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Throw the ultimate affordable Super Bowl party

Like a professional quarterback’s salary, throwing a Super Bowl party can be expensive. So how can you be sure—affordably—that your party is the one everybody will be talking about at work the next day? With these tips for some fun party perks that everyone will remember long after the play clock winds down.

Don’t break the bank on party supplies—The dollar store is your best friend when it comes to decorations and serving dishes. It’s just as much fun (and a lot cheaper) to grab hot wings out of a generic football-shaped dish as one with an officially licensed NFL logo. If you absolutely want those team colors in your decor, check out your local party supply store for paper plates, bowls, cups and tablecloths in solid colors.

Make it fun for non-football fans, too—We know it’s heresy, but it’s possible some of your guests might not care as much about the game as the rest of you. Consider setting aside a corner of your party space for games (video or board) or setting up a small TV or computer to watch other things between commercials.

Have a few fun games ready to go—Before the game starts, show your team spirit by seeing who can create the most die-hard fan costume using face painting supplies, crepe paper, spray-on hair dye and anything else you might have on hand. Your guests can vote on the best costume. And when things slow down during the game, re-energize the party by breaking out Super Bowl commercial bingo (you can find free printable cards online) or team/city trivia matches. Pick up some fun, inexpensive prizes on your trip to the dollar or party store to hand out to the winners.

Work up a game plan for food and drinks—A potluck and bring your own beverage party can help defray costs and can give you a wider assortment of goodies to offer. You can supply the ice, water and soft drinks, while guests bring their own beverage of choice. Pizza and wings might be a good option, too; many places offer great Super Bowl deals. Crockpot food like sloppy joes, meatballs or little smoked sausages can be inexpensive and easy. Oh, and don’t forget a few healthier options for guests who need them.

Create inexpensive swag bags—Just like on the Hollywood red carpet, send your guests home with some affordable but fun swag: Gift bags filled with candy, cookies, nuts (check for allergies first!), football-themed tchotchkes, a small bottle of water or Gatorade—even a small tin of pain relievers for the inevitable first few rough hours of Monday morning.

Two final tips: First, while it’s fun to cheer with a crowd, make it comfortable (and possibly healthier) for your guests by not over-inviting for the size of your home. Even if February wasn’t smack in the middle of cold and flu season, it’s no fun tripping over your friends’ feet with a full plate of chips and salsa in your hand. 

Second—and most important—keep an eye on your guests so you can be sure that anyone who’s over-imbibed makes it safely home, whether you need to ask someone to give them a ride or call an Uber. In fact, why not take a cue from stadiums nationwide and suggest guests switch to water for the final quarter of the game? 

Keep things safe and healthy so you and your favorite party guests will all be back at the same time next year for another fun Super Bowl celebration. Touchdown!

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How to find a morning routine that sets you up for a great day

Is your idea of a morning routine hitting the snooze button three times and then dragging yourself out of bed in just enough time to slide into work as the clock strikes 9:00 a.m.? You may get some extra sleep, but let’s be honest: A frantic race to work, whether at home or in the office, is probably not the best way to start off a productive day. 

“Yeah, sorry—I will never be a ball of energy in the morning,” you might say. To which we would reply: You don’t have to be. All you need in order to find a routine that sets you up for success is to find a routine that suits you. And we have some tips to help you do just that.

You don’t need to bound out of bed at 4:00 a.m., exercise for an hour, meditate and whip up a nutritious fruit-and-veggie smoothie to create a productive morning routine. Just aim to start your day in a more intentional way that will help you feel in control of your day rather than letting the day control you. Here are some simple suggestions to get you started (literally):

Some advance planning for the day—When you know the evening before what you need to accomplish the next day, from getting kids off to school to the work meetings on your schedule, you can prevent meltdowns and stress that result from rushing from one thing to the next. You don’t have to plan down to the minute; just have a handle on what’s coming and when. 

A consistent bedtime and wake-up time—Even if it’s not possible to stick to it every day, a fixed sleeping and waking schedule can help reset your internal clock and set you up for restful sleep (without the snooze button). You’ll likely also find that you have more energy during the day.

A few morning stretches—Morning exercise isn’t for everyone. But you don’t need to do a full circuit in a gym. A few gentle stretches when you get out of bed (with a glass of water beforehand for hydration) will help warm up your joints and muscles, get the blood flowing, and get your body revved up for the day ahead. 

A decent breakfast—Not eating in the morning can make your metabolism sluggish and set you up for a low-energy day. (If you exercise in the mornings, eat something small first to fuel your body—e.g., an apple with a bit of nut butter.) Be sure to work with your dietary needs and preferences to come up with a selection of breakfast choices that contain some fiber and protein to keep you going strong. 

These are only suggestions to get you started. You may choose other activities, like a 10-minute snuggle with your family, making your bed every day or taking a morning walk. The most important thing to remember is that the only way a routine will stick is if it works for you and your lifestyle—not for the fitness magazines, not for the morning show talk gurus and not for your favorite Instagram influencer. For YOU.

Some days will be easy, while other days you may face a screaming toddler or a cat with a queasy stomach that will send your schedule right out the window. But hang in there. Start small, and if something isn’t working, consider switching it up a bit. We have faith that you’ll find a morning routine that works for you! 

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Make tax filing easier in 2022

Filing taxes for 2020 was…challenging. Yes, that’s a good way to put it. Not impossible, but not exactly fun, either. While your 2021 return hopefully won’t be quite as much of a challenge, there are still several unusual factors to be accounted for (e.g., Child Tax Credits and Economic Impact Payments).

However, there are some simple steps you can take now to help make filing those tax returns easier come January.

Gather your tax records 

The best tax records are organized tax records. If your records aren’t quite there, now is the perfect time to get them together. 

First, be sure to notify the IRS if your address has changed and notify the Social Security Administration of any legal name changes. 

Next, you should have any year-end documents you’ve received from the IRS, such as:

• Letter 6419, the 2021 Total Advance Child Tax Credit Payments
• Letter 6475, your 2021 Economic Impact Payment
• Form 1095-A, the Health Insurance Marketplace Statement

Most income is taxable, including unemployment income, state tax refunds, gig economy income and virtual currencies. So, you’ll need the following documentation:

• W-2 from your employer(s)
• 1099-INT or 1099-DIV from banks, unemployment compensation, dividends, and distributions from a pension, annuity or retirement plan
• 1099-K, 1099-MISC, W-2 or any other income statements for contractors, freelancers and other gig economy workers
• Any other income documents and records of your virtual currency (e.g., Bitcoin) transactions
• All 2021 information related to the Child Tax Credit and Premium Tax Credit
• If you received a third Economic Impact Payment and believe you qualify for an additional amount, you’ll need your stimulus payment and plus-up amounts to calculate and claim the 2021 Recovery Rebate Credit
• Cash and non-cash charitable contributions

Don’t forget the other “usuals,” such as Form 1098 for mortgage interest you paid, receipts for deductible expenses, and your books and records for any business income and expenses. 

Set up your online account

If you haven’t set up an online IRS account yet, do it now (you’ll find links and information at irs.gov/individuals). If you already have an online account, make sure you can still access your account. An online account is important because it allows you to securely:

• View the amount of your Economic Impact Payment(s)
• Access the Child Tax Credit Update Portal
• Approve or reject authorization requests from your tax professional
• Update your email address and opt in or out of paper notices

Other steps

If you always receive a paper check because you don’t have a financial institution, this is an excellent time to open an account at an FDIC-insured bank or an NCUA-insured credit union. That will enable you to receive your tax refund by direct deposit, which will get to you much faster than a paper check.

If you prefer not to work with a financial institution, you can even get a pay card from your local grocery store or a large retailer like Walmart and have the refund deposited to the card. 

Also, check with your tax professional on a couple of important questions that may not make a difference in this year’s return but will give you a jump-start for the 2022 tax year:

• Do I need to adjust the amount I withhold from my paycheck? (The IRS also has a Tax Withholding Estimator for your use at irs.gov/payments/tax-withholding)
• Should I make estimated tax payments? (This is especially important for gig workers)

In anticipation of a more “normal” tax season, the official tax deadline has reverted to April 15. So, we hope this information will get you started on prompt and easier filing.

If you’d like more information, irs.gov/filing has a library’s worth of information to help you prepare for filing your 2021 tax return. As always, our firm is current on the latest rules and regulations, and we’re available and ready to help. Here’s to a stressless tax season for us all! 

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Why pets don’t make good holiday gifts

We buy pets as holiday gifts with the best of intentions. Haven’t decades of commercials shown us that there’s nothing more adorable than a cute little ball of fluff jumping out of a gift-wrapped box into its new owners’ welcoming arms?

So…we hate to be the grinch at the party, but there’s a reason animal abandonment soars after the holidays and shelters become inundated with puppies and kitties returned by owners who were unprepared to be pet owners. If you’re considering surprising your family with a new furry family member this holiday season, here are some cautionary points to keep in mind.

The holidays are stressful—for humans and for animals. Especially as we emerge from two years of pandemic isolation, there will be a lot of local and national travel as we reconnect with family and friends. Is it fair to leave a new pet alone, even for just a day? Or to ask them to mingle with strangers who show up at their new home? It’s a recipe for anxiety, accidents and even sickness for an overwhelmed animal.  

Kids will be kids—and there’s nothing wrong with that. But it’s hard for small children to understand that live pets aren’t as sturdy as the stuffed kind—especially when they’re surrounded by the excitement of the holidays. Puppies, kittens, chicks, bunnies and other young animals can end up with broken bones—or worse—from completely unintentional injuries inflicted upon them by enthusiastic little ones who only meant to hug or play. Consider whether your children are really ready for live pets.

Pet ownership should be a family activity—but too often, it isn’t. Pets need to be fed, exercised, housebroken, trained and played with, and kids have short attention spans (as do many adults). Once the newness wears off, do you want to spend your time chasing after family members to get them to walk the dog in the snow or change the cat litter? Don’t make a new pet a holiday surprise; instead, sit down with your family and discuss the long-term commitment and daily obligations. Once you’re confident they’ll fulfill their pet care duties, go to the shelter together to choose your new family member. 

Pets are expensive—and we’re not just talking about the shelter adoption fee. According to the ASPCA, the first-year costs of owning a cat or dog can run from $500 to more than $1,000. Then, you’re looking at yearly expenses between $1,000 to $2,000, depending on the animal’s size—over lifespans that can reach 15 years. And that doesn’t include emergency dental care or vet bills for injury or illness as they age. Take some time before you head to the shelter to research the financial aspect, especially if you’re set on a higher-maintenance breed.

Remember, a pet can’t be regifted. Unless you’ve confirmed that your potential recipient(s) have the time, ability, resources and willingness to commit to the care of an animal, consider a gift certificate to a local shelter so they can choose their own pet on their own time. Even better, wait until after the holidays when things have calmed down and there’s time to make a thoughtful decision. 

Every living creature deserves a safe and loving home. The love and joy you’ll get from knowing you are ready and able to provide a good life for your new furry family member will make the time you spend on your decision worth every second.

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Seven quick mindfulness techniques to help alleviate holiday stress

While most of us look forward to the holiday season, it can also be a major source of stress. We’ve borrowed several fast and easy mindfulness techniques you can use to help reduce stress when your “Ho-Ho-Ho!” turns into “Oh-No-No.”

1. Recognize the signs. Knowing you’re stressed is the first step toward calm. Pay attention to what your body tells you when you’re stressed: Your heart races, your fists clench, your face flushes, you grit your teeth—we all have our own go-to fight-or-flight responses.
2. Give your emotion a name. Are you angry? Afraid? Sad? Anxious? A UCLA study showed that attaching a label to an emotion lessens activity in the amygdala—the part of the brain that controls the fight-or-flight response—and helps you “hit the brakes” on that emotion.
3. Breathe. “4-7-8 breathing” is a popular method for calming stress. (Some people also swear it helps them fall asleep.) To try it, place your tongue against the back of your top teeth and keep it there as you:
   •Exhale completely through your mouth with a whooshing sound, then close your lips.
   •Inhale silently through your nose to a count of four.
   •Hold your breath for a count of seven.
   •Exhale completely through your mouth with a whoosh to a count of eight. 
   •Repeat three times.  
4. Use a mantra. “This too shall pass.” “Happy place.” “It’s just one day.” Repeat any meaningful word, motto, prayer or saying to yourself mentally (or under your breath) until your heart rate evens out.
5. Exercise. Some people take a walk or run when they’re stressed. Others scrub floors, fold laundry or stack wood. It doesn’t matter what exercise/chore you choose; the idea is to get your body moving and immerse yourself in the activity. 
6. Take 10. Sometimes you need to remove yourself from the scene and find a place to be alone for a few minutes. Your car, the bathroom, a supply room, even a closet can give you the space to bring your breathing back to normal.
7. Notice five things. When your anxiety goes into overdrive, try this exercise to calm your mind by focusing on your environment instead of your racing thoughts. Take deep, regular breaths, look around you, and make a mental note of:
   •Five things you can see
   •Four things you can touch
   •Three things you can hear
   •Two things you can smell
   •One thing you can taste

Don’t worry about doing these techniques the “right” way, because there isn’t one—it’s all about what works for you to ease your stress. Experiment with these exercises and hold on to the ones that work for you. And if you’d like to find more stress-busting ideas, simply Google “quick mindfulness techniques.” 

Above all, don’t let stress ruin your holidays. Because darn it, you deserve your “Ho-Ho-Ho!” moments as much as anyone else. You’ve got this!

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An attitude of gratitude. 20 things to be thankful for this year.

When is the last time you thought about what you’re most thankful for? If you’re like most of us, it was probably last Thanksgiving. But even crazy and chaotic years have their points of light, so here’s a handy list to help prepare yourself in case you’re put on the spot at this year’s Thanksgiving dinner. By the way, It’s also a good reminder of just how much we have to be thankful for.

