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Steve Weber’s Tax tips for Farmers

Farmers Weekly

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Tax tips for Farmers

Let’s talk about the ever-popular S corporation entity and some planning to help lower your taxes. These are by far the most popular choice for a new business with one owner or a few owners. They are popular for many reasons, due to the simplicity to form, cost to maintain in good standing, liability protection, and the best reason of all, tax savings.

Owner/ officers should take a reasonable salary (via w-2) to avoid a love letter from the IRS and at the same time expense out some of the work they do and reap some of the benefits of all that hard work. Don’t forget to employ your children and save some self- employment tax if they are under 18. You will need to setup a management agency to employ them through the corporation, as corporations can’t employ kids. I hope you can get yours to work better than two of mine. Make sure you spell out the duties of the job and don’t over compensate ($6300) is a great number by the way.

A shareholder may have deductible expenses related to their ownership of an S corporation. Ideally, the S corporation should reimburse the shareholder for out of pocket expenses that are necessary and reasonable. A new snowmobile or AR-15 is very cool, but not going to pass the test. This could be for expenses when starting the business, miles, lodging, meals, home office, and other items. Anyone who itemizes can take these on schedule A, but this is the wimpy way and they are not one for one. The key is to establish an accountable plan and show receipts for reimbursement. Sole owner S corps are very easy to setup in this fashion. We you have multiple owners it can get complicated as feelings can get hurt if owner A is reimbursed more that owner B. The clear majority of S Corps I handle are 100% owned by one person. The deduction for these reimbursements comes off the top not later when you prepare your personal taxes.

Things to remember are that you can’t reimburse for depreciation, you can reimburse rent, but it must be fair. If you reimburse rent at the s corporation level, then you have rent income on the personal return. S corporations don’t pay federal tax but do pay state replacement tax of $1.5. So, that is where you save. I don’t know about you but the banks aren’t paying anything close to that for holding and investing your money so invest in yourself and reap the benefits. Setup an accountable plan for reimbursing yourself out of your S corporation. Now go out and get that Christmas tree for the office and say ho ho ho when you submit your receipt for reimbursement.  Merry Christmas

 

 

 

Steve Weber, CPA

Source: Will County News

Fed hikes rates for second time in a decade

Fed hikes rates for second time in a decade

Fed hikes rates for second time in a decade
© Greg Nash

The Federal Reserve hiked interest rates for the second time in roughly a decade on Wednesday, as the central bank continues its efforts to return to pre-crisis normalcy.

In a policy statement, the Fed announced it had raised its benchmark interest rate from 0.5 percent to 0.75 percent, up just a quarter point from the previous level set one year ago.

The central bank announced the hike following a two-day policy meeting in Washington. The hike was widely expected — Fed officials had said they would like to raise rates once more in 2016, and the December meeting was the final chance to do that. But it also represents a significant shift in how the Fed has operated since the financial crisis.

Wednesday’s hike came nearly one year to the day since the Fed’s last interest rate increase, which was a slight rise from the near-zero levels it had held in places for years in an effort to help push the U.S. economy through the recession.

While that first hike was a major milestone for the Fed, this second hike could be even more momentous, as it is likely to be followed by more interest rates hikes in a much shorter time frame.The Fed said it expects interest rates to remain at accommodative levels for some time, and believes the economy will likely develop in such a way that borrowing costs will only increase gradually.

The march back to more normal interest rate levels also comes at a major time of change for the U.S. overall. The hike comes just weeks before President-elect Donald Trump officially assumes control of the White House, alongside a Republican House and Senate that are expected to push for major policy changes on a host of fronts.

Many economists have warned that Trump’s vow to tear up existing trade agreements and enforce strict tariffs against foreign imports could rock the U.S. economy.

Ambitious GOP plans to slash taxes and regulations, and Trump’s vow to push a broad infrastructure spending package, could combine to form a potent short-term boost to the economy. But it could also pose long-term risks by potentially overheating the economy and encouraging inflation.

The Fed did not mention how policy shifts in Washington could impact the economy, but rather said in its statement that it expects “that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate.”

Source: Will County News

Reports of GOP elector defections greatly exaggerated?

Reports of GOP elector defections greatly exaggerated?

POSTED AT 12:01 PM ON DECEMBER 14, 2016 BY ED MORRISSEY

Will the Electoral College throw the presidential election into chaos … or is this just another post-election fantasy for the Left? Lawrence Lessig set up a legal fund to woo “faithless electors” away from Donald Trump, and announced yesterday that’s he’s heard from several who are “seriously considering” their options for next week’s vote:

Lessig’s anti-Trump group, “Electors Trust,” has been offering pro bono legal counsel to Republican presidential electors considering ditching Trump and has been acting as a clearinghouse for electors to privately communicate their intentions.

“Obviously, whether an elector ultimately votes his or her conscience will depend in part upon whether there are enough doing the same. We now believe there are more than half the number needed to change the result seriously considering making that vote,” Lessig said.

Lessig’s claims contradict the assertions of Republican National Committee sources who report that a GOP whip operation intended to ensure Republican electors remain loyal to Trump found only one elector — Chris Suprun of Texas — would defy Trump.

Politico notes that Lessig didn’t bother to offer any evidence of this claim, which would make sense even if it were true. Only Suprun has gone public; anyone else would be contacting Lessig’s group on the QT. Many of them would face legal consequences for defying the voters in their states, so they won’t go public blithely.

On the other hand, this is a rather extraordinary claim, especially given Lessig’s ties to Barack Obama. Would three dozen electors show up on Lessig’s doorstep to betray the GOP — electors chosen by party officials for their loyalty, and who presumably have something to lose by betraying it? That seems a little unlikely — not impossible, but unlikely — and it cuts against the report from Politico yesterday about the results from the GOP’s standard Electoral College whip operation.

