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Will prices change due to South Dakota v. Wayfair Case?

Posted by Admin Posted on July 24 2018

       You may find a slight increase in the total of your online shopping cart in the future. Recently, the U.S. Supreme Court overruled the requirement that a retailer must have physical presence in a state in order to be required to collect sale tax in that specific state. Case South Dakota v. Wayfair brought this challenge as South Dakota believed that they lost $48 to $58 million annually because out-of-state sellers failed to collect sales tax. It is now up to the state if they require retailers without a physical presence to collect and remit sales tax. With the start in South Dakota, many states are following this tax structure. As of May 30, 2018, Iowa Governor Kim Reynolds signed an extensive state tax reform bill.  Large sellers will now be required to collect and remit sales tax even if they do not a have a physical presence in a state. Not everyone will be subject to this tax though; small sellers who do not deliver more than $100,000 of goods or services into the state or engage in less than 200 transactions will not be subject to collect sales tax. Starting in 2019, be prepared to spend a couple extra pennies while checking out online.

Article written by Jennifer Klenken in our Spencer Office


Congratulations to Alexandrea Keller, CPA in our Onawa office!

Posted by Admin Posted on July 17 2018


Alexandrea Keller, CPA was one of only 41 CPAs honored by the American Institute of CPAs (AICPA) as a member of the Leadership Academy’s tenth graduating class. Alexandrea was selected based on her exceptional leadership skills and professional experience for the four-day Leadership Academy program, which will be held from October 7-11 in Durham, N.C.


Alexandrea N. Keller is a senior accountant at Williams & Company CPA’s in Onawa, Iowa. Her responsibilities include leading comprehensive financial audit engagements, performing compilation and review services, and preparation of tax returns for individuals, corporations, nonprofit organizations and partnerships. Additionally, she prepares Medicaid and Medicare cost reports related to the reimbursement of nursing facilities.


Alexandrea joined Williams and Company CPA’s as a staff accountant in 2015 after graduating from Buena Vista University with a bachelor’s degree in accounting. She became a Certified Public Accountant in the fall of 2016. Alexandrea is currently working to obtain a certificate in data analytics from Ohio State University, and has been utilizing this knowledge as she leads the effort of implementation of audit data analytics at Williams & Company CPA’s.



The AICPA Leadership Academy was designed to strengthen and expand the leadership skills of promising young professionals while they network with a peer group of talented and motivated CPAs.

The 2018 Leadership Academy attendees were recommended by their employers, state CPA societies or both. Candidates submitted resumes and a statement explaining how participating in the Leadership Academy would impact them personally and professionally. They also wrote an essay on the topic “The future will bring significant changes to the accounting profession. What do leaders have to get right in order to successfully lead?”

Participants were selected from public accounting firms of all sizes, business and industry and consulting firms.

The 2018 Leadership Academy attendees were recommended by their employers, state CPA societies or both. Candidates submitted resumes and a statement explaining how participating in the Leadership Academy would impact them personally and professionally. They also wrote an essay on the topic “The future will bring significant changes to the accounting profession. What do leaders have to get right in order to successfully lead?”

To date, 310 CPAs have participated in the AICPA Leadership Academy, many of whom have gone on to take on leadership positions in their firms, businesses and volunteer organizations.

More information about the AICPA Leadership Academy is available online.


Williams & Company receives Iowa CPAs Month of Service Community Spirit Award

Posted by Admin Posted on July 06 2018

Williams & Company PC was presented with the Iowa Society of CPAs (ISCPA) Iowa CPA's Month of Service Community Spirit Award during its May 2018 Leadership Conference and Annual Meeting. Williams & Company is a tax and accounting firm with offices in Northwest Iowa and Southeast South Dakota.


Photo: Wes Simpson and Aaron Prewitt accept the award on behalf of Williams & Company PC, 2017-18 ISCPA president Patti Bell and ISCPA CEO Cindy Adams.


The award recognizes a team for exemplary dedication across their community through commitment of time and resources during the Iowa CPAs Month of Service event held annually in September.

The initiative is an accounting profession community service event that brings together members of ISCPA and their co-workers to make a positive impact by volunteering in the communities where they live and work.


