Provided By Charlie Miracle, CPA at Cordell, Neher & Company, PLLC

Virtual accounting is a carefully chosen blend of professionals selected to leverage their expertise to grow your business. Each firm does things a little differently, but there are a few fundamentals across the board.

  • Remote accountants work in sync with technology to help you do more with less.
  • Virtual accounting is a hybrid of traditional accounting and great software; in fact, virtual accounting is typically considered a software as a service (SaaS) option.
  • Remote bookkeepers use customized software, cloud-based tech, and a human touch to provide optimal solutions.

The most successful engagements begin with the right expectations and proper setup. However, many businesses do not take the time to set their office up with the right considerations. Here are a few ways to make sure your virtual accounting office is efficient and successful.

  1. Virtual means virtual!  If you want to go remote, you will need to establish procedures for sending items (scanning, email, etc.) to the virtual office.  Likely, your CPA will have an implementation plan, but if you aren’t positioned to use the cloud, virtual service will be a learning curve. Make sure you have a conversation with your provider to determine appropriate technology integrations.
  2. Streamline invoices. Set up a “generic” email for the accounting department, so multiple people have access. All invoices should be sent to this email, which can then route to a billing platform, like
  3. Internal control. Establishing a system for the virtual approval of invoices and payments that will ensure the flow of information is accurate, on-time, and properly classified. Virtual accountants typically have at least two sets of eyes on each step and multiple levels of staff working on one account.
  4. Uniform procedures. Make it simple to issue invoices and payments and require the company to follow the procedures with no exceptions!
  5. Align communication. Designate an in-house contact person for your virtual team. Since virtual people are not in the office physically, assigning a point person will ensure minimal interruption of service.
  6. Easy, not absent. Owners must review financials regularly and set up monthly or quarterly meetings with their remote accountants to make sure that everyone is on the same page. Owners will often turn away from their financials after they delegate the responsibilities. This lapse violates the first rule of ownership – always have one finger on the pulse of your bottom line.
  7. Access. If you want your virtual support group to operate with efficiency, you must be ready to give them partial access to bank accounts, credit cards, payroll, and routine vendor accounts. As part of the set-up process, you will need to define permissions for specific accounts. Take the time to discuss these selections and levels of access with your contact before your engagement begins.

Virtual accounting is a tremendous value to business owners. For most, the arrangement is a good fit, allowing them to rely on the expertise of others so they can focus on their core business. Getting off on the right foot, with the right expectations, is critical to overall success. If you are interested in getting started with remote accounting, give our office a call today and ask for Charlie or Diane 509-663-1661.

Build Your Rainy Day Fund

Like an emergency fund, it can come in handy.

Provided By: Nathan Cacka, CPA at Cordell, Neher & Company, PLLC

Sometimes, life gets expensive. A little bad luck or a twist of fate can hit us right in the checkbook and challenge us to live within our budget. An emergency fund helps us handle major financial disruptions, but for minor disruptions, it’s important to have a rainy day fund.

A rainy day fund and an emergency fund differ in scale, but not purpose. Both funds are designed to fully or partly absorb sudden costs. An emergency fund contains enough cash to help a household through a sudden financial crisis that could last 3 to 6 months: a serious illness, a job loss. Rainy day funds are much smaller in that they are normally intended for expenses ranging from $250 to $2,000. A rainy day fund is created in anticipation of certain expenses, rather than as a response to unforeseen emergencies.

As an example, say you have a 2012 Ford Explorer with 100,000 miles on it, at that age and usage level you know there is a good chance that you are going to have a significant repair, you just don’t know when it will happen. Wisely, they start a rainy day fund to deal with the potential expenses that could arise from that impending rainy day. 


Rainy day funds can address all kinds of financial inconveniences. Home appliances need servicing and repairs; a rainy day fund dedicated to your home appliances may help allay costs. Dental work can become expensive. Your child’s youth sports team costs. Veterinary bills for your furry family members. College textbooks seem to be pricier each year.

A rainy day fund can be built gradually, if preferred. Think $20 or $50 a month. Or, you can devote a lump sum to one. The cash can go into a savings account, a money market account that gives you the ability to write checks, or an interest-bearing checking account. You can fund your account by direct deposit by allocating a portion of your paycheck, utilize one of the many savings apps that round up your purchases and then have your change go directly into a savings account, or you could use the tried and true rainy day fund jar.

