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Pathways Consulting
  • Home
  • Our Services
    • Tax Planning & Tax Prep
    • Accounting & Bookkeeping
    • Payroll Services
    • Small Business Seminars
    • Management Consulting
    • Business Development
  • Quickbooks Services
  • About
    • About Us
    • Our Founder
    • Our Owner
    • Our Team
    • Privacy Policy
    • Terms Of Use
    • Ethics Statement
  • Contact
  • Blog

Our News and Events

Your Retirement Plan and the CARES Act

6/2/2020

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Retirement funds and how to care for them have been a hot topic during this pandemic. For some, it's been easy to leave them untouched. For others, retirement may no longer be an option. But with the creation of the CARES act, some incredible tools have been introduced that can help you maintain and save your retirement funds. 

Hello Summerville! As you read this, we hope you continue to be safe and healthy. It's been nice to come to work every day and see a sense of normalcy in our incredible town. Let's keep it up! It is very clear to everyone that this pandemic has affected our finances in more ways than one. One of the many unsung woes during this time has been retirement plans. The CARES act of 2020, the act that has supplied us with our stimulus checks and other resources, has also been geared towards helping retirement plans stay alive. With the unemployment rate being so low, the difficulties of getting unemployment, and the need of making it through financially has put pressure on retirement plans. Many are making the decision of taking out their funds because it is necessary.

There are now options that can help you get economic relief that won't require you to decimate your retirement plans. Thanks to the CARES act, new changes have been put into place to help support those with retirement and IRA plans who are dealing with the effects of a very flimsy stock market that continues to fluctuate. With these new adjustments under the cares act, retirees are allowed to pull out as much as they would like from their retirement plans, but you don't have to if you don't want to. If you do leave your account alone for the next year or so, it will give you the benefit to recover from this flimsy market. There is a benefit to leaving your benefits alone. 

These changes and opportunities are groundbreaking and will help you save your retirement and IRA while still supporting you financially now. Before the CARES act, withdrawing from your IRA and your retirement plan came with some serious repercussions. But now, that has all changed. 
  • The CARES act is now letting 401(k) participants take out a loan of 100% of the amount they have vested or $100,000. Whichever option is less. The act has also extended the loan payment back into the 401(k) by a year, giving participants up to 6 years to pay back the loan. There will also be no loan payments made in 2020.
  • Borrowing money from your 401(k) can be better than taking out a personal loan or a new credit card and amassing a ton of credit card debt. even though you will have to pay back this loan, you are paying it back to your retirement account. You are borrowing money from yourself, and paying yourself back. 
  • Thanks to this extra year you have been given to pay back your 401(k) loan mean you aren't getting anything taken out of your paycheck this year for your 401(k). This will give you a little more money now, helping with reduced hours or being furloughed. 
  • Up to $100,000 can now be withdrawn from a retirement fund. Those pulling out this money will also be exempt from the 10% penalty tax that comes along with withdrawing funds if you're under the age of 59 and a half, all thanks to the new coronavirus distribution. This distribution is available if you or your spouse has been diagnosed with Covid-19 if you've been laid off, if your work hours have been reduced, or if you had to go into quarantine. These funds will be distributed to you over a three year period. You can also get this distribution from your IRA, which usually doesn't allow plan loans.
  • The due date for contributions to IRAs and retirement plans has been extended to our new tax day of July 15th. 
  • Much more! 

Allowing people to tap into their retirement accounts and giving them a few years to pay it all back is huge! These changes are providing financial assistance now from the money that is already yours, while still helping you protect and pay back into your retirement. It will still guarantee that you have retirement funds when the time comes to actually retire. Make sure to chat with us about your next steps when it comes to making these choices, even as great as they are. Make sure to include your financial advisor when making these decisions, too. They will be able to walk you through the best benefits available to you and what is going to be the most cost-effective way if you'll need to pay back these loans. They can also walk you through how to keep your retirement plan intact. 

