Abramson & Company LLC

It’s an ideal time to begin making moves that could reduce your tax bills for 2024 and 2025. If you itemize deductions, you may be able to deduct medical expenses, state and local taxes up to $10,000, charitable donations, and eligible mortgage interest. But these deductions won’t save taxes unless they’re more than your standard deduction ($29,200 for joint filers, $14,600 for singles and $21,900 for heads of household). You may be able to work around deduction limits by bunching discretionary medical expenses and charitable gifts into the year they’ll do some tax good. For example, if you itemize for 2024 but not 2025, you may want to make two years of charitable contributions this year.

Fraud is a problem for companies of all shapes and sizes. One criminal approach that seems to be thriving these days is invoice fraud. The most common type of this crime is fraudulent billing. For example, a real or fake vendor might send an invoice for goods or services that the business never received (and may not have ordered in the first place). There’s also overbilling, duplicate billing and employee collusion. Some best practices to consider include: 1) Verify the identity and legitimacy of every new supplier or vendor. 2) Implement a thorough approval process for employees to follow. 3) Leverage technology such as AI-driven optical character recognition. Contact us for assistance.

If you’re a business owner working from home or an entrepreneur with a side gig, you may qualify for home office deductions. On the other hand, employees who work remotely can’t deduct home office expenses under current federal tax law. To be eligible for a deduction, you must use part of your home regularly and exclusively as your principal place of business, or a place to meet with customers, clients or patients in the normal course of business. Typically, the business use percentage is determined by your home office’s square footage, but other methods exist. We can address questions about the best way to compute home office deductions and the tax implications when you sell your home.

To help ensure stability and profitability, businesses need to engage in strategic planning. But which leadership skills are essential to this endeavor? Among the five most important are the ability to: 1) View the company realistically and aspirationally; accurate information and a sound vision are key. 2) Analyze the industry and market to foresee impending changes. 3) Understand customers and anticipate their needs; the latter point is perhaps the biggest challenge of strategic planning. 4) Recognize the company’s capabilities and resources. 5) Communicate effectively. We can help your business gather the financial information it needs to plan for the future confidently and decisively.

An eligible taxpayer can claim a credit of up to $7,500 for a new clean vehicle. These are qualified plug-in electric vehicles (EVs) and fuel cell vehicles. An EV must meet certain requirements, and there are income limits to qualify. For example, the manufacturer suggested retail price can’t exceed $80,000 for vans, SUVs and pickups or $55,000 for other vehicles. To qualify for the credit, your modified adjusted gross income can’t exceed $300,000 for married joint filers, $225,000 for heads of households or $150,000 for others. Beginning in 2024, you can opt to transfer the credit to an eligible dealer when you buy, effectively reducing the vehicle’s purchase price by the credit amount.

Budgeting is essential for businesses. Here are six key elements of a budget and some best practices to consider: 1) Current overview; compose an up-to-date description of your business, its market and impactful economic factors. 2) Budget rationale; explain how the budget supports your mission, vision and goals. 3) Line items; be sure you’re including all expenditures. 4) Performance metrics; clarify how you’ll determine whether you’re making, breaking or beating the budget. 5) Supporting appendices; discuss whether to include additional information. 6) Executive summary; this brief introduction can prove helpful to internal users, as well as lenders and investors. Contact us for more info.

There are ways to collect income and gains free from federal income tax. For example, if you receive a gift or inheritance, the amount generally isn’t taxable. And unlike withdrawals from traditional IRAs, qualified Roth IRA withdrawals are free from federal income tax. A qualified withdrawal is one taken after you reach age 59½ and have had a Roth IRA open for over five years, or you are disabled or deceased. Also, you can have a decent income and still owe 0% for long-term gains and dividends. In 2024, single taxpayers can have up to $47,025 in taxable income ($94,050 for married couples filing jointly) and be in the 0% bracket. Contact us. Advance planning may lead to better tax results.

A strong brand is critical to differentiating your business from competitors and can help boost revenue. A weaker brand can reduce sales opportunities and stifle growth. But brand strength isn’t easy to measure. That’s why many companies conduct brand audits. These are formal reviews of brand efficacy and market standing. There are various ways to conduct a brand audit. But most include gathering and analyzing readily available business information such as sales data, website analytics and social media interactions. They also may involve brand-focused customer and employee surveys. Ultimately, done properly, a brand audit can help with marketing, strategic planning and even fraud prevention.

High-income taxpayers may face two extra taxes: the 3.8% net investment income tax (NIIT) and a 0.9% additional Medicare tax. On top of income tax, the NIIT applies on net investment income. It affects taxpayers with adjusted gross incomes exceeding $250,000 for joint filers, $200,000 for singles and heads of household, and $125,000 for married people filing separately. Income subject to the NIIT includes interest, dividends, annuities, royalties, rents and net gains from property sales. Wage income and income from an active trade or business aren’t included. However, passive business income is subject to the NIIT. Contact us to discuss extra taxes and how their impact may be reduced.

For many business owners, choosing a successor is a difficult task. What’s worse, many owners’ initial picks for successor can turn out to be dubious choices. If you find yourself in this situation, don’t panic. First, discuss the matter with objective parties such as your professional advisors and trusted family members or colleagues. If you then decide to stick with your successor, talk about your concerns with the individual and look for ways to address what’s troubling you. If you determine that you must pick someone new, tell your initial successor as soon as possible and explain why. Then, review and improve your succession planning process to avoid making the same mistake twice.