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Timothy W. Tuttle & Associates
 


Volume 15 Edition 03                Please email comments to newsletter@tuttlefirm.com                  Mar 2019


Major Events This Month:

For March 2019      

Reminders:

Tax season is in full swing. Early reports from the IRS indicate that, on average, refund amounts are down compared to last year. If this is you, the first article lays out some reasons for the change. This issue also includes a warning to business owners to file their taxes on time, tips to keep your monthly bills in check, and some exciting board games to try.

Call if you would like to discuss how any of this information relates to you. If you know someone that can benefit from this newsletter, feel free to send it to them.
 

Oh No! Your Tax Refund is Now a Bill

If you are anticipating a nice refund this year, it may be a good idea to prepare yourself for a possible letdown. Many taxpayers will receive a smaller-than-expected refund and might even owe taxes to be paid by April 15. If this happens to you, here are some of the likely reasons:

With the uncertainty regarding whether you will receive a refund, hold off on major purchases and plans until your tax return is finalized. If possible, create a cash cushion to lessen the financial burden on you and your family. This is especially true if your withholdings are lower than last year.
 

Hints to Eliminate Monthly Bill Creep

Paying bills is inevitable, but paying too much is not. Are you aware of all the services you are paying for every month? Here are some tips to help you get a handle on your recurring monthly expenses:

It's easy for your bills to spiral out of control if you don't keep close tabs on them. Go through a review exercise every few months to ensure you aren't paying more than necessary.
 

Businesses: File on Time or Pay the Price!

March 15 is the tax-filing due date for calendar year S-corporations and partnerships. While this filing deadline does not require making a tax payment, missing the due date could cost you a hefty penalty.

The penalty

The penalty is calculated based on each partial month the tax return is late multiplied by each shareholder or partner. So a tax return filed 17 days late with no tax due could cost a married couple who jointly own a small S-corporation $800 in penalties!*

Take action

Here are some ideas to help you avoid penalties:

If you haven't filed your S-corporation or partnership return for 2018, there's still time to get it done or file an extension. Please call if you need assistance.

* The penalty calculation for 2018 S-corporations is $200 ($210 for partnerships) per calendar month late, multiplied by the number of shareholders. So a S-corporation or partnership return filed on April 1 is considered two months late!
 

Candyland Getting Stale? Try These Board Games

Board games offer a great way to unplug and spend time with family and friends. Thanks to a rise in popularity over the last few years, the options available to you are endless. If you are looking to branch out from the classic games like Monopoly or Clue, here are some excellent games to try:

  1. Ticket to Ride. Imagine you're a railroad tycoon in the early 20th century with a map and plans to build your railroad empire across the country. You battle against other players to claim routes and connect cities based on your specific destination cards. The original game uses a map of the United States, but many other maps are available - each with their own twist.
  2. Dixit. If you love telling stories, this game is for you. Each player has a set of cards and makes up a story based on the picture that is on one of the cards. It's up to everyone else to guess which card the storyteller is talking about. The goal of the storyteller is to be abstract enough that it fools at least one player, but not so obscure that no one knows what you are talking about.
  3. Catan. Picture yourself and your friends as early settlers that discover an island with multiple terrains and bountiful resources. The race is on to gather, build and barter your way to take control of the island. To keep the game engaging, the board is made up of tiles that can be shuffled around so the island looks different each time you play.
  4. Pandemic. This game is different from the others in that you work with the other players to defeat the game. You are tasked with the assignment of stopping the spread of four diseases that are capable of wiping out all of humanity. Each player has a different role and abilities to use while you strategize together as a team. If you cure all four diseases, you all win!
  5. King of Tokyo. Who doesn't wish they could be 300 feet tall and strong enough to smash skyscrapers? Well even if you don't, the King of Tokyo is a lot of fun. Each player picks a city-destructing monster and works to gain power and destroy each of the other characters to be the sole King of Tokyo.

The time it takes to complete each of these games can be anywhere from 30 minutes to several hours (depending on your level of investment in the game) and are recommended for ages 8 and older. In addition, each of these games has expansion packs or additional versions, so if you really like a game you can continually change the experience.
 

