Posts By :

smolinlupinco

financial-reporting-tips-for-nonprofits

Financial Reporting Tips for Nonprofits
Financial Reporting Tips for Nonprofits 1488 875 smolinlupinco

Financial reporting isn’t just about profits. A lot that falls under the umbrella of accounting, from preparing budgets and monitoring finances to paying invoices and managing payroll tax—and nonprofits can certainly benefit from formal accounting processes. 

If you’re a nonprofit entity, consider whether your accounting processes are managed as efficiently as possible. Not sure where to start? Check out these helpful tips. 

Create invoicing policies and procedures

If you’re unsure of where to start, take a look at your invoicing. Do you have policies and procedures for monthly cutoffs of recording vendor invoices and expenses? 

One option is to require that all invoices be submitted within one week of the month’s end. Otherwise, you may spend valuable time waiting on weigh-ins from employees or other departments—and ultimately, delaying the completion of your financial statements. 

By reconciling balance sheet amounts each month, you may also be able to save time at the end of the year by catching and correcting any errors early. It’s also helpful to reconcile your accounts payable and accounts receivable ledgers to statements of financial position. 

An extra tip: when you have multiple invoices to process, it’s best to set aside a block of time to enter invoices and cut checks all at once. 

Streamline data collection

Accounting clerks and bookkeepers need a variety of information to enter vendor bills and donor bills into your accounting system. One way to make this process more efficient is to design a coding cover sheet or stamp to collect information on the invoice or donor check copy. This helps to route invoices pending approval into a folder that lists your nonprofit’s general ledger account numbers—that way, the person entering data doesn’t have to look them up every time. 

In your cover sheet or stamp, you should also include a place for invoice payment approvals. For example, multiple-choice boxes can be used to indicate the cost centers to which amounts should be allocated. 

Be sure that the invoice’s payment is also documented for reference, and that your development staff provides details for donor gifts before recording them in the accounting system. 

Make the most of your accounting software

If you’ve purchased an accounting software package, there’s a chance you’re not taking advantage of all the tools it has to offer. Have you invested enough time to learn the full functionality of your software package? If not, consider hiring a trainer to review all of its functions and teach you and your team shortcuts and other time-saving tricks.

It’s also helpful to standardize the financial reports that come from your accounting software, so you don’t have to spend extra time modifying them to meet your organization’s needs. Not only will this reduce input errors, but it will also offer helpful financial insight at any point—not just at the end of the month.

Your accounting software can also help you automatically perform standard journal entries and payroll allocations. For example, many systems can automate payroll allocations to certain programs or vacation accrual reports. That said, be sure to review any estimates against the actual figures every so often, and always adjust to the actual amount before closing your books at the end of the year. 

Monitor your processes

If they’re not consistently monitored, even the most robust accounting processes can become inefficient over time. Every so often, assess your processes for any tedious or labor-intensive steps that could be automated, or steps that don’t add value and could be removed altogether. 

Additionally, make sure that the department responsible for overseeing your finances—CFO, treasurer, or finance committee, for example—reviews monthly bank statements and financial statements promptly. The earlier you catch errors or unexpected amounts, the better. 

Need more tips? 

If you’re interested in learning more about how to improve the accounting function at your nonprofit, our knowledgeable advisors are here to help. Contact us to learn more.

5-ways-to-update-your-accounting-practices

5 Ways to Update Your Accounting Practices
5 Ways to Update Your Accounting Practices 1594 938 smolinlupinco

When you think about the internal workflows and processes of your business, are you able to pinpoint why you do things a certain way? If the answer is “because we’ve always done it that way,” it might be time to make some changes. 

In fact, with all of the new developments in the financial and accounting realm, sticking to those traditional methods may actually be costing your business in terms of efficiency and cash flow alike. 

Here are five ways to keep your accounting processes and systems up-to-date. 

