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The Apex Blog

Tax and Accounting Blog: Finding the Signal in the Noise

The New and Easier Form W-4

Posted by Ruchi Attal Posted on Jan 21 2020

Happy New Year! With a new year comes new changes - maybe it is a new fitness plan, a new budget, or even a new job. Well you aren’t the only one making some changes in your life. Even the IRS is changing things up — they just debuted a new Form W-4 for the first time in nearly three decades.

Form W-4, the official name for the Employee’s Withholding Certificate, is a document employees fill out so their employers can determine how much federal income tax to deduct from their paychecks. This redesign was necessitated by the 2017 Tax Cuts and Jobs Act.

The IRS says the makeover “reduces the form’s complexity and increases the transparency and accuracy of the withholding system.” Rather than forcing taxpayers to fill out “complicated worksheets,” they’ll answer “more straightforward questions.”

But what does that mean for you and your taxes?

One major shift is that Form W-4 doesn’t use allowances any more. Due to changes in law, currently you cannot claim personal exemptions or dependency exemptions. The new W-4 calculates withholdings by having you complete up to five steps. Everyone has to do steps 1 and 5, but completing steps 2, 3, and 4 will depend on each person’s situation.

If you have been with your current company for a long time you might not even remember filling out your W-4, so do you need to fill out a new one? People who start new jobs in 2020 are required to complete the new form. But if you haven’t made any changes to your employment since last year, then your boss will just keep doing what they’re doing — determining your withholding based on your most recent W-4.

But what happens if you make a mistake? Don’t worry, it happens to everyone! If you don’t withhold enough, you may have to pay a tax bill or face penalties. If you withhold too much, you’re basically letting the government have an interest-free loan. Luckily, the IRS has a tax withholding estimator online to walk you through everything.

If you are worried about the new W-4, the IRS has a handy dandy FAQs page on their website to help clear things up for you. Still confused on how this change will affect you or your business? Give us a call today and we will be happy to help you out!

The (Tax) Benefits of Gifting

Posted by Ruchi Attal Posted on Nov 22 2019

They say it is better to give than receive. I agree – especially when that giving can lead to some tax breaks!! Did you know that some holiday gifts you give to employees, business partners, and clients may provide you with tax benefits?

I like giving gifts to my employees during the holiday season (Apex team – hope you are reading this!). If an employer offers gifts once a year (like at Christmas), the gift’s value would be treated as a “de minimis fringe” benefit. What does that mean exactly? The gift would be tax-free to the employee and tax-deductible by the employer. Win – win!  

Note: cash gifts, regardless of the amount, are considered additional wages and would be subject to the usual taxes. 

The holidays are the perfect time to give a gift to your clients to 1) show your appreciation and 2) get a tax deduction at the same time. In the spirit of giving, the IRS allows businesses to deduct gift expenses up to $25 per client per year. 

Also, in a world where emails and texts are the most frequent form of communication, there are many businesses that still send their clients holiday cards each year. Not a bad idea since holiday cards are considered stationary, which falls under business expenses. By the way, the postage to mail them is also a business expense!

The holidays are a great time to reach out to clients and employees and let them know how much you appreciate them. And believe it or not, our tax code actually encourages giving by providing some helpful tax breaks. So spread the cheer and enjoy the holidays.

Helpful End of Year Tax Planning Tips for Individuals

Posted by Ruchi Attal Posted on Nov 13 2019


You are past all the tax filing deadlines for 2018, so now it’s really time to focus on your taxes for 2019.  If you haven’t already thought about your taxes for the current year, you have less than two months left to make a difference for your 2019 taxes.   These three tips can help make your taxes a little more manageable come April. 

1. Defer your income, accelerate expenses

Income is taxed in the year it is received—but why pay tax today if you can pay it tomorrow instead?

It sometimes makes sense to accelerate deductions and defer income.  If you are self-employed, consider invoicing your clients in January 2020 instead of December 2019 to defer income to next year.  . On the deduction side, are you thinking of buying furniture or computers to start off the new year? You may be able to prepay some expenses in December to accelerate spending in the current year.

2. Contribute the maximum to retirement accounts

There may be no better investment than tax-deferred retirement accounts. They can grow to a substantial sum because they compound over time free of taxes.

Company-sponsored 401(k) plans may be the best deal because employers often match contributions.

Increase your 401(k) contribution so that you are putting in the maximum amount of money allowed ($19,000 for 2019, $25,000 if you are age 50 or over). If you can’t afford that much, try to contribute at least the amount that will be matched by employer contributions.

3. Charitable donations

The Tax Cuts and Job Act of 2017 doubled the standard deduction.  So, if you cannot take your charitable donations as a tax deduction any more, there may be a solution for you.  Consider opening a donor-advised fund to donate your money to. You can bunch your donations in one year, take the charitable donation as a deduction on your tax return for that year and use those funds to make contributions to various organizations in subsequent years. 

These tips are just a sample of the ways you can prepare for tax season. You can get significant tax savings with proper planning. Talk to your CPA today and plan ahead!


The One Where We Got Started

Posted by Admin Posted on Nov 07 2019

As tax and accounting professionals, we are constantly reading up on the latest and greatest in our field. Things are changing all the time, for a variety of reasons. Congress could pass a new law. The IRS could issue a new pronouncement. The GAAP could amend its recommendations and requirements. Any or all of these are regularly occuring events and it is our job to sift through the unending changes so that we can be informed enough to provide our clients with the most current and correct advice.

After much deliberation, we have decided to introduce our own blog. The idea behind our blog will be to help our clients find the signal in all the noise that is out there. The noise can be the sheer volume of information or it could be because of the complexity surrounding tax and accounting best-practices. Either way, our aim will be to help find the signal. We will try to break things down in the simplest way possible so that our readers can quickly and easily be more informed on the topics that we present. 


All thoughts and opinions shared here are for informational purposes and should not be taken as personalized tax or accounting advice. Every situation and circumstance should be analyzed independently by you and your CPA.