How about an investment account or a certificate of deposit? That idea could have more downside than upside. A rainy day fund is not only about saving money, but also easily accessing it. A CD gives you the chance to grow your invested assets, but if you want to quickly withdraw those assets, you may end up with a loss stemming from an early withdrawal penalty. Similarly, you could end up withdrawing less from a brokerage account than you put into it, due to investment underperformance.1

Rainy day fund is about peace of mind. When things breakdown and large expenses come, it can be very stressful, but it doesn’t have to be if you are prepared for those events. Instead, you will be able to feel a sense of relief and satisfaction in knowing that you wisely prepared for that moment.


1 – [7/10/18]

Call Nathan today!

Outsourcing Is Smart Business

Provided By: Charlie Miracle, CPA at Cordell, Neher & Company, PLLC

Have you ever stopped to think about the scope of the finance functions of your business?  If you do, you will probably be surprised at the many activities they encompass and how vital they are to the success of your company. Your business thrives when these activities are in working order. When faced with the options, a business owner quickly realizes that either they will need to manage their organization’s finances or hire someone else to do it.

Financial planning, financial risk assessment, record-keeping, and financial reporting are critical and time-consuming activities that are best managed by someone who has the right qualifications. But the fact of the matter is, CFOs cost money, and most small businesses do not have forty hours of work for a qualified individual. Rightly dividing resources within an organization is a critical matter, which is why outsourcing CFO services makes a lot of sense.

An Outsourced CFO is a valuable partner that can provide budget guidance, prepare and analyze financial statements, forecast cash flow, provide strategic financial planning and advisement, evaluate current bookkeeping systems, and act as a negotiator. Beyond these vital finance utilities, an Outsourced CFO can deliver expert “back office” support to business owners so they can focus on important job of growing their business. The finance function can be broken up into three main activities, each with a series of sub-functions.

  1. Transaction processing – accounts receivable, customer billing, credit and collections, accounts payable, general accounting, payroll, tax accounting, cost accounting, fixed asset accounting, benefits administration, and internal and external reporting
  2. Control and risk management – budgeting, cash flow management, insurance risk management, forecasting, tax planning, performance reporting, treasury management, and internal and external audit
  3. Decision support – business performance analyses (ratio analysis, cost analysis, pricing analysis), business planning support, and finance function management

The Decision to Outsource

Determining whether to outsource requires a focused and deliberate approach.  Below are six advantages that will help you decide whether outsourcing financial management would benefit your organization:

  • Lower Operating Costs – Any change that will reduce costs without otherwise endangering operations will generally be positive. Many businesses are just too small to justify hiring a full-time, in-house CFO.
  • Increased Efficiency – Inefficient operations harm your organization. A real advantage of outsourcing is that behind your outsourced financial planning expert stands an entire team of accountants, partners, consultants, and bookkeepers. When financial activities are outsourced and analyzed by an independent party specializing in that activity, efficiencies will result.
  • More Flexibility – When a business owner wears too many hats, one is bound to fall off. Outsourcing CFO functions will allow your organization to become more flexible in its ability to deal with its environment and core activities.  Changes that make an organization more agile will make it better able to excel.
  • Reduced Risk – Outsourcing a function may reduce the risk an organization faces. Outsourcing payroll, for example, is likely to reduce risk, as experts will now do the job.
  • New Ideas – Outsourcing CFO duties will bring new ideas to the table. Small businesses need to recognize that outsourcing an expert will give them a clear advantage with complex financial activities.
  • High Growth Potential – Many organizations are limited in their ability to take on more activities because their current staff is spread too thin. Outsourcing financial activities can allow business owners and other staff to engage in better-targeted tasks.

Before determining whether to outsource financial management functions, there are many factors to consider including the size of your business, industry, number of employees, volume of transactions, and skill sets. As a business owner, you will also need to do a gut check. Accepting the “virtual” reality of outsourcing means adjusting your expectations. In this environment, you will not be your CFOs only client, but you will have access to exceptional quality. If you are involved in the authorization process and can extend trust beyond your four walls, then you will truly benefit from this arrangement. However, if you are hung up on signing checks and are not able to hand over responsibilities, you will hinder the process and negate the experience.

Outsourcing services from your organization may enable you to operate more effectively.  With our requisite knowledge of different types of organizational structures, we can help you create innovative changes in your organization.  If you would like to learn more, please call our office to speak with Charlie or Diane and learn how a partnership with us can enhance the success of your business.

Charlie Miracle:

Diane Forhan:

Call Charlie or Diane today!