7 Common Missing Tax Return Items

Want your tax return filed quickly and without error? Then double-check this list of items that are often overlooked. These missing items often cause delays in getting your tax return filed:

  1. Forms W-2 and 1099. Using last year's tax return as a checklist, make sure all your W-2s and 1099s are received and applied to your tax return. Missing items will be caught by the IRS mismatch program. All these forms are required to be in the mail to you on or before Jan. 31. If you are missing a form, contact the company responsible for issuing them.
  2. Form 1095-A. If you have health insurance through the Health Insurance Marketplace, you will need this form to complete your taxes and potentially claim the Premium Tax Credit. The deadline for employers to distribute other versions of Form 1095 is March 4.
  3. Dependent information. If you add a new dependent in 2018, provide the name, Social Security number and birth date to have them added to your tax return. If you have a dependent that shares time with someone else, discuss the plan for who is going to claim them. Your tax return cannot be filed if there is conflict in this area.
  4. Cost/basis information. If you sold any assets (typically investments or real estate), you need to know the cost/basis amount to calculate your taxable capital gain. Check your investment statements to ensure that your broker includes the required information. Often times it's hard to find on the Form 1099-B summary, but it might be listed later in the statement details.
  5. Schedule K-1s. As an owner of a partnership or S-corporation, you will need to receive a Form K-1 that reports your share of the profit or loss from the business activity. Because of the new qualified business income deduction (QBID), businesses are required to report more information this year. When you receive your K-1, pay special attention to box 17 (codes V through Z) for S-corporations and box 20 (codes Z through AD) for partnerships. This is where QBID information is included. Without this, you cannot file your tax return.
  6. Forms or documents with no explanation. If you receive a tax form, but have no explanation for the form, questions will arise. For instance, if you receive a retirement account distribution form it may be deemed income. If it is part of a qualified rollover, no tax is due. An explanation is required to file your information correctly.
  7. Missing signatures. Both you and your spouse need to review and sign the e-file approval forms before the tax return can be filed. The sooner you review and approve your tax return, the sooner it can be filed.

By knowing these commonly missed pieces of information, hopefully your tax filing experience will be a smooth one.
 

7 Secrets to Amazon Success

With 6 million buyers visiting Amazon every day, it is tempting for a small business to explore listing their products to take advantage of this sales channel. However, it is not for the faint of heart. Here are seven secrets to a great selling experience:

  1. Select the right products. Try to find a product in your business that is unique enough that it can stand out, but will not damage your core business. Often the competitive Amazon environment finds you selling your key product on Amazon at a much lower price than you are selling it elsewhere.
  2. Actively manage your reputation. A poor product rating or seller score can kill your momentum. Always comment on customer low rankings. Try to use low-star comments as ambassadors to how you handle customer service.
  3. Create and defend your brand. Try to list products that have a brand you control. Then register your trademarked brand with Amazon. This will help keep competitive sellers off your listing.
  4. Aggressively get on the first page. Buyers will not typically go beyond one or two search result pages. The more you know your common search terms, the better you will perform. Also take advantage of Amazon-sponsored ads if they are cost effective. For seasonal products, introduce them before the season starts. The combination of low category volume, sponsored ads and a low introductory price will help your product move up the listings faster.
  5. Understand the buy box. Multiple sellers can be on a single listing. The lowest price gets the key selling default called the buy box. If you don't have the buy box you will get very few sales. So early on, be tenacious about getting and keeping the buy box.
  6. Beware of parasites. Amazon is FULL of them. They are virtual sellers who will source similar products and jump on your listing. They will then lowball the price and take over the buy box. Even if they don't get the low price, they will force you to sell at a loss, burn through your inventory, then take over your listing. Branding will help, but be prepared to face this problem.
  7. Weigh the pros and cons of FBA. Fulfillment by Amazon (FBA) is the preferred way Amazon wants you to sell. By sending inventory to Amazon and having them fulfill orders you get their Prime banner and no shipping hassles. If you don't ship FBA you're in for distorted delivery ship dates, lower sales and poor search results. Even if you choose FBA be prepared for multiple state sales tax hassles, and three to four week lead time to replenish your inventory.

While Amazon can boost your sales, be prepared for lower margins and the need for constant attention. Look for ways to use Amazon to augment your core business, not replace the success of your current business model.

As always, should you have any questions or concerns regarding your situation please feel free to call.

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Timothy W. Tuttle & Associates
www.tuttlefirm.com