Grace Werks Small Business Solutions

Grace Werks Small Business Solutions Our firm provides outstanding service to our clients because of our dedication to the three underlyi Responsiveness

Our firm is responsive.

Professionalism

Our firm is one of the leading firms in the area. By combining our expertise, experience and the energy of our staff, each client receives close personal and professional attention. Our high standards, service and specialized staff spell the difference between our outstanding performance, and other firms. We make sure that every client is served by the expertise of our whole firm.

Companies who choose our firm rely on competent advice and fast, accurate personnel. We provide total financial services to individuals, large and small businesses and other agencies. To see a listing of our services, please take a moment and look at our services page. Because we get new business from the people who know us best, client referrals have fueled our growth in the recent years. Through hard work, we have earned the respect of the business and financial communities. This respect illustrates our diverse talents, dedication and ability to respond quickly. Quality

An accounting firm is known for the quality of its service. Our firm's reputation reflects the high standards we demand of ourselves. Our primary goal as a trusted advisor is to be available and to provide insightful advice to enable our clients to make informed financial decisions. We do not accept anything less from ourselves and this is what we deliver to you. We feel it is extremely important to continually professionally educate ourselves to improve our technical expertise, financial knowledge and service to our clients. Our high service quality and "raving fan" clients are the result of our commitment to excellence. We will answer all of your questions, as they impact both your tax and financial situations. We welcome you to contact us anytime.

06/02/2026

The IRS has changed the way it handles tax refunds when taxpayers fail to provide valid direct deposit information on their tax returns.

Beginning with 2025 tax returns filed during the 2026 filing season, the IRS generally will no longer automatically issue a paper refund check if your bank account information is missing or incorrect. Instead, the IRS may freeze the refund and send Notice CP53E.

If you receive a CP53E notice, you typically have 30 days to provide (or correct) your direct deposit information through your IRS online account. To do this, you may need to establish an online account and complete an identity verification process through ID.me.

If you do not respond within 30 days, the IRS should eventually issue a paper refund check, but the process may delay your refund for up to 10 weeks. In some cases, the IRS may also pay interest on delayed refunds.

Taxpayers who do not want to use direct deposit may contact the IRS to request a paper check.

To avoid unnecessary delays, we recommend verifying that your tax return includes accurate bank routing and account information and that the account name matches the name shown on your return.

If you want to discuss your tax refund, please call me directly at 770-474-3602.

06/02/2026

The so-called Augusta Rule can create a valuable tax-saving opportunity for business owners who operate through an S corporation, a C corporation, or a partnership.

Under this rule, you may rent your personal residence to your business for up to 14 days per year and receive the rental income completely tax-free. At the same time, your business may deduct the rental expense as a legitimate business deduction.

So, if your corporation rents your home to hold business-related events, the corporation may deduct the fair market rental amount paid to you. At the same time, you exclude the rental income from your personal taxable income.

To use this strategy properly, documentation is critical.

If your business pays you $2,000 or more in rent during the year, the corporation generally must issue you IRS Form 1099-MISC. Even though the rental income is tax-free under the Augusta Rule, you should still report the income on your personal tax return and then offset it with a Section 280A(g) exclusion to avoid IRS matching notices.

The 14-day limit applies per residence—not per corporation. If you own multiple residences, each residence may qualify separately for up to 14 tax-free rental days annually.

You should also maintain records supporting the business purpose of each event and proof that the rent paid reflects fair market value. Comparable pricing from hotels, meeting spaces, event venues, or similar rental properties can help support the deduction.

Qualifying business uses may include board meetings, employee training sessions, strategic planning retreats, and employee appreciation events. However, entertainment-focused events or excessive personal use can jeopardize the deduction.

If you want to discuss the Augusta Rule, please call me directly at {770}474-3602.

05/22/2026

Tax Tip

Here’s a valuable tax strategy, commonly known as the Augusta rule, that can help you generate tax-free income while claiming a legitimate business deduction.

If you own a business structured as an S corporation, a C corporation, or a partnership, you may rent your personal residence to your business for up to 14 days per year. When this is done correctly, the results are highly favorable: your business deducts the full rental expense while you personally receive the rental income tax-free.

For example, if your home rents for $1,500 per day and your business rents it for 14 days, your business can claim a $21,000 deduction. That deduction reduces business income, and in the case of an S corporation or a partnership, it reduces income that flows through to you.

On your personal tax return, you report the $21,000 as taxable income, then subtract it under the 14-day rule, so your net result is zero tax on the $21,000.

While tax law supports this strategy, proper ex*****on is critical. You must follow several key rules, including:

• Rent for a business purpose. The rental must be for legitimate business use, such as meetings, planning sessions, or employee events.
• Avoid entertainment use. Most entertainment expenses are not deductible, so the rental should not be for entertainment purposes.
• Charge fair market rent. You must charge a reasonable rental rate supported by documentation, such as comparable market data or an appraisal.
• Document the business activities. Keep detailed records of meeting agendas, attendees, and business activities to substantiate the deduction.

Failure to meet these requirements—particularly proving fair rental value and business use—can result in the IRS disallowing the entire deduction.