Don't forget, friends! If you're looking for the best tax accountant in Summerville, the best tax services in Summerville, the best Quickbooks services in Summerville, the best IT services in Summerville, and the best payroll services in Summerville, we are still here for you. Tax season may be over for some and just starting for others, and we will be here for you no matter what!
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The Current State of Employee Retention Credit

5/19/2020

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With the world as we know it changing every day, we have been trying to stay on top of what's happening to help our clients and ourselves. We want to use this changing knowledge to protect our finances, our employees, to know if are eligible for assistance, and how to help our clients navigate through these strange times. Today we are going to be talking about Employee Retention Credit.

Hello, Summerville! We are so excited to see our beautiful town get back to some sense of normal. Everything about our daily and professional lives continues to change, but we are relieved to see that individuals and businesses continue to move forward. One of our main focuses these past two months has been how the current pandemic is affecting our finances. There has been a lot of help thanks to tax day being pushed back, the stimulus relief fund, and the CARES act. Each has seen its ups and downs for individuals and small businesses, bringing a mixture of relief and frustration.

Most of the financial help that we hear about day to day is that for personal finances, but businesses of all sizes have needed just as much help through these difficult times. Many have been required to operate at 50% capacity due to safety protocol during the pandemic while others have been completely shut down after they were deemed nonessential. With the signing of the stimulus relief package and the CARES act, businesses of all sizes were put into consideration. Small business loans and other forms of relief were immediately put into action, although their first big wave was not received well nor handled well.

Just like you as an individual, businesses have been on top of filing and working towards a way to help their companies survive so their employees have a place to come back to when this is all over. Most employers who were able to apply for any kind of assistance did so in March, but there are still opportunities and things to apply for if your company hasn't already. In this blog, we are going to be talking about one of these forms of assistance that is still available to businesses, and that is employee retention credit.

WHAT IS IT?
You may or may not be familiar with this term or what kind of help it provides. This is a business relief provision that encourages employers to keep employees on the payroll, even if they're not working. It helps provide relief to unemployment offices to limit the number of people applying for unemployment. It was also created to help guarantee that employers will have returning employees once they can open up again. Thanks to the creation of the employee retention credit, the government will reward your company for keeping your employees on your payroll and for deciding to choose this assistance. It is refundable tax credit taken against certain employment taxes that can equal up to fifty percent of an employee's wages that you, as an employer, are still providing. The tax credit is fifty percent of up to $10,000 in wages per employee that has continued to be paid by the employer. This means that your company can be awarded a $5000 tax credit per qualifying employee. This was created as a business relief provision. The money your company will be receiving is a refundable payroll tax credit for qualified wages that will be paid or have been paid to your employees between March 13th of this year until December 31st of 2020.

ELIGIBILITY
You and your company are eligible if you have been directly affected by COVID-19. If you have been forced to work at half capacity due to safety precautions, or you have been forced to shut down entirely because you are a nonessential business, you are eligible. No matter the size of your company, you are still eligible. Your company is eligible for this tax credit if your gross receipts for this current quarter are less than what they were in the same quarter this time last year. You are NOT eligible for this tax credit if you are a governmental employer, or if you are self-employed or a small business that has taken small business loans or other small business loans created to help with issues caused by the pandemic.

WHAT TO KNOW
Once you have decided to pick this type of relief, you can begin claiming it right away by reducing your payroll taxes sent to the IRS. If it ends up that your tax credits exceed your payroll taxes, you can ask for a refund directly from the IRS. If your company has over 100 employees, the only wages that can be obtained are of those who were full time and are not working right now. If you have under 100 employees, you can claim all of your employee's wages regardless if they are working or not. Wages up to $10,000 can be claimed, and this does include how much your company pays towards health insurance for each employee. Since you can claim 50% of this $10,000, the max credit you can receive is $5,000 per employee. The tax credit will be repaid to you after subtracting your share of your employee's social security taxes, and it will be treated like you overpaid your taxes, and it will be returned to you.

THE FUTURE
In comparison, the Paycheck Protection Program (PPP) was also created to offer similar benefits to businesses. You can't apply for both or receive benefits from both, you have to pick one or the other. When deciding which is best for you and your employees, always pick the aid that will help you and your employees the most, not one or the other. Since the applications for the PPP were suspended on April 17th of this year, this will now dictate your choice of what is available to you and your company. As the country slowly begins to reopen, pay close attention to how this will affect your business. You may be able to go back to work at full capacity, and you may not. There could potentially be more aid coming, we will just have to wait and see what the coming weeks will bring. If you and your company have been unable to receive any kind of benefits, keep your eyes open for this opportunity.

