Top 10 year-end tax planning tips

Another year is coming to a close, which only means a season of taxes is slowly approaching. Tax time can often be one of the most stressful times of the year for businesses, employees, and even clients, but that just means helping clients with a less stressful year-end planning session more crucial than ever. Read this blog post for helpful tips.


Between the upcoming presidential election and the COVID-19 pandemic and its attendant stimulus packages, this year has seen more than its share of uncertainty around tax — which makes helping clients with year-end planning all the more crucial.

“Year-end tax planning is more important than ever this year,” said Renato Zanichelli, national managing partner of tax services at Grant Thornton, in a statement. “Businesses both large and small have been dealt a tough hand. Having the right tax strategy will help businesses navigate this time of historic disruption and put them on the right track as a new year begins.”

“Lawmakers dedicated trillions of dollars to keep families and businesses afloat, but those provisions may also require quick action, in many cases by the end of this year,” added Dustin Stamper, managing director in the firm’s Washington National Tax Office. “The government wants to get money in the hands of those who need it, and many of the most generous provisions are tax changes that provide welcome liquidity for businesses and timely relief for individuals.”

With that in mind, the Top Eight Firm has put together a list of 10 key tax considerations for year-end planning for both individuals and businesses (below); for more see their year-end tax planning guides.

FOR INDIVIDUALS: 1. Use above-the-line charitable deduction
Everyone is entitled to a charitable deduction this year. The Tax Cuts and Jobs Act doubled the standard deduction while repealing or limiting many itemized deductions, leaving millions fewer taxpayers claiming actual itemized deductions. Typically, there is no tax benefit for giving to charity unless you itemize deductions. However, the CARES Act created an above-the-line deduction of up to $300 for cash contributions from taxpayers who don’t itemize. To take advantage of this provision, taxpayers should make sure to donate before the end of the year.
2. Understand the impact of that stimulus check
The CARES Act directed the IRS to issue stimulus checks of up to $1,200 per taxpayer and $500 per qualified child dependent earlier this year. The payments were paid based on 2018 or 2019 return information, but are actually structured as advances of 2020 tax credits. The credits phase out for higher-income taxpayers, so taxpayers want to understand the implications if the check they received based on 2018 or 2019 won’t match the amount of credit they will calculate on the 2020 return. If the 2020 credit calculation is less than they received, there is no clawback. If they received less than the credit calculated for 2020, they can claim it as an additional refund.
Opportunity zones are one of the most powerful incentives ever offered by Congress for investing in specific geographic areas. In certain scenarios, not only can an investor potentially defer paying tax on gains invested in an opportunity zone until as late as 2026, but they only recognize 90 percent of the gain if they hold the investment for five years. Additionally, if they hold the investment for 10 years and satisfy the rules, they pay no tax on the appreciation of the opportunity zone investment itself. If they’re worried about capital gains rates going up under a new administration, this may provide an excellent tax-free investment. There are more than 8,000 opportunity zones throughout the United States, and many types of investment, development and business activities can qualify.
4. Make up a tax shortfall with increased withholding
COVID-19 created cash-flow problems for many individuals. Taxpayers should make sure their withholding and estimated taxes align with what they actually expect to pay while they have time to fix a problem. If they find themselves in danger of being penalized for underpaying taxes, they can make up the shortfall through increased withholding on their salary or bonuses. A larger estimated tax payment at the end of the year can still expose them to penalties for underpayments in previous quarters, but withholding is considered to have been paid ratably throughout the year, so increasing it for year-end wages can save them in penalties.
5. Leverage low interest rates and generous exemptions before they’re gone
The historically low interest rates and lifetime gift and estate tax exemptions present a powerful estate-planning opportunity. Many estate and gift tax strategies hinge on the ability of assets to appreciate faster than the interest rates prescribed by the IRS. In addition, the economic fallout of COVID-19 is depressing many asset values. There’s a small window of opportunity to employ estate-planning techniques while interest rates are still low and the lifetime gift exemption is at an all-time high. The current gift and estate tax exemptions are set to expire in a few years, and a new administration in the White House could accelerate that timeline.
FOR BUSINESSES: 6. Accelerate AMT refunds
When the Tax Cuts and Jobs Act repealed the corporate Alternative Minimum Tax, it allowed corporations to claim all their unused AMT credits in the tax years beginning in 2018, 2019, 2020 and 2021. The CARES Act accelerates this timeline, allowing corporations to claim all remaining credits in either 2018 or 2019. This gives companies several different options to file for quick refunds. The fastest method for many companies will be filing a tentative refund claim on Form 1139, but corporations must file by Dec. 31, 2020, to claim an AMT credit this way.
7. Use current losses for quick refunds
The CARES Act resurrected a provision allowing businesses to use current losses against past income for immediate refunds. Net operating losses arising in tax years beginning in 2018, 2019 and 2020 can be carried back five years for refunds against prior taxes. These losses can even offset income at the higher tax rates in place before 2018. Companies should consider opportunities to accelerate deductions into a loss year to benefit from this rate arbitrage and obtain a larger refund.