The Hill goes farther in pouring cold water on the claim. While they’re getting e-mails and messages from activists, Republican electors say that their Democratic counterparts have actually remained rathe quiet:

Virtually all Republican electors reached by The Hill said they will vote enthusiastically for Trump.

“I’m voting how the people of Florida have told me to vote,” said Brian Ballard, a Florida elector who raised money for Jeb Bush and Marco Rubio during the GOP primary. “I don’t know anyone who isn’t. I appreciate people using First Amendment rights to reach out and try to convince me otherwise, but I’m obligated to support Trump because he won Florida.[“] …

While most electors say that they’re not hearing much from the Democratic delegates who are purportedly campaigning to get GOP electors on board, they’re still being flooded with letters, emails and phone calls from private citizens across the country urging them to abandon Trump.

Funny about that, eh? Jonathan Easley and Ben Kamisar write that the Democratic electors who are publicly calling for their Republican counterparts to reconsider their votes don’t have “little appetite” for a Republican alternative for whom they’d cast their own votes. That leaves Republican electors with having a choice of putting the White House in control of the GOP, or handing it off to the Democrats. That’s not exactly a tough choice.

Even if they abstain, what’s the end game? The election would go to the House of Representatives, where Republicans have a wide majority in the state delegations (32-15, and three evenly split in this session of Congress). Trump would win easily in this scenario, as House members would have to go back to their districts to explain why they ignored the election results to put someone else in the White House. That’s especially true considering that the House can only elect from the top three Electoral College vote winners, according to the 12th Amendment — which would be Trump, Hillary Clinton, and whomever one or more faithless electors choose in their balloting, primarily promoted by Democrats.

As I write in my column for The Week, this is yet another ludicrous liberal fantasy — and another way in which the party that scolded Donald Trump for shaking confidence in American elections wants to overturn the one they just lost:

But Trump opponents have seized on the Electoral College as a last-gasp measure to change the outcome of the election. Democrats want electors from states Trump won to change their votes, arguing that voters elected them to exercise their judgment. Clinton campaign chair John Podesta demanded intelligence briefings for electors on the Russian hacking threat — the same one they knew about in October when scolding Trump for approaching results with due caution. “Electors have a solemn responsibility under the Constitution,” Podesta wrote, “and we support their efforts to have their questions addressed.”

Forget the practical issue that any briefing of significance would require 538 electors to get security clearances in the space of a week. Electors do have a “solemn responsibility under the Constitution,” but it’s not to act as a shadow Congress or a substitute for the voters they represent. They have one job, and one job only: to fulfill in person the results of the presidential election in each of their states. They have no other authority or jurisdiction in the Constitution or by judicial precedent. …

The desperate liberal Electoral College project will fail anyway. Thirty-nine electors demanded the briefing, presumably to justify voting against Trump, but 38 of them are bound to Hillary Clinton already. The one Republican, Chris Suprun of Texas, had already announced his intention to vote for someone other than Trump or Clinton. Trump has a 35-elector edge even without Suprun, and no other Republican electors seem interested in throwing the election to the House of Representatives, or Clinton either.

For better or worse, voters put Donald Trump in the White House. Congress can and should investigate Russian efforts to hack into political organizations and push the executive branch to do a better job in combating such intrusions and attempts at influencing American politics. That will take a realistic approach to governance, for which the incoming Trump administration must prove itself ready to provide. The absurd attempts to overturn the election results demonstrate why Democrats aren’t being given that opportunity — at practically every level of government.

By the way, I’m old enough to remember when progressives warned that Republicans would try to steal the presidency by throwing the election to the House. In April, such an outcome was “anti-democratic.” I assume the author simply erred in not capitalizing the ‘D’ in his argument.

Source: Will County News

Steve Balich & Mike Fricilone win fight against increased water rates

Office of the Will County Board

James Moustis, Speaker

Will County Office Building f 302 N. Chicago Street f Joliet, IL 60432

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FOR IMMEDIATE RELEASE                                  CONTACT: Gary Mack and Sarah Kollmorgen

December 15, 2016                                                                                                                   630-357-7552

 

Board members win fight against increased water rates

Illinois American Water users to see less of an increase than proposed

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JOLIET, IL – Will County Board members Steve Balich (R-Homer Glen) and Mike Fricilone (R-Homer Glen) today announced they and the Citizens Utility Board (CUB) were successful in appealing a proposed water rate hike by Illinois American Water Company (IAWC).  Consumers in Homer Glen will now pay significantly less for their water than the amount IAWC requested.

 

“This is a victory for all of our constituents,” said Balich. “It means that working families will be able to keep more money in their pockets and not have to turn it over to American Water Company.”

 

Balich and Fricilone earlier had asked the CUB to intervene in IAWC’s proposed legislation, in order to get the sought after rate hike reduced. CUB accomplished this goal after the Illinois Commerce Commission (ICC) determined certain expenses IAWC proposed to recover from the rate hike were too high and should be decreased.

 

“Taxpayers already pay too much for their water,” said Fricilone. “I am gratified that we were able to work with CUB to diminish the burdensome hike IAWC wanted to push through. This is a great example of local government working with a non-profit watchdog organization to help our residents and hold utility companies accountable.”

 

CUB is a non-profit consumer organization that operates on donations from the public to represent consumer interests in utility rate matters before the Illinois Commerce Commission. Additional information about the organization is available on its website at www.cubillinois.org.

 

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Source: Will County News