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Differences Between Traditional IRA & SEP Contribution

Posted by Admin Posted on Feb 05 2016


by Patricia Jones CPA/ABV CFF CFE

It is important to save for retirement and there are several different types of retirement plans.  Today we are going to compare a traditional IRA (Individual Retirement Account) and SEP (Simplified Employee Pension) for a self-employed individual.    

      Traditional IRA                                                           
  • Maximum contribution $5,500; $6,500(50 years old & over) for 2015 & 2016
  • Contribution must be made on or before April 15, 2016 for the 2015 tax year.
      SEP (Simplified Employee Pension)
  • Maximum contribution 20% of net earnings
  • Contribution must be made on or before filing due date of tax return with extension.  For the 2015 tax year, an individual has until October 15, 2016 to make the SEP contribution.
In our example the self-employed individual is under the age of 50 and has no employees.  The net income for 2015 year is $50,000.  With the traditional IRA, the maximum contribution that can be made is $5,500 compared to $9,293 maximum contribution allowed for the SEP. 
Schedule C  Income              50,000                 50,000 
SE Deduction              (3,533)                (3,533)
Maximum Contribution               (5,500)                (9,293)
Adjusted Gross Income              40,967                 37,174 
Standard Deduction              (6,300)                (6,300)
Personal Exemption              (4,000)                (4,000)
Taxable income              30,667                 26,874 
Federal Income Tax                4,139                   3,570 
Self Employment Tax                7,065                   7,065 
Total tax              11,204                 10,635 
Please feel free to use the calculator tools available on our site by clicking hereIf  you have questions or would like to discuss IRAs or SEPs with one of our professionals, please contact us at 727-845-4166 or visit our website at

Posted by Admin Posted on Feb 05 2016

Year End Tax Planning Tips

Posted by Admin Posted on Feb 05 2016

Each year we must report to Uncle Sam whether we likei t or not. It is not enjoyable for anyone, but must be done. We put together a list of some end of the year ideas that might be able to save you some hard earned money on your taxes.


  1. If you itemize your deductions, pay your real estate taxes before December 31st. You have to pay them anyway, so might as well use the deduction this year.
  2. If you have already sold stock for a gain in value, consider selling some stocks you have losses in to offset the gains if you are in a higher tax bracket. But don't make the mistake of selling and then repurchasing right away as the IRS doesn't allow that loss.
  3. If you itemize your deductions, now is a great time to clean out your closets and give those old clothes to a charity. Get a receipt and itemize what you have to look up values. Or give money to your favorite charity by the end of the year. Just be sure to use a check and get a receipt. You can also give appreciated stock or mutual funds to a charity and the gain won't be taxable at all to you.
  4. If you are not at the maximum contribution amount allowed for your retirement plan, consider increasing it now. This will lessen your taxable income and put the money into your pocket and not Uncle Sam's.
  5. Consider contributing to a traditional IRA by April 15th of 2016. There are restrictions on income and if you already participate in a retirement plan.
  6. Add more to your Health Savings Account. This is a deduction from income for you.
  7. If you are a sole proprietor, partnership or S corporation, consider purchasing needed equipment by the end of the year.
  8. If you itemize or have a business, consider if you qualify for a home office deduction. The IRS has a new simplified $5 per square foot formula that allows up to a $1,500 deduction. Alleviates calculating all your home expenses and keeping track of depreciation on your home.
  9. If you are self employed, consider a Simplified Employee Pension plan, SEP. You are able to contribute up to 20% of your net income. If you have a S corporation, you can contribute up to 25% for all employees including yourself.
  10. Keep track of business miles with a log and take advantage of this simplified deduction of 57.5 cents per mile.
  11. If you itemize, you can deduct job hunting expenses for a job in the same field. This is subject to the 2% of adjusted gross income threshold.

There are some deductions that were not renewed and have yet to be signed into law to be in effect for the 2015 tax year. These include the sales tax deduction, mortgage insurance premium deduction, above the line deduction for qualified tuition, exclusion of income for discharge of qualified principal residence indebtedness, $250 deduction for school teachers.


