Uncategorized Archives - Page 5 of 5 - Hawkinson, Muchnick & Associates

Consider the value of time in business decisions

by Marketing | May 6, 2016 | Uncategorized

The “time value of money” is a critical concept in handling personal finances. The same basic premise can be applied in making decisions for your business.

Here’s how it works: Typically, the money you currently have in your hands is worth more than it would be years from now. That’s because you’re able to spend or invest the funds now instead of waiting to receive them. In other words, there’s an “opportunity cost” attached to any delay.

For example, let’s say you’re entitled to a $100 payment. If you receive the $100 now and you’re able to invest it at a 5% annual interest rate, you’ll have $105 after one year. Assuming you don’t need the money for expenses, it will be worth $110.25 after two years, and so on. This amount is known as the “future value” of the money.

Similarly, you can compute the “present value” of money. Suppose you won’t receive the $100 payment until one year from now. The value of the money must be discounted due to the opportunity cost. Using the same 5% interest rate, the present value of the $100 you’ll receive a year from now is $95.24 ($100 value divided by 1.05).

It’s easy to see how this concept can affect your business. Accelerating payments from customers will enable you to better meet your current obligations and provide reserves for investment. On the other hand, delays hamper cash flow and reduce the opportunity for investment. Computing the time value of money may also encourage you to lease, rather than buy, assets.

The time value of money is an important factor in business decisions. For help running the numbers and analyzing the results, give us a call.

Keep up with section 179 depreciation changes

by Marketing | May 3, 2016 | Uncategorized

Did you know that a recent law made changes to the section 179 expensing election for 2016? These modifications took effect as of January 1. Here’s what to consider as you make asset purchasing decisions this year.

Change #1. Beginning in 2016, section 179 is indexed for inflation. This year, the basic section 179 expensing limit will be $500,000. That limit is reduced dollar-for-dollar once your purchases exceed $2,010,000.
Change #2. The definition of “section 179 property” now permanently includes computer software and real property such as qualified leasehold and retail improvements and restaurant property. That means you can elect to use section 179 expensing when you purchase those assets.
Change #3. You may be able to deduct more of qualified leasehold and retail improvements and restaurant property in 2016. Beginning this year, the law eliminated the $250,000 cap on the amount of section 179 you could claim for this property.
Change #4. Beginning in 2016, air conditioning and heating units are eligible for section 179 expensing.

We are Growing!

by Hawkinson | Jul 13, 2015 | Uncategorized

Hawkinson, Muchnick & Associates is looking for a career oriented CPA with 3 to 5 years of public CPA firm experience to join our team.

HMA is a CPA firm in Douglasville, GA providing advanced accounting and tax services to closely held businesses, individuals, estates and trusts.

Qualified candidates must have extensive experience with a public CPA firm preparing and reviewing business and individual tax returns, accounting and financial statement preparation, and interacting with clients directly.

We offer an excellent opportunity to escape the long commute and grueling demands of the large downtown firms. Interested applicants should send their resume to [email protected].

REMINDER: FORM 1099 MAY NEED TO BE FILED FOR 2014

by Hawkinson | Feb 12, 2015 | Uncategorized

If you have a business or rental property, you might have to prepare 1099s to send to anyone you paid at least $600 for services in 2014. You should have sent these 1099 forms by January 31. You will then need to file a copy of the forms with the IRS by February 28. You generally do not have to send 1099s to corporations.

This requirement has been around for a while but the reason this is more critical than in the past is that there are questions on tax forms now specifically asking whether any payments you made require you to prepare these 1099s and, if so, whether you have or will file the required forms.

When you are ready to file your 2014 tax return and are faced with these questions you will be faced with the following if you have not filed the forms:

Truthfully answer the questions that you do not have to file the forms or that you have properly filed them;

Falsely answer the questions that you don’t have to file them;
Leave the forms blank.

In the case of alternative 2, you will be perjuring yourself which is NEVER a good idea and, is in fact, illegal.

In the case of alternative 3, you will be inviting the IRS to audit your return to see if you are in compliance. This is also NOT a good idea.

If you have not filed the required 1099s, you still can do so even though they are now late since they should have been sent already.

If you have any questions or if we can be of assistance, please call us.

NOW THAT YOU ARE THINKING ABOUT THE 1099 FILING REQUIREMENT, THIS WOULD BE A GOOD TIME TO GIVE SOME THOUGHT TO HOW TO ACCUMULATE SUCH INFORMATION FOR 2015 SO THAT YOU WILL BE ABLE TO FILE ON TIME. Since you might not know whether you will exceed the $600 filing requirement threshold until the end of the year, it would be best to put in place a system to track this information now through the end of the year.