Category Archives for "Taxes"

For favorable tax results in 2015, schedule a midyear planning review

We hope that everyone had a wonderful weekend & that your week has started of well!  I am sure many of you received the tax planning letter email recently.  This week I have decided to share one of the articles in the newsletter pertaining to mid-year tax planning.  I have referenced Christmas in July multiple times this past week, & my son’s elf on a shelf for some reason has suddenly reappeared…  Since it is the middle of the year, this topic seamed appropriate for this weeks blog post.

For favorable tax results in 2015, schedule a midyear planning review

Favorable tax results begin with planning — and planning at midyear gives you ample opportunity to start trimming this year’s tax bill. Here are suggestions to get you started.

Hire your children
Family tax savings are available when your child works full– or part–time for your business. One reason: you’re shifting income from your higher tax bracket to your child’s lower one.

Are you wondering how you’ll benefit from the savings when the “kiddie tax” applies? In 2015, this tax comes into play when your child has investment income in excess of $2,100. Part of the investment income, which includes interest, dividends, and capital gains, would be taxed at your rate. However, earned income — such as wages you pay your child for working in your business — is not subject to the kiddie tax. Even better, your child can earn up to the standard deduction ($6,300 for 2015) before owing federal income tax.

In addition, depending on how your business is organized, you may be able to save social security and Medicare taxes. Generally, you don’t have to pay these taxes when your under–age–18 child works in your sole proprietorship or a partnership consisting of you and your spouse. Wages paid to a child up to age 21 are also exempt from federal unemployment taxes.

Employing your child in a legitimate job at a reasonable wage offers other tax benefits as well, such as the opportunity for the child to fund a retirement account. During 2015 your child can deposit — and deduct — up to $5,500 into a traditional IRA. Tip: Though the contribution cannot be more than your child’s earned income, the funds do not have to come from the child’s wages.

Plan tax–advantaged education account withdrawals
Will your child be starting or returning to college at summer’s end? Now’s the time to plan how you’ll take money from your education savings accounts. Why? Tax–free treatment of withdrawals is only available for qualifying expenses. You want to be sure you know the correct amount of tuition, fees, books, supplies, and other qualified education expenses that you’ll pay during 2015.

Another midyear planning opportunity: coordinating qualifying expenses between education tax benefits. For instance, two education tax credits are available for 2015: the American opportunity credit and the lifetime learning credit. These credits are valuable because they directly reduce your federal income tax bill.

To claim either credit, you have to pay qualifying education expenses. These expenses are generally the same as the ones you pay with your 529 plan funds. The catch? While you can claim an education credit and take a taxfree distribution from your 529 plan in the same year, you can’t use the same expenses for both tax breaks. Midyear planning for your entire pool of education expenses gives you time to adjust the overall results.

Maximize retirement plan opportunities
If you’re working or self–employed, maximizing your retirement plan contributions is a tried and true tax–saving suggestion. The reason? You contribute money on a pre–tax basis, meaning your contribution is withheld from your wages before you pay taxes. That reduces your taxable income and your federal income tax, and can help you qualify for tax benefits calculated on the basis of your income. The savings can be substantial. For example, in 2015 you can contribute up to $18,000 to your 401(k) when you’re under age 50. You can add an additional $6,000 when you’re 50 or older.

What if you’re already on track to max out your 401(k) for the year? You may also qualify to contribute to a traditional or Roth IRA. The maximum contribution for 2015 is $5,500, plus another $1,000 when you’re age 50 or over.

Are you no longer contributing to a retirement account and instead getting ready to transition from your job and tap into existing assets and benefits? Midyear tax planning opportunities include establishing the timing of your distributions and deciding when to begin receiving social security.

For instance, say you’re retired, but not yet required to make mandatory withdrawals from a traditional plan. In that case, other options, such as drawing down your taxable accounts, can make sense. Yes, you’ll pay capital gain tax on profits. But remember that retirement accounts have a built–in federal income tax liability, which is typically assessed at less favorable ordinary tax rates. Your goal is to maximize the deferral of that tax.