These have been difficult and confusing times. You aren't wrong in feeling overwhelmed and confused. We where are here to support you, Summerville. You are not alone in your fight. Also don't forget, if you're looking for the best tax accountant in Summerville, the best tax services in Summerville, the best Quickbooks services in Summerville, the best IT services in Summerville, and the best payroll services in Summerville, we are still here for you. Tax season may be over for some and just starting for others, and we will be here for you no matter what!
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Preparing to Recover from a Pandemic

5/1/2020

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Even though the curve hasn't flattened as much as we'd like, and we've spent a lot of time focusing on staying safe at the moment, it's time to start thinking about the future. Your company is going to overcome all of this, and we are going to talk about how!

April was gone in a flash wasn't it, Summerville? Time has a very strange and unique way of passing. It's been hard keeping the days in order. Thankfully, working from home or with a small staff in our offices has helped us keep track. Can you believe that tax day came and went with so little attention this year? That's right! Tax day has officially been moved to July 15th! If you haven't paid and filed your taxes yet, that's ok! You still have time to do so. But, we do recommend filing your taxes sooner rather than later. This will help with refunds, getting your stimulus checks, and possibly speeding your small business loan applications up. Do what you can for your small business now to help your company in the coming months.

Although things are still unknown in the current market and our personal lives, it's time to start thinking ahead. We've spent our last few blogs sharing tips and suggestions on how to keep your employees safe, how the pandemic might affect your small business, the realities of your stimulus checks, but now it's time to start preparing for the beyond. It's a heavy truth that life as we've known it could be very different after all of this settles. But, we still want your company and the future of your company to be strong and prosperous. So, let's be hopeful and work towards that, together. As the best tax accountant in Summerville, we hope these tips and suggestions help you as we move forward in this very strange and uncharted time. 

All of the financial help and small business loans that have been created and promises may or may not come through for your company. Some companies have received these benefits, while some might never see a cent of help. It's constantly changing, and we aren't sure what these new changes could or couldn't mean. We are following the news just as closely for these updates. Hang in there. This pandemic has affected every industry, and the best way to get through this is to stand strong and to support one another. We are here for you, Summerville. Take these tips to heart, they could help you in the long run.
  • Keep Working! While some of you have shut down, have had to put employees on furlough, or even let some employees go, keep marching on. For those who are working from home or waiting to head back to work, keep working on those leads and prospects. Almost everyone is at home, so why not take the time to follow your leads, stay in touch with prospective clients, and keep researching and learning about the market and demographic around you? It might seem like the time to abandon the leads and connections you were working on right before all of this happened, but keep thinking about the big picture. When we do get back to business, you'll want to be right in front of your prospect's mind. Sticking with them and being supportive during this time can help them depend on and choose you after this. 
  • Keep your clients in mind! Use this time to stay connected with your clients. Don't just use your social media and advertisement platforms to shove sales in their faces. Check in on them, support them, and appreciate them for sticking with you. They're the reason you've made it to where you are today. Also realize that just like you, their needs have drastically changed, as have their financial situations. Are there new ways your company can provide something new and exciting to them now? Can you change your products, make special offers, or even offer a few special free tips and services that they could benefit in the moment? Supporting and nurturing the relationships you have with your clients now can help guarantee their loyalty later down the line when this is all over. 
  • Change up your advertisement! We rely on social media, TV, radio, and print to keep our companies alive. But now, can you think outside the box to connect to your audience in new ways on these channels while we are all at home, missing our normal schedules and interactions? Are there new ways you can deliver your products and services? Can you deliver them right to your client's door? Can you offer a delivery service through popular apps like Postmates or DoorDash? Can you move your products and services online so they can still be accessed by your audience from the safety of their homes? This can keep your company open and running now, help to avoid debt and other financial difficulties in the future, and help keep your clients happy. These changes can help make all of us feel normal and connected to the world around us. 
  • Get stocked up! When this all does turn around, can you imagine how business will flourish? There are so many stores and services that have been marked nonessential or who have to shut down due to the effects of the situation. This could be very scary and devastating now, but it could lead to a boom in business once your doors open again. Your customers are just waiting for their lives to go back to normal, and to get the things they've been missing. Make sure you're going to be prepared for this huge push. Make sure you have a staff ready to help with this boom both online and off to help with this transition and the huge demand coming your way. Also, make sure you have enough product in stock. You want to make up for lost time and to not disappoint your customers. Plus, this will help keep you ahead of the game, ahead of your competition, and help get your finances under control. 
  • Look for that extra money! Make sure you do apply for the small business loans and assistance that is starting to pop up and become more and more prevalent from the federal and local governments. Please reach out to us if you need help doing so, or have questions about how best to do this. Look into Amazon's Neighborhood Small Business Relief Fund, or other locally-based foundations created to help businesses like yours. Use your social media platforms and set up a GoFundMe Small Business Relief Initiative or look into Facebook's Small Business Grants Program. All of these programs are set up to help you now and for the future of your company. There is nothing wrong with taking advantage of these opportunities, that's what they're for! 