1. Streamline the payables process

When it comes to managing your accounts payable, using traditional paper processes could be costing you valuable time (and money). With automated technology solutions, you can streamline the process to improve efficiency, reduce costs, enhance security, and even obtain early payment discounts. 

Automatic payables systems can scan invoices and post them automatically based on the purchase or invoice number. Then, the payables clerk—or whoever is responsible for reviewing the invoice—can cross-reference the invoice and approve it for electronic payment based on terms negotiated with the vendor. 

2. Implement daily reconciliation

Many accounting firms wait until the end of the month to reconcile their bank accounts—but it doesn’t have to be this way. By reconciling accounts on a daily basis using automation software, you can catch in-transit payments that have been cashed but not recorded. And by eliminating that crunch at the end of the month, you can speed up other monthly closings. 

This also keeps you from having to wait for standard monthly entries that remain the same—depreciation, prepaid expenses, and property tax or insurance accruals, for example. By starting your end-of-month closing process sooner, you can improve the accuracy and timeliness of your financial statements while also taking some of the pressure off of your accounting staff. 

3. Use p-cards

Consider issuing corporate purchase cards, or p-cards, to at least one employee in each department to cover travel and entertainment expenses, or small items under $100 or so. This way, your accounting department can make a single payment for multiple purchases, rather than processing multiple small-dollar checks. 

As an added perk, most p-cards offer points and cash-back rewards that your team can take advantage of when paying back expenses. 

4. Digitize your processes

When you go paperless, you can lower expenses, increase efficiency, and maintain compliance—all in a way that’s more environmentally friendly. And when you use an electronic document management system, you can save significant amounts of physical storage space and reduce the time it takes to create and modify documents. 

While you may not be able to go completely paperless, there are plenty of documents and processes that can be digitized: contracts, invoices, payables, payroll documents, and employee records, for example. 

Consider implementing document management software solutions to help you convert your processes from paper to digital. 

5. Make the most of your accounting software

With ever-changing policies and practices, it’s more important than ever to use your accounting software to help you stay compliant and financially sound. This could involve making better use of your current account system or switching over to new software. Keep in mind that, as your firm grows, you will likely need more advanced functionality. 

To optimize your accounting software, start by making a list of your requirements, from types of activities to reporting. Then, cross-reference those needs with your software features to ensure that they’re all being met. You’ll also want to prioritize remote access so that your team can securely access real-time project information from anywhere. 

Look for integrations with other software and platforms, too, such as timecard entry and project management software, or third-party payroll software that can be used with minimal manual data entry.

Ready to upgrade your accounting practices? 

If your accounting firm’s processes and systems have been the same for years, it’s likely time for an upgrade—and our knowledgeable accounting advisers can help. Contact us to learn more.

iras-and-rmds-answering-your-faqs

IRAs and RMDs: Answering Your FAQs
IRAs and RMDs: Answering Your FAQs 1600 941 smolinlupinco

You may be aware of the fact that you can’t let funds sit in your traditional IRA indefinitely. Once you reach age 72, you’re required to start taking withdrawals. 

You may also be aware that the rules for taking required minimum distributions, or RMDs, are complex. Here are some answers to frequently asked questions about taking withdrawals from a traditional IRA (including SIMPLE IRA or SEP IRA). 

Can I withdraw money before retirement?

The simple answer: yes. 

That said, if you want to take money out of a traditional IRA before the age of 59.5, those distributions are taxable and you may be subject to a 10% penalty tax. 

That 10% penalty tax—but not regular income tax—can be avoided if you pay: 

  • Qualified higher education expenses
  • Up to $10,000 of expenses if you’re a first-time homebuyer
  • Health insurance premiums if you’re unemployed 

When can I take my first RMD for an IRA?

You must take your first RMD by April 1 of the year after the year in which you turn 72. Note that this rule applies whether or not you’re still employed. 

How do I determine my RMD? 

When calculating your RMD, take the account balance from the end of the preceding calendar year and divide it by the distribution period from the IRS’s Uniform Lifetime Table. 