You may be surprised to learn about the potential relationship.

Provided by Charlie Miracle, CPA at Cordell, Neher & Company, PLLC

Does your credit history partly determine the cost of your life insurance? It may. The potential for such a relationship may surprise you and is not without controversy.

Insurers think a good credit history implies several things. It signals a consumer who routinely lives up to financial responsibilities. It telegraphs maturity in a young adult. It may also be characteristic of good health and a long life.

That last sentence may have you scratching your head. Weird as it may seem, some life insurance providers see an excellent borrowing history as a predictor of continuing healthiness and longevity. Following this train of thought a little further, a poor credit history may be judged to reflect either inattention to, or ignorance of, personal financial responsibility. The root causes of that inattention or ignorance might cause those consumers to die earlier than others.

Last year, LIMRA (a noted life insurance industry research firm) examined what kind of data insurance companies were reviewing as they considered life insurance applications. Twenty-eight percent stated that they used a predictive model encompassing consumer credit histories. Eighteen percent simply looked at consumer credit records directly. Eight percent relied on a TransUnion score for life insurance applicants.

In some states, credit history also influences auto and homeowners insurance rates. The better the behavior, the thinking goes, the less inclined that consumer will be to file a claim. (It is illegal to use credit history as a factor in setting auto insurance premiums in California, Hawaii, and Massachusetts.)

Other types of data may also be evaluated. In addition to credit history, insurance companies may look at a consumer’s driving record, criminal history, use of prescription medicines, and applications for life insurance coverage submitted in past years. All this may affect life insurance coverage and premiums.

Why are life insurance providers interested in all this information? They want to make their business models more efficient.

Life insurance underwriting usually takes weeks or months and includes a medical exam. In this digital age, the whole process looks very analog. By streamlining it around predictive models and abandoning or softening the exam requirement, insurers remove a psychological hurdle that stands in the way of some policy sales. Data-based underwriting can take as little as 48 hours.

So yes, your credit history may affect what you pay for life insurance. While it may not be a prime factor, it does exert an influence. That is another good reason to keep your credit score high.

Charlie Miracle may be reached at 509-663-1661 or

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.


Download update article: FMLA 4/1/19

As you start a family, consider these ideas.

Provided by Kyle Meissner, CPA at Cordell, Neher & Company, PLLC

Being a parent means being more responsible than you have had to be before. That increased responsibility will also impact your financial decisions. You are now a provider and a protector, and that may make some or all of the following financial considerations necessary.

Think about a adopting a budget. As a couple, you may have lived for years without budgeting. As parents, this may change in light of the added costs of raising a child. You will face many new recurring costs: childcare, clothes, toys, diapers, and food to name a few. Keeping track of weekly or monthly expenses will make creating a budget easier. (The Department of Agriculture has an online calculator where you can estimate the total cost of raising a child to adulthood. The math may surprise you: the U.S.D.A. puts the average cost at $233,610 for a middle-income family).

Take care of health and life insurance. Your new child should be added to your health insurance plan as quickly as possible. Most insurance providers require you to notify them of a child’s birth within 30 days. You should get started before then; be aware that getting a Social Security number and birth certificate can take weeks to arrive in the mail. If you are in a group health plan, talk with the human resources officer or benefits administrator at work, and let them know that you want to add a dependent to your health care plan. If you have coverage through a private plan, your premiums may go up after you notify the carrier. Under the Affordable Care Act, a parent or legal guardian who has health coverage arranged through the federal or state Marketplace has 60 days from the date of birth or adoption to enroll a child as a dependent on their plan; once that is done, health care coverage for the child will apply, retroactively.

Term life insurance may be an affordable way for new parents to continue to provide for their family under a worst-case scenario. Disability insurance (which may be available where you work) covers you in the event of an extended illness or injury that stops you from doing your job. If you have a Health Savings Account (HSA), you can contribute more per year when you have a child. The maximum annual contribution for a family is currently set at $7,000.

Draft a will and review beneficiary designations. A will should do more for parents than declare who receives their assets when they die. It should also specify their choice of a legal guardian for their child in the event both parents pass away. Additionally, a will should specify a guardian of the estate, to manage any assets left to a minor child. While you may have named your spouse or partner as the primary beneficiary of your IRA or investment account, you should at very least add your child as a contingent beneficiary.

