Oct. 3, 2017

In This Edition
Three Strategies for Handling Estimated Tax Payments
Wisconsin State Budget Impacts Your Property Taxes
Tax Calendar
Free QuickBooks Training Events
Do You Need the Protection of a D&O Insurance Policy?

Three Strategies for Handling Estimated Tax Payments
In today's economy, many individuals are self-employed. Others generate income from interest, rent or dividends. If these circumstances sound familiar, you might be at risk of penalties if you don't pay enough tax during the year through estimated tax payments and withholding. Here are three strategies to help avoid underpayment penalties:

1. Know the minimum payment rules. For you to avoid penalties, your estimated payments and withholding must equal at least:
  • 90% of your tax liability for the year,
  • 110% of your tax for the previous year, or 
  • 100% of your tax for the previous year if your adjusted gross income for the previous year was $150,000 or less ($75,000 or less if married filing separately).
2. Use the annualized income installment method.  This method often benefits taxpayers who have large variability in income by month due to bonuses, investment gains and losses, or seasonal income - especially if it's skewed toward   year end. Annualizing calculates the tax due based on income, gains, losses and deductions through each "quarterly" estimated tax period.

3. Estimate your tax liability and increase withholding. If, as   year end  approaches, you determine you've underpaid, consider having the tax shortfall withheld from your salary or year-end bonus by December 31. Because withholding   is considered to have been paid  ratably throughout the year, this is often a better strategy than making up the difference with an increased quarterly tax payment, which may trigger penalties for earlier quarters.

Finally, beware that you also could incur interest and penalties if you're subject to the additional 0.9% Medicare tax and it isn't withheld from your pay and you don't make sufficient estimated tax payments. Please contact us for help with this tricky tax task.

Contact: Steve Albers, CPA
Wisconsin State Budget Impacts Your Property Taxes
The 2017-19 state budget includes more than $400 million in tax cuts, as well as a smaller amount of tax and fee increases. Most of the tax cuts are aimed at reducing the amount of property taxes that individuals and businesses pay. The two-year budget period runs until June 2019.
View a summary of how the State's budget will impact your property taxes>>>

Tax Calendar
October 16
Personal returns that received an automatic six-month extension must be filed today and any tax, interest and penalties due must be paid.
The Financial Crimes Enforcement Network (FinCEN) Form 114, "Report of Foreign Bank and Financial Accounts (FBAR)," must be filed by today, if it hasn't been filed already, for offshore bank account reporting. (This report received an automatic extension to today if not filed by the original due date of April 18.)
If a six-month extension was obtained, calendar-year C corporations should file their 2016 Form 1120 by this date.
If the monthly deposit rule applies, employers must deposit the tax for payments in September for Social Security, Medicare, withheld income tax and nonpayroll withholding.
October 31
The third quarter Form 941 ("Employer's Quarterly Federal Tax Return") is due today and any undeposited tax must be deposited. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until November 10 to file the return.
If you have employees, a federal unemployment tax (FUTA) deposit is due if the FUTA liability through September exceeds $500.
November 15
If the monthly deposit rule applies, employers must deposit the tax for payments in October for Social Security, Medicare, withheld income tax, and nonpayroll withholding.
December 15
Calendar-year corporations must deposit the fourth installment of estimated income tax for 2017.
If the monthly deposit rule applies, employers must deposit the tax for payments in November for Social Security, Medicare, withheld income tax and nonpayroll withholding.
Free QuickBooks Training Events
Our local, complimentary training events will assist bookkeepers and business owners in taking full advantage of the benefits QuickBooks offers. Topics covered during the trainings include the following:
  • Basics of getting around in the QuickBooks
  • Writing checks
  • Accounts payable
  • Accounts receivable
  • Reporting
The last hour of the seminar will include an in-depth presentation of payroll in QuickBooks.

Locations and dates include the following:

Green Bay, WI
Oct. 19
Manitowoc, WI
Oct. 20
Winona, MN
La Crosse, WI
Oct. 24
Oct. 31
Rochester, MN
Nov. 1
Marshfield, WI
Nov. 7
Medford, WI
Nov. 8

Do You Need the Protection of a D&O Insurance Policy?
Your efforts toward ensuring your financial security might be focused on building up your assets through wise investing or growing your business. But protecting the assets you already have is just as important. And if you serve as a director or officer of a company, or even sit on the board of a nonprofit, your assets may be vulnerable. One way to gain some protection is to obtain coverage under a directors and officers (D&O) insurance policy.  

Assessing Your Risks
D&O insurance helps protect an organization's directors, officers and board members from liability resulting from management decisions. Just a few examples of how such individuals can put themselves at risk include:
  • Committing a crime,
  • Failing to disclose a conflict of interest, or
  • Breaching their fiduciary responsibilities.
But even if directors or officers do nothing wrong, they still can be held financially responsible for others' missteps if they're sued and the organization lacks sufficient assets to protect them. Indeed, directors and officers are vulnerable to many types of lawsuits.  

Employment-related litigation - covering such   claims  as harassment, discrimination and wrongful termination - is particularly common, while legal action also may be brought by unhappy shareholders, lenders, customers, suppliers, competitors or government regulators.  

You may feel less vulnerable if you sit on the board of directors of a nonprofit. Although nonprofits do lack shareholders, they still have stakeholders - financial contributors or other individuals with a personal interest in the organization's mission. Thus, nonprofit directors, officers and board members can find themselves at risk if these stakeholders decide to sue its leaders for mismanagement.

Contemplating Coverage
When contemplating a D&O policy, determine exactly what it covers. For example, some insurers won't cover fraud-related claims, while others specifically exclude employment-related litigation.  

Next, weigh what's covered against the specific risks you're most likely to face. For example, if you're thinking about joining the board of an organization with a history of rocky employee relations, determine whether you'll be protected from employee-related lawsuits. If you uncover potential gaps in the D&O policy, or if it includes provisions that could lead to your coverage being rescinded in certain situations, you may need to obtain additional protection through supplemental liability insurance.

Building a Safeguard
Make no   mistake,  a D&O policy can be costly because of the high financial stakes involved. So an organization in cost-cutting mode may not wish to offer you this coverage. Nonetheless, if you're a director, officer or board member, a policy may serve as a critical safeguard for your family's assets. Contact our firm for an assessment of your situation.

Contact: Lance Campbell, CPA