Recent Tax Changes That Will Affect Individual Taxpayers

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was passed by the US House and the US Senate and signed into law by the President on December 18, 2015.  Some of the provisions in the act are permanent and others are for a limited amount of time.

The following are some of the provisions that may affect you:

Charitable Distributions for IRA’s:

The PATH Act permanently extends the ability of individuals aged 70 ½ to exclude from income up to $100,000 per year of distributions transferred directly to a qualified charitable organization for 2015 and succeeding years.

American Opportunity Tax Credit: 

The Path Act makes the credit permanent.  The credit is increased to $2,500 per year for four years of post-secondary education.  A phase out starts at $80,000 for single taxpayers and $160,000 for married taxpayers.  Taxpayers with income in excess of the phase out amounts have a reduced amount of credit allowable.

Deduction of qualified tuition and related expenses:

The above the line deduction for qualified tuition and fees has been extended through 2016.

Deduction for elementary and secondary school teachers:

The above the line deduction for elementary and secondary school teachers’ classroom expenditures has been permanently extended for years after 2014.  The $250 deduction will be indexed for inflation for years starting in 2016.

Deduction of State and Local general sales taxes:

The election to claim an itemized deduction for state and local general sales tax has been permanently extended for 2015 and subsequent years.

Deduction of State and Local general sales taxes:

The treatment of mortgage insurance premiums as deductible qualified mortgage interest subject to AGI phase-out is extended for 2015 and 2016.

Exclusion of mortgage debt cancellation:

The Act excludes from income cancellation of mortgage debt on principal residence of up to $2,000,000 through 2016.

To discuss these changes and learn how they may affect you, contact LBA Haynes Strand today by clicking the button  below.

Recent Tax Changes That Will Affect Your Business Decisions

There have been two recent changes in tax laws that affect business decisions.  One is the increase in De Minimis Safe Harbor Expensing Threshold in IRS Notice 2015-82 and the other is the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).

De Minimis Safe Harbor Expensing Threshold: 

There was a change in the repair and expensing rules in 2014.  Under those rules many of you signed a policy to expense items that cost under the de minimis safe harbor of $500.  This allowed you to deduct the cost of items under $500 instead of capitalizing and depreciating those items.  The IRS now allows you to change your policy so that you may deduct in 2016 the items costing less than $2,500.  If you did sign a policy under the previous rules, you may want to change your policy to deduct items costing up to $2,500.  This policy should be in writing and signed as soon as possible. 


The PATH Act was passed by the US House and the US Senate and signed into law by the President on December 18, 2015.  Some of the provisions in the act are permanent and others are for a limited amount of time.  The following are some of the provisions that may affect you.

Code Section 179 Depreciation:

The Code Section 179 expensing was scheduled to revert back to a limit of $25,000 for 2015.   The Path Act permanently sets the expensing limit at $500,000 with a $2,000,000 investment limit for tax years beginning in 2015 and subsequent years.  These amounts will be indexed for inflation for 2016 and subsequent years.

Bonus Depreciation: 

The Path Act extends the bonus depreciation under a phase-down schedule for calendar years 2015 through 2019.  Bonus depreciation is 50% for 2015-2017; 40% in 2018; and 30% in 2019.

Other Tax Credits and deductions:

  • The research and development (R & D) tax credit has been permanently extended with an increase from 14% to 20% of qualified costs.
  • The 100% exclusion allowed for gain on the sale or exchange of qualified small business stock held for more than five years is made permanent.
  • The PATH Act makes permanent the 5 year recognition period for built-in gain following conversions from a C corporation to an S corporation.
  • The Work Opportunity Tax credit is extended through 2019.

These are important updates that could affect your 2016 business year.  If you have any questions, please click the button below to start your conversation with a CPA at LBA Haynes Strand today!

John Bly Named a Board Member of EO’s Global Board

Co-Managing Member John Bly has received HUGE news for the upcoming year. John has been named a Board Member of EO’s Global Board, where he will serve the organization!  This is a special announcement, because only 9 members of the organization are asked to serve 3 year terms to lead the organization through vision and strategy, and John is one of three member leaders who will begin their board term in July 2016. While this is an amazing accomplishment for John, it is something that didn’t just happen overnight.  John has been a member and advocate of EO since June of 2008 and has served in a number of roles to further EO’s vision, including: President of the Charlotte Chapter of EO, Chair for the highly successful regional NERVE 2013 Conference, Area Director for the US East Region, Member of the Standing Finance Committee for EO Global, and an EO Accelerator Facilitator.

