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We provide Bookkeeping Services at very reasonable rates.
Why hire a bookkeeper when our firm can assume that responsibility and save you money?
 

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Audit Representation

We handle representation before the IRS and other governmental agencies. 

Sales Tax on short term rentals in PA and NJ:    
Do you rent out your vacation home or residence?

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Areas of Practice

 

Tax Return Preparation

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Accounting/Bookkeeping

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​Advisory/Consulting

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Estates and Trusts

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PA Inheritance Tax preparation

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Non Profits and Churches

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​​​Entity selection

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Albert Einstein     
"The hardest thing in the world to understand is income taxes."
Greek Villa

PENNSYLVANIA

Pa. law requires anyone who rents out their property to provide lodging for less than 30 days to collect and remit the Pennsylvania hotel occupancy tax to the Department of Revenue. This tax applies to rentals of rooms, apartments and houses arranged through online or third-party brokers. The tax rate is the same as the sales tax, 6 percent.

NEW JERSEY

Effective 10/1/18--all short term rentals of real estate for less than 90 days are subject to the State's combined Sales and Hotel tax of 11.625% Other local taxes may also apply.

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There is an exception if:

1. The property is rented through a licensed real estate broker.

2.Keys are picked up at the real estate brokers office.

3. Usual hotel services are not provided (maid services, linens etc.)

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IRA and other Retirement Opportunities for tax years   2019 and 2020

If you do not have an IRA or other type of retirement account, I strongly suggest you start one if eligible. In the case of an IRA, you will need to decide whether you want a traditional deductible IRA or a non-deductible Roth IRA.

 

The annual limits for each taxpayer for 2019 (and 2020) are $6,000. An individual who is at least 50 years of age will be able to make an additional contribution under a “catch up” provision for $1,000, making the allowable total $7,000 each. A nonworking spouse can also make a deductible IRA contribution or a non-deductible Roth IRA contribution as long as the couple files a joint return and meets other requirements.

 

There are income limits for both Traditional and Roth IRA’a which could affect your allowable deductible contribution to a Traditional IRA and the maximum contribution to a Roth IRA. However, if you exceed those income limits, we can discuss another strategy called a Back Door Roth IRA which will enable you to contribute to a Roth IRA. You can fund your IRA’s for the tax year 2019 up to 4/15/20.

 

If you are self-employed, I suggest we discuss your retirement plan options if you do not currently have a plan.

Work Opportunity Tax Credit

(WOTC)

Employers can earn a tax credit for each qualifying worker that ranges from $1,200 to as much as $9,600.

 

The exact tax benefit amount that a business can receive depends on several factors, including such things as:

  • How long the new worker was unemployed.

  • The employee’s salary.

  • The number of hours worked in the first year.

 

There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.

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What types of workers are eligible?

  • Veterans.

  • Temporary Assistance for Needy Families, or TANF, recipients.

  • Supplemental Nutrition Assistance Program, or SNAP (also known as food stamps) recipients.

  • Designated community residents living in certain economically struggling communities.

  • Vocational rehabilitation referral individuals.

  • Ex-felons.

  • Supplemental Security Income recipients.

  • Summer youth employees who live in certain challenged communities.

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The work opportunity credit was extended through 2020.

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Money Matters Comcast TV show
3-4-20

Deductions that were expiring are extended for 2019 returns

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  • Deduction for above-the-line qualified tuition and related expenses 

  • Deduction for mortgage insurance premiums treated as qualified residence interest

  • Deduction for unreimbursed medical and dental expenses as the floor was lowered to 7.5% of adjusted gross income

  • Credit for non-business energy property 

  • Income exclusion for canceled debt for qualified principal residence indebtedness where the taxpayer defaulted on a mortgage that they took out to buy, build or substantially improve their main home 

​Secure Act makes significant changes to Retirement provisions

Highlights for Employers

  1. The maximum tax credit for employers who establish new retirement plans is now $5,000, up from $500.

  2. Small-business owners who implement automatic enrollment in the plan will be eligible for an additional credit of $500, which could help offset the costs of 401(k) and SIMPLE IRA plan administration. This credit is available to employers newly adopting plans and employers who convert an existing plan to an automatic enrollment design. The tax credit is available for three years beginning with tax years after 2019.

  3. Employers will have additional time to adopt a retirement plan. Beginning in tax years after 2019, the legislation allows a plan to be adopted as late as the tax filing deadline, including extensions, for the taxable year rather than by the last day of that taxable year.

  4. There is a fiduciary safe harbor to 401(k) plan sponsors who include annuities in offerings to plan participants. The employer would not be able to be sued if the provider of an annuity chosen for the 401(k) plan defrauds the participant or ends up insolvent.

