CPA Blog

Could your next business loan get “ratio’d”?

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Published: Monday, 07 May 2018 08:34

Written by Phillip Strickler, CPA.CITP

We live and work in an era of big data. Banks are active participants, keeping a keen eye on metrics that help them accurately estimate risk of default.

As you look for a loan, try to find out how each bank will evaluate your default probability. Many do so using spreadsheets that track multiple financial ratios. When one of these key ratios goes askew, a red flag goes up on their end — and the loan may be denied.

Common metrics

To avoid getting “ratio’d” in this manner, business owners should familiarize themselves with some of the more common metrics that banks use to gauge creditworthiness.

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Home vs. away: The company retreat conundrum

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Published: Monday, 07 May 2018 08:29

Written by Phillip Strickler, CPA.CITP

When a business decides to hold a retreat for its employees, the first question to be answered usually isn’t “What’s our agenda?” or “Whom should we invite as a guest speaker?” Rather, the first item on the table is, “Where should we have it?”

Many employees, and some business owners, might assume a company retreat, by definition, must take place off-site. But this isn’t necessarily so. Holding an on-site retreat is an option — and a markedly cost-effective one at that. Then again, it may also recall the old adage: You get what you pay for.

Staying put

There are several ways that staying put can better keep out-of-pocket expenses in check. The most obvious is that you won’t need to rent one or more meeting rooms. Perhaps even more important, no one at your company will need to spend valuable time and energy calling around to various hotels, gathering information and negotiating costs.

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Home-related tax breaks are valuable on 2017 returns, will be less so for 2018

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Published: Monday, 07 May 2018 08:24

Written by Raul D. Prieto

Home ownership is a key element of the American dream for many, and the U.S. tax code includes many tax breaks that help support this dream. If you own a home, you may be eligible for several valuable breaks when you file your 2017 return. But under the Tax Cuts and Jobs Act, your home-related breaks may not be as valuable when you file your 2018 return next year.

2017 vs. 2018

Here’s a look at various home-related tax breaks for 2017 vs. 2018:

Property tax deduction. For 2017, property tax is generally fully deductible — unless you’re subject to the alternative minimum tax (AMT). For 2018, your total deduction for all state and local taxes, including both property taxes and either income taxes or sales taxes, is capped at $10,000.

Mortgage interest deduction. For 2017, you generally can deduct interest on up to a combined total of $1 million of mortgage debt incurred to purchase, build or improve your principal residence and a second residence. However, for 2018, if the mortgage debt was incurred on or after December 15, 2017, the debt limit generally is $750,000.

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Under the new tax law you can’t deduct hobby expenses.

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Published: Monday, 19 March 2018 08:27

Written by Phillip Strickler, CPA.CITP