Start saving a little for college. The estimated cost of four years at a public university starting in 2036? $184,000, CNBC reports. That may convince you of the need to open a 529 plan or have some other kind of dedicated college savings account with investment options. Most 529 plans require a Social Security number for a beneficiary, so they are commonly started after a child is born, rather than before. A 529 plan allows investments to grow tax free provided they are withdrawn to pay for the beneficiaries qualified educational expenses.

Review your withholding status and income tax forms. Adding a new member to your family means changes to your federal income taxes. You may become eligible for some breaks, like the Earned Income Tax Credit, the Adoption Tax Credit, the Child Tax Credit, and the Child & Dependent Care Credit, so you should consider adjusting your withholding to reflect these items.

Keep the big picture in mind. You still need to build retirement savings and having an emergency fund is even more important. Becoming a family may make accomplishing those important tasks harder, but you cannot neglect them.

After reading all this, you may feel like you need to be a millionaire to raise a child. The fact is, most parents are not millionaires, and they are able to manage. Whether you are wealthy or not, you need to take care of many or all of these financial and insurance essentials.

Kyle Meissner is a Certified Public Accountant with Cordell, Neher & Company, PLLC, a Wenatchee public accounting firm. Kyle may be reached at (509) 663-1661 or

By Martin Straub

Martin Straub is the owner of SimplePowerIT, LLC, an affiliate of Cordell, Neher & Company, PLLC, and provides cybersecurity and technology solutions and support to NCW businesses and nonprofits. Martin can be reached at (509) 433-7606 or

In the early days of the internet, most individuals and businesses considered themselves safe from hackers if they had reliable antivirus software. The occasional virus was a nuisance, but typically didn’t involve the theft of confidential data. Because it was inconvenient to secure PCs and WiFi networks with passwords, many of us didn’t bother. Similarly, when we created website accounts, we didn’t think twice about using “Password” as our password because really, what was the risk?

If only internet security was that simple still today! Hardly a week passes now where we aren’t hearing about yet another breach, often by companies that we thought we could trust and know had access to our personal data.

Unfortunately, whereas years ago, malicious internet activity was often motivated by technology “nerds” looking to prove that they were capable of breaching networks and releasing destructive viruses, today cybercriminals are most often motivated by money. The “dark web” provides a platform for criminals to exchange data, pass along trade secrets, and generally make their living.  An entire industry now thrives making money illegally on the internet, often at our expense.

Many small businesses and nonprofits naively think they won’t be targeted by cybercriminals.  According to Verizon, 58% of malware attack victims are categorized as small business. Another sobering statistic from a 2017 Ponemon Cybersecurity Study indicates that 61% of small businesses experienced some type of cyberattack in the past 12 months. The reason? Small businesses and nonprofits lack the resources of larger organizations and often don’t understand the risks or make it a priority to properly secure their data.

Fortunately, there are some basic precautions that all organizations can take to better secure their environment.

Be suspicious of every unsolicited email. According to the same Verizon study, an amazing 92% of malware is delivered via email. That doesn’t necessarily mean a malicious attachment; often it is a less suspicious link within the email that starts the malware infection. Phishing emails (and a clever variation known as “spear phishing” which impersonate a known person to gain the trust of the recipient) have become increasingly more sophisticated and difficult to distinguish from legitimate messages. Office 365 users are particularly susceptible, not because Office 365 is inherently less safe, but because it has a massive user base attracting more sophisticated attacks.

Use complex passwords and change them regularly. If this seems cumbersome (it is!) you’re not alone.  Criminals count on the use of simple passwords (or the same one used across many websites) to easily gain access. Consider the use of password management software (such as LastPass or Roboforms) to create complex, unique passwords and save them to an encrypted vault. Even better, if offered by your software vendors, enable multi-factor authentication.

Backup data offsite. Ransomware (whereby a virus encrypts network data and demands a ransom payment to release the encryption) is still one of the leading forms of malware. Often ransomware is able to “crawl” the network and infect all available files including backups. Ensuring an offsite copy (that has been verified and tested) is a proven method to recover from ransomware.

Control access to data. Because end user PCs are the most common sources of malware, controlling access to data may help contain a virus’ spread. If a user does not have a business need to access customer or other confidential data, use security controls to restrict their access. For instance, in QuickBooks, assign only permissions that correlate to the person’s responsibilities; on a server, assign folder share permissions only as needed.

Secure remote access to your network. Criminals can silently attempt to exploit any available access point into your network. Thus, poorly secured remote access is a common vulnerability. Consider blocking all unattended remote access (especially external vendors who access PCs or other devices in your network) and use virtual private networks which provide additional protection.

