Hawkins Ash CPAs https://hawkinsashcpas.com Part of your business. Part of your life. Fri, 14 Dec 2018 19:41:26 +0000 en-US hourly 1 December 2018 QuickBooks Newsletter https://hawkinsashcpas.com/6831-2/ Thu, 13 Dec 2018 20:58:09 +0000 https://hawkinsashcpas.com/?p=6831 The December QuickBooks Newsletter from Hawkins Ash CPAs is now available. Headlines include the following: Setting Up User Access in QuickBooks Online Hawkins Ash CPAs Adds Location in Mequon, Wisconsin QuickBooks Connect Roundtable Q&A Benefits of calling a QuickBooks Certified ProAdvisor View it here>

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The December QuickBooks Newsletter from Hawkins Ash CPAs is now available. Headlines include the following:

  • Setting Up User Access in QuickBooks Online
  • Hawkins Ash CPAs Adds Location in Mequon, Wisconsin
  • QuickBooks Connect Roundtable Q&A
  • Benefits of calling a QuickBooks Certified ProAdvisor

View it here>

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Benefits of Health Savings Accounts: Podcast https://hawkinsashcpas.com/benefits-of-health-savings-accounts-podcast/ Wed, 12 Dec 2018 20:54:53 +0000 https://hawkinsashcpas.com/?p=6822 As we discussed previously, the TAX CUTS AND JOBS ACT OF 2017 increased the standard deduction.  Because of that, it is estimated that 94% of taxpayers will now take the standard deduction.  One of the areas where you could itemize before and still can was in the field of medical expenses.  This is an area […]

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As we discussed previously, the TAX CUTS AND JOBS ACT OF 2017 increased the standard deduction.  Because of that, it is estimated that 94% of taxpayers will now take the standard deduction.  One of the areas where you could itemize before and still can was in the field of medical expenses.  This is an area where taxpayers can still see benefits of paying medical expenses.

For the average taxpayer, medical expenses have been difficult to deduct since there has always been this 7-1/2-10% income threshold.  This means that if you have income of $60,000, you would have needed to have $4,500 of medical expenses (not including pre-tax health insurance premiums that you pay) to get any kind of benefit.

ARE THERE OTHER WAYS THAT A TAXPAYER CAN DEDUCT THESE EXPENSES?

Absolutely.  There are really two main ones.  The first one has been around for a long time and that is called the Section 125.  It is also sometimes referred to as a Cafeteria Plan or a Flex Spending Account.  These are employer plans that an employee can contribute to up to $2,650 for 2018, and that is done on a pre-tax basis.  Then, that employee can use that account to reimburse themselves for medical expenses, dental expenses, optical expenses, and even prescriptions.  Over-the-counter medicines are not included, just prescriptions.   One of the disadvantages of this the entire time has been that it’s a use-it or lose-it system.  Therefore, if you decide to contribute $2,650 to it and you only have $1,000 worth of medical expenses, that extra money is lost.

Secondly, a number of years ago the IRS came up with an account called the “Health Savings Account,” and they kind of addressed a lot of these issues.  A Health Savings Account is actually an employee-owned account.  It is actually your own account and is not owned by your employer.  You can contribute $6,900 for a family or $3,450 for a self-only plan into that account for 2018 (excess amounts roll over into future years).  In addition, if you are over the age of 55 you can contribute an additional $1,000.  However, you must have a high deductible plan in order to do this.  Now with healthcare plans, a lot of the plans are considered to be high deductible plans, but you really want to double check with your employer to make sure that their plan is considered to be an “HSA Eligible Plan.”        

CAN YOU GIVE ME MORE DETAILS ON THE HEALTH SAVINGS ACCOUNT?

Other than the benefit of being individually owned and you can take them from job-to-job, and the fact that it can be rolled over from year-to-year: It is not a use-it or lose-it system.  The higher contribution limits are also a benefit.  In addition, the contributions are deductible whether you incur any medical expenses or not.  So in my example above, if you contribute $6,900 to your family plan and you only have $2,000 of expenses, that extra $4,900 can actually be carried over into the next year and years going forward.  You can also pay for your medical expenses with your regular after-tax dollars and get reimbursed for those expenses at a later date.  For example, what we have had clients do is they will pay their medical expenses over the years.  They will put money into their HSA and maybe five years from now they’ll want to buy a car or something like that, so now they can reimburse themselves for all five years of those expenses and be able to use that money as a down payment on a car.  There is a penalty if you take money out of an HSA and you don’t use it to reimburse medical expenses.  However, that penalty goes away at age 65, so some clients treat this as another IRA.  They put money into it over the years and then at 65 they start to withdraw the money.  Even if you don’t use it for medical expenses, yes you have to pay income taxes on it, but you don’t have to pay any penalties, so it’s very similar to an IRA treatment.     