Accounting method changes are among the most powerful ways to accelerate deductions, but remember any non-automatic changes a company wants to make effective for the 2020 calendar year must be made by the end of the year. C corporations make NOL refund claims themselves, but passthrough businesses like partnerships and S corporations pass losses onto to owners, who will make claims.

The fastest way to obtain a refund is generally by filing a tentative refund claim, but these must be filed by Dec. 31, 2020, for the 2019 calendar year. If losses will be in 2020, the business should start preparing to file early, because they cannot claim an NOL carryback refund until they file their tax return for the year.

8. Retroactive refund for bonus depreciation
The CARES Act fixed a technical problem with bonus depreciation, a generous provision that allows companies to immediately deduct the full cost of many types of business investments. The legislation expands bonus depreciation to apply to a generous category of qualified improvement property. QIP is commonly thought of as a retail and restaurant issue, but it is much broader and applies to almost any improvement to the interior of a building that is either owned or leased. The fix is retroactive, so businesses can fully deduct qualified improvements dating back to Jan. 1, 2018, which may offer relatively quick refunds. Taxpayers who filed 2018 and 2019 returns before the law changed can choose whether to reflect the additional retroactive deduction entirely in the 2020 year with an accounting method change, or amend both the 2018 and 2019 returns to apply bonus depreciation for QIP in each of those years.
9. Claim quick disaster loss refunds
A sign reminding people to social distance stands at Louis Armstrong Park in New Orleans, Louisiana.

Sophia Germer/Bloomberg

Tax rules allow businesses to claim certain losses attributable to a disaster on a prior-year tax return. This is meant to provide quicker refunds. President Donald Trump’s COVID-19 disaster declaration was unprecedented in scope, designating all 50 states, the District of Columbia and five territories as disaster areas. This means essentially every U.S. business is in the covered disaster area and may be eligible for refunds from certain types of losses. Under this provision, a business could claim a COVID-19 related disaster loss occurring in 2020 on a 2019 amended return for a quicker refund. The provision may potentially affect losses arising in a variety of circumstances, including the loss of inventory or supplies or the closure of offices, stores or plants. To qualify, the loss must actually be attributable to or caused by COVID-19 and satisfy several other requirements.

10. Consider the timing of payroll tax deduction
The CARES Act allows employers to defer paying their 6.2 percent share of Social Security taxes for the rest of 2020. Half of the deferred amount is due by Dec. 31, 2021, with the other half due by Dec. 31, 2022. This provides a great liquidity benefit, but taxpayers should consider the impact on deductions before the end of the year. Businesses generally cannot deduct their share of payroll taxes until paid. For most businesses, the value of deferring the actual payment is worth also deferring the deduction, but there may be some benefits for paying early to take the deduction in 2020, such as increasing an NOL for the rate arbitrage benefits discussed above. Some taxpayers using specific methods of accounting may also be able to pay the taxes as late as 8-½ months into 2021 and still claim the deduction for 2020.
BONUS: Re-evaluate the company’s tax function
Many tax departments at even the largest and most sophisticated companies still dedicate most of their time to basic number-crunching and repetitive processes. These kinds of inefficiencies make it hard to meet deadlines, present audit and tax risks, and cost businesses money — especially during unprecedented times like the COVID-19 pandemic where teams may be lean and struggling to keep up. Data analytics and automation can help mitigate these problems and enable a business’ tax function to focus more on strategic, value-added solutions — shifting away from a compliance-only role.
SOURCE: Employee Benefit Advisors. (08 October 2020) "Top 10 year-end tax planning tips" (Web Blog Post). Retrieved from http://employeebenefitadviser.com/list/top-10-year-end-tax-planning-tips