Extend your midyear planning to social security as well. You already know lifetime benefits increase when you delay claiming them. But should you delay? The answer depends in part on returns from other investments and whether you’ll continue to work or perhaps start your own business. If you’re married, your spouse’s expected retirement date will play a role in your decision too.

These are just a few tax strategies you should consider. To discuss those tax–saving options suitable for your circumstances, contact us for a midyear review.


We hope that everyone has a great week! Please let us know if there is anything we can do for you.

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Harvey & Caldwell, PA. Tax Planning Letter Midyear 2015

How credit scores work

We hope that everyone had a fantastic Independence Day weekend!  We have enjoyed spending time with loved ones, and attending some Royals baseball.  Oh, and how about the USA Women’s Soccer team, wow!  Summer most definitely is in full swing now, warm temps & long days just beckons us to fully enjoy the day.

This weeks blog comes from our July online advisor.  With all of the holiday specials going on, especially pertaining to cars, I thought this would be a good one for the week.

How credit scores work

If you’re applying for a car loan, a home mortgage, or a credit card to finance your next vacation, banks and other institutions will likely base their lending decision, at least in part, on your credit score.  The higher the score (other things being equal), the more money lenders will offer and the lower the interest rate they’ll charge.

Credit scores are a relatively new invention.  As credit cards became popular in the 1960s, card issuers needed a way to determine whether an applicant was likely to pay his or her bill on time.  Although lenders used various means to assess that risk, their methods tended to be inconsistent and sometimes inaccurate.  Around the same time, Congress started cracking down on discriminatory lending practices by passing several pieces of legislation that reined in lenders and collection agents.

All this didn’t go unnoticed by a firm called Fair Isaac and Company.  They developed a risk scoring model in the 1980s, a score that was widely adopted by credit issuers and banks throughout the United States.  The FICO score was born.  That score, which ranges from 300 to 800, is based on five factors that are considered good predictors of risk.

1. Payment history (35%). This factor is given the greatest weight.  Lenders want to know how many bills you’ve paid late and how many were sent to collection.  The more recent the problems, the greater the negative impact on your score.

2. Outstanding debt (30%). Rule of thumb: Keep your credit card balances at 25% or less of their limits.

3. Length of time you’ve had credit (15%). In general, a longer credit history will generate a higher overall score.

4. New credit (10%). Opening several new accounts tends to impact your score negatively in the short term.

5. Types of credit (10%). Having experience with several types of credit — revolving credit, installment loans, mortgages — can push your score upward.

The FICO score isn’t the only score used by lenders, nor is it the only factor they consider.  In fact, some lenders may use a different scoring model altogether.  Nevertheless, by keeping a watchful eye on the above five factors, you can certainly increase your odds of obtaining credit at reasonable interest rates.

What’s the best way to monitor your credit?  Examine your credit report regularly and quickly resolve any inaccuracies.


We hope that everyone has a great week! Please let us know if there is anything we can do for you.

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Harvey & Caldwell, PA. July Online Advisor

Go forward or backward to utilize tax benefits

Summer is now in full swing & we are loving it!  This next weekend is a holiday weekend, the 4th of July is upon us.  I am excited that it is actually on a weekend this year!  Bring on the bbq’s with our loved ones, & the celebrations of our Independence Day!

Being essentially at the midpoint of the year, this article from this months online advisor seemed appropriate to share for the week.

Go forward or backward to utilize tax benefits

Although the tax code contains some exceptions, income is generally taxable in the tax year received and expenses are claimed as deductions in the year paid. But “carryforwards” and “carrybacks” have special rules.  In this case, certain losses and deductions can be carried forward to offset income in future years or carried back to offset income in prior years, providing tax benefits.

Here are four examples.

• Capital losses.  After you net annual capital gains and capital losses, you can use any excess loss to offset up to $3,000 of ordinary income.  Remaining losses can be carried over to offset gains in future years.  The carryforward continues until the excess loss is exhausted.
For example, suppose you have a net capital loss of $10,000 for 2015. After using $3,000 to offset ordinary income on your 2015 return, you carry the remaining $7,000 to 2016.  The excess loss is first applied to your 2016 capital gains, and then to as much as $3,000 of your ordinary income.  Any remaining loss is carried forward to 2017 and future years.