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2018 Payroll and Year-End Reporting https://hawkinsashcpas.com/2018-payroll-and-year-end-reporting/ Mon, 10 Dec 2018 17:32:21 +0000 https://hawkinsashcpas.com/?p=6814 Click here to download the PowerPoint slides> Click here to download the sample spreadsheets>

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Click here to download the PowerPoint slides>
Click here to download the sample spreadsheets>

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Reason for the Season https://hawkinsashcpas.com/reasonfortheseason/ Fri, 07 Dec 2018 17:35:08 +0000 https://hawkinsashcpas.com/?p=6798 Happy Holidays from all of us at Hawkins Ash CPAs. In 2018, employees chose to donate volunteer time and holiday donations to causes that help eliminate food-insecurity and support healthy living through food. This holiday season, we donated just over $5,600 to charities that provide programs and services to stave hunger either locally or internationally. In […]

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Happy Holidays from all of us at Hawkins Ash CPAs. In 2018, employees chose to donate volunteer time and holiday donations to causes that help eliminate food-insecurity and support healthy living through food. This holiday season, we donated just over $5,600 to charities that provide programs and services to stave hunger either locally or internationally. In addition, our employees donated more than 350 hours of volunteer time.

Scroll down to view the organizations our employees chose to either volunteer with or give a donation.

View more volunteer pictures on Facebook>

Green Bay, WI

Feed My Starving Children (Green Bay Mobile Pack): As a Christian non-profit organization, Feed My Starving Children is called to feed God’s starving children hungry in body and spirit.

NEW Community Shelter: The Staff & Board of the Shelter work in cooperation with others in our community to address homelessness & hopelessness through education, counseling, resources, and in-house services.

La Crosse, WI

WAFER food bank: WAFER is committed to addressing hunger-related needs in La Crosse County, while treating each person with personalized service and dignity.

La Crosse Community Thanksgiving Dinner: The La Crosse Community Thanksgiving is held annually on Thanksgiving day at the La Crosse Center. This event celebrates our community every year and is made possible through the generosity and support of caring individuals and organizations throughout the Coulee Region.

La Crosse Area Salvation Army: The Meal Program of the La Crosse Area Salvation Army serves more than 1,500 meals each week to people in need. The meal program is open to all who are hungry, no questions asked.

Manitowoc, WI

Two Rivers Ecumenical PantryTREP provides food for needy families, school supplies for children, Christmas and Easter gifts for children, coats for kids, and Thanksgiving and Easter food.

Salvation Army of Manitowoc CountyThe Salvation Army of Manitowoc County exists to provide a Christ-centered atmosphere, which will be ever evolving to fulfill the spiritual, physical, and emotional needs of Manitowoc County. To create more visibility of The Salvation Army, as an active partner in the development and growth of the community through the creation and expansion of essential and purposeful services.

Marshfield, WI

Marshfield Area United Way (Nutrition on Weekends)-The Nutrition On Weekends program is a collaborative, community effort to target childhood hunger.

Shirley’s House of Hope, Inc.-The organization exists to rebuild, renew and restore lives of women and children hurting from domestic violence.

Marshfield Area United Way (Soup or Socks)-The SOS clothes closet/food pantry is a volunteer organization dedicated to providing clothing and/or food, at no charge, for those in need in the greater Marshfield area.

Marshfield Rotary Winter Wonderland: In the past eleven years, the Marshfield Rotary Winter Wonderland has provided over 500,000 pieces of pantry items to 29 food pantries in Marshfield and the surrounding area.

Medford, WI

Taylor County 4-H (Breakfast on the Farm)The Taylor County 4-H Program is a great place for young people to build self confidence, learn leadership skill and responsibility….and have a GREAT time doing it!

WIGM/WKEB Christmas Wish Program: Christmas Wish grants wishes to families that are going through a difficult time in their lives. Recipients live in Taylor, Price, Marathon, or Clark Counties.

Cansgiving (Colby Community Library): The non-perishable food items used to create the sculptures were donated to local food pantries (Colby and Unity).

Mequon, WI

Hunger Task Force: Hunger Task Force is Milwaukee’s Free & Local food bank and Wisconsin’s leading anti-hunger organization.

Rochester, MN and St. Charles, MN

Channel One Food Bank (Empty Bowl event): Channel One Regional Food Bank and Food Shelf, a certified member of Feeding America, is a non-profit organization that serves the mission to work in partnership with others to help feed people in need.