What is EO, you may ask…

The Entrepreneurs’ Organization, better known as EO, is a collection of like-minded entrepreneurs focused on business growth, personal development and community engagement.  The network is made up of nearly 11,000 individual members across the world!

EO Global’s vision is to grow the world’s most influential community of entrepreneurs.  They accomplish their goals by offering chapter development, learning opportunities, forums, and strategic engagement opportunities to members.  There are currently 144 EO Chapters worldwide in 48 different countries.  This organization truly offers once in a lifetime opportunities to entrepreneurs across the globe.  This is certainly a once in a lifetime experience for John as he will be able to work with entrepreneurs across the globe and will have the ability to visit some very special places!

To get involved with the Entrepreneurs’ Organization or to learn more, visit: or email

Creating A Strategic Plan For 2016

As the year end approaches, now is the perfect time to think about your strategic plans and growth strategies for 2016.  Your growth strategies and strategic plan should be focused on the upcoming year as well as three to five years down the road.  You have to understand exactly where your business is and have a vision of where you want your company to be in the future.  If you don’t have a plan that looks toward the future, you risk not ever growing your business.

One of the most important places to start is to build a budget.  As you are building your budget for 2016, and for your long term (3-5 year) strategy – think about the following questions:

  • Where do you want to be?
  • What size do you want to be?
  • Do you want to sell your company?

All of these questions should be asked on a yearly basis as you look three to five years into the future.  The answers to these questions will determine the day to day operational decisions you make.  If you are going to sell your company in two years, then maximizing current profitability is key – in order to show potential of the business.  If you are going to sell in 5 years and you need to grow significantly, then you may consider doing an acquisition.

Another item to think about is if you have the resources who can help you effectively sell your business or help you complete an acquisition?  Do you know how to set your company up to maximize the value you receive through a sale?  Teaming with a certified public accountant can help you with this. CPAs are notorious for having a wealth of resources and contacts that can help you build a network of advisors.  Whether it be an attorney, a wealth management advisor, a capital advisor, a bank, or SBA lender – CPAs can put you in touch with the right people.

Creating a strategic plan is essential to your business.  It is something that can help you identify the best opportunities for growth, understand potential financial results, and provide you with a detailed and focused plan that you can communicate to your team.

If you would like to learn more about how LBA Haynes Strand can help you achieve your long term goals, click the button below for a no-cost consultation!

3 Tips For Successful Tax Planning

Tax planning can be the single most important thing you do for your financial stability when entering into a new year. The tax planning process is an intricate one that involves gathering information, organizing numbers and data, creating a comprehensive financial picture and charting the best course forward.

With tax season almost among us, take a look at the tips below. Use these tips as a guideline to help protect your financial interests and ensure a smooth, successful tax year.

Tip #1: Know The Basics

Before you begin your tax planning process, there are a few things to keep in mind. These may seem like no-brainers, but you’d be surprised at the number of people who sometimes overlook the obvious!

  • Your income – a key determinant of the tax rate you are facing
  • Your location – tax laws and guidelines differ from state to state
  • Your expenditures – how much are you spending and where?
  • Keeping a budget can help tremendously with this!
Tip #2: Work Closely With a CPA Firm

Maintaining a close relationship with your CPA is vital! Your CPA is there to help find approaches that work best for YOU. Some techniques are better suited for businesses, while others align better with educational institutions or nonprofits. Your accountant can help you identify specific financial areas that incur higher tax rates and form preventative strategies to avoid possible tax increases. With a professional accounting service, you lower the risk of making mistakes. Remember to communicate with your firm all year long, not just right before tax season.

Quarterly financial updates – Think about sending your CPA firm financial updates on a quarterly basis. When they evaluate your numbers regularly, your firm develops more accurate tax saving estimates.

Best practices – Inform your firm of all business decisions you’ve made throughout the year. If your CPA firm has all the correct information, they are able to provide you with the very best advice for the upcoming year.

Regulation changes – Tax laws change every year, sometimes several times within a year. Tax laws shouldn’t be a huge concern when filling out your tax forms, but they should be one of the first things you research before starting a new tax year. Your CPA can help keep you up-to-date with all regulation changes in order to better your financial plan.