• Charitable deductions.  Your annual charitable deductions are limited by a “ceiling” or maximum amount, as measured by a percentage.  For example, the general rule is that your itemized deduction for most charitable donations for a year can’t exceed 50% of your adjusted gross income (AGI).  Gifts of appreciated property are limited to 30% of your AGI (20% in some cases) in the tax year in which the donations are made.  When you contribute more than these limits in a year, you can deduct the excess on future tax returns.  The carryover period for charitable deductions is five years.

• Home office deduction.  If you qualify for a home office deduction and you calculate your deduction using the regular method, your benefit for the current year can’t exceed the gross income from your business minus business expenses (other than home office expenses).  Any excess is carried forward to the next year.  Caution: No carryforward is available when you choose the “simplified” method to compute your home office deduction.

• Net operating losses (NOLs).  Business NOLs can be carried back two years and forward 20 years.  Here’s how it works. Say you calculate a $50,000 NOL in 2015.  Under the general rule, you’ll use the loss first to offset taxable income in 2013 and 2014.  Then you’ll carry the remainder forward, potentially until 2035.  Tip: As an alternative, you may opt to forego the carryback and instead carry the entire NOL forward.

Give us a call for help in maximizing the tax benefits of carryforwards or carrybacks.

We hope that everyone has a great week preparing for the holiday weekend! Please let us know if there is anything we can do for you.
All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Harvey & Caldwell, PA. June Online Advisor

Taxes & Marriage: The second time around

We hope that everyone enjoyed their weekend.  I cannot believe it is June!  I just realized I have to plan my sons birthday party… The end of the school year to summer definitely snuck up on me!  Many of us are attending graduations & deciding on summer plans now that the kiddos are out of school.

A common topic on my Facebook feed, aside from graduations, is weddings.  I have several friends getting ready to tie the knot.  Given my age, needless to say, for some this isn’t their first rodeo.  So when I saw this topic on our Online Advisor, I thought it could be beneficial to share with you, and possibly you have loved ones that are in this situation.

Taxes & Marriage: The second time around

Wedding bells bring rejoicing — and financial changes.  If you’re marrying for the second time, the changes might seem overwhelming.  On the surface, tax and financial planning for a second marriage is similar to that of a first marriage.

For example, no matter what month you hold the ceremony, the IRS will consider you married for the full year.  That means employer-provided fringe benefits and taxes withheld from your paychecks could require adjustment.  Depending on how much each of you earns and your past financial history, you’ll have to decide what filing status will be most beneficial, and how best to take advantage of tax breaks that may become available.

With a second marriage, you have even more decisions to make, including how you’ll merge your assets.  Will you purchase a new home? If both of you already own separate homes, you may each qualify for a $250,000 federal income tax exemption on the profit from the sale, as long as you have lived in the home for at least two of the last five years.  If only one of you meets the requirements for the exemption, consider selling the qualifying home and living in the other for a while.

You or your spouse might also have substantial debt or financial obligations.  Discuss your financial histories, including alimony or child support still owed and past bankruptcies.  Decide who will provide for the college expenses of the children in your now-combined household.  Depending on your age, you may want to investigate the effect of the marriage on your social security benefits.

Consider estate issues too, such as updating retirement plans with new beneficiary designations and retitling bank and brokerage accounts.  Be sure to discuss how heirs from previous marriages will be provided for, and remember to update your wills.

A second wedding is a joyful event for you, your new spouse, and your extended families.  To give your marriage an added advantage, call us before you say, “I do.”  We’ll offer our congratulations — followed by useful financial and tax planning advice.

We hope that everyone has a great week, and please let us know if there is anything we can do for you.

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Harvey & Caldwell, PA. June Online Advisor

Businesses in U.S. Territories Must File Form 8300 with the IRS on Cash Transactions of $10,000 or More

We hope that everyone had a wonderful Memorial Day Weekend!! One of our CPA’s wanted to share this article with you from the latest IRS Newswire.

Businesses in U.S. Territories Must File Form 8300 with the IRS on Cash Transactions of $10,000 or More

WASHINGTON — The Internal Revenue Service today reminded businesses in U.S. territories that they must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, when they engage in cash transactions in excess of $10,000 (link below). The form must be filed within 15 days of the transaction.