Winona, MN

La Crosse Hunger Task Force, Kane Street Garden: The Hunger Task Force of La Crosse operates the Kane Street Community Garden at the corner of Kane and St. Cloud Streets on the North Side. From mid-March to mid-October, volunteers plant, maintain and harvest a wide variety of fruits and vegetables.

Ten Days of Giving (Winona National Bank)The 10 Days of Giving food drive is an annual community collaboration between Merchants Bank and Winona Volunteer Services to make sure no one in Winona County goes hungry each winter.

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Hawkins Ash CPAs Adds Location in Mequon, Wisconsin https://hawkinsashcpas.com/hawkinsash-adds-location/ Wed, 05 Dec 2018 15:16:15 +0000 https://hawkinsashcpas.com/?p=6793 The Mequon office of Anderson, Tackman & Company, PLC joins Hawkins Ash CPAs. For Immediate Release La Crosse, WI – December 5, 2018 Hawkins Ash CPAs, a full-service regional certified public accounting and business advisory firm, announces that the Mequon office of Anderson, Tackman & Company, PLC and its partners Jeffrey W. Knorr, CPA and […]

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The Mequon office of Anderson, Tackman & Company, PLC joins Hawkins Ash CPAs.

For Immediate Release

La Crosse, WI – December 5, 2018
Hawkins Ash CPAs, a full-service regional certified public accounting and business advisory firm, announces that the Mequon office of Anderson, Tackman & Company, PLC and its partners Jeffrey W. Knorr, CPA and Daniel R. Moriarty, CPA will be joining them. This allows Hawkins Ash CPAs to expand its presence into southeastern, Wisconsin. The merger is effective December 1, 2018.

“This merger fits well into our growth, development and service strategy,” states Abraham Leis, CPA, Managing Partner of Hawkins Ash CPAs. “With the addition of Jeff and Dan’s practice, we now have nine offices in Wisconsin and Minnesota and are very excited to start serving clients in southeastern Wisconsin. Jeff and Dan, along with their team, bring a multitude of knowledge to Hawkins Ash, particularly in tax, accounting and auditing services. Their expertise complements ours, so clients can expect more service options and an even higher level of service.”

Jeff Knorr and Dan Moriarty will continue as Partners to serve their clients from the same Mequon office. Those clients are now able to take advantage of Hawkins Ash CPAs comprehensive line up of services, including auditing, valuation and international tax expertise.

“We couldn’t be happier to join Hawkins Ash,” says Dan Moriarty, CPA, Partner. “We’re especially excited for our clients to reap the rewards of the support and stability of such a well-established, respected firm,” he says.

Since 1956, Hawkins Ash CPAs has been providing expertise in audit, accounting, tax, and consulting services to a wide variety of sectors, including individuals, privately held businesses, nonprofit organizations, governmental entities, credit unions and housing authorities. Hawkins Ash is now a $19.5 million firm that aims to rank in the top 200 in a field of over 44,000 accounting firms in the nation. With the addition of the Mequon accounting practice, it now has six offices in Wisconsin, three offices in Minnesota, 18 partners, and over 130 professionals serving clients throughout Wisconsin, Minnesota and the entire United States.

About Hawkins Ash CPAs
Hawkins Ash CPAs provides certified public accounting services to privately held businesses, governmental organizations, nonprofit entities, housing authorities, and credit unions. The firm currently has offices in Green Bay, La Crosse, Manitowoc, Marshfield, Medford and Mequon, Wisconsin; and Rochester, St. Charles and Winona, Minnesota.  The firm was founded in 1956.

For further information, contact:
Abraham Leis, CPA
Managing Partner
Hawkins Ash CPAs
608.793.3131
aleis@hawkinsashcpas.com

Daniel R. Moriarty, CPA
Partner
Hawkins Ash CPAs
262-404-2111
dmoriarty@hawkinsashcpas.com

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Mortgage Interest Deduction Under New Tax Law: Podcast https://hawkinsashcpas.com/mortgage-interest-deduction-under-new-tax-law/ Fri, 30 Nov 2018 01:25:54 +0000 https://hawkinsashcpas.com/?p=6781 The TAX CUTS AND JOBS ACT OF 2017 really changed the way that people can deduct their mortgage interest on their tax returns. Prior to that law’s passage, taxpayers could deduct interest on the first $1,000,000 of mortgage debt that was taken out to purchase, build or improve real estate. They could also deduct the […]

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The TAX CUTS AND JOBS ACT OF 2017 really changed the way that people can deduct their mortgage interest on their tax returns.