If the sole beneficiary is a spouse who is 10 or more years younger than the owner, a separate table will be used. 

What if I have multiple accounts? 

For those with more than one IRA, the RMD for each must be calculated separately each year. 

However, you don’t have to take a separate RMD from each IRA—you may combine the RMD amounts for all IRAs, and either withdraw the total from one IRA or a portion from each. 

Can I withdraw amounts exceeding my RMD? 

Yes—you can always withdraw more than your RMD. Note, however, that you cannot put excess withdrawals toward RMDs in future years. 

When planning for RMDs, weigh your income needs against the ability to maintain the IRA tax shelter for as long as possible. 

Can I withdraw more than once a year? 

Yes. As long as you withdraw the total annual minimum amount by December 31 (or, if it’s your first RMD, April 1), you may withdraw your yearly RMD in any number of distributions throughout the year.

What if I don’t take an RMD? 

If your distributions for any given year are less than your RMD, you’ll be subject to an additional tax. This tax is equal to 50% of the amount that was not paid out but should have been. 

Plan ahead with us

Questions about your retirement planning? Our knowledgeable tax advisors can help. Contact us to learn more. 

pros-and-cons-of-c-corporations-for-business-entities

Pros and Cons of C Corporations for Business Entities
Pros and Cons of C Corporations for Business Entities 1275 750 smolinlupinco

If you’re launching a new business venture, you may find yourself wondering which type of company to create—and more specifically, whether a C corporation is the right option for you given your unique situation and goals. There are many advantages and disadvantages of doing business as a C corporation that are important to consider. 

What is a C corporation?

As a C corporation, your business is treated and taxed separately from you as its principal owner (unlike with an LLC). This protects you from the debts of business while also allowing you to control day-to-day operations and corporate acts like redemptions, acquisitions, and liquidations. 

As an added perk, the corporate tax rate is currently 21%—lower than the highest non-corporate tax rate. 

How to ensure your corporation is treated as a separate entity

For your business to be treated and taxed separately from you as an individual, you must follow the legal requirements of your state. For example: 

  • Filing articles of incorporation
  • Adopting bylaws
  • Electing a board of directors
  • Holding organizational meetings
  • Keeping meeting minutes

Compliance with these requirements, along with the maintenance of an adequate capital structure, will keep you from risking personal liability for business debts.

Pros and cons of C corporations 

If you’re unsure whether a C corporation is the right legal structure for your business, it’s important to explore both sides of this model. 

Advantages

On a tax-favored basis, a C corporation can be used to provide fringe benefits and fund qualified pension plans. While subject to certain limitations, the corporation can deduct various benefit costs (such as health insurance and group life insurance) without negative tax consequences. 

When it comes to raising capital from outside investors, a C corporation also offers significant flexibility—it can have multiple classes of stock, each with different rights and preferences that can be tailored to the needs of an individual along with potential investors. For those who decide to raise capital through debt, interest paid by the corporation is deductible. 

Disadvantages

Since it’s taxed as a separate entity, all of the corporation’s items of income, credit, loss, and deduction are calculated at the entity level, arriving at taxable corporate profit or loss. This means that, for new businesses, one potential disadvantage of a C-corp is that losses can be trapped at the entity level and not deducted by owners (unless they expect to generate profits in the first year). 

Another potential disadvantage is that C corporation earnings can be subject to double taxation: once at the corporate level, and again when distributed to you. That said, this risk is minimal, since most corporate earnings will be attributed to your efforts as an employee and the corporation can deduct all reasonable salary paid to you. 

Not sure if a C corporation is the right choice? Contact us.

While a C corporation might be the appropriate choice at this time, you may be able to apply to become an S corporation in the future if it’s more appropriate for your business. 