We understand your concerns and worries. We hope this list inspires you to keep working and to keep your hopes up. We will get through this and will continue to work hard together. Also don't forget, if you're looking for the best tax accountant in Summerville, the best tax services in Summerville, the best Quickbooks services in Summerville, the best IT services in Summerville, and the best payroll services in Summerville, we are still here for you. Tax season may be over for some and just starting for others, and we will be here for you no matter what! 









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The Reality of Stimulus Check Scams

4/17/2020

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During one of the worst times in recent history, scams should be the last thing we should be worrying about. But, the truth of the matter is that new scams surrounding the stimulus checks and government bailout programs for small businesses are starting to come to life daily, and are more powerful than ever before. 

Almost all of us have been anxiously awaiting the financial relief checks since the approval of the COVID-19 Relief Bill was passed. When will they get here? Who will receive them? How much will you get? On top of all these questions its a sad fact to share that during this terrifying time when we should all be standing together, stronger parties are trying to take advantage of those who have been the most affected by this devastating pandemic. Following in the footsteps of our recent blog about social security scams, we wanted to do a followup blog on the very real reality and the possibility of scams and frauds appearing right now. They could look like the relief checks, the key to getting your check quicker, small business loans, loans to help out larger companies, and even promising the cure for the pandemic all in exchange for your personal information. 

Waking up every day to the news right now is difficult. The unknowns are overwhelming and the lines to get toilet paper are still ridiculous. In this time that has brought so many of us together, it is almost impossible to think that yet another attack could be upon us. While many are still working or now working from home, the hauntingly large numbers of those who are now facing unemployment due to the coronavirus are staggering. This is leaving thousands upon thousands of people without a paycheck, unable to provide for their families or even pay their simple bills. Businesses, even if they are still operating on a very small level or have been forced to close or made the conscious decision to close, are also losing money by the day. When the news came that the stimulus package had been approved and relief checks would soon be on their way, a collective sigh of relief was felt among all of us. New small business loans and other relief options for companies are now in place as well. We all will slowly be getting back on our feet, in very small steps one way or another. But, while we wait for these checks, scammers could be and are now rearing their very ugly heads saying that they have your funds and to receive them you must supply them with very personal and private information. Let us stop you right now, and say that is NOT how the stimulus checks will be handled. 