Here is a list of things we did for our Communities:

  • We helped the City of Sheldon Labor Day Celebration with vendor setup, sale of wrists bands for the inflatables and games, tear down, clean up and drove homecoming candidates in the parade. Celebration Days are for all ages and makes for a great family outing to Sheldon with the parade, car show, arts & crafts and games/rides/inflatables in the park with food vendors. 

  • We coached little squirrel football (aka 8-9-year-old tackle football) and under 8-year-old soccer (the other football). 

  • We asssisted Camp Foster YMCA of Okoboji with multiple tasks from cleaning out flower beds, splitting and stacking wood, demolition of canvas & screen walls on three buildings, and helping with general maintenance.

  • We helped Positively Spencer Youth setup their homecoming float and walked in the parade.  Go Tigers!!!

  • We helped the Read to Succeed Foundation pass out books to 400 plus children in the first of 3 distributions during the school year.  The foundation buys brand new books for children 0 through 8th grade to own.  Studies show that second only to being read to, book ownership helps children reach their literacy goals.

  • We worked with Dive in Yankton to help move the aquatic facility master plan forward.  We helped them educate, promote, and market the concept.

  • We parked cars for an afternoon at Sacred Heart School.  The school is located next to the Clay County Fair which gives them some prime parking spots.  All the proceeds go to the school. 

  • We helped the Read to Succeed Foundation pass out books to 400 plus children in the first of 3 distributions during the school year.  The foundation buys brand new books for children 0 through 8th grade to own.  Studies show that second only to being read to, book ownership helps children reach their literacy goals.

  • We served as classroom assistants for the Preschool & K Zoo Experience from the #1 zoo in the world, the Henry Dorley Zoo from Omaha. The classes took turns learning about how animals differ from each other based on how many feet they have and how they get around. A great time was had by everyone and it was a great 5th day of school!

  • We also taught about sea turtles and sloths at West Monona for the 1st -5th grade zoo experience. The zoo staff had two other stations. One with live tarantulas and scorpions and the other station had 2 tiger skins from different climates. What an experience for those students!!

  • We read to elementary students in grades K - 2 in Le Mars and Hull. 

  • We participated in Spencer High School’s Tie Project & Professional Etiquette Skill Development project.  Junior and Senior boys received a neck tie and instruction on how to tie it.  Volunteers also taught the students other general professionalism skills such as handshakes, introductions and networking.

  • We worked shifts at multiple stands selling Nutty Bars, drinks, candy and popcorn for the Spencer YMCA at the Clay County Fair, AKA “The World’s Greatest County Fair.” All the proceeds go toward youth programing for the Spencer YMCA.

  • We participated in a Suicide Awareness Walk.

  • We participated in a University of South Dakota Showcase in Vermillion, SD with almost 200 students attending.

  • We also consult and sit on various boards throughout our communities.


About the Iowa Society of CPAs   The Iowa Society of CPAs (ISCPA) is the largest professional organization dedicated to CPAs, accounting professionals and accounting students in Iowa. We protect, enhance, guide and promote the accounting profession on behalf of our members working in public accounting, business, industry, government, nonprofit and education. To learn more, visit



Business Owners: Brush Up on Bonus Depreciation

Posted by Admin Posted on Mar 07 2018

Every company needs to upgrade its assets occasionally, whether desks and chairs   or a huge piece of complex machinery. But before you go shopping this year, be sure to brush up on the enhanced bonus depreciation tax breaks created under the Tax Cuts and Jobs Act (TCJA) passed late last year.

Old law

Qualified new — not used — assets that your business placed in service before September 28, 2017, fall under pre-TCJA law. For these items, you can claim a 50% first-year bonus depreciation deduction. This tax break is available for the cost of new computer systems, purchased software, vehicles, machinery, equipment, office furniture and so forth.

In addition, 50% bonus depreciation can be claimed for qualified improvement property, which means any qualified improvement to the interior portion of a nonresidential building if the improvement is placed in service after the date the building is placed in service. But qualified improvement costs don’t include expenditures for the enlargement of a building, an elevator or escalator, or the internal structural framework of a building.


New law

Bonus depreciation improves significantly under the TCJA. For qualified property placed in service from September 28, 2017, through December 31, 2022 (or by December 31, 2023, for certain property with longer production periods), the first-year bonus depreciation percentage is increased to 100%. In addition, the 100% deduction is allowed for both new and used qualifying property.