If you have any questions or would like assistance exploring the best type of legal structure for your business, our knowledgeable advisors can help. Contact us to learn more. 

annual-gift-tax-exclusion-amount-to-increase-in-2023

Annual Gift Tax Exclusion Amount to Increase in 2023
Annual Gift Tax Exclusion Amount to Increase in 2023 1600 941 smolinlupinco

Conveniently enough, one of the most effective ways to save on your estate taxes is also one of the simplest: when you use the annual gift tax exclusion, you can transfer assets to loved ones without any gift tax. 

While the current gift tax exclusion amount is $16,000 per recipient in 2022, that amount will increase by $1,000 in 2023. 

Making the most of your gifts

While it’s commonly misconceived that the onus of the federal gift tax is on the recipient of the gift, the reality is that these taxes are generally owed by the giver. That said, gifts can be structured so that they’re excluded from gift tax (and, if necessary, unified gift and estate tax). 

In 2022, you can gift each family member up to $16,000 without owing gift tax. In 2023, that amount will increase to $17,000. If you gift your children and grandchildren up to $16,000 before December 31, you can then gift them each an additional $17,000 beginning in January—significantly reducing your estate in a matter of months. 

This annual gift tax exclusion is available to each taxpayer. For those who are married and whose spouse consents to a joint gift, or “split gift,” the exclusion amount is effectively doubled. 

If you exceed the annual exclusion amount, you will need to file a gift tax return. Note that even if you give joint gifts with your spouse, you must each file individual gift tax returns. 

Lifetime gift tax exemption

As part of the unified gift and estate tax exemption, the lifetime gift tax exemption can shelter gifts above the annual exclusion amount from taxation. The current amount is $12.06 million, and that amount will increase to $12.92 million in 2023. 

That said, if you tap into your lifetime gift tax exemption, the exemption amount available for your estate will be eroded.

Gift tax exceptions 

Some gifts are exempt from gift tax, including gifts given: 

  • From one spouse to another
  • To a qualified charitable organization
  • To a healthcare provider for medical expenses
  • To an educational institution for tuition

These exemptions preserve both the full annual gift tax exclusion amount and the exemption amount, and won’t count against the annual gift tax exclusion. 

Plan your gifting strategy with us

Not sure how to get the most out of the annual gift tax exclusion for your estate planning? Contact us to work with a knowledgeable advisor and develop a powerful strategy that works for you. 

5-tips-to-prepare-for-year-end-inventory-counts

5 Tips to Prepare for Year-End Inventory Counts
5 Tips to Prepare for Year-End Inventory Counts 1600 941 smolinlupinco

The end of the year is approaching fast. For many, this means time for a physical year-end inventory count—the best way to ensure an accurate amount reported in your company’s perpetual inventory system.

Physical counts may seem tedious and time-consuming, but they can offer valuable insight into your company’s operational efficiency. Fortunately, there are some ways to streamline the process. 

Preparing for your inventory count

Follow the five tips listed below to increase the efficacy of your year-end inventory count. 

1. Use numbered inventory tags

Many companies use two-part tags to count their inventory: one to stay with the item on the shelf, and the other to be returned to the manager following the count. To ensure that the manager can account for every tag issued, use a tagging system to avoid double-counting or omitting items. 

The best way to do this is to number your tags sequentially—whether you order pre-numbered tags or create them yourself is up to you. Either way, you’ll want the tags to be numbered and ready to go well before the count is scheduled to begin. 

2. Preview your inventory

For an efficient inventory count, many companies do a test run a few days before the actual count. This helps to identify and correct any foreseeable problems (such as missing part numbers, unbagged supplies, and insufficient inventory tags). It also helps you determine how many workers to schedule for the project. 

3. Assemble counting teams

To avoid fraudulent counts, it’s helpful to assemble and assign teams to specific areas of the warehouse. (A map often helps workers identify count zones.) Additionally, avoid giving workers inventory listings to reference—encourage them to bring any possible discrepancies to attention rather than duplicating the amount from the listing. 

4. Write off unsaleable items 

If you already know that certain items are going to be written off, such as defective or obsolete items, be sure to dispose of them properly before the inventory count begins. 