Prior to that law’s passage, taxpayers could deduct interest on the first $1,000,000 of mortgage debt that was taken out to purchase, build or improve real estate. They could also deduct the interest on the amount of up to $100,000 of home equity debt. Click the orange circle below to listen.

SO HOW DOES THE NEW TAX LAW AFFECT THIS?

It affects this deduction in two ways. First, the $1,000,000 limit was reduced to $750,000 for new mortgages. However, the $1,000,000 was grandfathered in for current loans. Now, not a lot of people have $750,000 mortgages, so for many this will not impact their returns, but the second way really does. That is the interest on home equity debts which has been eliminated. This will affect people who took out home equity lines of credit and they used those for non-home improvement purposes, such as buying a car, consolidating their credit card accounts, taking a vacation, etc. These existing types of loans were not grandfathered in for this purpose.

AM I CORRECT THAT I CAN STILL DEDUCT MORTGAGE INTEREST IN FULL IF I HAVE A $150,000 MORTGAGE AND $50,000 IN HOME EQUITY DEBT THAT I USED TO REMODEL MY HOME?

That is correct. Because your total mortgage debt is under $750,000 and all of it was used to improve your home, that interest would still be deductible.

Now if we change the scenario a little bit: If you were to use $25,000 of that $50,000 home equity loan to remodel your home and $25,000 to buy a new car, only half of that interest would be tax deductible.

You know with tax law it always gets complicated, so even to further complicate things, you can only take these deductions now if you are actually itemizing on your return. Like we talked about in previous episodes, the itemized deduction limit went up. Therefore, you have to have itemized deductions over $12,000 for single or $24,000 for married even to be able to take advantage of any of the mortgage interest deductions.

DOES THIS ALSO AFFECT BUSINESS OR INVESTMENT INTEREST?

No it doesn’t. That is the nice thing. These rules apply only to mortgage interest on your personal residence and vacation homes. Not your businesses. That, for the most part, is still fully deductible.

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Employee Benefit Plan Resources: November 2018 https://hawkinsashcpas.com/employee-benefit-plan-resources-november-2018/ Thu, 15 Nov 2018 21:06:32 +0000 https://hawkinsashcpas.com/?p=6748 Check out our latest Employee Benefit Plan Resources Newsletter. This edition includes the following topics: 401(k) Plan Contributions for Student Loan Repayments: Potential Future Standard Practice? Selecting 3(21) Versus 3(38) Third Party Fiduciary Advisors Hawkins Ash CPAs Exhibit Expertise in Employee Benefit Plan Audits with AICPA Advanced Certificate The Employer Plans Compliance Resolution Program (EPCRS) […]

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Check out our latest Employee Benefit Plan Resources Newsletter. This edition includes the following topics:

  • 401(k) Plan Contributions for Student Loan Repayments: Potential Future Standard Practice?
  • Selecting 3(21) Versus 3(38) Third Party Fiduciary Advisors
  • Hawkins Ash CPAs Exhibit Expertise in Employee Benefit Plan Audits with AICPA Advanced Certificate
  • The Employer Plans Compliance Resolution Program (EPCRS)

View the newsletter>

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Nonprofit Connection: November 2018 https://hawkinsashcpas.com/nonprofit-connection-november-2018/ Thu, 15 Nov 2018 21:03:04 +0000 https://hawkinsashcpas.com/?p=6746 Read and sign up for the Nonprofit Connection Newsletter. Topics in this quarter’s edition include: Board-Designated Net Assets Nonprofit Tax Tidbits: Form 990 Schedule E and F The Tax Cuts and Jobs Act (TCJA) – New Requirements for Tax Exempt Organizations State and Federal Compliance Updates Client Feature and Executive Direct Q&A: Marshfield Clinic Health […]

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Read and sign up for the Nonprofit Connection Newsletter. Topics in this quarter’s edition include:

  • Board-Designated Net Assets
  • Nonprofit Tax Tidbits: Form 990 Schedule E and F
  • The Tax Cuts and Jobs Act (TCJA) – New Requirements for Tax Exempt Organizations
  • State and Federal Compliance Updates
  • Client Feature and Executive Direct Q&A: Marshfield Clinic Health System YMCA

View newsletter>

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Withholding Under the New Tax Bill: Podcast https://hawkinsashcpas.com/withholding-under-the-new-tax-bill-podcast/ Tue, 06 Nov 2018 15:58:14 +0000 https://hawkinsashcpas.com/?p=6728 Back in February of 2018, the IRS came out with new federal tax withholding tables for employers to use based on the new tax law. Although these tables were designed for the average taxpayer, there are scenarios where these tables may not work. In these cases, taxpayers may find out at April 15 that they […]

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Back in February of 2018, the IRS came out with new federal tax withholding tables for employers to use based on the new tax law. Although these tables were designed for the average taxpayer, there are scenarios where these tables may not work. In these cases, taxpayers may find out at April 15 that they thought that they were getting refunds because they had in the past, but they may not get any refunds, or may even owe. Click the orange circle below to listen to this episode.

