Dan Bowman, Grand Prize, 2 Hours Succession Planning ($400 Value)

Barbara Maple, Pair of Stadium Chairs

Joyce Trout, KCPA t-shirt and cap

Chris Smith, KCPA t-shirt and cap

Cheryl Gerber, RTIC tumbler

Andy Wyss, RTIC tumbler

Now that you are 70 ½ years old, and you own a traditional IRA, the IRS requires you to take or withdraw a required minimum distribution (RMD) each year for the rest of your life. The amount is calculated each year based on the value of your IRA account and it will be included in your taxable income.

For individuals who regularly contribute money to charity and now must take the RMD from their IRA, there is a tax provision that allows you to maximize the tax ramifications for both. Instead of writing a check to your charity, you can direct the trustee of your IRA to transfer funds directly to the charity of your choice.  The amount transferred will count toward the minimum amount that you were required to withdraw for the year.  The maximum amount that can be excluded from income in one year is $100,000.

The tax benefit comes from the fact that you will not have to report the withdrawal as income. Although you do not get to claim the amount as a charitable contribution, you will benefit by reducing your adjusted gross income (AGI) which can help you in other areas, such as the taxation of your social security benefits, a reduction in the net investment tax, and a reduction in state and local taxes paid.  Also, with the passage of the new tax law which doubles the standard deduction in 2018 there will be fewer people who are able to itemize deductions and hence won’t see the tax benefit of their charitable contributions.  For people who make charitable contributions by using the QCD, they will still get the benefit of the donations by the fact that they are reducing their taxable income.

For individuals who are charitable and have an RMD requirement, this is a smart strategy that makes the most sense in reducing taxes and providing funds to your favorite charity.

For the past few days, I have been participating in a National Agriculture Conference developed by the AICPA (American Institute of Certified Public Accountants). Many nationally-recognized experts have been speaking.

Kline’s CPA Group prides itself in our understanding of the agricultural industry. It has been a pleasure to be part of this national event and to strengthen our knowledge base.

As I’m sure all of my farm clients are well aware, the farm economy is in a stage where prices are low, net incomes are slim or nonexistent, there are trade uncertainties, and financing is tough. Working capital is weak and equity is being burnt up with no real end in sight.

So how can Kline’s help your operation through these tough times?  We can. . .

• Assist in preparing fair market value balance sheets and accrual income statements for you and your lending institutions. We can also assist with cash flows.
  • In many situations, we find that clients do their best to fill out their yearend balance sheets for the bank but that they may be missing pertinent information that the banker needs for an insightful analysis.
  • We also notice that not all lenders understand that just looking at a tax return will not give them an accurate picture of what an operation’s true net income is.
• Review financials in order to calculate liquidity ratios, profitability ratios, leverage ratios, etc. These ratios are extremely important to lending institutions when they are trying to compare your numbers with their internal standards.
• Compare your ratios with other operations your same size and location to identify strengths and weaknesses.
• Give input on how to utilize your strengths to improve your weaknesses. Many times, this involves working with your bank to structure things so that all parties are benefited.

A few other things to note that were covered in detail during the conference. . .

• Marketing your crop in this environment is very important! Be sure to mitigate your risk. If you don’t have anyone that you are working with on this, we can suggest some resources.
• Review your need for crop insurance to mitigate risk. Again, if you don’t have anyone that you are working with on this, we can suggest some resources.
• Don’t forget about succession planning. Make time to begin the process!! If you’ve already begun, continue. If you’ve finalized a plan, review it for applicability.
• Details about the Tax Cuts and Jobs Act. Please join us on August 14th for a review of this Act at our Customer Appreciation Day!

SCHOLARSHIP

Brian loved helping teens in this way because he saw the way their lives were impacted. YFC will be creating opportunities annually for students who cannot afford to participate in life-changing camps and trips. We will also provide funds for two graduating seniors to further their education and attend college.

LEADERSHIP

To steward our mission well we must develop the next generation of leaders. YFC will invest in high school student leaders, college interns and YFC ministry staff to continue the impact in our communities. Training and leadership development will continue to be delivered at a very high level.

MINISTRY

Brian was a visionary and always talked about growing the YFC footprint in our territory. In communities like Huntington and the surrounding area our schools and local authorities have identified several opportunities to expand our reach with at-risk teens.  We plan to invest in staff recruitment, volunteer training and will empower a team of adults to help focus on these opportunities.

Brian believed that young people needed hope and he believed the mission of YFC brought that hope to teens who were often times overlooked or simply not engaged in their community. We hope to increase that impact through a number of different initiatives that would have immediate and long lasting impact in the lives of young people in our communities. We invite you to join us in continuing the legacy of Brian Kline. For more information on how you can contribute to the Brian Kline Legacy Fund, contact Brandy Swope at Kline’s CPA (260)356-1040 or contact Roger Vezeau, Youth For Christ, (260)484-4551 or (260)224-2988.

Help us make an impact. Brian believed that young people needed the message of hope.

Youth For Christ is excited to announce the inaugural Brian Kline Golf Classic (formerly the Huntington golf outing) on the morning of Friday, June 15th at Chestnut Hills Golf Club. You are invited to be a part of this great event. The Brian Kline Golf Classic has been established to honor the life and legacy of Brian Kline.

For more information or to register you or your team, CLICK HERE. If you have questions contact Breanna Amico at mailto:bshroyer@yfcnin.org.

We look forward to seeing you on June 15th!

The limitation for the $10,000 property tax and income tax is associated with personal income taxes and property taxes paid on personal residences and second homes on Schedule A (Itemized Deductions). The Tax Cuts and Jobs Act included a provision that disallowed prepaying your 2018 state income taxes.  The IRS has also just released additional guidance regarding prepayment of property taxes.  For the property taxes to be deductible in 2017 the property taxes must have been assessed, meaning a payment to the county auditor or treasurer’s office will not be deductible unless the taxes have been billed or assessed.

We look forward to future opportunities to team up with WOWO to offer our clients the chance to meet and hear area professionals. We welcome your input if there is a specific topic you would like to see addressed.

Senate Bill 515 included a sales tax exemption for components of a “drainage water management system”. The bill specifically states the features of the system must facilitate controlled water drainage.  The NRCS website has information about drainage water management systems and a video about the system (found here) and it shows there must be a dam to control the level of water.  Our office has reviewed the Indiana Code, the Indiana Department of Revenue departmental notices and Commissioner Directives and there has been no mention of all field tile and components to be exempt from sales tax.  A new code section was added to the Indiana code and no prior section or subsection was amended or repealed upon passage of Senate Bill 515 related to the field tile and components.

We are aware Farm Bureau has pushed for the sales tax exemption, but we don’t believe the exemption is for all field tile purchases. If you are purchasing field tile and the tile company allows the purchase to be tax exempt, it would be best to continue to pay sales tax on the purchase.  We will continue to monitor all news releases and updates to the Indiana Code and send out any new information when it becomes available.

Changes in 529 plan rules include making computers and related equipment a qualified education expense for 529 purposes. The new legislation also allows account owners who take a withdrawal but then get a refund from the school to redeposit that money in the 529 plan within 60 days with no penalties.