The new law also allows 100% bonus depreciation for qualified film, television and live theatrical productions placed in service on or after September 28, 2017. Productions are considered placed in service at the time of the initial release, broadcast or live commercial performance.

In later years, bonus depreciation is scheduled to be reduced to 80% for property placed in service in 2023, 60% for property placed in service in 2024, 40% for property placed in service in 2025 and 20% for property placed in service in 2026.

Important: For certain property with longer production periods, the preceding reductions are delayed by one year. For example, 80% bonus depreciation will apply to long-production-period property placed in service in 2024.


More details

If bonus depreciation isn’t available to your company, a similar tax break — the Section 179 deduction — may be able to provide comparable benefits. Please contact our firm for more details on how either might help your business.

2018 Tax Reform Summary

Posted by Admin Posted on Feb 13 2018

Individual Changes

Modifying the Individual Tax Brackets

From 2018 through 2025, the Act would lower individual tax rates across the board. Beginning January 1, 2026, individual rates would return to current levels. During the eight-year period of lowered rates, the Act would retain seven tax brackets for individuals, but lower the rates to 10%, 12%, 22%, 24%, 32%, 35%, and 37%.



Increasing the Standard Deduction

For 2018 through 2025, the Act would increase the standard deduction to $24,000 for married filing jointly, $12,000 for single taxpayers, and $18,000 for head of household. The additional standard deduction for the aged or blind would continue at $1,300 ($1,600 for unmarried) in 2018. 

Eliminating the Personal Exemption

The Act would eliminate the deduction for personal exemptions from 2018 through 2025. The personal exemption is $4,050 for each taxpayer and dependent in 2017.

Eliminating or Changing Many Deductions

For tax years 2018 through 2025, the Act would eliminate a number of deductions.

  • State and Local Tax Deduction
    Currently, individual taxpayers who itemize deductions may deduct the amounts they pay for state and local property taxes and income taxes from their federal income. The Act would generally eliminate this deduction for tax years 2018 through 2025. The Act would, however, include an exception. Individual taxpayers could continue to claim as an itemized deduction in an amount up to $10,000 ($5,000 for married filing separately) per year an aggregate of state and local income taxes and/or property taxes paid during tax years 2018 through 2025. Notably, property taxes incurred in a trade or business would continue to be fully deductible on a Schedule C, Schedule E, or Schedule F.
  • Home Mortgage Interest Deduction
    The Act would restrict the home mortgage interest deduction to apply to new acquisition indebtedness in an amount up to $750,000 (MFJ) or $375,000 for married filing separately. The Act would also suspend the deduction for home equity indebtedness for all taxpayers for tax years 2018 through 2025.
  • Charitable Contributions
    The Act would generally leave in place current law regarding the deductibility of charitable contributions. With the increase in the standard deduction and the loss of many other itemized deductions, however, many charitable contributions would no longer result in a tax deduction. The Act would not change the ability of those over 70 1/2 to make qualified charitable distributions from an IRA, without including those distributions in income.
  • Miscellaneous Itemized Deductions Subject to the 2 Percent Floor
    For tax years 2018 through 2025, the Act would suspend the itemized deduction for all miscellaneous itemized deductions subject to the two percent floor. These deductions include, among many others, those for:
    • Unreimbursed employee expenses (including, among many others, home office expenses, uniform expenses, travel expenses, meals and entertainment expenses, license fees, tools used for work, and job search expenses)
    • Tax preparation expenses
    • Safe deposit box rental
    • Hobby expenses
    • Investment fees and expenses
    • Legal expenses
  • Medical Expenses Deduction
    The Act retains the current itemized deduction for medical expenses exceeding 10 percent of the taxpayer’s adjusted gross income. For tax years 2017 and 2018, the Act would decrease this AGI threshold for everyone (not just those 65 and older) to 7.5 percent.
  • Alimony Deduction
    Beginning with divorce decrees signed after December 31, 2018, alimony payments would no longer be deductible. They would, however, be excluded from the income of the recipient.
  • Moving Expenses
    The Act suspends the deduction for moving expenses, with the exception of moving and storage expenses incurred by members of the Armed Forces. This suspension applies for tax years 2018 through 2025.
  • Educator Expenses
    The Act retains the current $250 above-the-line deduction for eligible educators.