1. Family. Sure, they can be overbearing, frustrating and even weird at times. But they’re your overbearing, frustrating weirdos, and they love you, too.
2. Relationships. The one who pretends not to notice your morning breath, sees you without makeup, endures your rants about work, and still loves you.
3. Good friends. Friends are family who will actually tell you just how dumb you were to do that thing you just did—but they’ll also stand by you to the end.
4. Home. Whether it’s a shoebox apartment or a sprawling house, it’s comforting to have your own little corner of the world to come home to, dust bunnies and all.
5. Pets. Dogs, cats, ferrets, hamsters—there’s nothing like unconditional love in a fluffy package to snuggle with when you’ve had one of those days.
6. Health. The last couple of years have shown us that good health—both ours and our loved ones’—is truly a gift to be grateful for every day of our lives.
7. Modern conveniences. Electricity, dishwashers, indoor plumbing, air conditioning, cars, smartphones. Can you imagine life without them? 
8. Streaming services. The ability to watch anything from your favorite childhood shows to the movies and series everyone’s talking about—on your schedule.
9. Virtual meeting apps. Even without a pandemic, the ability to talk in real time and see the faces of distant friends and loved ones is miraculous.
10. Snow days. Is there anything better than going back to bed (or at least working in your PJs) when it’s 10 below zero with snowdrifts up to your windowsill?
11. A caring boss and co-workers you like. If you have these, we’d bet you already appreciate how much nicer it makes coming to work each day. 
12. Toilet paper. For obvious reasons.
13. Kind people. A lady in the grocery store line who lets you go ahead. A teenager who holds open a door when your hands are full. Kindness is still out there.
14. Good books. Oh, the bliss of whiling away a rainy weekend on the couch, absorbed in a new book or a beloved familiar story.
15. Email questions…that can be resolved in one reply and with one sentence.
16. Memories. The ability to connect your past to your present teaches you, gives you perspective and comforts you when you need it most.
17. Pizza and chocolate. The two most vital food groups. ‘Nuff said.
18. Travel. The world is opening back up to us. Maybe not as fast as we’d wish, but we have options again for seeing new sights and making memories.
19. GPS. Life is all about the journey, but sometimes you just can’t afford to get lost. And you don’t have to worry about folding a GPS the right way.
20. Our planet. Earth is truly a wonder; a big blue marble that, at last count, has supported 117 billion humans over the millennia—and will hopefully survive to support many more.

So there you have it; a (somewhat random) list you can print off and slip into your pocket to be pulled out at Thanksgiving dinner—or any time you need a shot of optimism and a reminder that we have so much to be grateful for.

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A freelancer’s guide to taxes

Ah, the freedom of freelancing. You’re the boss, so you can set your hours, pick your clients and choose your projects. Plus, you’re solely responsible for paying your own taxes, at tax time and all year long—

Wait, what? 

That’s right! As a freelancer, knowing how much and when to pay taxes is all on you. But don’t panic. With knowledge, organization and help from an experienced tax preparer or accountant, you can keep enjoying your freedom without dreading that bill from the IRS. 

You (and the IRS) know you’re a freelancer if…

If you earn $400 or more per year from a single employer as a freelancer, you’re self-employed in the eyes of the IRS—and this income must be included in your annual tax return. So not only are you responsible for your personal income taxes, but you’ll also pay a 15.3 percent self-employment tax to cover Social Security and Medicare taxes an employer would deduct from a paycheck.

The IRS will know you’re a freelancer because, for every client, you’ll complete a W-9 form at the time you’re hired. This form asks for your name, address and tax identification number (TIN), which is then reported to the IRS. At the first of the year, instead of a W-2, you’ll receive a 1099-MISC from every client who pays you $600 or more during the year. 

It’s taxing time!

Since taxes aren’t deducted from the paychecks you receive from your clients, it’s up to you to put aside money from each check to pay federal, state, local and self-employment taxes—and to pay them on time. If you expect to owe more than $1,000 in taxes for the year, you’re required to pay estimated taxes each quarter (due January, April, June and September). If you underpay your quarterly taxes, you’ll need to pay the balance when you file your April 15 tax return. If you underpay too much, you’ll be looking at an additional fine.

These two forms, which can be found at irs.gov, can help you with the estimations and calculations:

• Form 1040-ES helps estimate how much you’ll make during the year and what your estimated quarterly taxes should be based on those projections.
• Schedule SE helps calculate the self-employment tax you’ll report along with your regular income tax on your 1040. 

It’s a good idea to set up a separate savings and checking account for your business in order to keep personal and business finances from commingling. Estimate what percentage of each paycheck should go toward taxes (an accountant or tax preparer is your best source for this information, but 25 to 35 percent is a figure commonly cited by finance professionals, depending on your personal situation). The second your pay hits your account, move what’s needed into the account you’ve earmarked for taxes…and DON’T touch it until it’s needed to pay your quarterly or yearly taxes (seriously, don’t).  

The fun stuff: Deductions

Common deductions for freelancers can include:

• Home office space
• Auto and travel expenses
• Internet and phone
• Health insurance
• Office supplies
• Computer hardware and software
• Advertising materials
• Legal and professional services
• Taxes and licenses
• Certification costs
• Business meals

However…the IRS puts certain restrictions on many of these deductions, which is why they’re quick to red-flag inflated deductions. It’s also why self-employed people tend to be audited more often than W-2 employees. But if you’re a diligent record keeper who is truthful and accurate with your deductions, your likelihood of audit will be lower.

A freelancer’s best friend 

Now that your time really is money, it’s more valuable than ever. Don’t waste it trying to hunt down a million receipts. A good bookkeeping app like QuickBooks® will offer digital scanning capabilities to help keep your documentation organized and easily accessible at tax time. 

Speaking of tax time, we can’t emphasize this enough: Work with a tax accountant or CPA. Tax laws change frequently, so a good tax pro can be a freelancer’s best friend. Their fees will be a pittance compared to the amount you’d pay for a huge tax bill (surprise!) or penalties incurred for underpaying taxes. 

Now, armed with this information, it’s time to put your own tax plan into place—and go forth and fearlessly freelance. 

(Note: The information in this article was written with the sole proprietor business structure in mind. If you’re an LLC, S-corporation or C-corporation, details will vary.) 

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Elevate your small business with Google My Business

Attention small business owners: Have you set up your Google My Business listing yet?

If not, you’re missing a major opportunity to stand out in local search results. Not only does Google hold more than 75 percent of search market share, but according to research by SEO optimization platform BrightLocal, 64 percent of consumers have used a Google My Business (GMB) listing to find contact details for a local business. 

If you’re not familiar with GMB and/or have not yet optimized your listing, assume that your competitors already have—which means they’re likely getting the lion’s share of local online traffic. But fear not, this article offers the 411 on what you need to know to get your GMB listing up to snuff.

What is Google My Business?
GMB is a free, dedicated business listing space on Google—a single channel you can focus on to boost your local online presence, get noticed, and start moving closer to that prized spot on the first page of search results. In fact, it’s very likely you already have a GMB listing waiting to be claimed and/or optimized. 

Why use Google My Business?
Even if you don’t conduct business online, that’s where your customers and prospects are searching for products and services. If you’ve ever searched for “Dog groomers near me,” then you can understand how GMB can raise your profile to local prospects. Because location influences searches and search results, optimizing your GMB profile makes you more discoverable—and it allows your business to appear across Google products like Maps and Search.

What will Google My Business do for me?

When properly set up, it will introduce searchers to your business with information that includes:

• Contact information
  -Location address (which links to Google Maps)
  -Phone
  -Website URL
• A description of your business
• Business hours
• Important messages to customers such as changes in hours, temporary closures and other news
• Photos of your location, your products, your team…or anything else that tells your business’s story 
• Your products and services
• The main area you serve, and up to 19 more surrounding service areas
• Reviews of your business 
• Posts in GMB’s social stream to give visitors engaging content on an ongoing basis

How do I get Google My Business?
Start at support.google.com/business and search on “How to set up Google My Business” for instructions. Hint: Googling the same query in your browser will also get you dozens, if not hundreds, of sites with instructions and tips for setting up an effective GMB listing. 

Summing it up…
Start with GMB to build awareness of your business locally and boost your online search ranking. Building your local online presence is the key to success, so corner the market in your backyard first (we know you can do it!), and then you can branch out to other social media streams like Facebook, Twitter, or Instagram if you’re so inclined. 

But to grow, you must first be planted, so get that GMB listing built out. That way, when the thousands of people who Google “ near me” get their search results, your brand will be among the first they see.  

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How to keep in touch

When the pandemic first began, families had to adjust to a new normal: Family time, all the time.

For many families, the mandatory togetherness allowed them to become a closer, more cohesive unit. But as the world opens back up, how can you keep the closeness you created during the shutdown period?

Here are five ideas for keeping in touch, even when you’re not together:

1. Create a daily routine
   Before you all run off in different directions (work, school, extracurricular activities, social outings, etc.), sit down and create a routine—together, so everyone feels invested and will be more likely to participate. These routines could include:
   
   •  Eating dinner as a family on weeknights
   •  Talking about the highs/lows of everyone’s day
   •  Taking a walk after dinner with the family dog
   •  Planning meals and assigning cooking duties
   •  Scheduling downtime to give everyone some “me time”
   
   
2. Include extended family members
   While spending time with out-of-town family members may not yet be possible, schedule a weekly or bi-weekly video chat to check in, swap stories and share upcoming adventures. Video conferencing applications like Zoom or Google Meet give you the option of scheduling a recurring meeting so family members can plan around virtual family time.
   
   Once distance, time and comfort levels allow, make plans to spend time with extended family on a regular basis—whether at a park, a family member’s home or a restaurant in a central location. Don’t wait for the next big holiday to plan a family outing; make it a consistent activity!
   
   
3. Set boundaries
   With current world events causing tension and division between family and friends, set specific boundaries around hot button topics. Do this by sending an email or text to family members before meeting to let them know the topics you’d like to refrain from discussing and encourage them to do the same. Setting (and gently enforcing) boundaries will help keep the peace at family get-togethers.
   
   
4. Prioritize quality time
   Easing into the new normal will take a little finagling when it comes to balancing time within the household. As offices and schools reopen, the amount of time you’ll get to spend with your family will lessen and the quality of time spent together will become more important. Read on for some ideas to incorporate quality time:
   
   •. Put phones away at mealtime to focus on each other
   •  Spend 10 minutes before bedtime with each member of the household for some focused one-on-one time
   •  Plan a family game night
   •  Make a family bucket list and start checking items off
   
   
5. Get outside
   If weather permits, get outside for family activities, like a walk around the neighborhood, time at a local park, or a tour through the nearest zoo or botanical gardens. Being outdoors can reduce stress and help you get that all-important Vitamin D and fresh air. Throw a ball around, work in the garden or even start a water balloon fight!
   
   However you decide to keep in touch, remember to check in with your family members regularly so you can gauge how they’re adjusting to your family’s new normal.
   

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What’s your calendar style?

As summer winds down and the calendar turns to September, let’s take a look at what kind of calendar you’re turning.

In an over-scheduled world, a calendar is a necessity for staying organized—especially if you’re juggling work and household schedules. But there are so many types available that the choices can be overwhelming. That’s why we have a roundup of the advantages and disadvantages of the most popular types of calendars.

Calendar apps/online calendars

Advantages:

• Everything’s digital—no messy markers, no erasing and rewriting, no appointment cards to lose
• Perfect for those on the go; your phone’s always with you
• Easy to share your calendar with spouse/partner/kids/friends
• Easy to add notes and information as needed
• Easy to schedule recurring events like birthdays, sports practices, or events from online invitations
• Endless range of choices to suit your style
• Cloud backups protect information

Disadvantages:

• Security vulnerabilities
• Hard to disconnect when everything you need is in your device
• Constant notifications and alerts can be wearing
• Internet outages or weak cellular signals can block access
• There’s a learning curve to use the app/site

Popular options for work and/or home:

• Google Calendar
• Apple Calendar (aka: iCal)
• Microsoft Outlook
• Cozi Family Organizer
• Calendar.com
• Calendly
• Trello

Physical calendars

Advantages:

• Easy to use; can be faster to jot things down over entering information digitally
• Physically writing down an appointment or task can help the brain remember better
• No need for special technology
• Good for seeing the big picture all at once
• Can be displayed in a centralized area (e.g., refrigerator) for the entire family
• Can get creative with pictures, stickers and colors
• Can be a fun way to teach kids how to be organized

Disadvantages:

• Not easy to share with others
• Limited physical space
• Everything needs to be entered by hand
• May need to replace every year depending on format
• May not always carry the physical calendar with you

Popular options for work and/or home:

• 12- or 18-month multi-page wall calendars
• Daily, weekly or monthly planners
• Dry erase calendars

You may want to maintain your calendar using a combination of the types listed above. For instance, use your Google Calendar to enter and view appointments on the go, and then transfer those details on a weekly (or monthly) basis to a physical calendar in a central location. Or you could use a monthly calendar and assign each household member a different color for tracking their specific schedules.

The best way to find what works for you is through trial and error. Choose a system that will be easy to use not only for yourself, but your entire household.

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5 tips for affordable school and work wardrobes

There are clothes shoppers who only buy new, and there are shoppers who do a happy dance at the mere sound of the word “Resale.” While the former may snag the hottest fashions of the moment, the latter group gets to enjoy the thrill of the hunt PLUS they save major amounts of money in the process.

After a year at home during which “hot fashion” meant PJs just out of the clothes dryer for many of us, you may be raring to add to your family’s wardrobe this fall. Luckily, even if money is still tight in your household there are great deals out there. The key is to think outside of the mall…er, box. Here are five tips that will help:

1. Job One: Shop your closet. The first thing to do is take an inventory of what you have in your closets right now. Be ruthless; throw away clothes are too worn, damaged or outdated to wear, and donate or sell clothes that are in good shape but don’t fit anymore. (If you’re a talented sewer or crafty, you may be able to transform these items.) Once that’s done, you know what you have to work with.
   
   
2. Have a clothes swap party. This works with kids’ or adults’ wardrobes. Have everyone go through their closets and bring items that don’t fit or haven’t been worn in the last couple of years. Set out drinks and snacks and let the trying-on fun begin. If an item works for one of the other guests or their children, they’ve scored a great deal. If not, donate what’s left—or pool your resources to sell the items on eBay or Craigslist.
   
   
3. Know your budget. Before you step out the door, determine how much money you have available to spend (don’t forget to account for shoes, coats and other accessories). If a credit card makes it too easy to overspend, only use cash to shop. If you’re shopping with your kids, using cash is a great way to show them money management in action.
   
   
4. Shop secondhand. If you’ve always thought of secondhand shopping as dingy, smelly and populated with ‘70s fashion rejects, think again. All right, well, some thrift stores fit the description, but there’s a reason these stores are so popular with broke college students—they hold some fabulous finds. Cheery children’s resale shops are balm for a parent’s wallet, given how fast kids outgrow things. And on the more upscale side, today’s consignment stores for adults are bright, clean and ultra-fussy about the condition and brands they’ll accept (a like-new Chico’s jacket for $20? Yes, they’re out there, just waiting for your search savvy).
   
   Bonus tip: This should be done no matter where you shop, but especially at a thrift store be sure to check clothing before you buy for rips, stains or other condition issues.)
   
