Retirement

Your Trusted CPA Partner: Stepping Up for Fired Bench.co Customers

On December 27, 2024, Bench.co announced they are shutting down services effective immediately. This sudden closure leaves businesses using Bench.co without finalized 2024 financials—a critical requirement for preparing 2024 taxes. For customers accustomed to unsustainably low pricing, unpredictable service, and a proprietary bookkeeping platform, this serves as a stark reminder: you get what you pay for.

The real urgency? Bench customers have only 10 weeks to download their accounting data before the platform becomes permanently inaccessible. However, even with this downloaded data, Bench.co users face another challenge: incomplete and unreconciled 2024 financials. Since Bench used a proprietary accounting system, we leverage a third-party tool to migrate data to QuickBooks Online, the industry standard we use exclusively for daily bookkeeping. While this migration helps recover your data, additional cleanup is essential to get your 2024 financials fully prepared for tax filings.

At Insogna CPA, we’re here to help you navigate this transition and proactively tackle these challenges. Since 2011, we’ve been committed to transparency, continuity, and accessibility in everything we do. Using trusted, third-party platforms like QuickBooks Online, we ensure you always have 24/7/365 access to your data. You’ll never worry about being locked out or left in the dark, allowing your business to continue running smoothly—no matter what.

Here’s why Insogna CPA is the right fit for your business:

Scalable Expertise: Our experienced team handles everything from daily data entry and monthly reconciliation to real-time cash flow forecasting. These efforts drive strategic tax planning, helping you maximize savings and achieve your financial goals.
Personalized, Concierge-Level Support: Partner with a dedicated team that understands your business inside and out, offering expert guidance throughout the year—not just during tax season.
Unlimited, Proactive Communication: Stay informed and ahead with customized video updates and timely financial reports delivered daily, weekly, or monthly—designed to help you make smarter decisions.
Firm of the Future: We continuously vet the best software solutions to optimize efficiency. With full login access to your financials, you’re always in control and can get the answers you need, whenever you need them.

We are already successfully guiding businesses through this Bench.co transition and stand ready to help you rebuild your financials in QuickBooks Online, close out your 2024 books, and prepare for the year ahead with confidence.

At Insogna CPA, you’re not just another client—we’re your trusted CPA partner. Serving hundreds of businesses every month, we pride ourselves on proactive communication and unwavering support, so you can focus on running and growing your business.

Time is critical. Ready to see how accounting should be done? Contact Insogna CPA today to ensure your 2024 financials are ready for tax filing deadlines. Let’s start 2025 on the right foot—together.

How to Optimize Your Retirement Savings as a Self-Employed Professional

Being self-employed comes with incredible freedom and flexibility, but it also means taking full
responsibility for your financial future—especially when it comes to retirement. Without access
to employer-sponsored plans like 401(k)s or pensions, you must create and manage your own
retirement strategy.
The good news? This autonomy gives you the chance to design a plan that aligns perfectly with
your goals, income, and business structure. By understanding options like SEP IRAs, Solo
401(k)s, and Traditional IRAs, you can make informed choices to maximize your savings while
minimizing taxes. At Insogna CPA, a leading Austin TX accounting firm, we specialize in
helping self-employed professionals like you navigate these decisions with clarity and
confidence.

Retirement Options for Self-Employed Professionals

Let’s break down three of the most popular retirement savings options available to self-
employed individuals: SEP IRAs, Solo 401(k)s, and Traditional IRAs.

SEP IRAs: Simplicity with High

Contribution Limits
A Simplified Employee Pension (SEP) IRA is an excellent choice for self-employed
professionals and small business owners looking for a straightforward way to save.
How it Works
With a SEP IRA, you can contribute up to 25% of your net earnings (up to $66,000 in 2023).
Contributions are flexible and tax-deductible, which means you can lower your taxable income
while investing in your future.

Ideal for LLCs and S-Corps

● If you operate as an LLC, your contributions are based on self-employment income after
deducting half of your self-employment taxes.
● S-Corp owners can make employer contributions through the business, reducing taxable
income at the corporate level.
Considerations
● Contributions must be uniform for all eligible employees. If your LLC or S-Corp has staff,
you’ll need to match the same percentage of their salaries as you contribute for yourself.
● SEP IRAs don’t allow catch-up contributions for those over 50, which may limit savings
potential for older professionals.
Insogna CPA, a trusted tax accountant in Austin, can help ensure you’re making the most of
this plan’s flexibility while staying compliant with IRS regulations.