Increasing the Child Tax Credit and Creating a New Dependent Credit

To offset the considerable impact of the loss of many deductions and the $4,050 personal exemption per person upon families, the Act raises the child tax credit from $1,000 to $2,000 per qualifying child for tax years 2018 through 2025. Although the Senate bill would have expanded the credit to apply to qualifying children under the age of 18, instead of 17, the Act leaves the current age limit of “under 17” in place. Thus, the $2,000 credit applies only to children who are 16 years old and younger.

The Act also provides a nonrefundable $500 credit for dependents who do not qualify for the child tax credit. This would include dependent children over the age of 16 and dependents


The Act retains current law for the following credits for individuals:

  • Credit for the elderly and permanently disabled
  • Credit for plug-in vehicles
  • American Opportunity Tax Credit
  • Earned Income Tax Credit
  • Adoption Credit


Expanded Section 529 Plans

The Act would expand IRC §529 plans to allow funds to pay expenses for K-12 private schools.

Other Education Provisions

  • Allows student loan debt discharged because of death or disability to be excluded from income for years from 2018 through 2025. 
  • Retains the current deduction for student loan interest
  • Retains the current American Opportunity Tax Credit


Alternative Minimum Tax

The Act would eliminate the corporate alternative minimum tax (AMT) beginning in 2018, but retain the AMT for individuals. The individual AMT, however, would see increased exemption amounts and phase-out thresholds for individuals through 2025. 

Individual Shared Responsibility Payment

The Act would set the Individual Responsibility Payment to $0, beginning in 2019, meaning that individuals who do not have health insurance in 2019 and later will not be liable for the penalty. The penalty remains in place for tax years 2017 and 2018.

Estate, Gift, and Generation Skipping Tax

The Act would double the basic exclusion amount for estates of decedents dying during tax years 2018 through 2025 and for gifts made during those tax years. Under the Act, the basic exclusion amount for each person would be $11.2 million in 2018 (double the $5.6 million exclusion provided under current law).

Business-Related Provisions

Corporate Tax Rate

The Act would permanently lower the maximum corporate tax rate from 35% to 21%, beginning in 2018.

Planning Note: The Act would transform the corporate tax structure from a graduated system, to a flat rate for all income. As such, some small corporations, would see an increase in their corporate income tax rate from 15 percent to 21 percent.

Lowering Tax Rates for Pass-Through Business Income

From 2018 through 2025, the Act would generally allow many individuals receiving income from a pass through business—including a sole proprietorship, an S corporation or a partnership—to take a new Section 199A deduction.

Qualified Business Income

These individuals could generally deduct 20 percent of “qualified business income,” attributable to a domestic trade or business, from their taxable income. Qualified businesses income does not include investment income, such as that from capital gain or dividends.

Wages Limitation

The 199A deduction would generally be limited to 50 percent of W-2 wages paid. However, the wages limitation would only apply to individuals with taxable income greater than $315,000 (MFJ) or $157,500 for singles.

Service Trade or Businesses

Specified service trade or businesses are generally excluded from taking the Section 199A deduction.

First-Year Bonus Depreciation and Expensing

  • Additional First-Year Depreciation
    The Act would significantly expand current cost recovery options for businesses for five years and then reduce those options through 2026. The Act would generally allow 100 percent bonus depreciation for five years for qualifying property acquired and placed into service on or after September 27, 2017. Notably, the Act provides that these first-year additional depreciation property provisions would apply to used property, as well as new property.
  • Section 179
    Beginning in 2018, the Act would expand Section 179 to provide an immediate $1 million deduction (up from $510,000 in 2017) with a $2.5 million phase-out threshold (up from $2,030,000 in 2017).

Entertainment Expenses

Entertainment expenses are disallowed; the current 50% limit on the deductibility of business meals is expanded to meals provided through an in-house cafeteria or otherwise on the premises of the employer.

Other Key Ag-Related Provisions

  • Farm Equipment Depreciation
    Beginning in 2018, the Act would allow farm equipment to be depreciated over a period of five years, instead of seven years.

Like-Kind Exchange
The Act retains IRC §1031 like-kind exchange treatment for real property, but eliminates it for personal property, such as farm equipment or breeding heifers.

Important Changes for Individuals in the New Tax Law

Posted by Admin Posted on Jan 03 2018

For individual taxpayers, the new tax law - commonly known as the Tax Cuts and Jobs Act (TCJA) - includes many expected changes, some unexpected ones and some that didn't make the final cut.

