FAQ (Frequently Asked Questions)

• How do I find out how current tax changes will impact my tax return?
• I am getting ready to sell my business, how do I determine its value?
• Why do I need an accountant’s services when I can just prepare my tax returns myself?
• How can I improve the profitability of my business?

For more information, download the CDPA, PC brochure (PDF, 2 Mb)
 

How do I find out how current tax changes will impact my tax return?

There are several changes in this year's taxes, and how they will impact you will be based on an individual's circumstances.

One of the changes that we are seeing with broad implications is how dividends are taxed. Previously dividends were taxed at whatever rate the rest of your income was taxed at. However in 2003 the rules changed, and dividends may have a lower rate. They could be taxed in several ways:

1. Some may have the same tax rate the rest of your income is taxed at.
2. Some or all could be taxed at 5%
3. Some or all could be taxed at 15%
4. All of the above

The rate will depend on the date the dividend was paid to you, and the income tax bracket you fall into. Also, keep in mind that some dividends are not really dividends, but interest.

Another change is in the capital gains rates. Capital Gains, which come from selling investments, also follow the same structure as dividends. Both the dividends and capital gains rates will only be in effect for a few years, so it would be wise to take advantage of them while you can.

There are also some business tax changes that you will want to note. Generally, when a business purchases an asset they are supposed to depreciate the asset over several years. This means the tax benefit of the expense is spread over many years as well. However, the tax code also allows a taxpayer to elect to immediately expense some assets in the current year subject to limits. This is called Section 179 expensing. This year the limit for the amount of assets to qualify for Section 179 has increased. This means more expense can be taken this year and thus lowering your taxes.

Taxes are changing constantly and as Congress sees fit, and this being an election year expect to see more proposals of tax changes than usual. CDPA, PC can partner with you to keep you informed on tax changes year-round. This can help you minimize your taxes and realize your financial goals.

I am getting ready to sell my business, how do I determine its value?

Solid earnings along with factors such as economic trends, industry operations, market standing, intangible assets, regulation, and internal controls all are used to determine the value of a business. And both a seller’s and buyer’s point of view must be considered when selling a business. With professionals certified by the National Association of Certified Valuation Analysts, CDPA, PC offers business valuation services that employ professionally accepted methods to arrive at a well-reasoned and defensible estimate of value.

Why do I need an accountant’s services when I can just prepare my tax returns myself?

Most people need an accountant to take full advantage of the complicated and changing tax deductions and credits when preparing a tax return. Experienced accounting professionals don’t just file tax returns for government compliance, they look for ways to develop tax savings strategies and help individuals and businesses reach their financial goals. CDPA, PC goes beyond offering traditional accounting services, check with us on ways we can help your business grow.

How can I improve the profitability of my business?

Business owners should expect to reap the benefits of the hard work and long hours required of running their own business in the form of increased profits and the resulting value. In order to accomplish this, a business owner must begin to look at the business from a different perspective. That is, owners must work "ON" the business as opposed to always working "IN" the business. As a part of working "ON" the business, we suggest that you consider implementing strategies, such as The Four Ways to Grow Your Business — that has worked for many of our clients in improving profits and growing their business. By using proven tools and methodologies, CDPA, PC can help you design a plan to:

• increase the number of customers for your business,
• increase the number of times your customers actually buy from you,
• increase the amount of each purchase (average transaction value), and
• improve the internal processes within your business.

Contact us today to schedule a free consultation on how to help your business grow.

Read more about CDPA's:

services  :  about us  :  our clients  :   resources

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