5 talent trends to watch in 2020

Although 2020 is a new year, talent may still seem comparable to previous years' trends. In 2020, employers can expect to see talent management move into a more proactive role. Read this article to learn about the five talent trends to watch for in 2020.


2020 may herald a new year (and decade), but today's talent trends will likely seem familiar.

Employer branding, diversity and inclusion, empowering managers and developing employees all remain priorities for talent pros. For example, HR Dive identified "talent acquisition panic" as one of the driving forces of 2019 — and while recruiting won't necessarily remain in a panic state, most experts agree that it will be a strategic focus for all company leaders in 2020.

But experts also said that certain trends may rise in importance in the new year, and five, in particular, will likely stand out.

Talent management will move from reactive to proactive
The workforce now encompasses a large swath of employees, independent contractors and even robots, requiring a new approach, Michael Stephan, Deloitte's US human capital leader, told HR Dive in an interview. "It's going to change the way HR business partners approach … workforce planning," he said. "Not just how many heads you need, but 'where is the best place to access this particular talent?'"

That means employers will need to move from reacting to talent needs to anticipating them, Mark Brandau, principal analyst at Forrester, told HR Dive. "Most organizations look at it from a reactive perspective and not enough time is done on planning," he said.

Expect more proactive talent strategies that encompass tech's undeniable impact on work. Kristen Ruttgaizer, director of human resources at Igloo Software, agreed that employers will have to put more effort into initiatives that draw candidates in over time, such as solid employee experience.

Diversity and inclusion efforts provide a good example of what this shift may look like, as a successful D&I initiative requires that an employer address "the entire employee life cycle," according to Randstad US's report on 2020 trends. Talent is no longer about simple efficiencies; it's now a driving force for C-suite decision-making, Stephan explained.

Contingent hiring will be more integrated
While employers may no longer be in panic mode about talent acquisition, the rise of contingent worker hiring has complicated recruiting by introducing a new variable: When you need more help, do you hire an employee or bring on a contractor?

Employers are "trying to figure out the workforce ecosystem or strategy that cuts across the different sources," Stephan said. "They realize how important figuring out that ecosystem is to that future strategy. They're in rapid investment mode."

In other words, recruiters are starting to press third-party vendors to provide offerings that would allow them to see both employee and contractor availability from the same place, Brandau said. "Why aren't they in the same place and with a nod toward skills?" he said.

Some of this transition also may include adopting development structures that create "gig-like" models within an employed workforce, WorldAtWork's CEO Scott Cawood said in his Top 7 Workplace Predictions emailed to HR Dive, giving workers opportunities to work on a project-by-project basis and understand how their career will develop in the long-term.

'Super jobs' will become more prevalent
Employee learning and talent management are more intertwined now than ever; learning was the No. 1 trend in one of Deloitte's 2019 human capital trend reports. But that push is driven in part by the looming talent shortage and heightening competition. As employers adopt tools that can do some of the work that talent would previously be hired to do —​ think robots in Amazon warehouses —​ they're also inadvertently creating "super jobs" that require skill sets that cross multiple domains, Stephan said.

"A package organizer now has to be an expert in robotic tech," he said. Someone who is managing fellow organizers may now have to combine those key leadership skills with minor capabilities in robotics. To make up that gap, employers began to lean heavily on employee development —​ but how does a company balance necessary development time without disrupting the work?

"People need to be able to do their job and have access to knowledge when doing their job," Stephan said. A global manufacturing company that works on elevators once had a 3,000 page manual, he explained. Now, employees can use an iPad to search for ways to resolve issues on the fly, educating the worker while keeping them productive.