   
5. Know when to shop. While there are sales galore in August, the best deals can often be had in October. And there’s nothing like an end-of-season sale to get the blood pumping and the shopping bag filled. Stores usually clear out their inventory with low prices in April and September so there’s room for the new season’s clothing.

Other ways to save include taking advantage of discounts and coupons (many secondhand shops offer them now), buying clothes through eBay and Craigslist, and avoiding the temptations of your local mall. It’s also important to have a game plan; know which stores you want to shop and what kinds of clothing and accessories you need, with a little wiggle room in case you run across a particularly irresistible deal. And whether you’re shopping for yourself or your family, treat it like a fun treasure hunt—which is exactly what shopping for affordable clothes often turns out to be. 

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Back…to the office

The only certainty about life after a pandemic is that there isn’t much certainty. Masks on or off? Six feet of distance or three? Shake hands or nod hello? It depends on who you ask.

Given the changing and conflicting information out there (or the lack of it), it’s no surprise that after a year (or more) at home, the prospect of returning to a building filled with other human beings is stoking office workers’ anxiety. A 2021 American Psychological Association survey found that 48 percent of vaccinated respondents were still apprehensive about face-to-face interactions.

If you’re among those facing a return to your workplace and aren’t sure how you’ll handle it, take a deep breath and read through this collection of suggestions to help you prepare for office re-entry.

Before you return

Do some mental preparation. Psychologists use imagery to help people cope with anxiety-inducing situations. It may help you to spend a bit of time now imagining some of the scenarios you fear encountering at the office, and how you’ll deal with them. That can help you prepare emotionally if they do happen.

Have a dress rehearsal. If you can, go into the office before your return date. Look around and see what’s changed. Sit at your desk. Do a little tidying up after the year of disuse. Stock your drawer with masks and sanitizer if you’re still using them. Organize your desk, add some updated photos and maybe a new plant if you’re allowed. Make it welcoming for your first day.

Reset your sleep schedule. It wasn’t just stress that played havoc with many sleep schedules. When you can work late into the night, roll out of bed five minutes before starting time or grab a catnap at lunchtime, it’s easy to get into bad sleep habits. A week or so before your return date, gradually adjust to your new/old schedule by 15- or 30-minute increments each day.

Once at work

Wear a mask if you choose. If you live and work in an area where masking is based on an honor system, how can you know who’s being honorable? You can’t. So, if you’re more comfortable wearing a mask during the day, don’t apologize and don’t let anyone tell you that you shouldn’t. It’s your decision, full stop.

Keep washing and sanitizing. Even though touch is a less frequent method of COVID-19 transfer, wash your hands often. As a bonus, it will help protect you and those around you from other bacteria and viruses. It also doesn’t hurt to wipe down your work area with sanitizer wipes at the beginning of your day—especially if you share a desk.

Set your boundaries and stick to them. If you’re not comfortable with hugs or handshakes yet, it’s okay to say no. If you’re not up to going out into crowds with co-workers, that’s your right, too. Explain to them what feels comfortable and safe for you in a clear, kind and non-judgmental manner—and be willing to understand others’ thoughts and boundaries, too. Use “I” statements to let them know why your boundaries are important to you: e.g., “I have little ones at home who aren’t vaccinated yet, and I don’t want to risk bringing something home to them.” Honesty is the best way to re-establish a respectful and compassionate working relationship. 

Remember, some anxiety is normal. Even if they don’t say it out loud, your co-workers probably have anxieties, too. Allow yourself some time to adjust—after all, your surroundings may be familiar, but the world is definitely not the same as it was the last time you walked out the door. And if you do find yourself struggling, please don’t hesitate to talk to your doctor or mental health professional, who can help you take the steps needed to ease your way into your next normal.

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Back…to the office

The only certainty about life after a pandemic is that there isn’t much certainty. Masks on or off? Six feet of distance or three? Shake hands or nod hello? It depends on who you ask.

Given the changing and conflicting information out there (or the lack of it), it’s no surprise that after a year (or more) at home, the prospect of returning to a building filled with other human beings is stoking office workers’ anxiety. A 2021 American Psychological Association survey found that 48 percent of vaccinated respondents were still apprehensive about face-to-face interactions.

If you’re among those facing a return to your workplace and aren’t sure how you’ll handle it, take a deep breath and read through this collection of suggestions to help you prepare for office re-entry.

Before you return

Do some mental preparation. Psychologists use imagery to help people cope with anxiety-inducing situations. It may help you to spend a bit of time now imagining some of the scenarios you fear encountering at the office, and how you’ll deal with them. That can help you prepare emotionally if they do happen.

Have a dress rehearsal. If you can, go into the office before your return date. Look around and see what’s changed. Sit at your desk. Do a little tidying up after the year of disuse. Stock your drawer with masks and sanitizer if you’re still using them. Organize your desk, add some updated photos and maybe a new plant if you’re allowed. Make it welcoming for your first day.

Reset your sleep schedule. It wasn’t just stress that played havoc with many sleep schedules. When you can work late into the night, roll out of bed five minutes before starting time or grab a catnap at lunchtime, it’s easy to get into bad sleep habits. A week or so before your return date, gradually adjust to your new/old schedule by 15- or 30-minute increments each day.

Once at work

Wear a mask if you choose. If you live and work in an area where masking is based on an honor system, how can you know who’s being honorable? You can’t. So, if you’re more comfortable wearing a mask during the day, don’t apologize and don’t let anyone tell you that you shouldn’t. It’s your decision, full stop.

Keep washing and sanitizing. Even though touch is a less frequent method of COVID-19 transfer, wash your hands often. As a bonus, it will help protect you and those around you from other bacteria and viruses. It also doesn’t hurt to wipe down your work area with sanitizer wipes at the beginning of your day—especially if you share a desk.

Set your boundaries and stick to them. If you’re not comfortable with hugs or handshakes yet, it’s okay to say no. If you’re not up to going out into crowds with co-workers, that’s your right, too. Explain to them what feels comfortable and safe for you in a clear, kind and non-judgmental manner—and be willing to understand others’ thoughts and boundaries, too. Use “I” statements to let them know why your boundaries are important to you: e.g., “I have little ones at home who aren’t vaccinated yet, and I don’t want to risk bringing something home to them.” Honesty is the best way to re-establish a respectful and compassionate working relationship. 

Remember, some anxiety is normal. Even if they don’t say it out loud, your co-workers probably have anxieties, too. Allow yourself some time to adjust—after all, your surroundings may be familiar, but the world is definitely not the same as it was the last time you walked out the door. And if you do find yourself struggling, please don’t hesitate to talk to your doctor or mental health professional, who can help you take the steps needed to ease your way into your next normal.

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Ransomware 101

From the home user to the largest corporation, ransomware is now an issue for anyone who uses the internet. And now, with remote work and online learning so prevalent, it’s all too easy to become a victim of a ransomware attack.

Ransomware is most frequently spread by phishing emails and “drive-by downloading” (when a user accesses an infected website). It only takes one click to encrypt your data and be informed that if you don’t pay a ransom to unlock your data, you’ll lose it forever.

While you can’t prevent attempted attacks, here are several steps you can take to recognize and avoid being victimized by them:

1. Keep your antivirus software up to date—Features that monitor your files for suspicious attempts at encryption—the main weapon of ransomware—can be added to many antivirus programs today. If the software you use now doesn’t protect you against ransomware, you can find one that does.
   
   
2. Learn to recognize phishing emails—While your email program will filter some junk mail, cybercrooks may still slip through, pretending to be a trusted contact like a bank or other business. They’ll send you an official-looking email with a link or attachments (receipt, invoice, etc.). The attachments may look like genuine Word or PDF files, but they’re actually executable files that launch the ransomware when they’re downloaded and opened. If the email asks you to follow a link to provide information, don’t. Call the sender directly if you’re unsure whether the email actually came from them. 
   
   
3. Bulk up your passwords—In what’s known as a “brute-force” password attack, hackers attempt to access your network by trying as many passwords as possible—often with the help of bots—until they gain access. Change default and easily guessed passwords to combinations of upper- and lower-case letters, numbers, symbols and even phrases. And consider using multi-factor authentication for extra security.
   
   
4. Browse carefully—How do you avoid infected websites? To be honest, it’s not always possible. Some sites will just install malicious downloads without your knowledge, so stay away from infection-notorious gambling, pornography, pirated video streaming or peer-to-peer (P2P) file sharing sites. If your browser warns that a site is infected, don’t click through. Look for a lock icon before the domain name, which tells you the site is safely encrypted. Never download software that a pop-up asks you to install. And remember to ABC: Always Be Cautious.
   
   
5. Don’t forget the Internet of (other) Things—PCs aren’t the only devices susceptible to a hack. Thanks to mobile devices, the Internet of Things (IoT) and wi-fi, there are now other devices that can allow cybercrooks to enter through a network’s back door: Virtual Alexa-style assistants, security systems, smart TVs, wearable health monitors, even smart appliances.
   
   
6. Perform regular backups—Get into the habit of performing backups on a regular schedule, preferably on a removable drive you don’t keep connected to your system. Better to have to reconstruct a week or month of information instead of a year’s—or more.

If the worst does happen and you’re the victim of a ransomware infection, DON’T PAY THE RANSOM. You’re only funding the next attack, and since you’re dealing with criminals you have no guarantee they’ll even give you the encryption key if you pay.

The U.S. Cybersecurity & Infrastructure Security Agency (cisa.gov) instructs home users to immediately contact their local FBI office or local U.S. Secret Service office to request assistance—and to help send a tough message to cybercrooks that they’ve messed with the wrong person.

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Are you in danger of job burnout?

Work equals stress for most U.S. workers. According to the American Institute of Stress, 80 percent of workers feel stress on the job, and 25 percent of workers view their jobs as the number one stressor in their lives.

Because stress developed in early humans as a natural physical response to trigger our fight-or-flight instinct in dangerous situations, it’s an inevitable part of life. However, too much stress can lead to burnout—which can, in turn, lead to a number of physical and mental ailments, including:

• Fatigue
• Insomnia
• Sadness, anger, irritability
• Alcohol/substance abuse
• Heart disease
• High blood pressure
• Type 2 diabetes
• A weakened immune system

Who burns out?

Burnout can happen to anyone. If you have a heavy workload, and long hours cause you to struggle with your work-life balance; if you feel you have little to no control over your work situation; if your workplace dynamics are dysfunctional (e.g., you’re bullied or micromanaged); if you have little social support and feel isolated at work and home, your risk of burnout is high.

What are the signs of burnout?

Not everyone manifests burnout the same way. And right now, with the added challenges of disrupted offices and remote work, it can be even harder to recognize the symptoms in yourself or a co-worker.

So, how can you tell when you—or someone you know—have transitioned from stress to full-on burnout? Watch for these signs:

• You have to drag yourself to work and have trouble getting started
• You’re disillusioned with your job
• You’re apathetic and have lost the energy to be productive
• You’ve become cynical or critical at work
• You’ve lost confidence in your abilities
• You can’t concentrate, your quality of work has slipped and you miss deadlines
• You’ve withdrawn from all but necessary conversations at work and no longer socialize with co-workers
• You’ve become irritable and impatient with co-workers, customers or clients
• You take more “mental health days”
• You use food, drugs or alcohol to feel better—or to not feel at all
• Your sleep habits have worsened
• You suffer unexplained headaches, stomach or bowel problems, or other physical complaints

Can burnout be reversed?

One of the signs above may not mean burnout. But if you see—or feel in yourself—several or all of these behaviors, it’s time to consider your options, which may include:

• Talking to a mental health professional through an employee assistance program (if your employer offers one) or asking your doctor for a referral
• Discussing specific concerns with your manager to see if you can work together to reach solutions
• Reaching out to co-workers, friends or loved ones for moral support
• Trying stress-reducing activities like yoga or mediation, and getting regular exercise
• Getting more sleep to help protect your health

It’s not easy to admit that you’ve reached the point of burnout, but it is reversible. For the sake of your physical and mental health—and for those who care about you—take that first step now and consult your doctor or a mental health professional to rebuild a healthier, happier and more fulfilling life.

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5 ideas for close-to-home summer fun

Summer’s here, and the world is opening up again. However, not everyone feels comfortable traveling just yet. And that’s fine—there’s lots of fun to be found in every area. Here are some ideas to help you and your family have an enjoyable summer close to home.

Stargaze—You don’t need a telescope to watch the stars; some advance research, a pair of binoculars, a free astronomy or NASA app, and time for your eyes to adjust to darkness will help you see stars. Grab some pillows and blankets, turn off or get away from all the lights you can, and lie back to identify constellations or look for the space station.

Create a garden—If you don’t have the room or the inclination for vegetables or flowers, create a wondrous fairy garden in a corner of your yard or a yummy herb garden in a planter. Playing in dirt is always fun, and if you include little ones in the process, it’s a great chance for them to enjoy fresh summer air and learn more about nature.

Visit local outdoor attractions—It’s likely the outdoor museums and zoos in your area will be open with appropriate safeguards this year. Whether you have kids or not, why not get out and visit these places? They’ll be thrilled to see more patrons, and you’ll have the chance to reconnect with local attractions you may not have visited in years.

Go geocaching—If you’re not familiar with this activity, geocaching.com defines it as: “A real-world, outdoor treasure hunting game using GPS-enabled devices. Participants navigate to a specific set of GPS coordinates and then attempt to find the geocache (container) hidden at that location.” It’s popular, fun and easy to get started with information you can find online. There’s a whole community and unending adventures just waiting for you.

Take a scenic drive—Pack up the car with snacks and drinks, hop in, turn up the music and get outta town. You don’t have to go far; just drive out to the country or to the next town, take the kids on a tour of family landmarks, or stop at a local metropark for a picnic and to let everyone stretch their legs. You’ll be surprised how good a change of scenery feels.

Other ideas include mapping out a walking tour of your town, shopping at local farmers’ markets (summer produce is the best!), or enjoying an old-fashioned backyard water balloon fight when the summer heat and humidity climb. No matter your age and no matter how many people in your circle, have fun like a kid again and enjoy everything your area has to offer.

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Have you checked your Flesch-Kincaid levels lately?

If you’ve ever yawned your way through a wordy, boring document, you might have wondered if your own writing was as hard to understand. Luckily, there’s a great tool to measure the readability of your writing, and it’s as close as your word processor. (Note: For this article, we use Microsoft Word as our example. Details will vary if you use another application.)

Microsoft Word uses the Flesch-Kincaid method to determine readability scores. If you’ve noticed the Readability Statistics pop-up that appears at the end of a spelling and grammar check, you’ve probably seen the Flesch-Kincaid Grade Level under the Readability heading. That score matches the readability of the writing to a U.S. school grade level. Basically, the lower the grade, the easier it is for readers to understand.