Businesses, including individuals who are sole proprietors that receive more than $10,000 cash in a transaction or in two or more related transactions in any U.S. possession or territory must file Form 8300 with the IRS. Possessions and territories include American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico and the U.S. Virgin Islands.  This requirement is in addition to any filing obligation the business may also have with U.S. territory tax authorities under similar territory rules, including under a U.S. territorial mirror income tax code.

Examples of businesses that may have to file Form 8300 include those that sell jewelry, furniture, boats, aircraft, or automobiles, as well as those that are pawnbrokers, attorneys, real estate brokers, insurance companies and travel agencies.

Cash includes the coins and currency of the United States as well as foreign currency, cashier’s checks, bank drafts, traveler’s checks and money orders. The law also requires that businesses report related transactions occurring within a 24-hour period. If the same payer makes two or more transactions totaling more than $10,000 in a 24-hour period, the business must treat the transactions as one transaction and report the payments.   The IRS provides additional information on the filing of Form 8300 in a reference guide (link below).

We hope that everyone has a great week, and please let us know if there is anything we can do for you.

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

IRS Newswire, Issue Number: IR-2015-81, May 22, 2015

Form 8300:

Form 8300 reference guide:

How to start over financially

We hope that all the Mother’s out there had a fantastic Mother’s Day celebrating you!  We hope everyone else enjoyed the day as well.  I do apologize for this blog being a few days later than usual.  As I was looking for inspiration for this weeks blog, taxes honestly seemed like the last I wanted to post about… I was looking on MSN money and found this great article regarding starting over financially.  This past year (for me) has been full of major life changes.  This results in new struggles, new challenges, & I’ve found that I have had to rediscover myself.  Which has involved reviewing my own personal life, finances & debts, etc.  So this article resonated with me on several levels.. so regardless of where you are in life, I hope it may be beneficial to you as well.

How to start over financially

Since her 20s, Laure Justice, a copywriter in Mansfield, Ohio, has struggled to get on top of her debt.  Some payments, including old medical bills, went into collections and hurt her credit score.  A few years ago, she started tackling them one at a time.  “I picked the smallest one first and focused on it,” she says.

Over the past two years, she has successfully paid off the debts in collections, and in the process, she raised her credit score by 130 points.  “It was just about sitting down and making out a budget and figuring out where and how to save,” she says.

Justice encourages others struggling with past financial mistakes to get a new start, too.  In March, she self-published a book, “Personal Finance for Women: How to Stop Struggling While Making the Best of Starting Over,” and she maintains a blog,, on the same subject.  Justice is one of hundreds of thousands of men and women working to recover from past money missteps – and financial experts say there’s a lot they can do to increase their chances of success.

“If you’re going through bankruptcy, the stress of that and embarrassment can create high hurdles, but all hurdles are surmountable,” says Rebecca Dallek, a career and leadership coach for women.  Part of the process involves becoming aware of behavior patterns so you can shift them, she adds.  “There’s always a way forward.”

Here are eight more tips from financial and life experts on how to start over after hitting rock bottom:

Take a snapshot.  From income and assets to debt, Bruce McClary, spokesman for the National Foundation for Credit Counseling, says it’s important to examine your current financial state carefully. “Look at your budget, and see where things are.  You’ll see a lot of wreckage, and it might be a long journey in front of you, but you need to know the first steps,” he says. That includes monthly bills, expenses and spending.  If you need help, he adds, a credit counselor from a NFCC-member agency can help for no or low cost.

Prioritize savings and re-establishing credit.  “The two can be done simultaneously, but they are different goals,” McClary says.  Savings is critical, especially if it’s been depleted because of an event such as divorce, job loss or bankruptcy, and he says it’s important to get back on track as quickly as possible. He recommends working toward a goal of having six months’ worth of net income in the bank.

At the same time, rebuilding credit, especially after it’s been hurt by unpaid bills or bankruptcy, is essential so you can once again borrow money without paying exorbitant interest and fees.  “The most important thing is making timely payments on accounts that are up to date.  It takes consistency,” he says.