Script

WHO MAY GET CAUGHT BY THIS?

There are a number of situations that we found, and this is obviously not an inclusive list, but individuals that were paying high amounts of state and local taxes but were not in the alternative minimum tax may be affected by this because as we learned in previous episodes, the most you can deduct now for state and local taxes is $10,000. If someone was deducting $20,000-$30,000 in previous years, that is $10,000-$20,000 of additional income that is going to show up on their return that they probably weren’t expecting.

There are also people with three or more dependents that are over age 16, and they may be affected due to the fact that some of those exemptions went away.

Also, taxpayers with high business expenses and investment expenses, like the unreimbursed employee expenses that used to be itemized as miscellaneous deductions and now are not deductible. Those people will be affected by the new tax law. And also, just a normal couple that had about $24,000 in itemized deductions may be affected because they are going to lose those exemptions.

WHAT CAN A PERSON DO?

The IRS has really encouraged people to go onto their website and look at their withholding calculator and perform what they call a paycheck checkup. This calculator should give you a good idea on the correct allowances to take.

You could also talk to your tax preparer or CPA who can actually run a calculation for you. There is normally a little bit of a cost associated with this type of service depending on the complexity, but it would provide you with peace of mind.

WHAT SHOULD PEOPLE DO IF THEY NEED TO CHANGE THEIR WITHHOLDING?

What taxpayers should do at that point is file a new Form W-4 with their employer to change how much withholding comes off of their checks. One thing to remember with that is as it gets later and later into the year, you are only changing your withholding from this point to the end of the year. You may still have been short those first months of the year to now.

It was the intention of the legislators when they set up the new tax withholding tables to get the benefits from the tax reform bill to taxpayers as soon as possible. That is the reason why they made this change. Taking appropriate steps now can stop unexpected surprises later.

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Is Now the Time for Some Life Insurance? https://hawkinsashcpas.com/is-now-the-time-for-some-life-insurance/ Tue, 06 Nov 2018 15:39:09 +0000 https://hawkinsashcpas.com/?p=6726 Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind. Careful Calculations If the coverage is to replace income and support your family, this starts with tallying the costs that […]

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Many people reach a point in life when buying some life insurance is highly advisable. Once you determine that you need it, the next step is calculating how much you should get and what kind.

Careful Calculations

If the coverage is to replace income and support your family, this starts with tallying the costs that would need to be covered, such as housing and transportation, child care, and education — and for how long. For many families, this will be only until the youngest children are on their own.

Next, identify income available to your family from Social Security, investments, retirement savings and any other sources. Insurance can help bridge any gaps between the expenses to be covered and the income available.

If you’re purchasing life insurance for another reason, the purpose will dictate how much you need:

  • Funeral costs. An average funeral bill can top $7,000. Gravesite costs typically add thousands more to this number.
  • Mortgage payoff. You may need coverage equal to the amount of your outstanding mortgage balance.
  • Estate planning. If the goal is to pay estate taxes, you’ll need to estimate your estate tax liability. If it’s to equalize inheritances, you’ll need to estimate the value of business interests going to each child active in your business and purchase enough coverage to provide equal inheritances to the inactive children.

Term vs. Permanent

The next question is what type of policy to purchase. Life insurance policies generally fall into two broad categories: term or permanent.

Term insurance is for a specific period. If you die during the policy’s term, it pays out to the beneficiaries you’ve named. If you don’t die during the term, it doesn’t pay out. It’s typically much less expensive than permanent life insurance, at least if purchased while you’re relatively young and healthy.

Permanent life insurance policies last until you die, so long as you’ve paid the premiums. Most permanent policies build up a cash value that you may be able to borrow against. Over time, the cash value also may reduce the premiums.
Because the premiums are typically higher for permanent insurance, you need to consider whether the extra cost is worth the benefits. It might not be if, for example, you may not require much life insurance after your children are grown.

But permanent life insurance may make sense if you’re concerned that you could become uninsurable, if you’re providing for special-needs children who will never be self-sufficient, or if the coverage is to pay estate taxes or equalize inheritances.

Some Comfort

No one likes to think about leaving loved ones behind. But you’ll no doubt find some comfort in having a life insurance policy that helps cover your family’s financial needs and plays an important role in your estate plan. Let us help you work out the details.

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