5. Pre-count select items

If possible, take some time to pre-count items that aren’t expected to be used before year-end, complete with tagging and storing. If you notice a broken seal on the day of the actual count, those items should be recounted.

Value of inventory

Under the U.S. Generally Accepted Accounting Principles (GAAP), inventory is recorded at cost or market value—whichever is lower. That said, estimating the market value of inventory may require subjective judgment calls. It can be especially difficult to objectively assess the value of work-in-progress inventory, especially when it includes overhead allocations and percentage of completion assessments. 

Because the value of inventory is constantly fluctuating as work is performed and items are shipped and delivered, the best way to capture a static value is to “freeze” operations while the count takes place. This could involve counting inventory during off hours or breaking down counts by physical location. 

External auditors

If your company issues audited financial statements, at least one member of your external audit team will observe the physical inventory count. 

The auditor’s roles include: 

  • Observing procedures, including statistical sampling methods
  • Reviewing written inventory processes
  • Evaluating internal controls over inventory
  • Performing independent counts for comparison
  • Looking for obsolete, broken, or slow-moving items that should be written off

Be prepared to provide your auditors with invoices and shipping/receiving reports, which will be used to evaluate cutoff procedures and confirm reported values. 

Work with an advisor

If you’re concerned about your physical inventory counting procedures, our advisors can help you get it right, including investigating any discrepancies between your inventory count listing and the amount reported in your perpetual inventory system.

Contact us to get started. 

No Nanny? You May Still Be Liable for “Nanny Tax”
No Nanny? You May Still Be Liable for “Nanny Tax” 1600 941 smolinlupinco

If you’ve hired a house cleaner, gardener, or other household employee that isn’t an independent contractor, you may be liable for what’s called the “nanny tax”—even if you haven’t technically employed a nanny. 

You aren’t required to withhold federal income taxes when you hire a household worker, but you can choose to do so if requested by the worker (in which case, they must fill out a W-4 form). You may, however, be required to withhold Social Security and Medicare (FICA) taxes, along with paying federal unemployment (FUTA) tax.

In addition to federal income and other taxes, you may also be obligated to pay state taxes. 

Tax thresholds for 2022 and 2023

FICA taxes

If your household worker earns $2,400 or more in 2022 (not including food and lodging), you must withhold and pay FICA taxes. In 2023, this amount will increase to $2,600. Once you reach that threshold, note that all wages will be subject to FICA taxes—not just the excess. 

Note that you do not have to withhold these taxes for workers under the age of 18 whose primary occupation does not involve childcare, such as a part-time student babysitter.

Employers and household workers may each have FICA tax obligations—but as an employer, you are held responsible for withholding your worker’s FICA share while also paying a matching amount. 

FICA tax is divided between Social Security and Medicare, with the Social Security and Medicare tax rates being 6.2% and 1.45%, respectively, for both employers and workers. As an employer, you have the option to pay your worker’s share of wages for these tax purposes. That said, your payments will be treated as additional income for your worker’s federal taxes, so they will need to be included as wages on the W-2 form. 

FUCA taxes

If your household worker earns $1,000 or more in any calendar quarter (not including food and lodging), you must also pay FUTA tax. This tax applies to the first $7,000 of paid wages and is only to be paid by the employer. 

Paying your household worker taxes

To pay these household worker obligations, you will need to increase your quarterly estimated tax payments or increase withholdings from wages—as opposed to making an annual lump-sum payment. 

Unless you own your own business, you won’t have to file employment tax returns as the employer of a household worker, even if you’re required to withhold or pay tax. This is because employment taxes are reported on your tax return on Schedule H (Form 1040). 

In your tax return, include your employer identification number (EIN). If you don’t have one, you must file a Form SS-4 to get one. (Note that this is not the same as your Social Security number.)

If you own your business as a sole proprietor, however, you will include household worker taxes on the FUTA and FICA forms filed for your business using your sole proprietorship EIN.