Go slow.  It takes time to build new budgeting habits, yet McClary says people are often in such a rush to rebuild credit that they borrow too much.  “It’s better to start small. It makes sense to wait for your credit score to heal before you go out and buy big-ticket items,” he says.

Ease your fears.  Dallek says when people are facing a major life change or financial stress, the brain’s fear response often kicks into high gear, which can make it even harder to navigate the next steps.  “The area of your brain that deals in possibility, options and ideas starts to shut down, and you become very protective of your status quo,” she says.

To help counter that, she gives clients small baby steps to take so the process doesn’t feel too overwhelming.  Baby steps can include actions like speaking to one person in a new field you are considering, or talking to a person who has gone through the challenge you are currently facing, like finding a job after being out of work for a long time.  “It’s really important to get support so it feels a little less scary,” Dallek says.

Play pretend.  This exercise involves acting “as if” you have made a difficult decision, like pursing a new field of work, for a temporary period like a week.  “It gives people comfort without any real risk,” Dallek says, and makes it easier to engage in a volunteer project or network.  For example, say you work as an accountant but are thinking of switching into a career in sales.  You can spend your week of pretending looking for sales jobs and networking with sales groups as if you really are making the switch.  Then, when the week is over, you can consider how that felt, and if you actually want to pursue that new path.

Get organized. Rachel Rosenthal , a professional organizer and owner of Rachel and Company in the District of Columbia, says clients often call her when they are going through a major life change and they feel overwhelmed.  “They can’t deal with their daily life, and they know that organization will help them,” she says.
She usually starts by helping clients develop systems that will keep paperwork, whether it’s from a divorce, debt or bankruptcy, in a proper place.  “We don’t have control over the emotional part of things, but I try to take control of the physical side, which then helps with the emotional,” she says.

Something as simple as organizing your bedroom closet and developing a system for getting dressed in the morning can save you time and money, Rosenthal says, because you don’t end up buying more items you already have in the back of your closet.  To avoid getting physically and emotionally drained by the process, schedule short amounts of time to focus on organizing, she suggests.  Rosenthal created Organized in a Box, a DIY organization product, to help people take this step on their own.

Purge stuff you no longer need.  Rosenthal says most people make the mistake of holding onto too much stuff.  “All of our stuff, including paper, has emotional attachment for people, and they come up with the same sort of excuses for why they need to keep it,” she says.  But unloading those items, from books to shoes to paperwork, helps people move on and create space to build their new lives.  “Do a giant purge, make your systems and then maintain them,” Rosenthal advises.  “Control of your physical space leads to freedom in emotional space.”

Maximize your paycheck. Justice says she worked for low pay for too long.  Slowly, she built up her confidence, and her pay rate.  “As companies would start to offer me more, I thought, ‘They wouldn’t offer that if they didn’t like what I was doing,’” she says.  She slowly increased her income over time, which helped pay off her debts.

Make a to-do list.  Justice wrote down what she wanted, including paying off her debts, along with mini-goals that she knew would help her get there.  One was to start saving small amounts of money; if she made $100, she would put away $5.  “When I started making an actual plan is when I started to see changes,” she says.

Today, Justice has paid off all of her debt except for student loans – and she hopes her story will inspire others do the same.


I hope this article is inspiring to anyone out there who may be reevaluating their financial future or starting anew.  Have a great rest of your week!

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Palmer, Kimberly (May 9, 2015) How to start over financially. MSN Money via U.S. News & World Report. Retrieved May 12, 2015, from

Post Tax Season Tips for Business Owners

First, we would like to thank all of our wonderful clients for another successful tax season!  Without you we would not be the successful firm that we are today!

Now that the fog is starting to clear from the post Tax Day haze, and a little time off may have been taken, finding an appropriate blog post was a little baffling.  For many of us our 2014 taxes are filed, signed/sealed/delivered.  For others they are in the extension phase, but that is beside the point.  I am left sitting here thinking, now what?  What could I share that may be of benefit, when a majority of us will not even think twice about our taxes until the beginning of next year?

The only thing that really came up pertains to businesses.  Year round, businesses have to weigh their tax liability.  So when I found this article on FOX Business related to businesses, and what to do post-tax season, I thought it was the best article for this weeks post.