Solo 401(k): Maximum Savings Potential

The Solo 401(k) is tailored for self-employed individuals with no full-time employees (apart from
a spouse). This plan offers the highest contribution limits, making it ideal for high earners.

How it Works

Solo 401(k)s allow you to contribute both as an employee and as an employer:
● Up to $22,500 as an employee in 2023 (plus $7,500 in catch-up contributions if you’re
over 50).
● Employer contributions of up to 25% of your compensation, with total contributions
capped at $66,000 (or $73,500 with catch-up).
Key Advantages
● Roth Option: Many Solo 401(k)s allow Roth contributions, enabling you to invest after-
tax dollars for tax-free withdrawals in retirement.
● Loan Provisions: Unlike SEP IRAs, Solo 401(k)s often allow you to borrow against your
account balance, providing a financial safety net.
Best Fit for LLCs and S-Corps
● LLC owners calculate contributions based on net self-employment income after
deducting half of their self-employment tax.
● S-Corp owners use W-2 wages to determine contributions, combining employee
deferrals and employer contributions for tax efficiency.
Considerations
● Solo 401(k)s involve more paperwork and may require filing Form 5500 if assets exceed
$250,000.
● Hiring employees disqualifies you from the Solo 401(k), requiring a transition to a
traditional 401(k).
Whether you’re looking for a CPA firm in Austin Texas or need expert advice on Solo 401(k)
plans, Insogna CPA offers personalized support to help you make the right decisions.
Traditional IRAs: Accessibility and Versatility
A Traditional IRA is a straightforward and widely available retirement option, offering tax-
deferred growth on your investments.
How it Works
You can contribute up to $6,500 annually ($7,500 if over 50) in 2023. Contributions may be tax-
deductible depending on your income and participation in other retirement plans.
Advantages
● Universal Eligibility: Traditional IRAs are available regardless of your business
structure, making them accessible to both LLC and S-Corp owners.
● Ease of Use: Traditional IRAs require minimal administrative effort, making them ideal
for those seeking simplicity.
Considerations
● Lower contribution limits may not be sufficient for high-income earners.
● Deductibility phases out at higher income levels if you’re covered by another retirement
plan.
Our Austin accounting firm provides expert guidance to help you integrate Traditional IRAs
into a broader retirement strategy.
Choosing the Right Plan for Your Needs
How do you decide which plan is best for you? It depends on your income, business structure,
and financial goals. Here’s a quick guide:
● High Earners with Fluctuating Income: A SEP IRA provides flexibility to adjust
contributions based on cash flow.
● Maximizing Savings: Solo 401(k)s offer the highest contribution limits, ideal for
consistent and high earners.
● Simplicity: A Traditional IRA is perfect for those who value ease of setup and
maintenance.
● Tax Diversification: Opt for a Solo 401(k) with a Roth option to balance current tax
deductions with future tax-free withdrawals.
Integrating Retirement Planning with Business Structure
LLC Owners
Contributions are calculated based on net self-employment income. Pairing a SEP IRA or Solo
401(k) with your LLC can help you optimize both personal and business tax strategies.
S-Corp Owners
S-Corp owners can use W-2 wages to strategically structure Solo 401(k) or SEP IRA
contributions, minimizing corporate profits and self-employment taxes while maximizing
retirement savings.
As one of the top accounting firms in Texas, Insogna CPA can guide you in integrating
retirement plans with your specific business structure.
Secure Your Future with Insogna CPA
Planning for retirement as a self-employed professional can feel overwhelming, but you don’t
have to navigate it alone. At Insogna CPA, one of the best CPA firms in Austin, we make
complex financial decisions simple and empowering.
Whether you’re choosing a SEP IRA, Solo 401(k), or Traditional IRA, our expert team offers
tailored accounting services in Austin to help you maximize savings and minimize taxes.
Ready to take the first step toward securing your financial future? Contact Insogna CPA
today for a consultation and discover how our trusted Austin TX CPAs can help you
achieve your goals.

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Capital Gains Planning: How to Protect Wealth from Big Tax Hits

When it comes to selling a stake in your business or managing long-term investments, capital gains taxes can take a significant bite out of your profits. If you’re not careful, these taxes can erode the wealth you’ve worked so hard to build. Fortunately, with the right strategies, you can minimize your tax liability, keep more of your earnings, and reinvest in your financial future.

At Insogna CPA, one of the best CPA firms in Austin, we specialize in helping business owners navigate the complexities of capital gains taxes with confidence and clarity. Located in South Austin, we offer personalized accounting services tailored to your unique financial situation.