Educate your employees. Good cybersecurity “hygiene” starts by having employees who understand the company’s expectations, are aware of the risks, and are vigilant about potential cyberthreats. Have employees acknowledge your organization’s IT security policy (or create a policy if one doesn’t already exist). Regularly review threats with employees and consider implementing recurring phishing and training programs.

Because threats are constantly evolving, internal cybersecurity reviews should be a regular part of your business processes. For stronger protection or a more thorough assessment, ask an IT expert to evaluate your network.

Know the signals that could hint at theft or embezzlement at your business.

Provided by Brenda Alcala, CPA at Cordell, Neher & Company, PLLC

Weird things are happening at work. Power tools are missing. Something seems odd with your inventory. Bank reconciliations seem slightly amiss.

Follow up on your suspicions. You may have a problem with employee theft. Small businesses are more likely to have employee theft because 1) they are not large enough to provide the resources, controls and processes needed to decrease the risk; and 2) as a small business you know everyone and tend to be more trusting of your employees so, of course they would never steal, right? Wrong. Often those who end up stealing are the employees you trust the most.

What are the signs that you might have a thief at work? If enough items vanish from the office, the problem is clear – but some subtle clues may appear beforehand. Employee theft is not a one-time event by an employee, but usually involves stealing small amounts over a period of time that can add up to thousands, if not millions, of dollars if not caught in time.

Watch for an employee who consistently stays late – especially one with access to a warehouse or financial records. If he or she never wants to take any vacation time or frequently comes in over the weekend to “finish up a project,” that may also be another hint. In the same vein, watch out for workers who volunteer to collect receivables or make weekly cash deposits for you. On a more sophisticated level, picture two or more of your employees (one who can greenlight expenses among them) creating a phony supplier (vendor fraud), with checks being authorized and written to that shell company. In an article by CNBC, 14.7% of thefts were due to vendor fraud (money theft was #1 at 34.5%). While less common, it accounts for the largest loss of funds compared to any other form of theft.

What could tip you off to employee theft? Consider the person’s life away from work. Is this person dealing with financial hardship or a divorce? Does he or she like to live extravagantly? Is he or she close with certain suppliers, customers, or clients?

Who is the typical embezzler? Not some young new hire, but more likely a mature and trusted manager or financial officer. In a 2016 survey of firms impacted by white-collar crime, specialty insurer HISCOX arrived at a portrait of an embezzler: median age of 49, with a 56.3% chance of being female. Unsurprisingly, 40% of such crimes were committed by those working in finance and accounting departments.

HISCOX also found that 80% of embezzlement happened at firms with 150 or fewer workers. Notably, the embezzlement rate at companies of this size was ten times higher than at firms with 250-500 employees.

Why is embezzling from a small company easier than stealing from a large one? For one, many small businesses are started by friends or family; the principals trust each other and can readily access company finances, intellectual property, and sensitive employee information. Then, the business grows and outsiders are gradually able to enter this circle of trust – and the internal checks and balances do not keep pace with the growth.

By the way, non-profits are especially susceptible to theft. Why? You can cite a couple of factors. One, leaders of non-profit organizations tend to be good-hearted and altruistic and may not want to acknowledge that they could have embezzlers or thieves coming to work. Criminally minded individuals can sense this optimism and act on it. Two, internal controls at non-profits are often lacking or minimal; the leaders of these groups devote resources, time, and effort primarily to the mission of the organization. Whether you are a for-profit or non-profit organization, it is important to set clear policies and expectations of your employees and the consequences of committing employee theft.

Are you insured against any of this? Your current insurance policy may provide your business with fidelity coverage, also known as fraud insurance. If it does not give you that coverage, find one that does. You have enough things to deal with at your business. When fraud and theft occur, you don’t want to be left financially liable or distressed.

How do you recover? Recovering from employee theft is hard, and for some companies, can take years. The best thing to do is tell the police so others are aware of such person, and communicate with your employees what happened so they are aware of the consequences of such actions and implement improved controls to make sure it does not happen again in the future.

Brenda Alcala is a Certified Public Accountant with Cordell, Neher & Company, PLLC, a Wenatchee public accounting firm. Brenda may be reached at 509-663-1661 or

Cordell, Neher & Company, PLLC adds to team

Wenatchee, WA.- Cordell, Neher & Company, PLLC has announced the addition of Diane Forhan as Client Accounting Services Manager. Forhan brings 18 years of experience to the Firm.