Here are the most important things that individual taxpayers need to know about the TCJA, which was signed into law on December 22, 2017. Except where noted, these changes are effective for tax years beginning after December 31, 2017, and before January 1, 2026.


Changes to Individual Rates and Brackets

For 2018 through 2025, the TCJA retains seven tax rate brackets, but six of the rates are lower than before. The tax brackets for ordinary taxable income are as follows:

In 2026, the rates and brackets that were in place for 2017 are scheduled to return.


Taxes on Long-Term Capital Gains and Dividends

The TCJA retains the current tax rates on long-term capital gains and qualified dividends. For 2018, the rate brackets for adjusted net capital gains are:

Adjusted net capital gains are net capital gains plus qualified dividends less gains required to be taxed at 25% and 28%. These brackets are almost the same as what they would have been under prior law. The only change is the way the 2018 inflation adjustments are calculated.


Individual Alternative Minimum Tax (AMT)

Despite discussion by Congress to repeal the individual AMT, the new law retains it. But, starting in 2018, the exemption deductions will increase significantly and the exemptions will be phased out at much higher income levels.

Under prior law, the AMT exposure for many individuals was caused by high itemized deductions for state and local taxes and multiple personal and dependent exemption deductions. Those tax breaks are disallowed under the AMT rules.

Under the new law, many individuals who owed the AMT under prior law will be off the hook in 2018. Why? In addition to higher AMT exemption deductions and higher exemption phaseout thresholds, the TCJA 1) limits deductions for state and local taxes, and 2) eliminates personal and dependency exemptions.


Standard Deduction and Personal and Dependency Exemptions

A big decision for individual taxpayers will be: Should I itemize deductions or take the standard deduction? Under the new law, many more taxpayers are likely to take the standard deduction, rather than itemize deductions. Why? The TCJA significantly increases the standard deduction amounts, starting in 2018, to:

       $12,000 for singles (up from $6,350 for 2017)

       $24,000 for married couples who file jointly (up from $12,700 for 2017),

       $18,000 for heads of households (up from $9,350 for 2017).

Additional standard deduction amounts for elderly and blind individuals are still allowed.

Unfortunately, the TCJA eliminates personal and dependency exemptions. (Under prior law, personal and dependency exemptions would have been $4,150 each for 2018.)


Deductions for State and Local Taxes

Under prior law, if you itemize deductions, you're allowed to deduct an unlimited amount of personal state and local income and property taxes. You also have the option of forgoing any deduction for state and local income taxes and, instead, deducting state and local general sales taxes.

Starting in 2018, the TCJA limits the deduction for state and local income and property taxes to a combined total of $10,000 ($5,000 for married people who file separately). Foreign real property taxes can no longer be deducted. However, you can still opt to deduct state and local general sales taxes instead of state and local income taxes.

Important note: The TCJA specifically says that you can't claim a 2017 deduction for prepaid state or local income taxes that are imposed for a tax year beginning after December 31, 2017. The IRS has also issued an advisory stating that prepayments of anticipated property taxes that haven't been assessed prior to 2018 aren't deductible in 2017. In addition, prepaying state and local property taxes to lower your tax bill for 2017 could backfire if you are subject to the AMT.


Tax Breaks for Homeowners

Under prior law, individual taxpayers are allowed to deduct interest on up to $1 million of mortgage debt to buy a first or second residence. The mortgage debt ceiling is reduced to $500,000 for married people who file separately. Under prior law, individuals could also deduct interest on up to $100,000 of home equity debt.

Starting in 2018, the TCJA allows you to deduct interest on up to only $750,000 of mortgage debt incurred to buy a first or second residence ($375,000 for those who use married filing separately status). However, this change doesn't affect home acquisition mortgages taken out under binding contracts in effect before December 16, 2017, as long as the home purchase closes before April 1, 2018.

So, the limits allowed under the prior law ($1 million or $500,000 for married people who file separately) continue to apply to home acquisition mortgages that were taken out when the prior law was in effect - even if these loans are refinanced after 2017 (as long as the refinanced loan principal doesn't exceed the old loan balance at the time of the refinancing).

What about home equity loan interest? Starting in 2018, the TCJA eliminates the provision that allows interest deductions on up to $100,000 of home equity loan balances.