Keep detailed records

Once you pay your taxes, be sure to keep all related records for at least four years following the due date of the return or the date the tax was paid—whichever is later. 

In your records, include the following:

  • Worker’s name
  • Address
  • Social Security number
  • Employment dates
  • Amount of wages paid
  • Amount of taxes withheld
  • Copies of any forms filed

If you need assistance understanding and applying tax rules to your situation, contact us to work with a knowledgeable tax advisor. 

Thanks to Inflation, You Can Save More for Retirement in 2023
Thanks to Inflation, You Can Save More for Retirement in 2023 1600 941 smolinlupinco

Do you know how much you and your employees can contribute to your retirement plans next year? In Notice 2022-55, the IRS recently announced cost-of-living adjustments that apply to the monetary limitations for pensions and other qualified retirement plans for 2023. 

Because of inflation, these amounts have increased more in comparison to recent years. 

401(k) plans

In 2023, the contribution limit for employees who participate in 401(k) plans—along with 403(b) plans, most 457 plans, and the Thrift Savings Plan—will increase from $20,500 to $22,500. 

For employees over the age of 50 who participate in the above-mentioned plans, the catch-up contribution limit will increase from $6,500 to $7,500. As a result, these individuals can contribute up to $30,000 in 2023. 

SEP and defined contribution plans

In 2023, the contribution limit for defined contribution plans, including Simplified Employee Pension (SEP) plans, will increase from $61,000 to $66,000. 

To participate in a SEP, eligible employees must receive at least $750 (increased from $650 in 2022) for the year. 

SIMPLE plans

In 2023, SIMPLE plan deferrals will increase from $14,000 to $15,500. For employees over the age of 50 who participate in SIMPLE plans, the catch-up contribution limit will increase from $3,000 to $3,500. 

IRA contributions

In 2023, the limit on annual individual IRA contributions will increase from $6,000 to $6,500. The IRA catch-up contribution limit for those over the age of 50 is not subject to a cost-of-living adjustment and will remain the same as in 2022: $1,000. 

Additional plan changes

The IRS also announced the following changes for 2023: 

  • The annual benefit limitation under a defined benefit plan will increase from $245,000 to $265,000. Limitations for those who separated from service prior to January 1, 2023, will be calculated by multiplying their compensation limit (as adjusted through 2022) by 1.0833.
  • Limitations concerning the definition of “key employee” in a top-heavy plan will increase from $200,00 to $215,000.
  • For determining the maximum account balance in an employee stock ownership plan subject to a five-year distribution period, the dollar amount will increase from $1,230,000 to $1,330,000. For determining the lengthening of the five-year distribution plan, the dollar amount will increase from $245,000 to $265,000.
  • The limitation for “highly compensated employees” will increase from $135,000 to $150,000. 

Plan ahead with our financial advisors

Because contribution amounts will be significantly higher in 2023 than in previous years, you and your employees will be able to save more in your retirement plans. 

If you have questions about your tax-advantaged retirement plan, or if you’re interested in exploring other retirement plan options, please contact our experienced tax services team. 

end-of-year-tax-planning-for-individuals

End-of-Year Tax Planning for Individuals
End-of-Year Tax Planning for Individuals 1600 941 smolinlupinco

As we approach the end of the year, it’s important to start thinking about ways to lower your tax bill for 2022. One of the first steps you can check off your list? Determine whether you’ll take the standard deduction or itemized deductions for the year. 

Because of the high standard deduction amounts for this year—$25,000 for joint filers, $12,950 for single filers and married couples filing separately, and $19,400 for heads of household—many taxpayers won’t itemize their deductions. Also, note that many itemized deductions have been reduced or eliminated under current law. 

Those filers that do itemize can deduct medical expenses exceeding: 

  • 7.5% of adjusted gross income (AGI)
  • State and local taxes up to $10,000
  • Charitable contributions
  • Mortgage interest on a restricted debt amount

Unless they exceed your standard deduction, however, these deductions won’t save you money on your taxes. 