"They're having to adapt to a really fast changing market," Brandau said.

It's not all tech-driven. The rise of super jobs also has forced employers to redefine leadership development and what it means to be a leader in an organization that requires each worker to have a broad swath of skills, Brandau added.

'Agility' will give way to 'adaptability'
Last year, "agility" was the buzzword of choice. But employers and experts have made a semantics shift toward "adaptability" as employers consider how to best prepare for the future of work.

"When you think of agility, you think of being able to bend an arm in a certain way," Brandau said. "But adaptability is an intelligence of...which way do I need to bend and why?"

The concept is not wholly different from agility, which requires an employer to be ready for the rapid changes descending upon the business world, but it does require an employer to more seriously consider how its people work and behave. "Adaptable is about living and breathing around networks," Stephan said.

A company's culture may need to adopt a philosophy about "failing fast and learning fast," he continued. After all, a workplace can't be "adaptable" if its people aren't ready — though Brandau predicts this will continue to be a hurdle for employers to overcome.

"You have to have a workforce that is ready to adapt to change. We hate change," he said. "Adaptive workforces thrive in change. How do you do this in real ways?"

Employers will have to use data to dive local —​ whether they're ready or not
To find talent faster, some employers have invested in data and "workforce sensing" to get a more accurate assessment of the local talent market. The pressure to do so —​ and quickly —​ has only risen in recent years as employers grapple with talent gaps. That data can inform the type of tech an employer needs or even a new location strategy, Stephan said. And that doesn't even account for HR's use of internal data to gauge employee experience.

Unfortunately, HR teams aren't exactly prepared for this deep dive, even if the branding around it has been centered on employee experience, Brandau said. "HR and these areas have not typically been very good at dealing with data," he added. "How are managers going to deal with an intelligent suite? They aren't ready for it."

Employers that want to improve their workforce sensing capabilities will need to invest serious time into understanding external data sources. Where are the "pockets of workforce capabilities"? "Our clients really aren't there yet," Stephan said. But this talent market might just push them there.

SOURCE: Moody, K. (08 January 2020) "5 talent trends to watch in 2020" (Web Blog Post). Retrieved from https://www.hrdive.com/news/5-talent-trends-to-watch-in-2020/570026/


Health Resolutions You Can Stick To In 2018

 Picture: PA Photo/thinkstockphotos.
Picture: PA Photo/thinkstockphotos.
It has once again reached that time of year when we start to think of New Year resolutions to make and break. But do we ever really keep them?

We ask the experts which resolutions we should be making this year, and how we can actually stick to them.

Whether it's giving up smoking, exercising more, or getting our 5-a-day, most of us have usually given up before January ends.

But with a little help from the pros, you can live a happier, healthier life in 2018...

1. Drink more water

Health and fitness mentor Sarah-Anne Lucas (birdonabike.co.uk) says starting a daily ritual is the answer to New Year resolutions. She suggests drinking more water: "Water intake is massive. Most people do not drink enough, but what we'd all like is more energy. That comes down to what you put in, so increase your water intake. It's the first thing you put in your body in the morning. Go and get yourself a minimum of 100ml water and get it into you. To progress that practice, add lemon, to make the body alkaline. Lemon water is amazing, it also adds a bit of flavour."

2. Learn to meditate

Life-coach and mindfulness practitioner Dr Caroline Hough (aspiring2wellness.com) says we can train our minds to reduce stress, making us more likely to achieve our goals: "It involves sitting and meditating for 20 minutes. Bring yourself into the moment and be aware. That's an awareness of your external environment, so just looking at the flowers and the trees and the sunshine and appreciating it instead of rushing through life. Be aware of your internal environment, by noticing if you're very stressed, for example if you're clenching your muscles. We tend to live our lives at a level of stress which is unhealthy."

3. Start self-watching

Professor Jim McKenna, head of the Active Lifestyles Research Centre at Leeds Beckett University, advises we record our successes to motivate ourselves: "Whatever you want to do, whenever you achieve, write it down. You're trying to achieve it every day, so it needs to be nice and small, and all your job is then is to keep the sequence running. It's really as simple as that. What you're capitalising on there is positive self-regard, but also the fundamental process of self-watching. There's a lot of success in seeing your own achievements. When you collect all that up, you can start saying, 'Actually I've got nearly 10 occasions there when I did well, I'm doing well, I'm someone who can change'."