Post Tax Season Tips for Business Owners

Hopefully, you made it through the tax deadline content with the results of your business income tax return.  But just because April 15 is in the rear-view mirror, that doesn’t mean you should stop thinking about taxes.

It’s time to consider the current year and your financial situation with an eye to your 2015 income tax liability.  Here are some tips to help you get and stayed organized:

Update your books. Business owners need to keep a contemporaneous set of books.  If you use accounting software, post transactions daily so you can closely monitor your progress.

It’s easy to maintain an accurate checking account balance by paying bills through your accounting software, entering all deposit information on a regular basis and reconciling your bank accounts.  It also makes it easier to check your profit or loss for the year, compare figures to previous years, and keep an eye on cash flow.  And if you need to provide a current profit and loss to a lender or someone else, it will be immediately available.

Midyear review of books and tax planning. By June or July you should be considering a tax planning session with your tax pro.  At the meeting you should provide a profit and loss and balance sheet, discuss your business plans for the year and comment on any business trends you are noticing that will affect your tax liability for 2015.  Your tax pro should be able to work with you to find some creative ways to minimize your tax bill.

Fund a retirement plan. If you do not have one in place already, consider opening a retirement plan not only to defer income taxes, but to provide for your future.  Receiving only Social Security benefits is not a viable retirement savings plan.  Unless the government acts, the Social Security program is on a course to bankruptcy.  For more information consult Retirement Plans for Small Business

Equipment and other capital purchases. These transactions are normally depreciated over the useful life of the asset purchased.  However, Section 179 deduction in which the taxpayer is allowed to write off the entire purchase price and bonus depreciation are available to help a business owner minimize his tax liability.  Check the rules and regulations in this publication: Depreciating Business Property

Adjust estimated tax payments. Perhaps when you filed your 2014 tax return you were left with a large tax liability or a large refund.  Either way, you need to take a close look at how you are calculating your estimated tax payments.  Remember that estimates are just that: estimates.  So as the year progresses, you need to keep an eye on your bottom line and adjust your estimates accordingly.  There’s nothing worse than overpaying when you could better use the funds for cash flow to keep your business alive.  Well, maybe there is something worse: underpaying and ending up with a huge liability that you had not planned for.

Employee benefits. Employees are the backbone of a well-run business, and when a business owner adequately rewards his employees he gets loyalty and hard work in return.  Not only that, the employer can enjoy a nice tax savings as well.  When you add benefits like health insurance, group term life insurance, child care subsidies, and other pre-tax benefits to an employee’s pay, you save money because you are not required to pay the employer’s share of payroll taxes on this form of pay.  So rather than just giving a raise to an employee, provide her with a fringe benefit that she will find useful.  See Employer’s Guide to Fringe Benefits for more information.

Thank you all again so much for such an incredible year, and please let us know if there is anything that we can do for you!

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Lee, Bonnie (April 27, 2012) Post Tax Season Tips for Business Owners. FOX Business. Retrieved April 27, 2015, from

Need more time to file your 2014 tax return? Just ask for it

We hope that everyone had a great Easter weekend, and/or you are having a great week of Passover spent with loved ones!  Tax Day is Officially less than a week away… insert sweating, teeth grinding emoticons.  We are right there with you!  I am sure like me, many of you are thinking “there is no way I am ready to file right now!”  Luckily there is something called an extension!

I have recently moved & am trying to settle the new nest.. I quite literally just got my home wifi up & running today, after a week-plus without (I have been very guilty of hijacking wifi whenever possible).  Needless to say, my attention has been a little diverted as of late.  So I am most definitely having to file an extension.  As per usual I hit the usual resources for weekly blog inspiration, and of course found this lovely treasure on our resource page.  I am sure you have guessed it, it is about how to file for an extension.

Need more time to file your 2014 tax return? Just ask for it

If you need more time to file your 2014 income tax return, you can get an extension — and no explanation is necessary.

You may have a very good reason for wanting more time to file your 2014 individual income tax return.

For instance, you might want to hold off funding a retirement plan such as a Keogh or SEP until you can save more money.

