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The Student Debt Relief Plan and Your Taxes

The Student Debt Relief Plan and Your Taxes

President Biden, Vice President Harris, and the U.S. Department of Education developed a three-part plan to help federal student loan borrowers transition back to making regular payments post-pandemic. As a part of this plan, the Administration introduced the Biden-Harris Student Debt Relief Plan in August, which would forgive a certain dollar amount of student loan debt for qualifying borrowers. There have been several updates to the plan since its introduction, which we will share with you today.  Currently, the Student Debt Relief Plan has been blocked by multiple lawsuits. The plan is currently blocked pending a ruling in the Supreme Court which will hear oral arguments regarding the plan in February 2023 with a decision expected by June 2023. In the meantime, the Department of Education has extended the pandemic-era pause on federal student loan repayments until 60 days after the Department is permitted to implement the program or the litigation is resolved. If the program is not implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that.  Those who have already submitted applications for the program will receive communication from the Department of Education about whether the application qualifies, if the program is implemented. Until the final ruling is delivered by the courts, applications are closed.  If the program is implemented, eligible borrowers that fall below income levels of $125,000 for individuals and $250,000 for married couples or heads of households could receive the following:  Up to $20,000 of student debt cancellation for Pell Grant recipients  Up to $10,000 of student debt cancellation for most other non-Pell Grant recipients ...
End of Summer Business Check-Up

End of Summer Business Check-Up

As the leaves begin to change and our focus shifts to Q4 goals, now is the perfect time to take a closer look at your business. Performing an end-of-summer business check-up can provide important insights into what you may want to change before the end of the year, or how to prepare for 2023.   When reviewing the areas of your business that can determine its overall health, there are a few places you can dig deeper:  Gather/Analyze Financial Statements Review your profit and loss statement, income and cash flow statements, and balance sheets so you can gain a better understanding of your company’s financial status. When you review your profit and loss (P&L) statement, you may also want to consider the following:   If your business was profitable, determine if you have any needs for new equipment or upgrades, or improvements to property. Purchasing fixed assets and placing them in service prior to year-end may reduce your net income, which may reduce your tax liability. Bonus depreciation and Section 179 depreciation are tax incentives that allow you to claim a larger deprecation deduction in the year when a piece of equipment or certain improvements are placed in service. Talk with your accountant to see if bonus depreciation or Section 179 elective depreciation is available on potential equipment purchases or improvements.    To take advantage of this incentive, we recommend speaking with your accountant now. In most years, those decisions could be made later in the year, but with supply chain issues in recent years you will need to make equipment purchase decisions earlier in the year so that your vendors...
Client Feature: Rejuvenation Spa

Client Feature: Rejuvenation Spa

When you step into Rejuvenation Spa, expect a retreat for relaxation and total wellness. As an Aveda Lifestyle salon, each treatment offered is held to a high standard using Aveda treatments and products, focusing on the client’s needs.   Rejuvenation Spa came to be when long-time stylist Tina Morshauser stepped out from behind the chair and into life as an entrepreneur in 1998 after years of training that began when she was in high school. She purchased Yellowstone Day Spa and operated as the only stylist among a spa and support staff of 7 until her business partner, Gretchen Brown, joined her in 2000.   Over the past two years, Morshauser and Brown have expanded the salon, adding an additional location in Sun Prairie, and have a team of 42 between their Madison and Sun Prairie locations. Brown noted that Rejuvenation Spa is a team-based pay salon, which includes a profit share when monthly goals are met.   The spa has partnered with Green Circle, which aligns with the spa’s mission to be environmentally conscious in all they do. “Through Green Circle, we can recycle almost all that we use in the process of doing services. We have added a $1.50 environmental service fee to each service in order to help pay for the service,” Brown said. “We recycle ALL plastic, metal color tubes and aluminum foil used in highlighting services, all waxing waste (paper, sticks, etc.), and the hair that is left over after a cut is collected and sent to become oil booms (to soak up oil spills) or made into plastic bins that we use to collect everything that...
Inventory Accounting & Valuation Methods

Inventory Accounting & Valuation Methods

If you keep inventory in stock, it’s important to ensure that it’s accounted for properly. Inventory can affect your company in many ways, impacting cash flow, cost of goods sold, and your profit. Today, we’re diving into two popular inventory accounting methods and the ways you can value your inventory or assets.   What is Inventory Accounting Inventory accounting values and accounts for changes in the inventory a company holds during a given period. It determines the value of assets during the three stages of production: raw goods, in-progress goods, and finished goods ready for sale.  Each item in stock has a value recorded separately.  In manufacturing processes, the value of an item can change depending on the stage of production. The sum total of all inventory item values is recorded as a company asset.  The accounting method you choose has a direct impact on the cost of goods sold calculation for the accounting period, and on net income earned. Companies use cost of goods sold (COGS) to determine the direct cost of producing the goods sold without taking overhead costs into account, and generally includes only direct materials and labor costs.  To calculate the cost of goods sold, add the beginning inventory and purchases, then deduct the ending inventory from that number in the following way:  Cost of goods sold = beginning inventory + purchases – ending inventory.  Accounting Methods The method businesses use to cost their inventory directly guides the income and inventory value they report on their financial statements. Two popular methods to compute the cost of goods sold and ending inventory for a period are First...
Quick Guide: Accrual vs Cash-Based Accounting

Quick Guide: Accrual vs Cash-Based Accounting

As a small business owner, there are many decisions to be made, particularly when you’re just starting out, to ensure everything runs smoothly and efficiently. One important decision to make is selecting an appropriate accounting method for your business. Accounting methods are simply the rules your business will follow when reporting revenues and expenses. Today, we’ll dive into the two primary accounting methods — accrual vs cash-based accounting — what they mean, and how to choose between the two when setting up your business.   Before we get started, it’s important to note the IRS requires taxpayers to choose an accounting method that accurately reflects their income and to be consistent with their choice of accounting method from year to year. This is because switching between methods could potentially allow a company to manipulate its revenue to minimize its tax burdens. To change your accounting method, you must receive approval from the IRS, typically with Form 3115. It’s important to choose your method carefully; if you’re unsure which method would work best for you, consult with a tax advisor before launching your business.   Cash-Based Accounting Method  We will start with the cash-based accounting method, as it is the method most used by many small businesses. Cash-based accounting recognizes revenue when cash is received and when expenses are paid. For example, when you receive a bill from a vendor that is due next month, that expense is not recognized until it is paid. This is a simpler method because there is no need for accounts like Accounts Receivable or Accounts Payable – only cash accounts are required. This option is...