You, the American citizen, don't have to do anything or file any kind of paperwork or to receive your stimulus check. The economic impact payment will automatically be deposited into your bank account that was connected to your 2018 and 2019 tax returns. Even if you have received your tax returns in the past as a paper check, the IRS will still deposit the funds into the account they have on file for you automatically. They will also calculate the amount you need based on your income over your 2018 and 2019 tax returns and your personal need. You won't have to do any calculations or send in any kind of paperwork. The IRS will not be contacting you in any way. The IRS did just announce that they will be releasing a brand new website that will allow you to see the status of your stimulus check when it will arrive, and it will also allow you to check the bank account or it is headed to. If there is a problem with the bank account number, you will need to change that right away on the IRS website. The IRS is making updates to their website almost daily, so if you have any questions make sure you visit their website. 
  • Who and How Much? 
Now the big question is who will be receiving these stimulus checks and what kind of amount could you be looking forward to? 
  • Individuals who make up to $75,000 and married couples who file together who make a combined $150,000 a year are automatically eligible. 
  • For individuals who make $99,000 a year or more and joint-filing couples who make $198,000 or more are not eligible. 
  • For those individuals who make between $75,000 and $99,000 a year and married joint filers that make between $150,000 and $198,000, will receive $5 less per $100 they make.  
  • Those who receive social security and railroad retirees who do not file a tax return are also able to receive relief funds and will not have to file a return for receiving this money. 
  • Payment can be up to $1200 for each individual and up to $2400 for married couples filing jointly. 
  • Married couples can also earn up to $500 for each child they claim on their taxes. 

  • Scams on the Horizon
With all of that being said, with all of this new information being released by the IRS every day and everyone needing this money, this is when the scams begin. What could a hacker or scammer look like in this situation? 
  • The IRS will NOT contact you over the phone. You will not receive phone calls or text messages from them. If you do, these are scams. Even if they push you to give away your information to receive your payments faster or offer you the cure to the coronavirus (which sadly does not exist yet) do not give way your bank account number, debit card number, PayPal information, or anything of the sort. Do not click on any links you receive in text messages promising the same information. Hackers can get into your phone once you open these links, and get the same information they need to break into your bank accounts, and so on. 
  • The IRS will not be emailing you about your payment or faster ways to receive your money. DO NOT open any links or emails about receiving your checks. These links can give hackers access to your computer and all of your personal information. 
  • The IRS will not be sending you your relief check through the mail. If you receive a "check" in the mail that you have to call to activate or deposit, this is a scam.
  • Please note, it will take some time for the IRS to calculate who is receiving what and when. Please be as patient as possible. 
  • Do not engage with these scammers in any way. Hang up right away and delete any text messages and emails immediately. If you have been contacted by one of these scammers, please alert the FBI at www.ic3.gov right away. 
  • These emails or letters could look like they are from the CDC or the World Health Organization. No funds are coming from there. They are looking for your donations and support. 
  • Watch out when donating to COVID-19 related charities. Always make sure they are legitimate charities. Fake charities do exist out there and are looking to steal your money. 
  • Beware dangerous or fake websites promoting that they have the real truth about COVID-19, real updates, or a cure, and only allow you to access this information if you provide them your banking information or to pay for it. That is also a scam. 

We hate that these scams and schemes are very real right now. Since they are, we wanted to make sure that you are on high alert. All of these warnings also apply to small businesses and companies receiving financial support during this time. Please take comfort in the fact that the Department of Justice is forming a legal and integrative response to deal with these frauds. The US Attorney General's office has also developed a special task force along with appointed COVID-19 fraud coordinators to help deal with this situation. Here in the Lowcountry and throughout the state of South Carolina, our District US Attorney Peter M. McCoy Jr has also stated that his office and the department of justice are making this type of fraud a priority. 

Scary times can become scarier. But, we are here to help all of you through it. Stay alert, stay safe, and stay home. We will get through this Summerville, we know it! 

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Working In New Spaces

3/30/2020

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The coronavirus has changed the way we live our lives. It has changed our daily schedules, where and how we work, and has changed the face of education for our children. For parents working from home for the very first time while their children in school are also working from home, the landscape of living and working together has been altered. What does this mean for parents and their children and how can they be the most successful in these times of change?