Perhaps you’re waiting for a tax form from a trust, a partnership, or an S Corporation. Or maybe you’ve just been busy.

It doesn’t matter. Whatever the cause or motivation, you can usually put off filing for up to six months beyond April 15.

That means you could have until October 15, 2015, to finalize your return — assuming you follow the rules.

Here’s what you need to do:
• Estimate your total tax liability for 2014, subtract what you’ve already paid in withholding or estimated payments and remit most or all of the balance, and
• File an extension request form (generally Form 4868 for an individual return) by April 15.

You can file the extension request form electronically, by phone, or by mailing it to the IRS. If you owe taxes, you can pay with an electronic funds transfer, your credit card, or a check.

Requesting an extension for your personal return also gives you additional time to file a gift tax return for 2014. The gift tax return extension is automatically included. You don’t even have to check a box. But if you owe gift tax (or generation skipping transfer tax), or are requesting an extension only for a gift tax return, you’ll need to use Form 8892.

One more quirk: If you live and work outside the United States, you may qualify for an automatic two-month extension of time to file without having to send in a form.

If you have special circumstances such as military service, or think you might have difficulty paying the tax due with your extension, please contact us. We can help you work through the rules.

We hope you are having a great week & please let us know if there is anything we can do for you!

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Harvey & Caldwell, PA April Online Advisor


Be prepared when applying for a business loan

Good morning everyone!  Happy Spring!  I know that many of us thought this day would never come!  We are so ready for the warmer weather & to start seeing the flowers bloom.  Now that it is officially spring, it is also less than a month before Tax Day is here.  As we are wrapping up the finances of this last year, we are also beginning anew for this year.

Spring represents new beginnings.  As I was pondering what we could share with you this week I was reflecting on what new beginnings I am looking forward to for myself, my family, loved ones.  A dear friend of mine is launching a new business, her kitchen opens in less than two weeks, it is kind of a big deal.  Her new beginning for this season, for life.  While most of us are not embarking on such an extreme new beginning, her process brought me to a topic that has been one of our business tips of the month, which is how to get a loan for a new business.

As a business owner, & watching my friend go through this process, having to create a business plan to show potential investors etc., I thought it could be helpful for someone that is launching a new business to have an idea of what it may take to convince a lender to give your business some capital.

Be prepared when applying for a business loan

Often small businesses must rely on debt to launch operations during crucial start-up years, expand into new markets, or weather economic downturns.  But getting approval for business loans can be a discouraging process.  Understandably, lenders are trained to be skeptical.  They look for potential risk — risk that the business may not survive or the loans won’t be paid back.  One of your main tasks as a business owner is to convince lenders that your company is financially sound and those risks have been considered and mitigated.

How do you make a convincing argument? Be able to sell and support the following three “talking points”:

You and your partners are a good risk.
Lenders seek assurance that your team has the capacity to carry out a solid business plan.  They’ll want evidence of strong management skills and real life experience in your company’s industry.  Assuage their doubts by demonstrating that you and your partners have paid back loans in the past.  Get a copy of your credit report and make sure to correct any errors before applying for a loan.  If your firm has been operating for a while, consider getting a credit report for the business as well.  Once you receive the loan, follow through. That way, you’ll have a solid repayment history to show potential lenders next time around.

The loan amount makes sense.
Not too much, not too little.  Average loans offered by the Small Business Administration run about $300,000, but they can range from micro-loans of $5,000 to guaranteed loans in the millions of dollars.  Estimating the size of the loan will depend on its expected uses — equipment, real estate, software development, and so on.  Underestimate your financing needs and the company may deplete working capital too soon. Take out a loan that’s too big, and you may run into cash flow problems when it’s time to pay off the debt. So take a hard look at the business reasons for the loan and associated financial projections.

You have “skin in the game.”
Lenders want security. Should your company run into unexpected difficulties, lenders want to know that collateral supporting the loan is sufficient. Personal and business assets — everything from money in the owner’s bank account to equipment on the warehouse floor — can provide that assurance.

Please let us know if you have any questions &/or need to schedule an appointment to discuss your taxes/financial planning.  Have a wonderful first week of spring & to your new beginnings!