As an example, this blog article scores at 8.3, which means it can be easily read by the average eighth grader. This chart shows the readability at each grade level:

If you’d like to make your writing suitable for the largest possible audience, we have a few tips:

• Vary your sentence structure. Using too many short sentences creates choppy copy, while using too many long sentences makes things hard to read. A mix of long and short sentences works best.
  
  
• Know your audience. If you’re writing technical copy, something too simplistic will risk boring them. If you’re writing for family and friends, however, you may want to dial back the big words.
  
  
• Make your copy easy to scan. Especially if it will be read on a laptop screen or a mobile device, use shorter paragraphs or bullets, or bold important points.

Even if you’re just writing a letter to Aunt Marion, paying attention to your readability score will make your audience appreciate the easier reading—even if they don’t realize what they’re appreciating. Here’s to plain English and clearer writing!

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Easy ways to save on energy costs

Over the past year, we’ve all spent more time than usual at home—which may mean you’ve paid more attention to your utility bills than in previous years. If you’ve noticed a creep upward, here are some easy ways to help keep your energy costs down.

Use energy-efficient light bulbs—CFL and LED bulbs offer more energy efficiency than incandescent bulbs. CFLs are the more budget-friendly choice and use about 75 percent less energy compared with incandescents (LEDs use about 80 percent less energy but are still expensive to buy, although prices are coming down).

Use Energy Star-rated products—Those stickers you see on appliances have helped users save more than $30 million dollars on utility costs and reduce greenhouse gases. An Energy Star-rated appliance can cut bills for that product by 30 percent.

Change your furnace filter—Experts say you should change your furnace filter once a month. It will not only help extend the life of your furnace, it’ll lower energy costs. And as a bonus, the air quality in your home will be more comfortable for allergy sufferers and healthier for everyone.

Clean your dryer’s lint screen and duct—According to the Consumer Energy Center, a clogged lint screen can increase your dryer’s electrical use by 30 percent, or $25 a year. A blocked dryer duct will not only make your dryer less efficient, it’s a fire hazard. You should clean your lint screen after every load…and the duct yearly.

Unplug electronics when not in use—The Department of Energy estimates that when small electronics (toaster, coffeepot, etc.) are plugged in and turned off, they continue to suck an additional $100 worth of electricity per year. Unplug them when not in use or plug them into a power strip and turn off the strip until needed.

Close your curtains in the summer—Here’s a super-basic, super-easy tip to end on. In the summer, keep your curtains closed during the day to prevent the sunlight from heating up your home. This simple step can reduce incoming heat by as much as 30 percent.

When you were young and your parents yelled, “Turn off the lights when you leave the room! Is our name Edison?” they weren’t just being cranky. The fact is every little bit does add up…to bigger savings. Try some of these easy ideas for reducing energy costs and see if your utility bills don’t start inching downward.

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Take advantage of your tax season takeaways

What do accountants do with themselves after tax season? Actually, the same thing they do during busy season: They work hard for their clients. The only difference is that instead of cranking out tax returns, they help clients work through other aspects of their financial health—including issues revealed during the yearly tax return process.

That’s why the best time to work with your accountant on any takeaways or questions is right after tax season…when everything is fresh in your mind. Here are some examples:

Is there a way to reduce my tax bill?
Your accountant can help you understand opportunities for lowering your tax bill. A popular option is contributing money to an individual retirement account. Work with your accountant to see if this is a strategy that makes sense for you—and if not, to discover other ways to save.

How do I handle <insert complicated tax situation here>?
If your tax situation is outside the basics—you experience a major life change (adopting a child, receiving an inheritance), you own rental properties or you have complex investments—an accountant can help you structure your finances appropriately for the next tax season.

Now, if you’re a business owner, you may have additional questions, such as:

Am I still using the right business structure?
If you own a business, it may be time to move to another structure with more advantages for your situation. You may have started as a sole proprietor, but have grown enough that a limited liability company (LLC) or S-corporation structure would be a better fit. Your accountant can help you assess the options.

How can I adjust my cash flow? Manage my debt? Adjust my budget? Keep payroll accurate? Handle unpaid invoices?
There’s so much to keep up with as a small business owner. An accountant can work with you to manage your revenue through ebbs and flows, consider the best borrowing strategies for your business, create a realistic and accurate budget, handle your payroll and set up invoice systems with automatic reminders for your customers—freeing you to work on your business.

It’s hard to be objective about our own financial situations, whether personal or business, and that’s where accountants excel (no pun intended). They bring so much insight and experience to the table. Why not give your accountant a call today, and see how she or he can help you be prepared for whatever next tax season brings?

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Put your tax refund to work for you

Spend it? Save it? Invest it? Share it? Here are a few ideas for putting your tax refund to work for you:

Build the emergency fund. As we discovered in 2020, it’s too easy to be taken unawares by illness, job loss or other disasters. Use your tax refund to start or add to your emergency savings account, so you’re not left using credit cards to meet vital expenses.

Pay down high-interest debt. If you don’t pay off your credit cards monthly, or you’re paying down loans, this is your chance to lower your debt and reduce the amount of interest you owe—which, depending on the credit card, can be quite substantial.

Make a donation. It feels great to help a cause that’s close to your heart. If your finances are in good shape and you don’t need the money, donate all or part of your refund to your favorite charity. Bonus: If it’s a tax-deductible donation, it can be a deduction for you next year.

Invest in your kids’ education. According to U.S. News, from 2001 to 2021, the average tuition growth at national universities rose by 50 percent or more. Given that increase, adding your refund to their college funds wouldn’t be the worst use of the money.

Invest in your home. Does your house need some overdue repairs? Are your creaky appliances begging to be replaced? Whether you rent or own, improvements and repairs can pay for themselves in lower utility bills and/or increased value.

Invest in yourself. Take an online class, pay for a professional certification, attend a conference, re-up your gym membership (IF you’ll use it), buy a better mattress. If it can improve your earning potential or your health, it’s a good investment.

Spend a small amount on something fun. No one says you can’t use a bit of your refund (say 10 percent) to do something nice for yourself—while using the rest of the refund wisely. A $500 refund gives you $50 to treat yourself to something you’ll enjoy.

A tax refund isn’t found money; it’s money you earned and loaned to Uncle Sam interest-free for a year. So, take advantage of it! Whether you fund an IRA, save for a down payment on a home, pay down your mortgage, invest your refund or buy life insurance, its lasting effects will ripple through your life long after the check has been cashed.

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Accounting terms: A glossary for the rest of us

Most professions have their own lingo, and accounting is no different. What is different is that you have a vested interest in understanding what your accountant tells you about your financial situation. So, here’s a quick primer on common accounting terms—some business-related, some general—to keep you in the know:

• Accounts payable—The amount of money you owe to other people.
  
  
• Accounts receivable—The amount of money people owe you for goods or services you provide.
  
  
• Assets—Property/equipment you own with a monetary value (cash, vehicles, stock, accounts receivable).
  
  
• Balance sheet—A financial document that provides a snapshot of a business’s assets, liabilities and owner equity.
  
  
• Business entity—The legal structure of a business (sole proprietor, partnership, LLC, S-Corp).
  
  
• Cash flow—The movement of cash in and out of a business. Ideally, you want a higher flow of income into the business than expenses going out.
  
  
• Credits/Debits—In accounting, credits are money coming in, while debits are money going out (note: this is reversed in banking).
  
  
• Depreciation—An asset’s loss in value over time (an automobile, a building, a computer).
  
  
• Equity—The net worth of a company when liabilities (what’s owed) are subtracted from assets (what’s owned).
  
  
• Expense—Any costs incurred by you or your business.
  
  
• Liabilities—Debts owed to another person or entity that you’re responsible for paying.
  
  
• Net profit/loss—Total revenues minus total expenses equal net profit (if revenues are positive) or net loss (if expenses exceed revenue).
  
  
• Overhead—Expenses related to running a business (mortgage/rent, utilities, payroll, property taxes, supplies).
  
  
• P&L—The profit & loss statement (P&L) is an overall look at how well your business has performed and how much income you made or lost over a given period.
  
  
• Revenue—The income a company brought in from the sales of goods or services, before subtracting expenses.
  
  
• ROI—Return on investment (ROI) is how much you gained or lost on an investment relative to the amount of money you spent on it.
  
  
• Working capital—The amount available to run your business when current liabilities are subtracted from current assets.

While these definitions aren’t detailed, they should be enough to let you chat knowledgeably with your accountant—especially if you’re a small business owner. If you’d like to know more, a quick Google search of “accounting glossary” will give you a number of detailed sites to peruse. Here’s to being an informed client!

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Plan now for your spring garden

There has rarely been a winter when we so badly needed to see (and feel) spring. Depending on where you live, this could mean bluer skies, warmer temperatures, time outside and…gardening! For those who live in a climate where spring doesn’t always mean it’s warm enough to garden outdoors, consider creating an indoor planting box for flowers, veggies, herbs or all of the above.

No matter where you live, there are things you can do now to be prepared for the moment Mother Nature lets you outside to play in the dirt.

• Inventory your gardening supplies—Are your gardening gloves, shoes, tools, seed starting materials (pots, trays, etc. if you start your seedlings indoors) or anything else you use missing or in need of repair? Now is the time to take inventory, comparison shop and order replacements if necessary.
  
  
• Decide what to plant and order your seeds—This is the perfect excuse to lose yourself in seed catalogs or visit garden supply websites. Making a list now avoids uncertainty later when you’re at the local nursery and what you’d decided on or had your heart set on isn’t available.
  
  
• Decide where to plant—You don’t need to be an artist or purchase design software to draw a diagram of what you’d like to plant and where. A piece of paper and a sharpened pencil is all you need to start plotting your garden layout. For indoor gardening, start to scope out the perfect spot indoors to ensure your “crop” has proper lighting and won’t be in the way of everyday living.
  
  
• Stock up on plant growth aids—You know you’ll need them, so why not go ahead and purchase your pesticides, fertilizers, weed barrier and plant ties so you’ll have them readily available?
  
  
• Make up your plant markers—If you use plant markers for your garden, make them now so they’ll be at hand when the first seeds are planted. Bonus: This could be a good project to keep little hands busy when they can’t go outdoors.
  
  
• Keep a garden idea journal—Write down ideas, save pictures and articles that inspire you throughout the year, and go through them when it’s time to start planning. Pinterest is a great solution to maintain an online idea journal.
  
  
• Join an online gardening forum—Share your love of all things horticultural with gardeners from all around the world. You’ll get ideas for your garden (indoor or outdoor) and may be able to help rookie gardeners solve their own issues.
  
  
• Choose a new garden ornament—Just because you can.

Time spent on planning during the cold, dreary days of winter can pay off in the verdant, colorful garden of your dreams come spring and summer. Take that time now—and don’t forget to share photos!

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How to tune up a home office when you don’t have one

While “under a blanket on a cold winter day” isn’t the worst place to work, it’s a good idea to regularly assess your remote working environment—especially if you don’t have a full home office setup—to decide if anything needs an adjustment or upgrade. Here are four important points to consider:

1. Desk—Instead of working at the dining room table or on the couch, is there a corner of your home that can accommodate a small desk? Furniture makers have stepped up to offer compact foldable or easy-to-disassemble desks that let you reclaim your space on the weekends.
   
   
2. Seating—A dining room chair is meant to be comfortable for an hour, not a full workday. Ditto for the couch or your bed. Is it time to upgrade to a “real” office chair? If you don’t have room for an office-style chair, consider a lumbar pillow to add back support to the seat you use now. Or add a standing desk converter that you can set on a tabletop to give yourself standing breaks during the day.
   
   
3. Computer setup—How far do you have to crane your neck to see your laptop screen? Do you constantly zoom in to read text on the monitor? Do you have all the monitors you need? A laptop stand and monitor riser will elevate your screens so they’re level with your eyes, give you more screen real estate, and save you a (literal) headache and painful neck strain. And don’t forget the external keyboard to save those wrists and hands.
   
   
4. Lighting—Have you escaped the harsh glare of office fluorescents only to squint in a dim corner at home? Lighting is one of the most important factors for a comfortable workspace. While natural light is best, if that’s not an option, look for ways to diffuse lamp light. Choose floor lamps that shine upward, use lampshades to soften bulb harshness, and experiment with placement to avoid casting shadows or workspace glare.

Check with your employer to see if the company will pay for equipment upgrades. If that’s not possible, it’s still a good idea to consider making these changes because they’re not only good for you physically but could also be for others in your family who are working from home.

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6 tips to fight the mid-winter blues

Blah. It’s February. The depths of winter. Gloomy days relieved only by the darkness of night. A month made for curling up under the blankets and staying in bed. Sound familiar?

If you’re feeling sluggish and a bit low in spirits, you may be suffering from the mid-winter blues. Luckily, we’re here with six tips for raising your spirits and your energy until spring comes along:

1. Exercise—Indoors or outdoors, exercise can work wonders in fighting mild feelings of depression. Whether you bundle up for a walk, do yoga at home or have a snowball fight with your kids, even 15 minutes of activity a day can help.
   
   
2. Eat right—We tend to reach for starchy, sugary comfort foods when we’re down, but replacing those empty carbs with whole grains and adding the nutrients found in colorful fruits and vegetables will promote better moods, not to mention health.
   
   
3. Grab some sunlight—When the sun appears, take advantage of it! Open your blinds and let the sun shine in. If you can, get outside and take a quick walk, go for a drive, run an errand—anything to get some of that bracing Vitamin D.
   
   
4. Start a new hobby or interest—Keeping your mind active lifts your mood. Take an online class, write that novel, start online singing lessons, learn to meditate, knit or paint…the options are endless.
   
   
5. Be social—Stay in touch with family and friends, even if it’s virtual—and especially if you live alone or work at home. We humans are social animals, and even introverts need love and connection. Or at least occasional communication with other human beings.
   
   
6. Get cozy on the couch—If you’re stuck indoors, here are some useful reasons to park yourself on the sofa: Enjoying the divine medicine of laughter with a funny movie or TV show; losing yourself in a good book; or listening to upbeat music can stoke your spirits.

This winter, why not take a cue from Scandinavians? Over the centuries they’ve spent coping with long, dreary winters, they’ve learned to embrace the practice of what the Danish call hygge (say “hoo-ga”)—a mood of coziness and comfort. It’s a time for them to enjoy being at home and spending quality time with family and friends. We hope the tips above will help you create your own feeling of hygge until the sun (and warmth) returns again.

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Put LinkedIn to work for your business

If you think of LinkedIn as just a job-search site, you’re not alone. After all, it was the job listing component of the platform that turned into a highly lucrative source of revenue for the social media giant. However, it’s so much more than that.

