Archives for April 2013

Capitol Loss Deduction: Should it Reflect Inflation?

Over the years, the Internal Revenue Code has adjusted for inflation of many different tax incentives to help individuals cope with the negative effects of inflation. Congress selects these provisions and the annual change is driven by the consumer price index. One provision that has not changed is the capital loss deduction.

The capital loss deduction was established in 1976 and allows for a maximum of $3,000 in capital loss deduction each year, and has not changed since it was introduced. There are numerous reasons to explain why there is a cap on the amount of deductions, but it comes down to taxpayers being able to write off all losses, retaining the gain assets and defer taxation by selling them later. It would dramatically decrease the amount in federal tax revenue.

By using the consumer price index inflation calculator, in 2002, the maximum deduction would be around $9,500. Today the deduction maximum would be around $12,000, and if it was tied to inflation the maximum would continue to rise. This would eventually open up the opportunity for people to deduct all losses, or even sell at a loss and retain gained assets, which would defer taxation. This would greatly reduce the amount of federal tax revenue.

So what does this mean for taxpayers? Well, it means at this time, that the highest amount able to be deducted is $3,000. Anything over $3,000 that does not offset capital gains or deducted can be carried over to the next year. Many people argue that this system is has eroded the value of the deduction. However, the real question is can there be a regulation that would increase the amount deducted without undermining the amount of federal tax revenue?

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.


Time Management

By using time management, we can effectively manage our time to accomplish as much as possible during the day and not neglect everything else. The following are ideas that can help you manage your time better.

Phone calls are essential to your business, but they can also take up a lot of time during the day. To save time, have an administrative assistant field the phone calls. They can direct the callers to the best person to answer the questions. Set up specific times during the day to return calls. Let client know that you will return calls during your designated times, and if they want a quick response then direct them to emails.

To-do lists can help focus your attention on what needs to be done, and are a great time management tool. You can prioritize what needs to be done this week and what can wait until later. Update the list on a weekly basis to ensure that nothing is forgotten and you know what to work on for the week.

Constructing time blocks is another way to manage your time and ensure productivity. Instead of having 15 minutes here and 30 minutes there, you will give yourself an hour to work on a task and things will start getting finished. Just like blocking time to return phone calls, you can block times out of the day to see clients, work on paper work, prepare for the next clients, etc. This makes sure that you have time to do everything and give yourself generous amount of productivity time to attend to other parts of your business.

Another time saving technique is delegating tasks. You do not have to be the person to do everything. Find ways to delegate out work so that you can lighten your load to take care of the important things. It is an acceptable practice to let go of the reins a little and have someone trained to handle certain tasks that do not need to be handled specifically by you.

Our time is valuable and using it to the best advantage is in the paramount for your business. Remember you are only one person and having time to do everything will not help grow your business.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.


Tips for Getting Your Taxes Done Now

You’ve waited until the last minute to file your taxes. You know it is time to roll up your sleeves and get it done. Without being rushed to meet the April 15th filing deadline, you’ll need to set aside a couple of hours of time to file your 1040. Whether you do it on your own or allow our team of tax professionals to do it for you, the following tips will help you to get through those seemingly difficult hours and just get this done.

Updating Software and Documents

The IRS didn’t release all of the tax filing documents until late this year. To make matters worse, various tax filing programs were not set up in time to meet the changes. The IRS even detailed some types of filing while it worked out the process. The bottom line is that, before you file, you need to ensure you have the right documents or the most up to date software programs. You can get what you need at the IRS website if you plan to do this on your own. Submitting the wrong return or lacking key tax information while completing it could cost you big time. You do not want to make these mistakes.

Take Advantage of Big Deductions

One of the easiest but most often overlooked ways to get a tax break is to open an IRA. Even if you have other types of savings accounts, maximizing the amount of money in these accounts to meet the limits set by the IRS could mean more money in your pocket and less money in the pocket of the government. Let’s say you owe this year. By opening up an IRA and depositing some funds into it, those funds become a tax deduction for you. That means you save those funds for retirement (and they start helping you to earn money through compounding interest) and you don’t have to repay them to the government.


Once you sort through all of the tax documents, you’ll want to e-file rather than mailing your documents. First off, even if you owe money, e-filing is effective because it allows you to receive a confirmation that the IRS received your return. If you are expecting a refund this year, be sure to sign up for direct deposit. This will help you to get your money faster. It is also completely safe to do.
The bottom line: Don’t wait to file your taxes any longer. You also don’t have to try and do the work yourself. Contact us for tips and help getting your return in fast.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.


Looking Out for Property Tax

With any state, the majority of revenue comes from both personal and real property tax. Combined with the erosion of local tax base, many home and business owners may face higher assessed values then in past years. Some tax assessors may be too aggressive with their assessments so they can maintain the tax revenue, but it is important to keep on top of your assessed property value to make sure that you are not paying too much in property tax.

The object of property assessment is to provide fair and equitable value for each property. Most properties are assessed using fair market value. Fair market value is “the price in a competitive market a purchaser, willing but not obligated to buy, would pay an owner, willing but not obligated to sell, taking into consideration all the legal uses to which the property can be adapted and might reasonably be applied.” The property assessment is either full market value or a percentage of the market value. States then take the assessed amount and multiply it by the millage to get the amount owed in real estate taxes. This process can take place yearly, or over a mandated time, usually 3-6 years.

Determining the assessment of residential home tends to be more straightforward then the process of industrial or commercials properties. Houses are compared to other homes in comparable neighborhoods that have recently sold to determine the assessed value. Commercial and industrial properties have more variables to consider before an appropriate assessment is generated. Since there are so many variables, the chance of an assessment error is there, giving the business owner a chance for an appeal of the assessment.

Timely tracking of personal property assessment is essential to guarantee deadlines are not missed. Many only offer a brief deadline for appeal, usually 15-45 days from the assessment date. Once the business owner determines if there is a tax assessment that warrants an appeal, the appeal is filed. There are three levels to the appeals depending on the severity of the assessment. Each needs proper detailed documentation. If you think that there is a problem with your assessment then it would be beneficial to consult with a CPA firm for assistance.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.