In addition, the TCJA preserves the home sale gain exclusion. This valuable tax break allows you to potentially exclude from federal income tax up to $250,000 of gain from a qualified home sale, or $500,000 if you're married and file jointly. Both the House and Senate versions of the tax bill originally included restrictions related to this break, but none of the proposed changes made the final cut.


Medical Expense Deductions

The new law expands the deduction for medical expenses to cover costs in excess of 7.5% of adjusted gross income (AGI) for 2017 and 2018. (Under prior law, the threshold for deducting medical expenses was 10% of AGI.) After 2018, the deduction threshold is scheduled to return to 10% of AGI.


Education Tax Breaks

The TCJA leaves all of the existing education-related tax breaks in place. It also allows you to take tax-free distributions of up to $10,000 per year from a Section 529 plan to cover tuition at a public, private, or religious elementary or secondary school, starting in 2018.


Child and Dependent Tax Credits

Under prior law, many households were ineligible for the $1,000 child tax credit, because they made too much money. But next year, more families will be eligible for this credit — which will help offset the elimination of the dependency exemptions — and it will double.

Starting in 2018, the maximum child tax credit increases to $2,000 per qualifying child, and up to $1,400 can be refundable. (In other words, lower-income taxpayers can collect up to that amount even if they don't owe any federal income tax.) The income levels at which the child tax credit is phased out will also increase significantly (to $400,000 for married couples who file jointly). So, almost all taxpayers with under-age-17 children will qualify for this break. In addition, a new $500 nonrefundable credit is allowed for qualified dependents, such as:

  •     A qualifying 17- or 18-year-old,
  •     A full-time student under age 24,
  •     A disabled child of any age, and
  •     Other qualifying (nonchild) relatives if all the requirements are met.


Roth Conversion Reversals

Starting in 2018, you won't be able to reverse the conversion of a traditional IRA into a Roth account. Under prior law, you had until October 15 of the year after an ill-advised conversion to reverse it and thereby avoid the conversion tax bill.


Need help?

The TCJA represents a major tax overhaul. It will take time and effort to understand its full effect on your personal tax situation. Your tax advisor can help you take advantage of beneficial changes and avoid pitfalls. And stay tuned for more articles about additional aspects of the new law.


Other Noteworthy News

The Tax Cuts and Jobs Act is 479 pages long and covers a lot of ground. Here are some lesser-known aspects of the new law that might affect you personally.

Adoption. The TCJA retains the tax breaks for adoption expenses.

Alimony. Starting in 2019, taxpayers can no longer deduct alimony payments if they're required to by a divorce agreement entered into after December 31, 2018. Recipients of affected alimony payments will no longer have to include them in taxable income, as they currently do. (The current tax treatment stays in place for divorce agreements entered into on or before December 31, 2018, however.)

Gift and estate taxes. Starting in 2018, the unified federal gift and estate tax exemption will increase to roughly $11.2 million or $22.4 million for a married couple.

"Green" vehicles. The TCJA retains the tax credit of up to $7,500 for new qualified plug-in electric vehicles.

Moving expenses. Starting in 2018, deductions for most miscellaneous itemized expenses and moving expenses (with an exception for members of the military in certain circumstances) are eliminated. Tax-free employer reimbursements for moving expenses are also eliminated.

Personal casualty and theft losses. Starting in 2018, itemized deductions for personal casualty and theft losses are eliminated, except for personal casualty losses incurred in federally declared disaster areas.


Happy Holidays from Williams & Company!

Posted by Admin Posted on Dec 20 2017

As the end of the year approaches, it is a good time to think of planning moves that will help lower your tax bill for this year and possibly the next. The Senate and the House have recently passed their version of the tax reform bill. We are now just waiting for results of the reconciled bills. The majority of the expected provisions will not take effect until 2018. 

We have compiled a checklist of actions based on current tax rules and the potential changes in 2018 that may help you save tax dollars if you act before year-end. Not all actions will apply in your particular situation, but you, a family member or your business will likely benefit from many of them. We can narrow down the specific actions that you can take once we meet with you to tailor a particular plan. In the meantime, please review the following list of items to consider on an individual basis and contact us at your earliest convenience so that we can advise you on which tax-saving moves to make. (For businesses, please refer to the business items listed further down.)