Tip #3: Don’t Forget Retirement Plans

Everyone loves a tax decrease, but most folks overlook the fact that a retirement plan can be used as a tax-savings vehicle. Although your income is reduced when you contribute to your retirement plan, your taxes are reduced as well. Working with your CPA and wealth management advisor is a key factor in ensuring that you have the best plan in place. Don’t have a wealth management advisor? Don’t worry – your CPA can point you in the right direction.

Depending on your current standing with these factors, there are several tax planning strategies you and your CPA Firm might want to consider.

Standard and itemized deductions – You may want to consider itemizing your deductions if you pay a significantly high mortgage on an owned home.

Contribute funds to your retirement plan – The more money you make, the more taxes you pay. And the less money you make, the less taxes you pay. One of the best ways to lower your taxes is to decrease your income by contributing to your retirement plan. Your contribution reduces your income, which lowers your tax bill.

Want to learn more about securing tax-planning success? Contact us to start the conversation about your financial future with our firm – accountants who truly care about becoming a partner in your success.

Medicare and You – Things You Need To Know If You’re Turning 65

If you are turning age 65 soon, there are several things you should know about Medicare. You need to know if and when you should apply for Medicare and what your options are when you sign up for Medicare. You can find more information on the Medicare website at   

When to sign up for Medicare coverage:

The initial enrollment period for all Medicare plans is the seven calendar month period starting three months before the month you turn 65.  If you sign up during the first three months of the enrollment period, Medicare will be effective on the first day of the month you turn 65.  If you enroll during the last four months, Medicare Part B will be effective one to three months following the month of enrollment.  There is a late enrollment penalty if you do not enroll in Medicare during the enrollment period.  This penalty is in the form of additional premium when you do enroll.

If you are age 65 and are covered under a group health plan from your or your spouse’s current employment, you may enroll in Medicare Part B at any time while covered.  You may also defer enrolling in Medicare Part B without paying a penalty.  If you defer enrolling, you have eight months after the earlier of the month employment ends or the group health coverage ends to enroll in Medicare Part B.  COBRA and retiree health coverage do not count as current employer coverage.

**You may switch plans each subsequent year from October 15 to December 7. 

Types of Medicare Plans:


Original Medicare is comprised of Part A and Part B.  Medicare Part A is hospital insurance and covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.  There are no premiums for Part A.  Medicare Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.  Premiums for Part B are due monthly and vary according to your income and when you sign up for Medicare.  If you are receiving Social Security benefits, you will automatically get Part A and Part B starting the first day of the month you turn 65 and premiums will be deducted from your benefit payments.  If you are not already receiving Social Security benefits, you need to sign up for Part A and Part B during the enrollment period.  You may sign up online at or at the local Social Security Administration office.  You will be billed for the Part B premiums. 

Part D: 

Medicare Part D is prescription drug coverage.  Parts A and B do not cover prescription drugs.  If you want prescription drug coverage, you can enroll in Medicare Part D online at This website can give you the plans available to you in your geographical area and the premium costs of the various plans if you enter the prescriptions you are currently taking.  The premiums vary among different companies depending on your prescriptions. 

Advantage Plan (Part C):

A Medicare Advantage Plan, also known as Medicare Part C, is a plan that includes both Part A and Part B.  It may also include Part D if you want to and may include other benefits.  This is like an HMO or PPO.  Private insurance companies approved by Medicare provide the coverage.   In most plans, you need to use plan doctors, hospitals and other providers or you pay more or all of the costs.  You cannot have a Medigap policy if you are enrolled in a Medicare Advantage Plan and you may be limited in your ability to switch from a Medicare Advantage Plan to other plans.

Supplement Insurance (Medigap) policies:

You must be enrolled in Medicare Part A and Part B.  Medigap policies are sold by private companies and help pay for costs not covered by Original Medicare, such as co-payments and deductibles.  It may cover other services not covered by Original Medicare, such as medical care when you travel outside the US.  You must pay the private insurance a monthly premium in addition to the Part B premium.  A Medigap policy only covers one person so both you and your spouse need your own separate plan.  Some companies may offer a discount on premiums if both spouses have policies through their company.  Medigap policies do not cover long-term care, vision or dental care, hearing aids, eyeglasses or private-duty nursing.  There are many types of Medigap plans and you will need to compare coverages and out of pocket costs before you enroll in one.

It may be helpful to enlist the aid of a professional or an investment counselor to help you determine the best fit for your particular situation. LBA Haynes Strand can help – set up your no-cost consultation.