So much has changed within the last few weeks since our last blog post about how small businesses and corporations need to operate during this time of crisis. It continues to change the work world so much, that we wanted to follow that blog up by discussing just how much COVID-19 is changing and affecting the lives of everyone in the working world down to the youngest of your family. One of the biggest reliefs and changes during this time is the 90-day deferment on taxes for everyone, allowing both individuals and corporations to pay and file their taxes on July 15th instead of April 15th. But, with that relief, comes a bit of a struggle. Many of us are working from home for the very first time and with children our children that are school-aged or younger.  Going from the office to our home offices, kitchen tables, or couches has been a huge shift, especially if you're working alongside your son or daughter as they are virtually taking classes and sending in assignments in brand new ways themselves. Thankfully, you don't have to worry about your small business or corporation meeting tax deadlines for a few more months while you're getting adjusted. The biggest adjustment is working from home, being productive, and trying not to drive one another crazy!

As COVID-19 changes the guidelines on how to work, we wanted to break it down to the individuals affected by these huge changes and to share some tips and suggestions on how to successfully make this transition productive both to your company and to your well being. Without the latter, your work and productivity could suffer. So, let's get to work!

Every family, personal work space, and your job at hand is unique and different. Through this unknown time, you'll have to find what works best for you. These suggestions might be the perfect solution to your learning curve, or they might be the complete opposite. Take these as stepping stones, and continue to see what works for you and your family. In the end, whatever works for your family is the right way. There is no right or wrong way, there will just need to be a lot of trial and error until you reach a comfortable level of living. Hopefully, by then, life will be back to normal, or as close to it as possible!

TRACKING TIME
One of the most consistent things we have seen to be successful for working parents and their children is to stay on schedule. The key is to create a schedule for this new way of living and to stick to it. This applies to both parent and child. All of this will depend on how old your child is and what their needs are, but living as consistently to your life before moving home is very important. Begin by waking up at the same time, get ready and dressed for the day, and eat breakfast at the same time. The temptation to sleep in, stay in the same PJs for days and eat whatever whenever is going to be a huge temptation. Don't fall into that trap! We aren't saying you need to get dressed to the nines or dress your children for picture day. The key is to change out of your PJs every morning and into another outfit that makes both you and your kids feel productive and normal as possible. Then, we recommend creating a schedule for your students for the whole day, not just during school hours. This will help them stay adjusted to their normal school day, stay on top of their expectations of getting homework done and studying completed, and allocate their free time. This way their grades don't drop while they are spending all of their time watching TV, playing video games, or on their phones. Keep them on a schedule that will create your workday too, one that allows you to stay close to your schedule too. For our parents with young children, keep them on a schedule as much as possible and one that is as close to what they have been living with. Take advantage of nap time, quiet playtime, and lunchtime as your work hours. You might need to get a little creative, and that's ok!

NEW RULES
It will be very important to sit your family down and talk about what's happening in the world and what these changes mean for everyone. The situation will change expectations, free time, and it will also mean spending all of your time together during work and play hours. You will also need to communicate with your boss, employees, and colleagues that they might need to be more flexible because of your new work situation with your children. Express that your children could walk into a work call or video meeting at any time, and you might need to get up and leave to answer an emergency or a baby crying at any time. If anything, mention this often so it is never a surprise and not something that is forgotten by anyone. This is also the time to set boundaries with your kids. This might mean allowing them more TV, video game, and screen time to give you more space and time to get work done. If that is the case, explain to them that this extra free time is a treat and that everything will return to normal once work and school go back to their normal schedule. Set boundaries, especially for your school-aged children, and let them know when they can come into your work space, and when they can only come in when it is an absolute emergency.

SAVING TIME
During this crazy time, create a system that allows you to work and allows you to still be a family. Take breaks together from work and school to exercise together, take a car ride, or walk the dog together while still practicing social distancing. When work and school are over for the day, make sure they are over for the day. Separate work from play with the whole family, unless you have to finish a job or a project. Keeping regular dinner hours, family game or movie nights, and beyond are very important. Spending time together as a family is very needed. But, allotting yourself adult time is very important as well. It is also important to parent as a team and juggle these new schedule changes and learning curves together. Share the normal household tasks like you never have before. Switch places creating the daily schedule, serving as a teacher for the day, and even switch giving your partner the night off. Allow your partner to not have to worry about household chores or the necessary grocery trip if they're slammed with work, and let them repay the favor to you when you're swamped with work. You can even switch shifts throughout the day, whatever works for you!