Today, social media has become an indispensable part of business, and not just for job searching. Thanks to the development of cloud technology and the growing migration to remote work, social media is one of the most important ways to get your brand—business or personal—and your message out into the world.

LinkedIn is still a hot spot for job seekers, but even if you’re not looking for a career change, it’s a platform you should take advantage of to enhance your professional presence. Here are five reasons why:

1. LinkedIn is a professional platform. You won’t distract from your message—or be distracted—with photos of frolicking puppies or impassioned live-tweets of the hottest new binge-watch. LinkedIn is all business, all the time.
   
   
2. LinkedIn can help position you as an authority. Share your expertise and insights with regular posts and articles. Showcase samples of your work. Announce professional achievements. You’re an expert; be proud of that status and let everyone know it!
   
   
3. LinkedIn reported 690 million users worldwide in 2020. While you probably won’t connect with all of them, the potential for connections you can tap is virtually limitless. Plus, LinkedIn’s users love to share useful content, extending the reach of your information.
   
   
4. LinkedIn keeps you up to date on industry news and trends. Follow and connect with people, groups and companies in your industry and profession, and you’ll have a daily news feed perfectly tailored to your topics of interest.
   
   
5. LinkedIn helps build social proof. The ability to recommend or endorse connections is built into the platform. We are a ratings-obsessed society, and those recommendations can play a major role when someone wants to do business with you.

If knowledge is power, connections are the circuits that spark that power. LinkedIn members are not only enthusiastic content-sharers—they love to connect and grow their networks with fellow professionals from all over the world. Whether you’re looking to boost your business or your personal brand, LinkedIn can help extend your reach.

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4 habits to keep your brain healthy

You exercise your body to stay healthy, but how often do you exercise your brain? Research has shown that keeping your brain cells strong and sharp can help lower your risk of developing dementia. Here are four ways to make sure your body’s busiest organ keeps running smoothly.

1. Keep doing. Brain activity stimulates new nerve cell connections and may even help your brain build new cells. Activities that can help jump-start that process include:
   
   •Reading and writing.
   •Taking courses through local programs (adult education, community programs,  community colleges) or online.
   •Solving crossword, jigsaw, Sudoku or any other types of puzzles you enjoy. 
   •Taking up hobbies and crafts that require creativity or manual dexterity.
   •Attending lectures or plays.
   •Trying new things: learn to play an instrument, travel to a new city.
   
   
2. Move often. When you use your muscles, you help your mind by increasing the number of blood vessels that carry oxygen-rich blood to your brain. You’ll also help develop new nerve cells and build connections between your brain cells. Plus, the usual benefits: lower blood pressure, cholesterol, sugar and stress. And you don’t need to run a marathon; walking, gardening, dancing, playing tennis or swimming all fit the bill. Aim for 30-60 minutes several times a week.
   
   
3. Eat healthy. Feed your body, feed your mind—but feed them well. It’s been proven that people who eat a Mediterranean-style diet are less likely to develop dementia. That means less red meat and salt and more polyunsaturated oils, colorful fruits and vegetables, whole grains, nuts and seeds, plant proteins, and fish. Foods that are especially brain-friendly include:
   
   •Wild salmon
   •Blueberries
   •Beans
   •Avocados
   •Dark chocolate
   
4. Stay social. People with strong social networks have a lower risk of dementia, since social connections are believed to strengthen the connections between your brain cells. Social interaction also helps fight off stress and depression, which can contribute to memory loss. Stay alert for opportunities to connect with loved ones, friends and acquaintances, and consider volunteering or being part of a book club or hobby group if you’re missing the company of others.

As we get older, we all have the occasional memory lapse. But practicing these four basic habits—along with getting enough sleep, limiting alcohol and not smoking—can help keep your blood flowing and ensure your body and brain stay active and vibrant for many years to come.

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Tools to make remote work less remote

Now that you’ve been working remotely for several months, how are you feeling about your shared office apps? If you’re still scrambling to put together a set of tools that meet your virtual needs, here are some applications that will go a long way toward making everyone feel like they’re working together as a team…even when you’re not in the same office.

Video meetings

• Zoom—The most popular way to meet virtually, Zoom offers several levels of service. One of those is a free option that lets you meet with up to 100 participants for 40 minutes.
• Google Meet—With a Google account, you can create a video meeting, invite up to 100 participants and meet for 60 minutes free. Paid plans offer more options.
• GoToMeeting—No free plan, but since it’s made for business, you’ll find hi-def video and other features for smaller teams that you’d normally see in enterprise-level plans.

Instant chat/messaging

• Slack—In addition to direct messaging, Slack makes it easy to share files; access archives; and create channels, groups and reminders. There is a free option, but it’s limited.
• Microsoft Teams—Close connectivity with Office 365 and lots of features makes Teams the perfect messaging app for your company if you already use Microsoft tools.
• Google Chat—If you already use Google’s paid G Suite, Google Chat can help your team connect with each other by direct message or group conversations.

Calendar management

• Outlook—One of the most common calendar apps, Outlook’s familiarity is a major strength. If you know how to use Office 365, you know how to use Outlook. 
• Calendly—This scalable software works with your calendar to automatically check your availability, cutting down on the amount of back-and-forth when scheduling meetings.
• Google Calendar—If you use Gmail or any other Google app, Google Calendar can sync your calendar across all of your devices as long as you’re logged in with your Google account.

A final option to consider that doesn’t really fit into any of the categories above is Google Drive, which contains Google Docs, Google Sheets and other apps. It’s more of a file storage system, but it’s free and a great way to create, circulate, and review documents and spreadsheets.

With any of these applications, you’ll take significant strides toward creating an efficient remote office that feels much less remote.

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3 tips to lower your tax stress in 2021

It’s probably fair to say that most of us can’t wait to see 2020 out the door. But there’s one more task to carry out before you can wave goodbye to The Year We’d Rather Forget: Be ready to file your taxes.

With changes to the tax code for 2021—many because of the COVID-19 pandemic—now is the time to get your tax season ducks in a row while you have the luxury of time to do it. Here are some tips to be sure you’re ready:

1. Collect your documents—Do you have all the documents you need to file your taxes? Avoid the last-minute scramble by gathering them now. Besides the usual suspects 
(W-2s and 1099s), remember that special circumstances may require special documentation, especially if COVID affected you. A job layoff, falling ill with COVID, a closed business, the inability to work due to virus-related childcare issues—make sure you’ve documented these circumstances.
   
   
2. Tally up life changes—If you got married or divorced, purchased health insurance on the Marketplace, bought or sold a home or business, retired, or experienced any other major life change, be sure all records are up to date. Also, be sure that you’ve apprised involved parties of the change(s) and that you have proper documentation. Something as small as forgetting to change your name with the Social Security Administration could cause major delays in processing your return.
   
   
3. Check in with your preparer—Not only is it a good idea to reserve an appointment with your preparer before the first-quarter rush, it might be an equally good idea to schedule a quick check-in before year end, if possible. Your tax professional will have the latest on tax code changes. You can also get questions answered such as: How did the CARES Act stimulus check affect income? How do you handle the PPP loan that kept your business afloat? What’s the standard deduction for this year? What about those increased unemployment benefits? Whatever the question, your preparer can alert you of circumstances that affect your tax situation.

Sure, it might feel early to be thinking about taxes when we’re still in the holiday season, but just think of how nice it will be not to have to scramble or get hit with unwelcome surprises on Tax Day.

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Resolution 2021: Look outward

Congratulations, we’ve made it through 2020! We’ve proven to ourselves that we’re disciplined and strong! And we appreciate even more what our family and friends mean to us! Does that mean we don’t need to make resolutions this year? Maybe. But it’s always good to have a goal. So, if there’s nothing to resolve for yourself, why not direct your resolutions outward for 2021?

It feels good to do something nice for someone; even science tells us so. A study published in the journal Nature Communications asked participants to spend money on either themselves or others over a four-week period. The group that spent money on others reported feeling happier than the control group that spent money on themselves, no matter how much or how little they spent. And that generous feeling continued to influence the decisions they made for subsequent tasks in the study.

We’re not suggesting you go out and spend money on random people, of course (unless you want to). In fact, you don’t need to spend any money; you can do nice things for your family, friends and community that take little money, not much time and allow you to maintain social distance when needed. Here are some ideas:

• Send someone who needs a pick me up a quick handwritten card or note.

  
  
• Ask someone: “What can I do for you?”
  
  
• Ask elderly or homebound family members or neighbors if you can pick up groceries or run other errands for them.

  
  
• Smile and thank those who aren’t acknowledged enough—cashiers, baggers, the servers who bring out your curbside carryout, delivery drivers…a small gesture can go a long way.
  
  
• Use your computer expertise to set someone up with free video chat software and teach them to use it. For those who are alone, it can be a sanity saver.

  
  
• Drop off an occasional meal for a family member, friend or neighbor.

  
  
• Help beautify your community (e.g., take part in park or roadside clean-ups).

  
  
• Donate food, personal protective equipment (PPE), computers and any other items to those in need.

While it’s important to be kind to yourself, make the extra effort in 2021 to look outward and take care of those around you as well. Here’s to a better and brighter new year!

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The case for content

If your business has a website, you’ve heard about the importance of content. Lots of content— educational, timely, entertaining and frequently updated information that helps boost your search rankings and engage visitors.

Still, you might be asking: Our customers come to us because of the products and/or services we offer, so is it really that important to push out a steady stream of content?

The short answer is yes. And here are four compelling reasons why:

• Good content develops trust—The goal is to not only attract prospective clients with engaging content, but to keep them coming back and build relationships. But like any relationship, it’s easier to commit if prospects see that you clearly understand their challenges and can help solve them. Authoritative, user-friendly content that addresses their concerns and shows them how to solve a problem—without a sales pitch—will establish you as an empathetic expert they can rely on and trust.
  
  
• High-quality content takes on a life of its own—Website visitors are more likely to read and share content if they find it valuable. A clear and concise blog or social media post on the latest trends in your industry or common pain points (and how to resolve them), for example, serve as useful information that visitors will be more compelled to share.

  
  
• Engaging content makes you stand out from the competition—When consumers are comparing businesses online, what makes one stand out from the others? Yep, you guessed it: helpful, thoughtful content. Take the blog or social media post example from above. If the information presented proves to be timely and helpful to readers, they are more likely to come back to your site (while forgetting all about your competitors).

  
  
• Valuable content builds your email list—A website visitor is just that: someone who pops in, looks around and pops back out. But if visitors have the option to download, for example, a free eBook that focuses on how to solve a common issue or simplifies an otherwise complex topic, they are more likely to provide their email in exchange for your content. And that means you can add another prospect to your list.

Content is a must in today’s web-driven world—enabling businesses to stand out from the competition and provide both clients and prospects with helpful, educational information. If you have not yet, it’s time to jump on the content bandwagon.

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Retrain your brain for a more thankful Thanksgiving

This Thanksgiving, what are you grateful for?

If you have to reach a little deeper this year to find your answer, don’t feel alone. It’s easy to be thankful in good times, but this year—like no other in recent memory—so many have been touched by illness, job loss, natural disaster or the chaos of daily life, which makes it a little more difficult to muster a sense of gratitude.

When life gets this challenging, is it even possible to feel grateful? Yes, according to Robert Emmons, author of “Gratitude Works! A 21-Day Program for Creating Emotional Prosperity” and a leading scientific expert on gratitude.

“Not only will a grateful attitude help—it is essential,” says Emmons. “In fact, it is precisely under crisis conditions when we have the most to gain by a grateful perspective on life.”

This is your brain on gratitude

The science of gratitude (yes, there is such a thing) has proven that practicing gratitude on a regular basis can change your brain, resulting in increased happiness, improved health and relationships, better sleep, less stress, decreased anxiety and depression, lower pain levels, and increased productivity.

How? First, two definitions: Serotonin is the hormone that regulates our mood and feelings of well-being and happiness. Dopamine is the chemical that’s released during pleasurable situations, stimulating us to seek out more of those situations. The simple act of finding things to be grateful for increases the production of serotonin, while the practice of gratitude stimulates dopamine—which encourages your brain to repeat that great feeling. So, in essence, the regular practice of gratitude can help rewire your brain.

How to practice gratitude

You don’t need complex rituals to increase your thankfulness. Even if you don’t send them, the mere act of writing thank-you notes or letters to those who are important in your life can help you turn your focus away from negative feelings and thoughts. Or, if you’re a journaler, keeping a gratitude journal and adding entries a few times a week can help remind you of what you’re thankful for.

The results of studies with groups that focused on writing letters of gratitude showed better mental health four weeks after the study. And even better mental health 12 weeks after the writing activities—compared to groups that didn’t write letters.

Even though it won’t happen overnight, you can retrain your brain to focus on the positive, not the negative. It’s a practice that even those of us who are more fortunate can take a lesson from—at Thanksgiving and all year round.

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How to get the most out of a virtual conference

If you plan to attend a conference soon, it will likely be a virtual event. While some may dismiss virtual conferences as just sitting in front of a computer, the fact is they can be more comfortable (sweatpants, anyone?), more rewarding and every bit as enjoyable as an in-person event. If you’re a virtual conference newbie, here are some tips to get the most from your experience:

• Make sure your tech is ready for a virtual venue. Your hosts will send out information, instructions and links to download the applications you need. Don’t wait until the last minute—make sure video, audio and other tech is up and running before opening day.

  
  
• Plan ahead to minimize distractions. Block out the time on your work calendar. Ask your spouse or older children to handle kid and home duties during conference hours. Silence your phone. Turn off email, messaging and anything else that isn’t part of the conference experience. You can do your check-ins during the scheduled breaks.

  
  
• Be present. Don’t assume a virtual conference is second-best. Because you’re not distracted by other conference-goers or balancing your notes on your lap in uncomfortable hotel chairs, you can devote more attention to the presentations and be comfortable enough to take it all in.

  
  
• Work out a schedule of sessions. Typically, virtual conferences make recorded sessions available free to attendees for a period of time after the event. If you can’t attend a session live, view it later. 

  
  
• Attend as a group. Many conferences offer discounts for multiple attendees from the same company. Split up just as you would at an in-person event and attend different sessions and events.

  
  
• Participate and network. This is the time to expand your virtual community. Use live chat to engage with other attendees. Ask questions. Answer online polls. Attend social events. Attend breakout or round table sessions. These are all good ways to reach out to other attendees for more in-depth conversations.

  
  
• Take breaks. Don’t sit all day. Stand up, take stretch breaks, get coffee and follow the 20-20-20 rule for your eyesight—every 20 minutes, look at something 20 feet away for 20 seconds.