  5. An Open Multiple Employer Plan (MEP) would allow two or more unrelated employers to join through a pooled plan provider to create economies of scale. There are specific guidelines that must be followed, including requiring the pooled plan provider to register with the Department of Labor and the IRS, be a named fiduciary, and act as the ERISA Section 3(16) plan administrator. This provision begins for plan years after December 31, 2020.

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Highlights for Employees and Individuals

Employees will also benefit from the SECURE Act, the biggest gain being the opportunity to save for retirement because their employer has new opportunities or financial incentives to offer 401(k) and SIMPLE IRA plans.

  1. Long-term part-time employees will be allowed to participate in an employer’s retirement plan if they work more than 500 hours over three consecutive years.

  2. The maximum age for contributing to traditional IRA’s was repealed, starting with tax years after Dec. 31, 2019.

  3. Increases by 1½ years the age at which required minimum distributions (RMD) must begin, taking into account longer life expectancies. This allows plan participants who attain age 70½ after Dec. 31, 2019 can wait until they turn 72 to begin taking distributions.

  4. Waives the 10 percent early withdrawal penalty for withdrawals up to $5,000 to cover expenses related to childbirth or adoption, for distributions made after Dec. 31, 2019.

 

Inherited IRA’s

The rules for Inherited IRA’s have suffered a significant change, particularly for “Stretch IRA’s”.

  • Old rules allowed beneficiaries of IRA’s to stretch out their RMD's over their lifetime, providing them with years to reap tax-advantaged gains.

  • Now, for deaths occurring as of 1/1/20, those inherited IRAs must be depleted within 10 years unless the assets are bequeathed to a spouse or other beneficiary who meets certain exemptions. Some of these exemptions include beneficiaries who are the minor children of the deceased or beneficiaries who are chronically ill or disabled.

  • This provision alone is expected to generate about $15.7 billion in tax revenue over the next decade.

  • For everyone else, the changes mean they will have to take steeper distributions and pay taxes, when they may not be in need of the funds.

  • The good news is that those who were already taking distributions from an inherited IRA may continue to do so.

  • Roth conversions for owners of Traditional IRA’s may be a tactic for some that could significantly lower their future beneficiaries’ tax bills. Careful analysis and planning are required before implementing a Roth conversion.

Testimonials

I have been dealing with Nick for over 30 years. Great guy and has saved me much money by doing a good job on my tax returns.        Michael Stewart

     Memorial Day Parade Harleysville, Pa.

Dept of Labor 

New Overtime Rules

On September 24, 2019, the U.S. Department of Labor announced a final rule to make 1.3 million American workers newly eligible for overtime pay.

The final rule updates the earnings thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime pay requirements and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. The new thresholds account for growth in employee earnings since the thresholds were last updated in 2004.

In the final rule, the Department is:

  1. Raising the “standard salary level” from the currently enforced level of $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker).

  • This means that you must now pay a full-time employee at least $35,568 to avoid paying Overtime if they are executive, administrative or professional employees.

  1. Raising the total annual compensation requirement for “highly compensated employees” from the   currently level of $100,000 per year to $107,432 per year.

  2. Allowing employers to use non-discretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level.

         These final rules are effective on 

                      January 1, 2020.                                              

Opportunity Zone Fund Tax Benefits

This program, enacted under the TCJA tax Law, is designed to encourage investment in distressed communities designated as “qualified opportunity zones” by providing tax incentives to invest in “qualified opportunity funds” (“opportunity funds”) that, in turn, invest directly or indirectly in the opportunity zones.

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The qualified opportunity zone program generally offers three potential tax benefits to investors:

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First, a taxpayer may elect to defer tax on capital gain from the sale or exchange of property with an unrelated person by investing the gain as equity in an opportunity fund within 180 days after the sale or exchange.  The deferral ends on December 31, 2026, or sooner if the taxpayer sells its interest in the opportunity fund, and at that time the taxpayer must recognize the gain (and pay tax) with respect to the original property.

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Second, if the taxpayer holds its interest in an opportunity fund for five years, it can step up its basis in the opportunity fund by an amount equal to 10% of the deferred gain with respect to the original property and, if the taxpayer holds its interest in the opportunity fund for seven years, it can step up its basis in the opportunity fund by an amount equal to an additional 5% of the deferred gain with respect to the original property (for a total of 15%). The stepped-up basis reduces the amount of gain recognized by the taxpayer at the end of the deferral period.

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Third, if the taxpayer holds its interest in the opportunity fund for at least 10 years, the gain on appreciation over the original investment is tax free.

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Within the 50 states and D.C., there are 8700 Opportunity Zones home to 31.3 million people

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