Proposed New Tax Legislation:

  • The proposed bill does not change any of the Net Investment Income Tax or the additional Medicare tax implemented by the Affordable Care Act (Obamacare). Higher income taxpayers will continue to be subject to these taxes.
  • Both bills have proposed to dramatically change the expenses that qualify for itemized deductions and the amount of the standard deduction. If passed this may reduce the number of people that will itemize their deductions in the future. Individuals that fall into this category may want to consider paying charitable contributions and real estates taxes for 2018 in the 2017 year.
  • Tax brackets in both bills are generally more favorable than current law.
  • Taxes on C Corporations and pass-through entities would generally be lower under both bills than current law. You may want to consider ways to defer net income in those entities until 2018.
  • Businesses contemplating large equipment purchases also should keep a close eye on the tax reform plan being considered by Congress. The current version contemplates immediate expensing – with no set dollar limit – of all depreciable asset (other than building investments made after Sept. 27, 2017, for a period of at least five years.


The bills have been reconciled, but we don't know all the provisions of the proposed law. We will have a very short window to react to the final provisions. You may want to consider making plans to address any of the proposed portions of the potential new law that may impact you. We can help you sort out your individual options.


Below are some strategies to reduce 2017 income taxes:


  • Postpone income until 2018 and accelerate deductions into 2017 to lower your 2017 tax bill.
  • It may be advantageous to try to arrange with your employer to defer, until early 2018, a bonus that may be coming your way.
  • If you expect to owe state and local income taxes when you file your return next year, consider asking your employer to increase withholding of state and local taxes (or pay estimated tax payments of state and local taxes) before year-end to pull the deduction of those taxes into 2017.
  • Estimate the effect of any year-end planning moves on the Alternative Minimum Tax (AMT) for 2017, keeping in mind that many tax breaks allowed for purposes of calculating regular taxes are disallowed for AMT purposes.
  • You may be able to save taxes by applying a bunching strategy to pull "miscellaneous" itemized deductions, medical expenses and other itemized deductions into this year.
  • Increase the amount you set aside for next year in your employer's health flexible spending account (FSA) if you set aside too little for this year.
  • Increase the amount you set aside for next year in your employer's 401(k) plan, or 403(b) plan for nonprofit employees.
  • If you become eligible in December of 2017 to make health savings account (HSA) contributions, you can make a full year's worth of deductible HSA contributions for 2017.


The following actions could possibly be used to save taxes by carefully structuring your capital gains and losses:


  • Sell at a loss to offset earlier gains to make the best tax use of paper losses and actual losses from your stock market investments.
  • Long-term capital losses offset long-term capital gains before they offset short- term capital gains. Similarly, short-term capital losses offset short-term capital gains before they offset long-term capital gains. Remember you may use up to $3,000 of total capital losses in excess of total capital gains as a deduction against ordinary income in computing your adjusting gross income (AGI).
  • Sell the original holding and then buy the same securities at least 31 days later.
  • Sell the original holding and buy similar securities in different companies in the same line of business.
  • For mutual fund shares, sell the original holding and buy shares in another mutual fund that uses a similar investment strategy.


Business actions to consider:

  • Businesses should consider making expenditures that qualify for the business property expensing option. Expensing is generally available for most depreciable property (other than buildings), off-the-shelf computer software, air conditioning and heating units, and qualified real property-qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.
  • Businesses should consider buying property that qualifies for the 50% bonus first year depreciation if bought and placed in service this year (the bonus percentage declines to 40% next year).
  • To reduce 2017 taxable income, consider disposing of passive activity in 2017 if doing so will allow you to deduct suspended passive activity losses.


These are just some of the year-end steps that can be taken. Careful planning can save you substantial amounts of tax. If you would like to discuss any of these matters in greater detail, please give us a call at your earliest convenience so that we can help you realize maximum tax savings from these and other year-end planning strategies. Contact your Williams & Company representative with any questions.


Make New Year's Resolutions to Improve Profitability

Posted by Admin Posted on Dec 19 2017 people scoff at New Year’s resolutions. It’s no mystery why — these self-directed promises to visit the gym regularly or read a book a month tend to quickly fade once the unavoidable busyness of life sets in.