In this role, Forhan manages and further develops the rapidly-growing Client Accounting Services Department.  She also manages the internal accounting and budgeting processes.

In addition to her deep professional experience, Forhan holds a BS in Accounting and is a member of the Washington Society of CPAs.

“I’m delighted to become a staff member at CNC, with their reputation of top-notch client and community service.  I’m also excited for this opportunity to further develop CNC’s Client Accounting Services Department,” she explained.

Cordell, Neher & Company, PLLC, is one of the largest Certified Public Accounting firms in North Central Washington with individual and business clients spanning the globe. The Firm has been providing businesses, not-for-profit organizations and individuals with financial and tax planning assistance for more than 30 years. The Firm is comprised of experienced, dedicated professionals with widely diverse backgrounds and areas of technical expertise. Because business and personal accounting today is so broad in scope, specialized expertise is needed to offer a full range of accounting services.

By Timothy M. Dilley, CPA, Cordell, Neher & Company, P

The tax reform legislation that Congress approved in December of 2017 was the largest change to the tax system in more than three decades. The last time the U.S. tax code saw such a significant reform was under President Reagan in 1986. Under this new legislation, substantial changes have been made to both individual and corporate tax rates.

The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers. We have highlighted a few of the most pertinent details below. Please keep in mind, the purpose of this article is to summarize several key provisions.

What’s Changing?

Tax Bracket Rates. While taxpayers will still fall into one of seven tax brackets based on their income, the rates have changed. Some of the brackets have been lowered. The new rates are: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

Standard Deduction. The standard deduction has nearly doubled. For single filers it has increased from $6,350 to $12,000; for married couples filing jointly, it’s increased from $12,700 to $24,000.

Personal Exemption. Under the prior tax code, a taxpayer could claim a $4,050 personal exemption for themselves, their spouse and each of their dependents, thus lowering their taxable income. Under the new tax code, the personal exemption has been eliminated. For some families, this will reduce or counter the tax relief they receive from other parts of the reform package.

State and Local Tax Deduction. The state and local tax deduction, or SALT, now has a cap. While it remains in place for those who itemize their taxes, it now has a $10,000 limit. This is a significant change as filers could previously deduct an unlimited amount for state and local property taxes, plus income or sales taxes.

The Child Tax Credit. The child tax credit has been expanded, doubling to $2,000 for children under 17. It’s also available to more people. Single parents who make up to $200,000, and married couples who make up to $400,000 can claim the entire credit, in full.

Non-Child Dependents. A new tax credit is available for non-child dependents. Taxpayers, such as elderly parents, can claim a $500 temporary credit for non-child dependents. This can apply to a number of people adults support, such as children over age 17, elderly parents or adult children with a disability.

Mortgage Interest Deduction. Going forward, anyone purchasing a home will only be able to deduct the first $750,000 of their mortgage debt. This is down from $1 million.

Pass-through Entities. The owners, partners and shareholders of S-corporations, LLCs and partnerships will receive a tax break. Those who pay their share of the business’ taxes through their individual tax returns will have a 20% deduction.

To ensure business owners do not abuse the provision, the legislation has included additional terms to this provision.

Bonus Depreciation. The Bonus depreciation will increase from 50% to 100% for property placed in service after September 27, 2017, and before January 1, 2023, when a 20% phase-down schedule will begin. The previous rule that made bonus depreciation available only for new properties was also removed.

What Remains the Same?

Student Loan Interest. You can still deduct Student Loan Interest – the deduction for this will remain at a max of $2,500.

Medical Expenses. The deduction for medical expense was untouched. Filers can deduct medical expenses that exceed 7.5% of their adjusted gross income.

Home Sellers. Homeowners that sell their house and make a profit can exclude up to $500,000 (or $250,000 for single filers) from capital gains. This still requires that it is their primary home; and they have lived there for at least two of the past five years.

What Does This All Mean?

Although doubling the standard deduction will arguably simplify the process of filing taxes for individuals, there are still deductions and credits to consider. More so, the filing for small businesses can potentially become more complicated.

It’s important to remember that each taxpayer scenario is unique. The professionals in our office can answer the questions you may have regarding the individual, estate and corporate tax provisions outlined in the tax reform bill. Contact us today to schedule a consultation.

Tim Dilley is a Certified Public Accountant with Cordell, Neher & Company, PLLC, a Wenatchee public accounting firm. Tim may be reached at 509-663-1661 or

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