Larry Stoner

05/10/2026

Tax Savings with Contributions

Recent tax law changes make it more challenging to receive meaningful tax benefits from charitable giving.

Under the current 2026 rules, higher standard deductions and new limitations mean many taxpayers receive little or no benefit from itemizing charitable contributions. Additionally, personal donations are made with after-tax dollars, often increasing the overall cost of giving.

But as a business owner, you can beat this problem.

Your business can structure certain payments to charities as ordinary and necessary business expenses. When structured this way, your business takes the deduction on its business return, reducing not only income taxes but also (potentially) self-employment taxes or, if applicable, payroll taxes. In addition, the business deduction generally lowers your adjusted gross income, improving eligibility for other tax benefits.

To qualify, the payment must have a clear business purpose and a reasonable expectation of financial return. In practice, this means the expense should function as advertising, promotion, or customer development.

There are several proven strategies:

• Sponsoring charitable events to promote your business
• Donating a percentage of sales to encourage customer purchases
• Supporting local organizations to enhance community branding
• Using coupons or rebate-style programs tied to charitable giving

Proper documentation is essential. To support the deduction, maintain records such as sponsorship agreements, marketing materials, and evidence of business intent.

If you want to discuss how to use your business to support charities, please call me on my direct line at 770-474-3602.

Sincerely,

04/21/2026

Health Savings Accounts (HSAs) are a great way to save money.

Unlike any other tax-advantaged account, they provide a triple tax benefit:

1. Contributions are tax-deductible.
2. Monies inside the HSA grow tax-free.
3. Withdrawals are tax-free if used for medical expenses.

Withdrawals after age 65, if not used for medical expenses, are subject to regular income taxes.

Some wealth advisors counsel HSA owners to treat their accounts like a super IRA—to maximize their contributions and make few or no withdrawals for medical expenses. By the time they retire, they could have a substantial amount saved in their accounts. They can withdraw the money tax-free to pay medical expenses, or withdraw it for non-medical expenses and pay regular income tax.

But HSA owners need to understand that after they die, the tax code treats HSAs very differently from IRAs or 401(k)s.

If your spouse is your HSA beneficiary (as is normally the case for married people), the account will automatically go to your spouse upon your death, with no taxes due. Your HSA becomes your surviving spouse’s HSA.

If you don’t have a spouse as your beneficiary, your HSA automatically ends on the date you die.

Your non-spouse beneficiary—whether a child or someone else—will receive the funds and have to pay regular income tax on them that year. This is very different from the tax treatment for inherited IRAs or regular 401(k)s; non-spouse IRA and 401(k) beneficiaries have 10 years to withdraw all the money from the account and pay tax on it.

Sooner or later, every HSA will have a non-spouse beneficiary, whether because the HSA’s owner never married, they got divorced, or their spouse predeceased them. The HSA is generally not the best vehicle for passing your wealth to the next generation.

If someone other than your spouse is your HSA beneficiary, you can reduce the tax hit they’ll face when you die by making tax-free withdrawals from your account to reimburse yourself for past medical bills you paid. These include not just doctor bills but also dentist bills, vision care, and many other expenses.

It doesn’t matter how old these bills are as long as you paid them after you established your HSA and didn’t deduct them on your taxes. However, you must have proper documentation for them. You can take such reimbursements anytime, but it is definitely something to consider if you become seriously ill and don’t expect to live much longer.

All HSA owners should get in the habit of keeping receipts for their medical expenses. There are HSA expense-tracking apps that can make it relatively easy to maintain this documentation.

If you want to discuss HSAs, please call me at 770-474-3602

04/08/2026

Dear Friends,

Many business owners overlook a powerful strategy that allows them to pay family members, reduce taxes, and avoid payroll taxes altogether.

You likely know the traditional approach: hire your child and put them on payroll. That strategy works well for younger children in a sole proprietorship. But once your child turns 18—or if you operate as a corporation—payroll taxes usually apply.

In the right situation, a lesser-known alternative offers a better outcome.

You can hire a family member for a “one-time project” instead of ongoing work. This structure allows you to deduct the payment at your higher tax rate while your family member reports the income at a much lower rate—often with little or no tax liability.

For example, you might pay your college-age child to design a website, create marketing materials, or complete a facility upgrade. If you structure the work as a true one-time project—not a continuous or recurring one—the income avoids employee status and thus payroll taxes for both you and the child. It also avoids 1099 independent contractor status and thus self-employment taxes for the child.

This approach can generate meaningful savings. In one scenario, a $23,225 payment produced over $7,800 in net family tax savings.

To make this strategy work, you must follow several key rules:

• Define a clear, one-time project with a specific scope.
• Pay a reasonable, fixed amount upon completion of the project.
• Avoid hourly wages or ongoing tasks.
• Maintain simple documentation and proof of completion.
• Ensure the arrangement supports proper worker classification.

This strategy depends heavily on proper structure and ex*****on. If you treat the work as ongoing employment, you risk having your child or other family member classified as an employee or a 1099 independent contractor.

When done correctly, this approach efficiently shifts income, minimizes taxes, and keeps compliance simple.

If you want to discuss the one-time project strategy, please call me on my direct line at 770-474-3602

Larry Stoner

Address

Stockbridge, GA
30228

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