But, for business owners, the phrase “New Year’s resolutions” is just a different way of saying “strategic plans.” And these are nothing to scoff at. In fact, now is the perfect time to take a critical look at your company and make some earnest promises about improving profitability in 2018.

Ask tough questions

Begin by asking some tough questions. For example: How satisfied are you with the status quo of your business? Are you happy with your profitability or had you anticipated a much stronger bottom line at this point in your company’s existence? If you were to sell tomorrow, would you get a fair return based on what you’ve invested in effort and money?

If your answers to these questions leave you more dissatisfied than pleased, your New Year’s resolutions may have to be bold. This doesn’t mean you should do something rash. But there’s no harm in envisioning next year as the greatest 12 months in the history of your business and then trying to figure out how you might get there.

Rate your profitability

To assess your company’s financial status, begin by honestly gauging your current performance. Rate your profitability on a scale of 1 to 10, where adequate working capital, long-term employees and customers, consistent growth in revenues and profit, and smooth operations equal a 10.

Many business owners will apply numbers somewhere between a 5 and a 7 to these categories. If you rate your business a 6, for example, this means your company isn’t tapping into 40% of its profit-generating capacity. Consider the level of improvement you would realize by moving up just one notch — to a 7.

Identify areas for improvement

One way to discover your company’s unrealized profit enhancement opportunities is to ask your customers and employees. They know firsthand what you are good at, as well as what needs improvement.

For instance, years ago, when the American auto industry was taking its biggest hits from foreign imports, one of the Big Three manufacturers was experiencing significant customer complaints about poor paint jobs. An upper-level executive visited the paint shop in one of its factories and asked an employee about the source of the problem. The worker replied, “I thought you’d never ask,” and proceeded to explain in detail what was wrong and how to solve it.

Get ready for change

If you have a few New Year’s resolutions in mind but aren’t sure how to implement these ideas or how financially feasible they might be, please contact our firm. We can work with you to identify areas of your business ready for change and help you attain a higher level of success next year.

© 2017  

Weigh your options for cashing in on outstanding invoices

Posted by Admin Posted on Dec 13 2017


How long will you take to collect the outstanding receivables that are reported on your balance sheet? Many companies take weeks or even months to collect invoices from customers. Fortunately, there are ways to convert them into cash now.

Line of credit

A line of credit can help bridge the “cash gap” between performing work for customers and getting paid. Your credit line can be collateralized by unpaid invoices, just like you pledge equipment and property for conventional term loans. Banks typically charge fees and interest for securitized receivables.

Each financial institution sets its own rates and conditions, but these arrangements generally provide immediate loans for up to 90% of the value of an outstanding debt and are typically repaid as customers pay their bills.

For example, an HVAC contractor had difficulty making payroll after two of its large clients waited 75 days to pay outstanding invoices. A local bank gave the contractor a line of credit for $180,000. To secure the loan, the contractor was required to put up $200,000 in unpaid invoices as collateral and then repay the loan, plus fees and interest, once customers remitted payments.


Factoring is another option for companies that want to monetize their unpaid — but not yet delinquent — receivables. Here, receivables are sold to a third party factoring company for immediate cash.

Costs associated with receivables factoring can be much higher than those for collateral-based loans. And factoring companies are likely to scrutinize the creditworthiness of your customers. But selling receivables for upfront cash may be advantageous, especially for smaller businesses, because it reduces the burden on accounting staff and saves time.

For instance, a small tool-and-die shop faced cash flow issues because customers routinely paid their bills between 60 and 90 days after issuance. As a result, the owner used a high-interest-rate credit card to make payroll and spent at least three days a month chasing down late bills. So, the owner sold off roughly $200,000 of its annual receivables to an online factoring firm. This saved the shop hundreds of personnel hours annually and allowed it to stop building up high-rate credit card interest expenses, while considerably easing cash flow concerns.

Other creative solutions

Before monetizing receivables, banks and factoring companies will ask for a receivables aging schedule — and most won’t touch any receivable that’s over 90 days outstanding. What are your options for the stalest of receivables?

Before you write them off, call the customer and ask what’s going on. Sometimes you might be able to negotiate a lower amount — which might be better than nothing if your customer is facing bankruptcy. If all else fails, you might consider a commission-based collection agency. Or call us to discuss your delinquent accounts receivable. We’ve helped many clients devise creative solutions to convert receivables into fast cash.

© 2017