  
  
• Attend the virtual expo. Even without a physical exhibit hall, you can interact with vendors in their virtual booths and ask questions or watch product demos and videos just as you would in person.

Virtual conferences are still new, and a lot of people are just getting used to meeting online. There may be minor hiccups here and there, but don’t stress—we’re all feeling our way through this and learning as we go. You’re there to learn, connect with others in your field and most of all, have fun!

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10 fun activities for a socially distanced fall season

Even with summer in the rearview mirror, there are lots of opportunities to get out of the house and enjoy activities with family and friends (or others in your “bubble”). Here are 10 suggestions for fall fun that everyone in your crew—regardless of age—can enjoy.

1. Host your own festival—Has the local fall festival been canceled? Then host your own in the backyard. Pumpkin bowling, relay races, candy treasure hunts, an apple cider and cookie booth, face painting, a fall craft contest with prizes…almost anything your town can dream up, you can do yourself—especially if the kids help with setup.
   
   
2. Take a short road trip to see the changing colors—Pack a cooler with snacks, lunch and drinks, and stop along the way for a fall picnic or hike. And don’t forget the wipes in case of pit stops.

   
   
3. Go apple picking—Check with your local apple orchard or cider mill to see if they’re offering safe apple picking or other activities.
   

4. Have a tailgate party in your driveway—Even if your team’s not playing, put on your jersey, make some party snacks and play a game of catch in the backyard.
   
   
5. Visit a museum or two—Museums are open and keeping visitors safe with social distancing. Don’t hesitate to contact your local museum for information to see if it’s an option for you.
   
   
6. Fire it up—Do you have a fire pit or grill? Head outdoors to grill hot dogs and make s’mores. Tell campfire stories to add to the fun.
   

7. Make rainy day plans—Gather in the house for a family game and puzzle marathon. Graze on snacks while you play anything from silly board and card games to jigsaw and word puzzles.

   
   
8. Decorate your home—Gather fall leaves, acorns, pinecones and other fall-ish things to decorate your porch or other spaces. Buy pumpkins, gourds and autumn-colored flowers to serve as the focal points of your displays.

   
   
9. Go on a scavenger hunt—Google “Scavenger hunt ideas,” and you’ll find lots of ideas to help create a hunt in your neighborhood, local metropark or nature center. They’re fun whether you break into competing teams or search together.

   
   
10. Visit a corn maze—There are few activities that so loudly shout, “It’s fall!” as winding your way through corridors of corn stalks. If you’ve never been before—and if you’re satisfied with the venue’s safety measures—you’ll likely enjoy the experience.

The days may be growing shorter, but even in this year of social distancing, there’s fun to be had by all.

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Online reviews: What you need to know

Do online reviews help or hurt a business? Depending on the type of review, of course, it could go either way.

First, consider what a good review can do for your business. Courtesy of Qualtrics.com, here are a few stats:

• 97 percent of people read reviews of local businesses.
  
  
• 93 percent of consumers say that online reviews influence buying decisions.
  
  
• A Yelp rating increase of one star can equal a 5 to 9 percent increase in revenue.
  
  
• Customers are willing to spend 31 percent more on a business that has excellent reviews.

Clearly, positive reviews can help your business—with word of mouth and even a revenue boost. Here's another important statistic: 91 percent of 18- to 34-year-olds trust online reviews as much as personal recommendations. As this demographic moves up to become your ideal client (and they will), it will be more important than ever to have those stellar reviews out there for the, well…reviewing.

Now, let’s consider what a bad review can do to a business. Here are the current stats:

• 94 percent of consumers say an online review has convinced them to avoid a business.
  
  
• 4 out of 5 consumers change their minds about a purchase after reading negative online reviews.
  
  
• A business risks losing up to 22 percent of its customers when one negative article turns up in a search. Three negative articles raises the risk of lost customers to 59.2 percent.

A single bad review in a sea of good ones shouldn't tarnish your reputation. After all, you can't please everyone. But that also doesn’t mean you can just walk away from it. Bad reviews must be dealt with, and swiftly! Online review experts recommend replying to bad reviewers with a brief message to let them know they’ve been heard. Usually an authentic apology and/or an invitation to contact you for a resolution will cool the heat quickly.

If the bad review turns out to be unjustified crankiness, you may lose that customer (not necessarily a bad thing). But if the complaint is justified and you make it right, you may save the relationship and earn a diehard fan in the process.

Overall, it’s important to be seen online, and reviews are one of the best ways to make a name for your business. Stockpiling positive reviews can help a business exponentially. And while a bad review can hurt, if you handle it quickly and professionally, it can also turn out to be good for business.

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7 tips for surviving ‘back to school’ this year

It's hard not to be apprehensive about fall this year with many schools reverting to online learning at home for students. But if it helps, you're not alone. Recent statistics show that 51 percent of working parents said they'll be distracted to a "moderate" or "great" degree on days when their kids learn from home, and 42 percent are worried to the same extent about their job security due to the situation.

For those parents facing a kids-at-home-this-fall school season, here are a few tips to make sure virtual school plus remote work don't equal your loss of sanity.

1. Communicate with your company. Be upfront with your needs and allow your employer the same courtesy. They want this new way of working to succeed, too. Flexible scheduling, shifting start times, job sharing, weekend work hours in exchange for time off during the week—these are just some of the ways companies across the country are collaborating with remote staff to get work done.
   
   
2. Communicate with your spouse/partner. Without judgment or challenge, lay out your needs, requests and expectations, and decide how you'll split kid duty. To allow both of you uninterrupted work time, consider alternating—either in blocks of time or by day—as the "contact" parent who can work out among the kids, while the other retreats to a designated quiet space. Just be sure to split the contact duties equitably!
   
   
3. Communicate with your kids. Let your children know the rules and expectations for the school year. Remind them that you're working while they're learning, and assure them that you'll all adjust together as needed. Where practical, give your kids some input into the process so they feel invested, too. 
   
4. Do a tech check before you're in full virtual mode. Does your internet have the bandwidth to handle everyone being online at once? If not, contact your provider to see how you can optimize your connection.
   
   
5. Create a schedule and keep it in full view. Get a school/class schedule from your school district or teachers and build the family schedule around it. Don't toss your usual school-year routines out the window because you're home. Set alarms for an early start, take showers, get dressed, have meals and go to bed just as you would in a normal year. Don't forget to include breaks, exercise, homework and family time.
   
   
6. Designate dedicated spaces to serve as "school" and "office." Even if it's the opposite ends of your dining room table, set up visual cues that kids will recognize as boundaries to respect. Mark "walls" around your chair with painter's tape. Print out a red stop sign to hang on your laptop so they take questions to your partner instead. Have a box, basket or small rolling cart handy in each area to hold supplies, so you can move them easily if needed (i.e., to clear off the kitchen table for lunch).
   
   
7. Have activities available to occupy your kids in their down time. Especially if you'd like to limit screen use, dollar stores are a great source for age-appropriate activities—toys, craft supplies, stickers, coloring books and reading books. Ask your kids for input on what they'd like to do and if possible, give them a number of items to choose from.

Most of all, cut yourself—and everyone else—some slack. Yes, there will be bumps in the road, especially at first. Just be open to making adjustments, and don't insist on an unrealistic level of perfection, from your family or yourself. Because if there's anything that this pandemic era has taught us, it's that we are all just doing our best.

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Take some time to optimize your Google My Business profile

As summer comes to an end, many people go into business-clean-up mode—gearing up for year end. One item to add to your list is enhancing your Google My Business profile. The internet is where most consumers find a business, so make sure your information is engaging, accurate and current to elevate your visibility online.

Your Google My Business profile appears in Google Maps search results as well as local results for standard searches. Your profile also includes the “knowledge panel” that displays on the right-hand side of a results page. Here are a few tips to make sure your Google My Business profile is optimized:

• Update general information—For example, if you have summer hours in place, make sure to update as you move out of the summer season. Ensure your phone number and address are correct and that photos posted are relevant to your business. Also update your business description if it’s been awhile since you created your profile.
  
  
• Up your activity with Google posts—This is a cool feature, allowing you to post relevant, current news and information about your business without having to pay for costly advertisement space. Take some time to add a few end-of-summer posts to help promote your business beyond your general My Business listing.
  
  
• Make use of Q&A—With Google Q&A, anyone can ask and anyone can answer any question about any business in the world, such as: Are you open on Sundays? Is there free parking? Do you take walk-ins? The questions and answers appear publicly on your Google My Business profile and may show up at the top of your listing depending on which search query you’re showing up for. For example, if a consumer is searching a salon that takes walk-in clients and a local salon has a walk-in question in their Q&A section, that salon will be more likely to show up in the search results. So, make sure your Q&A section is current.

A solid online presence is critical to business success. Ensuring your Google My Business profile is optimized will help increase your visibility and get you in front of more relevant searchers.

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Back-to-school budget-friendly tips…

It’s back-to-school season, and that typically means buying a lot of stuff to prepare kids for the start of a new academic year. While 2020 may look a bit differently (some schools may enact online learning and/or hybrid models), kids will still need a few essentials—from backpacks to electronics. Here are a few tips to keep your back-to-school shopping within your budget.

• Take advantage of early-bird sales— Stay on top of back-to-school sales. Instead of stocking up for the first few months only, try to buy items for the entire school year. Plan for the long-term to make the most of early-bird deals.
  
  
• Make a plan before shopping— Be prepared before you hit onsite or online stores. It’s dangerous to shop without a well-thought-out list, because it often leads to impulse purchases. Ask your child’s school or teacher for a list of required items to help you build your list and take the guess work out of what your child needs.
  
  
• Look for “used” items—You can get great deals when you shop for “used” items online. For example, Amazon offers the option to buy used, which typically means an item has been returned and simply re-boxed. Many times, you can get a brand new, re-packaged item at a big discount.
  
• Search your home first—Remember to look at home for items before spending money on new goods. Many supplies, like notebooks, pens, backpacks or basic electronics, will often be sitting, forgotten and unused, in closets and desk drawers.

Back-to-school time can be hectic and expensive. Planning ahead will help you save more and stress less!

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Upping data security for virtual workspaces…

For many businesses, COVID-19 forced them into a remote office model. Months into the pandemic and having had a successful experience, a lot of business owners have decided to maintain virtual workspaces. For those adopting this new normal, upping security must be a priority to keep data safe.

Here are a few security essentials to keep in mind:

• Secure devices—Ensure that staff who access business applications and data only do so using an authorized device, including computers, tablets and phones. For all business-related devices, implement a screen-locking policy to lock devices that are idle after a set length of time—for example, more than five minutes. Also adopt multi- or two-factor authentication, which requires users to verify their identity by entering a security code that is sent to their phone or email account.
  
  
• Secure internet connections—To better secure virtual workplace connections, start by implementing an updated password policy. For example, mandate use of longer passwords/passphrases or a password manager (e.g., Keeper, LastPass). Passphrases consist of at least three nonsensical words (e.g., dinnercatpen), are unique for each login, and cannot be reused for other applications. Also, develop and implement home internet connection guidelines to further bolster security. For example, connecting a computer directly to internet routers with an ethernet cable and using a VPN represents the more secure home connection scenario (Wi-FI represents a weak security scenario).
  
  
• Close the human-error gap—One of the best ways to keep your business data secure is to maintain a trained and educated staff. Set aside time to train your entire team on best practices for remote workplace security. And, perhaps, put a mandatory annual training course in place to keep your team updated on current cybersecurity scams.

Virtual workspaces will likely continue to grow in popularity. Just make sure that you are putting data security at the forefront if you make the transition to virtual a permanent one.

Stay safe and secure!

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The extended individual tax deadline is approaching fast…

It’s hard to believe that we are already into July. Even with the deadline for filing your return and making a payment (if you owe) being extended to July 15, 2020, it still seemed like it came upon us fast. With only a few weeks left, be sure to get any final documents to us and answer any outstanding communications immediately.

Here are a few basic tax season reminders:

• If you are getting a refund, the fastest way to receive your money is to file electronically and choose direct deposit.
  
  
• For self-employed individuals and others who pay quarterly estimates, the first and second quarter federal estimates tax payment are due on July 15.
  
  
• If possible, submit all documents to our team electronically.

As we continue to adjust to the new normal, we want to remind everyone to continue to be safe this summer. And here’s to a very happy July 4th!

Please reach out to us if you have any questions or concerns regarding your tax return.

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Get your indoor herb gardening on!

New gardeners have come out of the woodwork this year, looking to create a sustainable food supply in their own backyards. Of course, not everyone has the space or the time to create a full-on outdoor garden. So, why not start small…and indoors?

Growing herbs indoors allows you to enjoy homegrown produce that adds a zip of fresh flavor to meals with a quick clip of a few fresh sprigs. For gardening newbies, it also serves as a low-stakes entry into more substantial edible gardening—and all you need is a sunny window. Start your own indoor herb garden this year by following a few helpful tips:

Pick the plants that are right for you.
Think through what herbs you use most while also considering those that are easy to grow. For example, choose a few no-fuss plants that tend to thrive indoors such as basil, chives, mint, oregano, parsley, rosemary and thyme.

Start from seeds or cuttings.
You can start your herb garden with seeds or by cutting sprigs from an existing plant. If you have a family member or neighbor who is an avid gardener, you may want to ask for a few cuttings. Otherwise, simply purchase seeds from a local garden store or online.

Collect the right containers.
You’ll need to use containers that allow for proper drainage, so be sure to purchase pots designated for herbs. Your pots also need something to protect your indoor surface, such as a saucer or round plastic protector. You can use any size container, provided the plant fits. Just realize that the smaller the vessel, the sooner you'll have to repot.

Show them the light.
The majority of herbs need a lot of sunlight—at least six hours a day. To maximize exposure, place plants as close as possible to your brightest window. The bright light of a south-facing window is best.

Water with care.
Don’t get overzealous with watering. It actually takes very little water to sustain a small herb garden. To make sure your plants prosper, keep the soil consistently moist, but not waterlogged. If leaves begin to wilt or turn yellow, scale back the watering.

Harvest little by little.
Harvest a few sprigs at a time with kitchen shears or by pinching leaves off with your fingers. You’ll want to avoid cutting more than a quarter of the plant at a time because this can cause distress and even kill them.

Whether you have a green thumb or not, following the above tips will help you be victorious in growing your own indoor herb garden. Here’s to getting your gardening on!