❓ What Are Capital Gains Taxes?

Capital gains are the profits earned when you sell an asset—such as real estate, stocks, or a stake in your business—for more than its purchase price. The tax rate you’ll pay on these gains depends on how long you’ve held the asset.

Short-Term Capital Gains: If you’ve owned the asset for less than a year, the profits are taxed as ordinary income, which can range from 10% to 37%.
Long-Term Capital Gains: Assets held for over a year qualify for lower tax rates, typically between 0% and 20%, based on your taxable income.

Additionally, high earners may face the Net Investment Income Tax (NIIT), an additional 3.8% on top of their capital gains tax.

Our team at Insogna CPA, a leading Austin TX accounting firm, can help you understand how these rates impact your specific financial situation and develop strategies to reduce your tax burden.

💡 Strategies to Minimize Capital Gains Taxes

Let’s explore the proven strategies business owners can use to keep more of their profits while staying compliant with tax laws.

1. Time the Sale of Assets Strategically

Timing is everything. Selling your assets at the right time can have a significant impact on your tax bill.

📌 Hold for Long-Term Gains: Always aim to hold assets for more than a year to qualify for the lower long-term capital gains tax rate.
📌 Income Smoothing: Consider selling during a year when your taxable income is lower, such as after retirement or in a year with fewer other sources of income.

Our Austin tax advisors can help you time your sales strategically to maximize your tax savings.

2. Use Installment Sales for Business Stakes

If you’re selling a significant portion of your business, an installment sale can spread out the tax burden over several years.

📌 How It Works: Instead of receiving the full payment upfront, you structure the sale to receive payments over time.
📌 The Benefit: This allows you to report the gains incrementally, keeping you in a lower tax bracket each year.

We offer specialized expertise in this area as part of our accounting services in Austin for business owners.

3. Leverage Qualified Opportunity Zones

Opportunity Zones offer a unique way to defer and reduce capital gains taxes while supporting community development.

📌 Tax Deferral: By reinvesting your gains in a Qualified Opportunity Fund, you can defer taxes on the original gain until 2026 or until the new investment is sold.
📌 Tax-Free Growth: If the new investment is held for at least 10 years, any additional gains on that investment are entirely tax-free.

As one of the top CPA firms in Austin Texas, we can guide you through the Opportunity Zone process and its potential benefits.

4. Gifting Appreciated Assets

If you’re planning to share your wealth with family or give to charity, gifting appreciated assets can be a smart tax strategy.

📌 Family Gifting: Transferring assets to family members in lower tax brackets can reduce the overall tax liability.
📌 Charitable Contributions: Donating appreciated assets to a qualified charity eliminates capital gains taxes on the gifted portion and provides a tax deduction for the asset’s full market value.

Looking for a CPA in Austin Texas to help implement these strategies? Insogna CPA offers tailored solutions for small businesses and high-net-worth individuals.

5. Offset Gains with Tax-Loss Harvesting

You can reduce your taxable gains by selling underperforming assets to realize losses.

📌 How It Works: Capital losses can offset your capital gains dollar-for-dollar. If your losses exceed your gains, you can use up to $3,000 annually to offset ordinary income.
📌 Future Savings: Any unused losses can be carried forward to reduce taxable gains in future years.

Special Considerations for Business Owners

Section 1202 Qualified Small Business Stock (QSBS) Exclusion

If you’ve invested in a C Corporation that qualifies as a small business, you may be eligible to exclude up to 100% of the gains from your federal taxes.

Eligibility: The stock must be held for at least five years, and the corporation must meet specific criteria outlined under Section 1202.
The Impact: For qualifying stocks, you can exclude up to $10 million or 10 times your basis in the stock, whichever is greater.

Our Austin small business accountants can help you determine if your stock qualifies for this exclusion and guide you through the process.

S Corporation Tax Planning

As an S Corporation owner, you have unique opportunities to manage capital gains:

Basis Management: Maximize the use of your stock basis to minimize taxable gains when selling your stake.
Installment Sales: Spread gains over multiple years to reduce the immediate tax impact and manage cash flow effectively.

Partnering with Insogna CPA

Capital gains planning is complex, but with Insogna CPA—a trusted Austin accounting firm—you can make informed decisions that protect your wealth and minimize tax liabilities. Our team offers comprehensive accounting services to business owners across Texas, from small businesses to high-net-worth individuals.