4. Look after your skin

Louise Thomas-Minns (uandyourskin.co.uk), celebrity skin therapist, recommends we pay more attention to protecting and caring for our skin: "Wash your skin nightly. Not removing make-up, daily dirt, oil, grime and pollutants from the skin every night will result in infections and outbreaks. Your skin regenerates at night too, so give it a helping hand. And don't pick! Picking at your skin will result in scarring and create more spotty outbreaks. Wear SPF every day to slow ageing and protect from the harmful effects of UV rays. Find out your skin type from a skin health expert, so you stop wasting time and money on incorrect products."

 

Read the original article.

Source:
Go Active (6 December 2017). "Health Resolutions You Can Stick To In 2018" [Web blog post]. Retrieved from address http://www.goactiveincumbria.com/get-started/other/article/Health-Resolutions-You-Can-Stick-To-In-2018-e9f9d40d-ca39-48ed-be2e-b2f88f4061eb-ds

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Employers prefer paper-based approach for open enrollment

Sure, technology is great, but can it ever live up to a face-to-face sit down? Let's take a look at the facts from Employee Benefit Advisor.


Fewer than half of businesses use technology to handle annual enrollment or manage time off, Affordable Care Act reporting or benefits changes during the year, according to a recent white paper by one of the nation’s leading ancillary benefits providers.

Citing a 2017 LIMRA report entitled “Convenient and Connected: Employers and Benefits,” Colonial Life highlighted several reasons why employers are resisting the digital age. They believe their organization isn’t big enough (32%), a technology solution is too expensive (24%), they don’t have enough staff (16%), in-person meetings are more engaging, or it’s the preference of their broker or plan administrator (tied at 15%).

In fact, Colonial Life post-enrollment surveys from 2009 to 2016 show that 98% of employees understand their benefits better through 1-to-1 benefits counseling and 95% describe the personalized attention they received as valuable.

Steven Johnson, vice president in premier markets and enrollment solutions at Colonial Life, was surprised by the prevalence of “manual and outdated ways.” However, he also understands the tendency to resist change— noting, for example, how some people still maintain landlines in spite of a reliance on smartphones for calls, text, e-mail, social media and GPS directions.

“Slow adoption of technology can be especially true in the workplace,” he says. “Heavy dependence of the fax machine at many workplaces still baffles me with so much advanced technology available to perform the job better, faster and cheaper.”

For those employers looking to add capabilities to their benefits technology programs, the report noted that LIMRA found most cited cost reduction (36%) or control of benefit data (35%). Rounding out the list was reduced staff time (32%), improved benefits communications (29%) and better employee experience (27%).

Among the features most sought after for either benefits administration systems, enrollment technology or both, LIMRA said low cost led the way (87%), followed by data security (86%), ease of use for employees (85%), it’s accessible all year (80%), employees re-enrolled annually or all insurance benefits are on the same platform (77% apiece).

Colonial Life stressed the importance of providing personalized resource materials, such as web content, e-mails and one-to-one meetings, as well as ample time for employees to make wise choices for themselves and dependents. Another recommendation was that insurance carriers make available benefits counselors to help guide employees through their decisions.

Johnson urged benefit brokers and advisers to help educate their clients on affordable enrollment technology solutions that will greatly enhance the experience for their employees while also reducing administrative burdens and challenges for employers and plan administrators.

“A trusted benefits adviser can share case study examples from companies of similar size and industry to illustrate the benefits of adopting a benefits admin solution for enrollment,” he says. In addition, he suggests that employee survey feedback can be shared to help advance the argument that “the overall experience is far better for those who’ve used technology to help them make their important benefits decisions.”