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5 tactics to spending less this year

It’s safe to say that most people are laser focused on money right now—specifically on how to make it last longer. To help you do just that, we compiled the following list of tips for spending less in 2020:

1. Rank expenses by priority.
   This will help you create a monthly budget. First, differentiate between discretionary and fixed costs. For example, fixed costs may include rent, car payment and utilities…while discretionary expenses may include entertainment, cable TV and new clothing. Second, rank all of your fixed costs in order of importance, starting with those you can’t live without. For most, this will include rent, car, utilities and food. Then, rank your discretionary items; this will help you identify some expenses that you can cut out for a while.
   
   
2. Question every expense.
   Go over your list on a regular basis—even daily—to identify items you can cut completely or those you can negotiate a discounted rate on. This includes reviewing all of your subscription services (e.g., gym, radio/music, etc.)—and remember, if you don’t use it, lose it.
   
   
3. Continue to cut out discretionary expenses.
   Once you’ve streamlined your budget, continue to eighty-six as much non-essential spending as possible, even if only on a temporary basis. For example, cut out the fancy coffee every morning or suspend getting takeout food for a while.
   
   
4. Get a grip on impulse purchases.
   Impulse and pleasure purchases can be the biggest budget buster. Try to refrain from getting online and browsing, because this often leads to impulse purchases. The more you can rein in your impulse spending, the longer your money will last each month.
   
   
5. Switch out your credit cards for a debit card.
   It’s always easier to pull out a credit card for purchases…thinking, “I’ll just pay for this later.” But “later” always comes quickly. Try tucking all your credit cards away in a drawer and using only a debit card. When you know the money will immediately be withdrawn from your account, it makes you think twice about what items you really need.

For many, keeping careful watch over household cash flow is a necessity right now. Try following a few or all of the tips above to make your hard-earned money last longer.

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The PPP Saga Continues

As if we don’t already have fatigue over the PPP-loan information overload, the saga continues ...

Last week, the SBA finally released the application borrowers will use to request loan forgiveness from their lender. In an admirably snarky article, Forbes pointed out that although the application did include instructions, the SBA failed to provide “detailed blueprints for constructing a fully functioning time machine, so nearly two million small business owners could magically transport back to a time when this forgiveness guidance would actually be useful.”

We share in your frustration about these ongoing and tedious updates. The forgiveness formula remains both ambiguous and complicated, often requiring a dozen steps to be applied to each individual employee and comparing several different time periods. Deconstructing and unpacking the guidelines is infinitely more complex than most borrowers anticipated. As such, we invite you to contact us if you would like to outsource your PPP loan forgiveness calculation to our firm.

That said, this article provides nine key points of clarification with respect to the forgiveness application, which include:

1. FTE calculation
2. Owner-employee compensation
3. Alternative payroll covered period for weekly or bi-weekly payroll only
4. Paid and incurred payroll costs
5. Health insurance payroll costs
6. Retirement payroll costs
7. FTE reduction exceptions
8. Salary/wage reduction
9. The “check here” box
10. Timing of forgiveness
11. The flux capacitator

A DeLorean time machine would come in particularly handy with respect to the first two of these points.

1. FULL-TIME EQUIVALANCY (FTE) CALCULATION

According to the application, a borrower’s FTE is equal to the average number of hours paid per week, divided by 40, and rounded to the nearest tenth. The maximum FTE that you can count for each employee is capped at 1.0.

You can elect to use a simplified method for computing your FTE. Assign a 1.0 for employees who work 40 hours or more per week and a 0.5 for employees who work fewer hours.

This latest update is inconsistent with earlier guidance (as well as our previous loan forgiveness calculators), which defined a full-time equivalent at 30 hours. As such, click here to access our updated forgiveness calculator.

2. OWNER-EMPLOYEE COMPENSATION

An owner-employee’s compensation during the eight-week period following disbursement of the funds cannot exceed eight weeks’ worth of 2019 compensation (still capped at $15,385 per individual). In other words, if an owner-employee made $1,000 per week in 2019, the maximum amount of owner-employee compensation that can be forgiven is $8,000. This is a completely new (and arbitrary) rule that will affect smaller companies where most of the forgiveness was based on the officer salary (especially if the 2019 officer salary was less than $100k).

3. ALTERNATIVE PAYROLL COVERED PERIOD FOR WEEKLY OR BIWEEKLY PAYROLL ONLY

Generally, the eight-week covered period begins the day the PPP loan was dispersed.

That said, borrowers with a biweekly (or more frequent) payroll schedule can elect to calculate eligible payroll costs using an eight-week (56-day) period beginning on the first day of their first pay period following their PPP loan disbursement date. 

In other words, if your loan was dispersed on May 4, and your next pay period began on May 15, you can elect to calculate your eligible payroll costs using the eight-week period that began on May 15.

Note that this applies to weekly and biweekly payroll only.

4. PAID AND INCURRED PAYROLL COSTS

For pay periods that are longer than bi-weekly (for instance, those that occur on fifteenth and the last day of the month), payroll costs that are paid during the eight-week covered period and payroll costs that are incurred during the eight-week covered period are generally eligible for forgiveness.

Payroll costs are considered paid on either the day that paychecks are distributed or on the day the borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned.

Payroll costs that are incurred but not paid during the covered period (or the alternative covered period as described in #3) are eligible for forgiveness as long as they are paid on or before the next regular payroll date.

5. HEALTH INSURANCE PAYROLL COSTS

The health insurance payroll costs that are eligible for forgiveness comprise the total amount of costs paid by the borrower for employer contributions for employee health insurance, including employer contributions to a self-insured, employer-sponsored group health plan. Pre-tax and after-tax contributions by employees are not eligible for forgiveness.

6. RETIREMENT PAYROLL COSTS

Retirement payroll costs that are eligible for forgiveness include the total amount paid by the borrower for the employer contributions to employee retirement plans, but exclude any pre-tax or after-tax contributions by employees.

7. FTE REDUCTION EXCEPTIONS

Under the terms of the PPP loan, forgiveness amounts will be reduced if a borrower decreases the number of full-time-equivalent employees between February 15 and April 26 and does not restore the headcount by June 30, 2020.

The application clarified that a borrower’s loan forgiveness amount will not be reduced if the borrower does not restore FTE headcount due to any of the following reasons:

• An employee was fired for cause during the covered period.
• An employee voluntarily resigned during the covered period.
• An employee voluntarily requested and received a reduction in hours during the covered period.
• The borrower made a good-faith, written offer to rehire an employee during the covered period (or the alternative payroll covered period), and the employee rejected the offer. Additionally, the borrower must inform the applicable state unemployment insurance office of such employee’s rejected offer of reemployment within 30 days of the employee’s rejection of the offer.

8. SALARY/HOURLY WAGE REDUCTION

Among the most complicated rules to be managed and calculated pertain to salary and wages. In short, forgiveness will be lowered if salary or hourly wage-reductions occur during the eight-week covered period (or alternative payroll covered period).

Here are the general rules:

• Wage reductions apply only to employees who work for your company during the covered period. If an employee stopped working for your company prior to the eight-week covered period (or alternative covered period), you may disregard that employee in your calculations.
• To complete the application, you must distinguish between hourly and salaried employees.
• For salaried employees who made less than $100,000 in 2019: If the employee’s SALARY during the eight-week covered period (or alternative covered period) was reduced by more than 25 percent as compared to 1/1/20 through 3/31/20, conduct a “safe harbor calculation.”  The “safe harbor calculation” looks like this:

1. List the employee’s annual salary as of 2/15/20.
2. List the employee’s average annual salary from 2/15/20 through 4/26/20.
3. If the annualized salary is less over the period from 2/15/20 through 4/26/20, you pass the first “safe harbor” test. In other words, if #2 is less than #1, move onto #4. If the annualized salary was more over the 2/15/20 through 4/26/20 period (#2 is more than #1), the forgiveness amount will be reduced.
4. Annualize the average wages through 6/30/20.
5. If the annualized salary is the same or higher than the annual salary as of 2/15/20, you qualify for the safe harbor and are not subject to the salary reduction for that employee. If the annualized salary is less than the annual salary as of 2/15/20, the forgiveness amount will be reduced.

• For hourly employees who made less than $100,000 in 2019: Conduct a “safe harbor calculation” if the employee’s AVERAGE HOURLY RATE during the eight-week covered period (or alternative covered period) was reduced by more than 25 percent as compared to 1/1/20 through 3/31/20. The “safe harbor calculation” looks like this:

1. List the employee’s hourly rate on 2/15/20.
2. List the employee’s average hourly rate from 2/15/20 through 4/26/20.
3. If the hourly rate is less over the period from 2/15/20 through 4/26/20, you pass the first “safe harbor” test. In other words, if #2 is less than #1, move onto #4. If the hourly rate was more over the 2/15/20 through 4/26/20 period (#2 is more than #1), the forgiveness amount will be reduced.
4. Annualize the average hourly rate through 6/30/20.
5. If the annualized average rate is the same or higher than the rate as of 2/15/20, you qualify for the safe harbor and are not subject to the wage reduction for that employee. If the annualized average is less than the annualized average is as of 2/15/20 (#2 is more than #1), the forgiveness amount will be reduced.

9. THE “CHECK HERE” BOX

On the third page of the eleven-page applications, borrowers are asked to check a box if they received PPP loans in excess of $2 million. If your loan was not in excess of $2 million, be careful that you do not inadvertently check this box.

The SBA has announced that loans of less than $2 million will not be audited. Instead, the SBA will assume good faith with respect to your certification that the “current economic uncertainty” of the COVID-19 pandemic makes such a loan for your business “necessary to support their ongoing operations” and were willing to certify to the lender to that effect.

10. TIMING OF FORGIVENESS APPLICATIONS

Your completed application (fill out your application here) should be submitted directly to your lender, who is required by law to provide you with a response within 60 days.

The SBA seems to have an unbounded ability to provide updates and clarifications that simultaneously create confusion, so we expect forthcoming legislation and updates.

Stay tuned! And, as always, contact us or another trusted advisor for additional support, clarification, and guidance on any of these issues.

11. THE FLUX CAPACITATOR

All that said …

As we write these words, a bipartisan bill is being considered in the Senate that would:

1. Double the current eight-week covered period that businesses must use funds if they are to be considered eligible for forgiveness.
2. Expand forgivable amounts to include costs paid for personal protective equipment. 

Fortunately, the flux capacitor can go back in time and travel to the future so we can see how this unfolds. Oh wait … we still don’t have that. 

Instead, Fenton & Ross will continue to keep you updates as the guidelines are released and legislation changes. In the meantime, maintain clear documentation, and be prepared to store this documentation for six years, at which point we hope that this saga will reach its conclusion.

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5 tips to getting your healthy on this summer!

With more of us likely staying close to home this summer, why not plan to either start a healthy and regular workout schedule or enhance your current routine? It’s never too late in the year to get your healthy on, so we’ve compiled a short list of tips to get you moving.

1. Start with a plan—The more organized you are, the more likely you will stay on track. Start by creating a short workout plan, which could include specific days of the week you will work out  (Monday, Wednesday and Friday, for example). It can also include the type of workout per day—Monday: weight training, Wednesday: biking, and Friday: 5k walk. Block out time on your calendar for working out as well.
   
   
2. Start out slow—Don’t burn yourself out by jumping into an intense workout regimen. This can often lead to quitting altogether. Commit to working out two days a week at first, and then work your way up to five or even six per week! Also make sure to select workouts that support your level of wellness. As you exercise more and more, you will gain the strength and endurance required to elevate the level of workout difficulty.
   
   
3. Get good sleep—When you give your body a chance to recover with at least 6 to 8 hours of good sleep, you’ll find that working out is much more enjoyable and less strenuous.
   
   
4. Adjust your nutrition plan—Stock your kitchen with healthy fruits and veggies, and start to move away from processed packaged foods. The more whole, plant-based foods in your diet, the better, lighter and more energetic you will feel! And whenever possible, choose water over sodas or juices (avoid the sugar).
   
   
5. Find a workout buddy—Many find it difficult to get motivated when working out alone. If this sounds like you, find a dedicated workout partner. When someone else is depending on you to show up, your accountability tends to skyrocket. And if you can’t physically work out together, agree to check in regularly and hold each other accountable.

Any time is a good time to improve your health and well-being. Applying just a few of these tips can help you significantly increase wellness for the long haul.

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Is this the year for a staycation? How to kick back, relax and vacation at home

Summer is typically the time people start planning vacations—Disney World…cruises…the beach. This year, however, travel may not be in the cards. But that doesn’t mean you have to sacrifice down time and fun with the family. Make this the year you plan a fantastic staycation! Here are some tips to make sure you can kick back, relax and have a memorable time with a vacation at home.

• Unplug completely from work—You’ll never feel like you are on vacation if you are sneaking away to answer emails and Slack messages. Put your staycation on the calendar so your colleagues know that you are incommunicado for the duration of your vacation. Set an out-of-office message for email and other communication platforms…and don’t answer work calls.
  
  
• Take a break from news (and maybe even put mail delivery on hold)—Again, the point is to create the feeling of being on vacation, so lose the news and hold the mail. Both can be a source of stress, so eliminate them for the duration of your “getaway.”
  
  
• Plan destination dinners—If you can’t make it to the beach this year, for example, at least eat like you are living coastal. Before your staycation begins, stock up on meats, perishables and pantry items required to create meals from some of your favorite destinations.
  
  
• Relax outside by candlelight or a bonfire—Getting outside is often a big part of most vacations. Just because you are at home doesn't mean you have to stay inside. In the evenings, plan time around a bonfire or firepit (make s’mores and other favorite by-the-fire treats), play some relaxing music, and just talk and catch up. If a bonfire or firepit is not possible, create a cozy area with candles to sit and chill.
  
  
• Plan day and evening events with the family—If you have kids, plan outdoor games like scavenger hunts or glow-in-the-dark hide-and-seek (which only requires a few glow sticks…and humans, of course). If you have a pool, plan to spend time soaking up the sun and playing pool games. For indoor fun, go “old-school” and play board games or teach the kids a few fun card games.
  
  
• Make a vacation playlist—Whether inside or out, playing music always adds a fun element, and can help create the illusion of being at a desired destination. For example, if you love the Caribbean, make a playlist of tropical, island-style tunes. Make one or more playlists that everyone will enjoy listening to.

Stay-at-home vacations can be very relaxing and fun…not to mention easy on the wallet. If you plan to stay home this year, apply a few of our tips so you can truly kick back and enjoy a vacation in the comfort of your home.

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Work-from-home best practices

The fact is that many of us are now working from home…and we’re not sure just how long this will be a necessity. With this in mind, we compiled a list of best practices to support a successful and secure work-from-home operation.

• Ensure a good internet connection (and have back up)—Ensure that you have the best internet provider supporting your home operation. In cases of internet downtime, have a portable backup ready, like Verizon’s Jetpack or Sprint’s MiFi. If you use your phone as a hotspot, make sure you have enough data to cover you for at least a full workday.
  
