Travel Per Diem Rates for Lodging

A per diem rate for lodging can only be used by employers for employee reimbursements in certain situations. The Federal government sets these rates by location which are accepted by the IRS which are currently either $216 or $134. However, if you are self employed filing a schedule C or F you have to use actual lodging receipts for your tax deduction. 

Defined Benefit Retirement Plans

This is termed a qualified plan by the IRS and allows business owners to contribute over $300,000 a year in certain cases where you combine a 401k profit sharing and cash balance plan. The ages of the employees are a big factor in determining the contribution along with years of service which has to be done by an actuary and can't be discriminatory between employees. A defined benefit plan determines how much each participant gets in retirement. These sort of plans are best when there are few employees and the owner is much older than the other employees. The administration cost of defined benefit plans are about $1,500 a year now vs. $10,000 ten years ago. I believe actuaries are benefiting from better computers. One disadvantage is that you have to contribute every year even if you are having a bad year so the business should be profitable for at least three years in a row to consider such a plan.

Section 529 Plans

Section 529 plans are even better now under the new tax law than they were before, and they were pretty good before. As of 1/1/2018 you can now take out tax free  $10,000 a year per beneficiary to cover tuition expenses for private elementary and secondary schools. Under the old rules you could just take out withdrawals for qualified college expenses. Georgia also gives you a $4,000 tax deduction per child for contributions to the State of Georgia 529 plan. Contributions are not deductible on the federal return but the plan grows tax free and qualified withdrawals are not taxed. The named beneficiary of the 529 plan does not have any legal rights to the funds so you retain control. If you withdraw funds for reasons other than education you are subject to taxes on the earnings plus a 10% penalty. You also have the right to change the beneficiary to another qualifying family member. 529 plans do not have any income, age, or annual contribution limits except for a lifetime contribution limit of $235,000 to $520,000 which varies by state plan. You can also treat a large contribution  as a gift over a 5 year period to fall under the annual gift tax exclusion of $15,000.

Extended Returns for 2017 and Estimated Taxes for 2018

If you paid estimated taxes for 2017, you should plan on paying estimated taxes for 2018 even if we have extended your 2017 tax return. You should at least pay in the same federal and state quarterly amounts for 2018 that you paid in 2017. I will adjust the 2018 estimates when I finish the 2017 tax return. The next quarterly estimate is due on June 15 so it would be helpful if we could finish your 2017 tax return by then. You pay an underpayment penalty of 5% on an annual basis for unpaid 2018 federal taxes at each quarter due date. The GA amount is even higher. Let me know if you need any quarterly estimate forms.