Working around deduction restrictions

By applying a “bunching” strategy to either push or pull discretionary expenses and charitable contributions into a tax-advantageous year, some taxpayers may be able to work around deduction restrictions. For example: if you’ll have itemized deductions for this year but not next, consider making two years’ worth of charitable contributions at one time. 

Keep reading for more ideas on how to work around deduction restrictions. 

Postpone income until 2023

By postponing income until next year and accelerating deductions into this year, you can claim larger 2022 tax breaks that are phased out over various AGI levels. 

These include: 

  • Deductible IRA contributions
  • Child tax credits
  • Education tax credits
  • Student loan interest deductions

Postponing income may also appeal to taxpayers with changed financial circumstances who anticipate being in a lower tax bracket in 2023. That said, some individuals may find it beneficial to accelerate income into 2022, especially if they anticipate being in a higher tax bracket next year. 

Convert a traditional IRA into a Roth IRA

Eligible individuals may want to consider converting a traditional IRA into a Roth IRA by the end of the year—particularly those with IRA-invested stocks or mutual funds that have lost value. 

Note that this conversion will increase your income for the current year, potentially reducing tax breaks that would otherwise be subject to phaseout at higher AGI levels. 

Account for the NIIT

For high-income individuals, it’s important to consider the 3.8% net investment income tax (NIIT) on certain unearned income—3.8% of the lesser of net investment income (NII), or excess of modified AGI (MAGI) over a threshold amount.

That threshold amount is: 

  • $250,000 for joint filers or surviving spouses
  • $125,00 for married individuals filing separately
  • $200,000 for others

Your desired approach to minimize or eliminate that 3.8% surtax will depend on your estimated NII and MAGI for the year. Note that NII does not include IRA (or most retirement plan) distributions. 

Defer bonuses

If you anticipate a bonus coming your way this year, it may work in your favor to speak to your employer about deferring it until early next 2023. 

Make qualified charitable contributions from a traditional IRA

Those who will be 70.5 years of age or older by the end of 2022 should consider making this year’s charitable donations through qualified contributions from a traditional IRA. This is especially advantageous for those who don’t itemize deductions. 

As these distributions are made directly from your IRA, the contribution amount is not included in your gross income or deductible on your tax return. 

Account for annual gift tax exclusions

Gifts of up to $16,000 made to each recipient can be sheltered by the annual gift tax exclusion if they are given before the end of the year. 

Need more ideas? Speak with a tax professional

These are just a few of the ways that you can save taxes this year. Contact us to work with a seasoned tax professional who can help you determine the best next steps for your situation.

moving-out-of-state-its-time-to-review-your-estate-plan

Moving Out of State? It’s Time to Review Your Estate Plan
Moving Out of State? It’s Time to Review Your Estate Plan 1600 941 smolinlupinco

If you’re planning a move to a different state, you probably have a long list of items to address: securing vehicle registrations, finding new primary care providers, and updating financial records, just to name a few. 

As you work your way through your to-do list, don’t forget to review your will and other estate planning documents—because a different state likely means different laws. 

State laws for estate planning

While your will is generally valid in any state, it’s worth noting that laws governing wills and most other estate planning documents can vary from state to state. Depending on where you move, you may need to take some extra steps to ensure total enforcement, such as appointing a new executor. 

Not only do you need to navigate different state laws, but you also need to stay abreast of changes, because state laws for estate planning often undergo reforms. In order to achieve the desired results and avoid forfeiting certain tax benefits—or, in a worst-case scenario, having your documents deemed obsolete—it’s important to stay up-to-date on current policies. You’ll also want to consider the impact of the new state tax on your pensions and other retirement plans. 

Review before you move

To simplify the process in the long term, we recommend reviewing your estate plan before you make the move to a different state. That way, you can determine whether any changes need to be made and revisit your documents accordingly. 

Need help? Contact us to work with an experienced tax professional.

Start Typing
in NJ, NY & FL | Smolin Lupin & Co.