This is an unknown time full of uncharted territory. Maintaining a sense of balance, normality, and regularity is the key to staying productive as a business owner and the head of a successful family. It may seem impossible at first, but keep working. You will figure out what works best for you. Remember to stay smart, keep following the WHO guidelines, and to wash your hands!

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Watching the Road

2/28/2020

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Every year tax law changes ever so slightly. This can affect big payments, what you can and cannot pay on, and goes all the way down to determining how much you can and cannot write off down to the half-cent. As you are preparing for this year's tax season and tax write-offs, you still have to keep 2020 in the back of your mind. The moment you drop off your taxes for 2019, 2020 will be right there ready to become the center of attention. 

We are a little over two months into 2020, and inching closer and closer to tax day. How are you feeling? Have you already submitted electronically? Are you still trying to tie up loose ends and gather all of your paperwork? No matter where you are in your tax journey at this moment, it's not hard to admit that tax season can be difficult. It takes time for any size company to gather paperwork and get everything in order, to make sure you have everything to prove your write-offs, and that you're writing off everything you can to hopefully get a good chunk back in return. Just like any tax law, how and what you can write off every year can and does change. It might not be a significant change, but it does indeed change every year. Just like any large or small part of changing tax law, this small dollar and cent change can add up at the end of a fiscal year. You need to stay educated be aware of these changes as best you can. If this is something you can't stay on top of, then please leave it in the hands of a professional. All of us at Pathways Consulting are here to help you with your tax needs in Summerville. Please don't hesitate to contact us! 

In this busy and stressful time of tax season, we like to stay as positive as possible, and remind our clients about the incentives taxes can bring to them and their companies. One of these positive factors is reminding our clients of what they can write off every year, and how that can help their company in the long run. One particular and popular write off that has seen some small, but serious, changes is how much in mileage you can write off per mile driven for business use, charitable use, and for medical or moving purposes. In this particular blog, we are going to be discussing the most recent changes in the mileage rate that began on January 1st of this year (2020), as something to look forward to. The mileage rate for the taxes you are currently working on or have already submitted will be a little different from these numbers. But remember, if you haven't already done your taxes, or your tax preparer is still working on them, the 2019 rates are still available and are known by all tax professionals. The importance of this blog is to give all of our clients and future clients something to look forward to and to make sure they are informed of the 2020 tax changes. For some these new milage rates will be a welcome change, for others it might be a little disappointing. 

These are the mileage rates for the use of a car, pickup truck, and panel trucks for 2020. 
  • For the use of business, it is now 57.4 cents per mile driven. 
  • For medical or moving, it is now 17 cents per mile driven. 
  • For charitable reasons, it is 14 cents per mile driven. 

Business use, moving, and medical use saw the biggest changes for 2020. Driving for business went down one half-cent, and driving for medical and moving went down three cents. This might not seem a lot, but if your company has employees driving for hundreds or thousands of miles per year, those half cents or three cents per mile that you can no longer write off can make a difference. But, at least it is still something. The amount that can be written off per mile for charitable reasons did not change between 2019 and 2020. Keep in mind that for 2019 taxes, you still have those whole half cent and three cent differences, so use those to your advantage and don't forget to write them off! 

What created and set these new tax rates you might ask? For mileage driven for business reasons, it is determined on the yearly fixed rate of the operation of vehicles. For medical and moving purposes it is based on the variable cost o that tax year. Business owners, please be warned. You can only write off the mileage for five or fewer cars used at one time. If you have more than that, only five of the car's mileage can be written off. Also, if the car has already been claimed under another deduction, then the mileage cannot be claimed as well. It has to be one write off or the other.  

While preparing for next year's taxes and planning your write-offs, there are still a few important things that you need to keep in mind. Due to changes from the Tax Cuts and Jobs Acts, taxpayers will not be able to claim a miscellaneous deduction for unreimbursed employee travel expenses any longer. When it comes to the expenses of moving beyond the gas mileage, the only time you can claim moving expenses on your taxes is if you're a member of the military and you are under orders to move. Unless you fit that description, no other write-offs about moving can be included in your taxes. 