 

Source:
Shutan B. (13 November 2017). "Employers prefer paper-based approach for open enrollment" [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/employers-prefer-paper-based-approach-for-open-enrollment?brief=00000152-1443-d1cc-a5fa-7cfba3c60000

 

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Making and Keeping New Year’s Resolutions

Originally posted by Elizabeth Halkos on http://www.purchasingpower.com

It’s a new year, and for millions of Americans that means New Year’s resolutions are in order. Many of us will promise to exercise more and eat less to lose weight in 2014. Some of us will set income or sales goals, and some will set goals for what they want to buy this year. Some goals may be to spend more time with friends and family, or even to take long-needed vacations.

Every year it seems we’re excitedly setting our New Year’s resolutions, but by mid-February, those promises are out the window. Why can’t most of us stick to those resolutions? Psychiatrist Sarah Vinson, MD, says many people quit in the first few weeks because they don’t see results. The best method, she says, is to break the resolution down into manageable goals.

Dr. Vinson said people should do three things when making a resolution:

1. Set manageable goals. Instead of saying “I will lose 50 pounds this year,” make a promise to work out twice weekly and have the goal of losing five pounds in a month.

2. Have an accountability partner to help you stay on track. Find someone with similar goals and tackle them together.

3. Determine the factors that prevented success in the first place. Think about what got in the way of you accomplishing the goal in the past, and fix it. For instance, if you plan to work out every morning, but can’t get up, try going to bed an hour earlier the night before.

Here’s to a prosperous New Year for all of us – and achieving our resolutions!

 


Bosses: Here are 7 New Year’s resolutions to help retain your talent

Originally posted on December 16, 2013 by Tim Loh on http://blog.ctnews.com

Each year, employees make career-related New Year’s resolutions much more frequently than their bosses — but their top resolution is to find a new job, according to Danbury’s OI Partners-Cunis & Gontin, a coaching and leadership development consulting firm.

And so, Cunis & Gontin has put together a list of New Year’s resolutions for bosses that should help them retain their top talent.

“If more managers resolved to develop their employees’ leadership skills, invite their input, demonstrate continued interest in their careers and recognize their contributions, fewer workers would be determining to find new jobs each year,” said Mary Ann Gontin, Managing Partner with OI Partners-Cunis & Gontin.

Retaining talented employees has become a higher priority in an improving job market, the firm said, as more than three-fourths of employers worry about losing key employees, according to a survey by OI Partners.

Here are the top seven resolutions managers can make to help retain talent:

1. Coach workers in how to become more influential and persuasive. “Explain the implications of their actions and decisions on internal politics and help them become savvier. Provide training and guidance in how to craft their messages to meet the needs of others. Managers are too often frustrated by employees’ inability to work effectively through others. Teach them how to win over people in appropriate ways,” said Gontin.

2. Develop employees’ leadership skills. “Use challenging ‘stretch assignments’ that motivate workers, require them to learn new skills and build coalitions. Look for opportunities where members of your team can step into leadership roles. That may mean you have to be in the background more and become comfortable with sharing the spotlight,” said Gontin.

3. Improve your feedback and increase their accountability. Most managers are inconsistent in communicating expectations and holding people accountable. Be clear about your expectations and give timely feedback to your team when they do a good job or miss the mark.

4. Tap into employees’ wealth of knowledge and experience. Encourage employees at all levels to suggest, create and communicate new ideas based on the direct experience of those on the line. Personally ask people for their input to get the best recommendations.

5. Demonstrate continued interest in employees’ careers. Reassure employees that they are appreciated for the work they’re doing. Increase the frequency of discussions about their careers and one-on-one meetings with their managers.

6. Recognize and reward contributions. Managers should be certain they recognize employee contributions, both big and small. A compliment from the boss can be as effective as a monetary reward. Many employees feel that their managers do not spend enough time thanking them for a job well done, but are too quick to criticize them for making mistakes.

7. Build teamwork and provide developmental coaching to workers.

Look for ways to partner employees on projects and concentrate on assembling compatible teams. Include ground rules on how they should work together, check in with them periodically throughout the assignment and facilitate a discussion on what’s working and what’s not. Coordinate a debriefing at the end of the project for overall feedback and lessons learned. Developmental coaching sharpens employees’ leadership skills and helps retain the most talented workers.