefit to the Insured
are considered wages to the employee and must be included on their W-2.
Let me leave you with this…
The IRS just provided a tax enforcement update where the Service has collected $4.7B from new initiatives. Those details include…
1 – $2.9B related to IRS Criminal Investigation work into tax and financial crimes, including drug trafficking, cybercrime, and terrorist financing.
2 – $475M form criminal and civil cases attributed to whistleblower information.
3 – $292M from high-income non-filers earning $400K to $1M who haven’t filed their taxes since 2017. This is an increase of $120M since September 2024.
Making sure that your bookkeeping and tax work is correct is important than ever.
If I don’t have an updated November 2024 set of financials, it will be difficult if not impossible for me to do any tax planning for you. Please get your work into us today.
This is the twenty-second column in my series trying to get our clients ready for their December Tax Planning Sessions.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
www.SalarySolutions.net
www.AccountingSolutionsLtd.com
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.