If it's for your 2019 taxes or your upcoming 2020 taxes, please be very careful and cautious about how and what you're writing off. If this is a grey area for you personally, again, please hire a professional tax preparer to handle this for you. These small changes that happen every year in write-offs are known to them because it's their job to know all of this information. Using a professional tax preparer for any size company could save you more money and get you more in your tax return in the long run. Tax season can be a difficult time, but it doesn't have to be. We are here to give you the best tax service and help in Summerville, and our doors are always open! Keep working hard, and make sure to get your taxes in by April 15th! 
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Small Business Tax Facts (That You Might Not Know!)

1/16/2020

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We've said it once and we will say it again, tax law is constantly changing. With the dawning of the Tax Cuts and Job Act, we will continue to see changes to all levels of taxes. Taxes for small businesses are no exception to these changes. So in honor of tax season officially arriving, here are some tax facts that you might not know about for your small business! 

It's a new year, which of course means new changes in tax law. Tax season is finally here, so if you are looking for the best tax professionals to help you file and get ready for April 15th, we are the best company in the Summerville area. As you are starting to prepare your taxes for your small business, you might need to hit the books again or chat with one of our tax professionals to help you plan for these new changes and laws that you might not know about. To get you started on the right foot for 2020, here is a handful of some of the most important things you will need to think about and know when it's time to start filing for April 15th!  
  • If you are starting a small business or are new in your small business venture, be aware that taxes will most likely be one of the biggest costs for your company every year. They will be more expensive than rent on your building, your marketing campaigns, any business travel and expense, and so on. The only thing that might be more expensive than taxes is your company payroll, but all that depends on the size of your small business and how many people you employ. 
  • Don't forget that you will be paying different kinds of taxes beyond that of just federal tax. Along with tax-related costs, you will have to pay for social security, property tax, and sales tax. The time and effort you put into keeping track of all of this, keeping your write-offs organized, and the person you pay to manage everything will also be taking a bite out of your budget too. 
  • For a lot of small business owners, and you might be included in this pool, taxes are a huge worry and concern. A lot of time is spent thinking about if can you pay them? What will you be paying taxes on? Why do I have to pay taxes like this and why am I not receiving certain write-offs? How is the best way to pay them? Should I have someone else take care of my taxes for me? Am I doing it all correctly? It's a lot to think about, and you're not alone if you are worried about them. That's where our company can step in. We will answer all of these questions, ease your stress, and give you your time back to focus on your business and what you do best. 
  • Good news! Personal taxes and tax brackets have been seeing some major changes for 2020. Small business owners are also going to be included in this pool of changes. So, at the end of the day, your taxes might be getting smaller. The Tax Cuts and Job Act officially reduced tax rates for small businesses. On top of reduced tax rates for individuals, C corporations will see a 21% tax rate in the future. Partnerships, S Corporations, and other similar companies who are eligible will see a 20% income deduction! 
  • These new deductions will be very helpful in the coming months because the rate for tax preparers will be and has been going up in the last few years. Their rates have been going up over the last few years because of the sheer amount of changes to tax law. With so many changes since the Tax Cuts and Jobs act and what the federal tax changes have brought to individuals and small businesses alike, CPA's will be doing much more work than ever before. They will need to be paid more for the time and education it will take to understand, command, and stay on top of all of these changes. 

At the end of the day, some of these changes and facts might not be huge. But they will be big enough to affect your bank account, peace of mind, and how you plan on filing your taxes. It's good to know and understand that since 2018, congress has passed major adjustments to business tax laws that included a lower operation tax rate, new rules for pass-through businesses, and a tax break for some industries. It is also important to know that these changes made in 2018 are still settling and taking effect. They will be significantly affecting small businesses that work with overseas productions or individuals overseas. International taxes and regulations are a whole other beast of their own. Stay up to date on them, or work with someone who can help you change with the times. 

We are here to make your tax preparations accurate, efficient, and stress free. If any of this information made you feel stressed, call us right away. We are officially ready for tax season and are happy to help you. Until then, make sure you and your small businesses are ready for the changes ahead and at hand. Until next time stay organized, educated, and ready for tax season! 


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