In This Issue
CPA News:
U.S. Supreme Court Rules States Can Collect Taxes from Internet Purchases
Who Needs an Audit?
Giving Now or Later
5 Estate Planning Musts
A Simple Way to Save
Benefit Now, Pay Later
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Additional Updated Information
June 2018 Newsletter
May 2018 Newsletter
July 2018 Q & A

Q:I heard the new tax changes affect depreciation on business-owned automobiles. What are the specifics?

A: The Tax Cut and Jobs Act increased annual depreciation caps on passenger cars. Depreciation on both new and used vehicles acquired and placed in service during 2018 (with a bonus first year depreciation deduction) is capped at $18,000, $16,000, $9,600 and $5,760 for service years one through four. The latter cap also applies after the fourth year. Depreciation limits for business vehicles without the bonus deduction are $10,000, $16,000, $9,600 and $5,760 for service years one through four.

Q: My parents want to give a gift to my son to help pay his college tuition. Will this affect our financial aid?

A: Yes, it will likely affect what’s known as your Expected Financial Contribution (EFC), which the federal government, colleges and universities use to determine scholarships. A dependent student is expected to pay a higher percentage of income for college expenses than parents, so giving your son the money directly will likely decrease any financial aid. Your best bet is to have the grandparents make the gift to you or pay some expenses directly for the least effect on financial aid.

U.S. Supreme Court Rules States Can Collect Taxes from Internet Purchases

The U.S. Supreme Court recently ruled that states can collect sales taxes from purchases made from online retailers, regardless whether or not the retailer had a “physical presence” in the state where the consumer resided.

Who Needs an Audit?

You may know that publicly traded companies must undergo professional external financial audits, but what about closely held businesses?

Giving Now or Later

Charitable trusts are popular because they give donors a tax-advantaged way to benefit both a favorite cause or charity and their loved ones. Charitable remainder trusts and charitable lead trusts are the two most recognizable types of these trusts.

5 Estate Planning Musts

People of almost any financial means share some basic estate planning concerns, which should be addressed in written plans. Here are some tips that can help.

A Simple Way to Save

As summer approaches, many businesses begin to plan next year’s employee benefit menu. A retirement plan is typically among employees’ most desired benefits, and one of the simplest, most cost-friendly ways to provide one is the Savings Incentive Match PLan for Employees IRA – better known as a SIMPLE IRA plan.

Benefit Now, Pay Later

When companies offer employees deferred compensation in the form of “qualified” retirement plans, including 401(k) and SIMPLE plans, they offer tax-advantaged contributions and potential earnings.

Short Bits

Consumer expenditures rose 2.4% in 2016, according to the Department of Labor's Bureau of Labor Statistics.
Families saw average annual expenditures increase from $55,978 in 2015 to $57,311 in 2016. Spending increased in seven of nine categories: food, housing, healthcare, entertainment, education, cash contributions and personal insurance and pensions. Spending on transportation, as well as apparel and services, declined.

The Federal Reserve Bank of New York's February 2018 SCE housing survey showed the majority of households continue to view housing as a good financial investment, although some felt this way more than others.
About two-thirds of respondents think that buying property in their zip code is a very good or somewhat good investment, compared to 60% in 2016. In the West, 70% think buying property is a good investment compared to 56% in the Northeast.

LIMRA conducted a survey to learn how much American workers knew about their benefits, and found out they can use more education.
A little more than half of employees weren’t aware life insurance benefits could be used for any purpose, and fewer than half were aware that short-term disability income insurance generally pays for leave after childbirth. One-quarter of employees understood that critical illness insurance pays out a lump sum that can be used for anything upon diagnosis, not just medical expenses

The First-Quarter WELLS FARGO/GALLUP investor and retirement optimism index survey finds that only 20% of non-retired investors have calculated their future retirement income or expenses.
Pre-retirees were more likely to have planned their retirement activities and location.

To learn more about KVLM LLP,
visit www.kvlmcpa.com.

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