For more information or to speak confidentially with us, contact us at or call 727-845-4166.

Is Your Business the Next Victim of Theft?

Posted by Admin Posted on Feb 05 2016

We hear about fraud and think this could never happen to us. In the 2014 Report to the Nations on Occupational Fraud and Abuse published by the Association of Certified Fraud Examiners, Asset Misappropriation accounts for about 85.4% of fraud causing a median loss of $130,000. On average the amount of time from when fraud commenced until it is detected in the study was 18 months. 


Fraudulent asset misappropriation occurs many different ways by theft of cash, fraudulent disbursements, skimming, cash larceny, payroll schemes, check tampering and expense reimbursements schemes.          


Most small business owners are busy with scheduling, customers, employees, ordering, sales and marketing that they don't have time for  bookkeeping.  They will hire a bookkeeper, trusted friend, family member or  company to help with the task. 


Just a few tips that may help a business owner protect against fraud:


Background check. A pre-employment background check will usually provide criminal record information. 

Review bank statements.  In today's digital world, most bank statements are sent electronically.  If a bank statement is mailed, the owner should always open statement first.  Look for unusual items such as transfers to other bank accounts, large transactions and debit transactions to unknown vendors.

Bank reconciliations monthly.  Request bookkeeper provide a copy of reconciliation.  Look for unusual items such as old outstanding deposits in transits and outstanding checks. 

Online banking.  The owner should go online to review the bank account.  Most banks will provide online copies of cancelled checks. Review cancelled checks for the payee and endorsement. 

Online banking access.  Limit access capabilities for online banking.  Owners should have full access, while other users should be set up with controls and limited access.  Controls can limit access to specific bank accounts if the company has more than one account, dollar limits for daily amounts or transactions, ability to transfer between accounts, and online bill paying.

Check registers.  Many small business owners use accounting programs, such as Quickbooks. Compare the payee/vendor on checks written to the actual cancelled check with online banking.  As an example, fraudster may issue check  payable to "CASH" for $x,xxx and then cash the check. However, in the accounting program, the fraudster would change the check payee from "CASH"  to "ABC Supply Company" so it is not noticed by owner or manager.


If your company becomes of victim of fraud it is advisable to notify the appropriate authorities.  All too often when fraud is discovered no criminal charges are made. Owners terminate the fraudster's employment and will agree not to press charges in return for restitution.  Unfortunately, if there is no public criminal record the fraudster's next employer may be the next victim. 


Organizing for Personal Taxes

Posted by Admin Posted on Jan 25 2016

By Traci A. Malik, CPA CFE MAcc


Gathering your documents for your personal taxes can be daunting for some. When clients come into meet with us or drop off their tax documents, we tend to get asked about how to save money on tax preparation and what are the documents that we need. Hopefully, this will help serve as a guide for you.

What we need:

  • Tax documents received; 1099s, 1098s, W-2s, K-1s, etc.
  • Charity receipts for amounts getting claimed.
  • A total for medical expenses categorized by doctors, prescriptions, insurance premiums.
  • The new health insurance tax document; 1095-A, 1095-B or 1095-C.
  • Rental income and expenses summarized and categorized.
  • Self employment income and expenses summarized and categorized.
  • If deducting mileage, we need the total miles driven and the business miles driven.
  • If you are a retired public safety officer, we need to know if you receive qualified health insurance from the pension.
  • If you sold stock during the year and the cost information isn't provided on the tax document, we need the information from you as to what you paid for it and when it was purchased.
  • If you have a lot of receipts for deductions, we only need a summary to the total.
  • Dependent care information.
  • Alimony amount paid or received.


What we don't need or may cost you more:

  • A bag or box full of receipts that we need to total.
  • Statements during the year that do not affect taxes.
  • Your homestead exemption notification.
  • Documents or correspondence that is provided a little bit at a time.


If you would like a tax organizer to help with the planning of the documents needed, please feel free to contact us for one. We look forward to helping you with your taxes!