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

Harvey & Caldwell, PA March 2015 Business Tip of the Month


Energy Tax Credit: Which Home Improvements Qualify?

Happy March! I know many of us are ready for the spring weather to return! We are beyond busy as can be, as many of you can imagine.

So many people are trying to be more green, & just save money on energy costs. When I saw this article it struck me that everyone may not know that energy upgrades on your home could result in tax credits, so I thought we should share it with you.

Energy Tax Credit: Which Home Improvements Qualify?

Taxpayers who upgrade their homes to improve energy efficiency or make use of renewable energy may be eligible for tax credits to offset some of the costs. As of the 2014 tax year, the federal government offers two such credits: the Residential Energy Efficiency Property Credit and the Nonbusiness Energy Property Credit. The first credit is good through 2016; the second was due to expire after 2014 (although it has been extended in the past). Claim either credit by filing Form 5695 with your tax return.

Residential Energy Efficiency Property Tax Credit

Equipment that qualifies for the Residential Energy Efficiency Property Credit includes solar, wind, geothermal and fuel-cell technology:
-Solar panels, or photovoltaics, for generating electricity. The electricity must be used in the home.
-Solar-powered water heaters. The water heated by the system must be used inside the home, and at least half of the home’s water-
heating capacity must be solar.  (Solar heaters for swimming pools and hot tubs do not qualify.)
-Wind turbines that generate up to 100 kilowatts of electricity for residential use.
-Geothermal heat pumps that meet federal Energy Star guidelines.
-Fuel cells that rely on a renewable resource (usually hydrogen) to generate power for a home. The equipment must generate at
least 0.5 kilowatts of power.

Renewable energy tax credit details

According to the U.S. Department of Energy, you can claim the Residential Energy Efficiency Property Credit for solar, wind and geothermal equipment in both your principal residence and a second home. Some gas suppliers will honor this, but be sure to verify with your local supplier. Fuel-cell equipment qualifies only if installed in your principal residence.

The credit is equal to 30% of the cost, including installation. There is no upper limit on the amount of the credit for solar, wind and geothermal equipment, but the maximum tax credit for fuel cells is $500 for each half-kilowatt of power capacity, or $1000 for each kilowatt.

For example, a fuel cell with a 5 kW capacity would qualify for 5 x $1000 = $5000 tax credit.

Nonbusiness Energy Property Tax Credit

Equipment and materials can qualify for the Nonbusiness Energy Property Credit only if they meet technical efficiency standards set by the Department of Energy. The manufacturer can tell you whether a particular item meets those standards. For this credit, the IRS distinguishes between two kinds of upgrades.

The first is “qualified energy efficiency improvements,” and it includes the following:
-Home insulation
-Exterior doors
-Exterior windows and skylights
-Certain roofing materials

The second category is “residential energy property costs.” It includes:
-Electric heat pumps
-Electric heat pump water heaters
-Central air conditioning systems
-Natural gas, propane or oil water heaters
-Stoves that use biomass fuel
-Natural gas, propane or oil furnaces
-Natural gas, propane or oil hot water boilers
-Advanced circulating fans for natural gas, propane or oil furnaces

Details of Nonbusiness Tax Credit

You can claim a tax credit for 10% of the cost of qualified energy efficiency improvements and 100% of residential energy property costs. However, significant limits apply:
-This credit is worth a maximum of $500 for all years combined, from 2006 to the present.
-Of that combined $500 limit, a maximum of $200 can be for windows.
-The maximum tax credit for a furnace circulating fan is $50.
-The maximum credit for a furnace or boiler is $150.
-The maximum credit for any other single residential energy property cost is $300.

If you did any home energy improvements this past year be sure to let us know! If you have any questions &/or need to schedule an appointment to discuss your taxes/financial planning needs please give us a call. Have a wonderful week!

All the best,

Harvey & Caldwell, PA Team

Please feel free to contact Harvey and Caldwell, PA at 913-451-4400 or visit our website as a resource for your tax & financial planning needs.

MSN Money via Intuit Turbotax. Energy Tax Credit: Which Home Improvements Qualify? Retrieved March 1, 2015, from–Which-Home-Improvements-Qualify-/INF12111.html