Whether you need help with tax-loss harvesting, gifting strategies, or Opportunity Zone investments, our Austin TX accountants have the expertise to guide you every step of the way.

Ready to safeguard your wealth from big tax hits? Contact Insogna CPA today to schedule a consultation with one of the best CPAs in Austin!

Paying for Assisted Living & Home Care for Senior Citizens in Texas

Did you know that nearly 12% of Texans are over the age of 65? With longer lifespans comes a reality many of us will face—caring for aging loved ones. While it’s a privilege to help, the costs of care can add up quickly, and understanding your options is crucial. Whether it’s in-home help or full-time nursing care, Texas offers resources, but knowing where to turn can make all the difference.

🏡 In-home Care

Sometimes, an elderly family member may only need help with grocery shopping, meal preparation, or light housekeeping. If cooking has become a challenge, the Texas chapter of Meals on Wheels provides meals to seniors at little or no cost.

If you’re comfortable with someone visiting your loved one in their home, there are many in-home care services available—both through agencies and individuals. National services like Care.com and Visiting Angels offer resources, and there are also local options. Costs vary depending on the level of care, with payment typically by the hour or a flat day rate. Local and state agencies may offer some financial support—details are available on the Texas Health and Human Services website. If your loved one owns their home but is low on cash, a reverse mortgage could free up funds while allowing them to stay in their home.

🩺 Assisted Living and Nursing Home Care

If an elderly family member needs help with cooking, shopping, or getting to appointments, those needs can usually be handled with services like ride-shares or grocery delivery. However, when medical issues like Alzheimer’s, dementia, or physical disabilities arise, more intensive care may be required. If a live-in caregiver isn’t an option, it might be time to consider assisted living or nursing home care.

For seniors who are still mobile and cognitively strong, assisted living can be a good solution. These facilities provide meals, activities, and social interaction, all in one place. But be prepared—costs in Texas range from $4,000 to $10,000 a month depending on the amenities and level of care needed.

For those requiring nursing home care, the costs are often higher, and assets like a home could be used to cover these expenses. Entry fees or deposits of several thousand dollars are common, and while room and board are included, extras like cable or salon services may cost extra. If your loved one’s assets are depleted, it’s worth exploring Medicaid options, though availability can be limited and the paperwork time-consuming.

Need Help?

Caring for an aging loved one can be overwhelming—emotionally and financially. But you don’t have to figure it all out on your own. We’re here to help you navigate the financial side of senior care, from understanding care costs to making the most of available resources. Give us a call today, and let’s plan together for the care your family deserves, with less stress and more peace of mind.

Tax-Deferred: What Does It Mean And How Does It Benefit You

When you’re planning for your child’s future education or your own retirement, there are several smart ways to save. You might dive into the stock market, invest in income-generating real estate, or stash money in education savings accounts or retirement plans.

Understanding how these different savings vehicles are taxed is critical to making the best choice for your financial situation. Let’s start with a look at the tax treatment of IRA accounts.

💡 IRA, Roth IRA, and other Retirement Plans

Individual Retirement Account (IRA)
There are two main types of IRAs: the Traditional IRA and the Roth IRA. Despite their similar names, their tax treatments are worlds apart.

Traditional IRA – Contributions to a traditional IRA are usually tax-deductible unless you have a retirement plan at work. In that case, higher-income earners may lose the deduction. Earnings within a traditional IRA are tax-deferred—meaning you won’t pay taxes now, but you will when you take money out. If you didn’t take a deduction for contributions (whether by choice or due to restrictions), withdrawals will be partly taxable and partly tax-free.

Roth IRA – Roth IRA contributions are never tax-deductible, but the real magic happens when you withdraw. If you’ve had the account for at least five years and you’re over 59.5 years old, both contributions and earnings come out tax-free.

So, which one is best for you? It depends. If you need that tax break now, a traditional IRA may be the way to go. But if you’re fine without the immediate deduction, the Roth IRA’s tax-free withdrawals are a serious long-term win.

Retirement Plans
Whether you’re an employee or self-employed, the tax code offers a buffet of retirement plans to help you save. From 401(k)s to SEP IRAs, these plans generally allow you to defer taxes on contributions until you withdraw the funds in retirement. However, if you opt for the Roth version of a 401(k) or 457 plan, your contributions aren’t tax-deferred, but your withdrawals will be tax-free in retirement.

💡 Savings, Gains, and Withdrawals

Bank Savings
Simple but effective, money tucked into a bank savings account or CD earns interest that’s taxable in the year it’s earned. The good news? Once you’ve paid the tax, the full amount is yours to use, no strings attached.

Capital Gains
Whether from stocks, bonds, or real estate, capital gains are a big part of tax-deferred investing. Long-term capital gains, which come from assets held for over a year, are taxed at a lower rate than short-term gains. For most people, that rate is 15%, significantly lower than ordinary income tax rates.

Education Savings Accounts
Planning for college? The Coverdell Education Savings Account and the 529 Plan are your go-to tax-advantaged savings tools. While contributions aren’t tax-deductible, both plans’ earnings grow tax-deferred and are tax-free if used for qualified expenses like tuition. Start early to maximize the benefit!

Health Savings Accounts (HSA)
HSAs are a powerhouse of tax advantages if you have a high-deductible health plan. Contributions are tax-deductible, earnings grow tax-free, and withdrawals used for qualified medical expenses are also tax-free. After age 65, you can even use the funds for non-medical expenses—though you’ll pay taxes on those withdrawals.

Unqualified Withdrawals
Beware of dipping into retirement or savings accounts for non-qualified reasons. Early withdrawals can trigger hefty taxes and penalties. It’s always best to consult a tax professional before making any moves.

Navigating the world of tax-deferred investing?

Our team of experts can help you find the best strategies for your specific situation in 2024 and beyond. Let’s talk about how you can grow your savings while minimizing your tax bill—schedule a consultation with us today!

How to Leverage Roth 401(k) and Roth IRA Plans for Retirement Success

Contributing to a Roth 401(k) or Roth IRA is a smart move for your retirement game plan. These accounts let you save while enjoying significant, long-term tax perks. But before diving in, it’s worth weighing the pros and cons to figure out what best aligns with your financial goals.

The key difference between a Roth and a traditional retirement plan boils down to when you pay taxes. With a traditional 401(k)/IRA, you contribute pre-tax dollars now and settle the tax bill later, during retirement. Roth plans flip the script: you contribute with after-tax dollars today, meaning those withdrawals in retirement come tax-free. It’s all about deciding when you’d rather deal with Uncle Sam.

❓ Roth Plans vs. Taxable Accounts: Why Go Roth?

Choosing a Roth 401(k) or IRA over a standard taxable account can offer significant protection and perks. While you get the same investment options, Roth accounts come with some legal shields, especially when it comes to bankruptcy protection and lawsuits—something taxable accounts can’t guarantee.

Another bonus? No annual tax reporting. Unlike taxable accounts where you pay income taxes annually, a Roth allows your earnings to grow tax-free, and qualified withdrawals are tax-free too. Fewer tax headaches, more growth potential.

💡 Roth vs. Tax-Deferred Retirement Accounts: More Savings, Fewer Hassles

A Roth 401(k)/IRA offers better long-term tax savings than a tax-deferred retirement account. Since you pay taxes upfront, all future growth is tax-free—meaning you can enjoy more tax-free money in retirement. And with no required minimum distributions (RMDs), your money can keep growing as long as you want.

Plus, there’s no age limit for contributions as long as you have earned income. It’s a plan that grows with you, literally.

✍️ Estate Planning with Roth Plans: Leave More for Your Heirs

From an estate planning perspective, Roth accounts offer a win-win. With tax-free distributions, there’s no income tax for beneficiaries on the money they inherit. Plus, Roth plans allow your heirs to take RMDs on their terms while leaving the rest to grow tax-free. And bypassing probate? That’s just icing on the cake.

🚶‍♂️‍➡️ The Backdoor Roth IRA: A Clever Workaround

If your income exceeds the IRS limit for Roth IRA contributions, a “backdoor” Roth IRA could be your secret weapon. It’s an IRS-approved method that allows high earners to enjoy the benefits of a Roth. You can roll over funds from a traditional IRA into a Roth IRA or convert the entire account. Keep in mind, you’ll still owe taxes on the transferred amount, but it can be worth it for the long-term tax savings.

In a nutshell, choosing a Roth 401(k) or Roth IRA is a solid investment in your financial future. It’s about playing the long game and reaping the rewards when you need them most.

Ready to Plan for Your Future?

At Insogna CPA, we’re pros when it comes to helping you navigate retirement planning. Whether you’re eyeing a Roth 401(k) or looking into that sneaky backdoor Roth IRA, our team of licensed CPAs is here to make it easy. Reach out today, and let’s build a strategy that sets you up for success. Your future self will thank you.