  
• Map out dedicated office space—There can be numerous distractions when you work from home. Don’t settle for setting up your “office” at the kitchen counter. Try to create a private, dedicated workspace away from the noise. If possible, a room with a door (that you can close when needed) is best.
  
  
• Establish a “get-started” routine—Creating a familiar routine to launch your workday is a great way to make the transition to a home office. For example, get a cup of coffee (or tea) first thing, write out your daily to-do list (on paper or electronically), and then move on to reviewing internal communications. Whatever your routine, structure and familiarity can be very comforting and help keep you on track.
  
  
• Get used to video—You will feel far less isolated when working from home if you have the ability to connect with clients and colleagues via video meetings. Using video chat applications like Zoom is a great way to stay connected and keep projects and deliverables moving forward efficiently.
  
  
• Communicate securely—While we are on the topic of video conferencing, you’ll want to carefully review the security features offered in your solution of choice. For example, Zoom allows you to lock meetings so that no one can join who isn’t supposed to be there. You can also host larger meetings or webinars that require a password/PIN.
  
  
• Select technologies that offer top-notch security—Be sure that you are using the most advanced cloud-based solutions to keep your data secure. Choose technologies that support two-factor or multi-factor authentication.

The necessity to work from home is the current reality for many. So, be sure that you are set up to work efficiently and effectively. And as always, we are here to help. Until we return to the office, stay safe and healthy!

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CARES Act Summary

On March 27, 2020, the CARES Act (H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act) was signed into law.

Though the laws and relief packages are always changing—and more might be coming in the days, weeks, and months to follow—we want to summarize the latest tax provisions and keep our clients updated.

That said, please email or call or office to discuss how these new programs and laws impact you, your family, and your business.

Economic Stimulus

The CARES Act provides for additional unemployment benefits and one-time stimulus checks.

• U.S. residents with adjusted gross incomes up to $75,000 (or $150,000 married) are eligible for a one-time stimulus check of $1,200 ($2,400 if married), plus a one-time additional payment of $500 per dependent child.
  • The amount is reduced by $5 for each $100 of annual AGI that exceeds the threshold, and the stimulus is not available for those with an AGI that exceeds $99,000 (or $146,500 for head of household with at least one child; or $198,000 for married with no children).
  • Stimulus checks will be deposited automatically into the account on file with last year’s tax returns. If no account information is available, checks will be mailed.
• For unemployed individuals, an additional $600 per week payment will be added to existing unemployment benefits for up to four months.
  • Temporary unemployment benefits amounting to $600 per week are also available for people who do not traditionally qualify for unemployment benefits, such as self-employed workers and independent contractors.
  • An additional 13 weeks of unemployment benefits are available through the end of 2020 to help those who remain unemployed after state unemployment benefits are no longer available.
• CARES allocates funding for states to:
  • Reimburse nonprofits, government agencies, and Indian tribes for half the costs they incur through the end of 2020 to pay unemployment benefits.
  • Pay the cost of the first week of unemployment for states that choose to pay recipients as soon as they become unemployed (versus instituting a one-week waiting period).
  • Support short-term compensation programs for employers who reduce employee hours instead of furloughing employees.

Paycheck Protection Program Loans

Running until June 30, small businesses and nonprofits with no more than 500 employees per location are eligible to receive a Small Business Administration loan through the Paycheck Protection Program (PPP) to pay specified costs such as rent, mortgage, utilities, wages and payroll costs, paid leave, health insurance premiums, employee benefits, and other specified items.

Time is of the essence on these loans: $350 billion was earmarked for this program, which is set to expire June 30, 2020. Monies will likely run out before then, so call you bank today and tell them that you intend to apply for the loan.

PPP loans are for sole proprietors, independent contractors, and self-employed individuals. Though certain documentation will be required (payroll tax filings, 1099s, income and expenses, and certification that your business needs this money due to the coronavirus), no collateral or personal guarantees are required. The maximum loan amount is $10 million or 2.5 times the average total monthly payroll costs incurred in the one-year period before the loan is made.

Depending on how the loan is spent, some or all of this loan amount could be forgiven. Forgiven amounts will include payments for payroll, mortgage interest, rent, and utility payments.

Refer to prior Fenton & Ross analysis dated April 2 on this.

EIDL Loans

Economic Injury Disaster Loans (EIDL) are available to small businesses as well as private, nonprofit organizations that have suffered substantial economic injury as a result of the coronavirus. Loans up to $2 million may be granted, with up to a $10,000 emergency advance.

EIDL are much harder to get, often require 20 percent personal guarantees and collateral, and may take longer to be awarded.

Employee Retention Credit

Under the CARES Act, employers whose business operations have been fully or partially suspected, or whose gross receipts have declined by more than 50 percent when compared to last year’s quarter, are eligible for a payroll tax credit of 50 percent of wages paid to employees during the COVID-19 crisis. If the employer has 100 or fewer full-time employees, all wages qualify regardless. Tax-exempt organizations do qualify for this credit. This credit is capped at $10,000 in wages per employee for wages paid between March 13, 2020 and December 31, 2020. therefore, the maximum credit is $5,000 per employee. You are unable to claim this credit if you have a forgivable SBA loan, such as the loan available through PPP.

Payroll Tax Deferral

CARES allows taxpayers to defer paying the 6.2 percent employer portion of Social Security tax through the end of 2020. Deferred tax will be due in two equal payments: One at the end of 2021 and the second at the end of 2022.

Retirement Accounts

For qualified retirement accounts, the CARES Act waives the 10 percent early-withdrawal penalty for amounts up to $100,000 for coronavirus-related uses. Withdrawals must occur on or after January 1, 2020. Income on distributions will be taxed over three years.

For defined contribution plans and IRAs (but not defined benefit plans), there is a one-year waiver of required minimum distributions which applies to 2019 RMDs that would have been needed by April 1, 2020, as well as all 2020 RMDs.

Charitable Contributions

A number of changes to charitable contribution laws have been made:

• The CARES Act allows taxpayers an above-the-line deduction of up to $300 in charitable donations made in 2020, regardless of whether contributors itemize.
• The CARES Act lifts AGI limitation for cash donations made in 2020 for individualizes who itemize and corporations. (Donations to donor advised funds and supporting organizations do not qualify.)
• The 10 percent limitation for charitable contributions from corporations is increased to 25 percent of taxable income.
• The CARES Act also increased limitations on contributions of food inventory increased from 15 percent to 25 percent.

Student Loan Payments

Principal and interest on federally held student loan debt (but not private student loans) has been paused through September 30. Through 2020, employees can also exclude the amount of student loan repayment assistance from their employers from their gross include, capping at $5,250.

Modifications to Net Operating Loss Rules

Net operating losses arising in 2018, 2019 or 2020 tax years may be carried back five years. Beyond that, the 80 percent taxable income limitation for NOL dedications taken in 2018, 2019, and 2020 has been temporarily removed. Prior tax year returns can be amended to take advantage of these modifications.

Excess Business Loss Limitation Repealed

For 2018, 2019, and 2020 tax years, the CARES Act repeals excess business loss limitation for pass-through entities and sole proprietors.

Business Interest Expense Modifications

For tax years 2019 and 2020, the CARES Act increases the amount of interest that can be used to offset a business’s adjusted taxable income from 30 percent to 50 percent. The Cares Act allows a taxpayer to elect to use its 2019 adjusted taxable income to compute its business interest limitation for its 2020 return.

As for partnerships, the increase to 50 percent does not apply to the calculation of the partnership’s business interest expense limitation, but beginning in 2019, 50 percent of each partner’s excess business interest can be treated as paid or accrued by the partner in 2020.

Bonus Depreciation for Qualified Improvements

Rather than having to depreciate them over 39 years, qualified leasehold improvement, qualified restaurant property and qualified retail improvement property are eligible to write off 100 percent of costs associated with improving facilities. This change is effective January 1, 2018, so Fenton & Ross will review tax returns to determine when to file amended tax returns.

Corporate Alternative Minimum Tax ("AMT") Credits

Before 2018, corporations were subject to a corporate alternative minimum tax (“AMT”). The CARES Act accelerates a company’s ability to recover corporate AMIT credits by making any unused credit fully refundable in 2019 and providing an election to obtain the entire refundable credit amount in 2018.

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COVID-19 UPDATES

Our firm has been busy reviewing new federal law and compiling resources to support our clients during the COVID-19 pandemic and economic crisis. There is currently an abundance of incorrect or ill-advised information circulating on the news and the internet. We want to keep you accurately informed and remind you that we’re here to answer the questions confronting you during these unprecedented circumstances.

Here are a few of the most common questions that we can help answer for our clients who are business-owners:

• “Should I apply for one or both of the Small Business Administration (SBA) loans Economic Injury Disaster Loan (EIDL) and/or Paycheck Protection Program loan?”
• “How much do I qualify for, and how much of the loan will be forgiven?”
• “Should I consider other available relief options related to payroll credits and deferment of payroll taxes?”

We also want to make sure that our clients who are employees, independent contractors, or self-employed know about the assistance programs available to them.

To help you navigate all of these programs, we have compiled two matrices:

1. BUSINESS FEDERAL RELIEF PROVISIONS details the various federal loan programs, credits, and deferrals, as well as their relationships and conflicts with one another, available for businesses during the coronavirus crisis.
2. CALIFORNIA & FEDERAL BENEFITS FOR WORKERS IMPACTED BY COVID-19 details the various state and federal benefits for individuals (employees, sole-proprietors, independent contractors, etc.) available during the coronavirus crisis.

Please contact our office to request these resources. 

That said, the solution for each business and each individual will look different. We can help you navigate these and other complex decisions during this period of rapid change. Please remember that we’re here to serve as a trusted advisor and help you identify and take the most beneficial course of action for the health of your business.

Please let us know if you need assistance in determining the best course of action. We are here to help. We also invite you to visit the COVID-19 page on our website for the latest information about the financial response to the emergency.

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Paycheck Protection Program

On Friday, March 27, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), which contains various tax and economic stimulus protections, including a forgivable loan program for small businesses.

The program—called the Paycheck Protection Program (PPP)—is administered through the Small Business Administration (SBA) and has allocated $350 billion to help small businesses keep workers employed during the crisis.

You can review the Small Business Information Guide as it relates to the PPP. Please keep in mind that this is brand new legislation that is subject to change, and the Treasury Department has been updating it regularly.

That said, following are some of the highlights as we understand them today:

All businesses with 500 employees or less are eligible—including nonprofits, veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, independent contractors, S-corporations, C-corporations, partnerships, and LLCs.

• Small businesses and sole proprietors can apply for the loan beginning April 3. Independent contractors and self-employed individuals can apply beginning April 10.
• The program is open until June 30, but we encourage you to apply immediately as funds are capped.

Loan amounts can be the lesser of $10 million or up to 2.5 times the average total monthly payroll costs from the 12 months prior to the loan origination. Payroll costs (not to exceed $100,000 per employee) includes wages, health care, and retirement benefits. Independent contractors paid as individuals for services related to your primary business may also be eligible. (If Fenton & Ross does your accounting, We can assist you in calculating your average monthly payroll.)

Loan interest is capped at 0.5%.

However, loan forgiveness is available for amounts spent on the following items during the eight-week period that begins on the loan origination date:

• Payroll costs
• Mortgage interest incurred in the ordinary course of business, or rent paid based on a leasing agreement
• Utility payments: electricity, gas, water, transportation, telephone, or internet
• Additional wages paid to tipped employees

Forgiveness is allowed only if 75 percent of expenses are used for payroll costs during the covered period.

This means that employers who have furloughed employees can rehire them at the beginning of the loan period and qualify for wage-related loan forgiveness amounts.

• If your company reduced wages, reduced employee hours, or furloughed workers between February 15, 2020 and April 27, 2020, the amount of loan forgiveness will not be reduced so long as your company restores wages, hours, or employment by June 30, 2020.
• Note: The loan forgiveness amount can be reduced if there is a reduction in the number of employees or a reduction of greater than 25 percent in wages paid to employees.

Loan duration is a maximum of two years.

Personal guarantees and collateral are not required to secure the loan.

Loan repayments are automatically deferred for six months and up to one year. This includes interest, fees and loan principal. 

PPP loans are applied for through approved banks. The SBA may administer some loans based on viability. Visit the SBA website for a list of approved banks.

• Here is a Sample Application from the SBA:

For businesses that have been denied SBA loans previously, lending requirements are more lenient.

Keep in mind that the Small Business Administration also offers a loan called an Economic Injury Disaster Loan (EIDL), which provides up to $2 million of financial assistance to small businesses and nonprofits that have experienced substantial economic injury as a result of COVID-19. Here are some highlights of EIDL loans:

• When you apply, you can also obtain up to a $10,000 advance within three days of applying. This $10,000 advance is considered a grant and does not require repayment.
• An EIDL loan requires credit and collateral, and repayment is required, but it might be beneficial to organizations who cannot sustain enough money from a PPP loan.
• Loan amounts cap at $2 million.
• The amount of your PPP loan will be reduced by any EIDL monies you receive. If you need to take advantage of the immediate EIDL grant for up to $10,000, but would also like the loan-forgiveness option of the PPP, our suggestion is to refinance the EIDL and merge the payroll portion into PPP. If Fenton & Ross is your company’s accountant, we can help you with this process.

The last page (page 6) of the Small Business Information Guide has a Loan Comparison Chart that compares and contrasts the PPP loan and the EIDL loan programs.
 
As always, please let us know if you have any questions.

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Families First Coronavirus Response Act: Employer Tax Credits

On March 18, 2020, the President signed the Families First Coronavirus Response Act (Coronavirus Response Act) which increases funding for various programs and addresses paid sick and family leave, including tax credits for employers and self-employed persons.

The Coronavirus Response Act requires employers with fewer than 500 employees to provide up to ten days of paid sick leave to employees who are forced to stay home either to quarantine or to care for a family member (qualified sick leave), or to care for a child if the child’s school or place of care is closed (qualified family leave). You can check out this chart for a summary of the following benefits. 

I. Credit for Qualified Sick Leave (for Employees):

In the case of sick-leave wages paid by an employer to an employee, the employer may receive a refundable credit against its share of either the OASDI or the RRTA portion (as applicable) of the payroll tax. The credit can be claimed on a quarterly basis, equal to 100 percent of the amount of sick-leave wages paid.

The amount of the credit is limited to $200 per day per employee. However, the credit increases to $511 per day if the employee is on leave for the following reasons:

• The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
• The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19; or
• The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

The total payroll tax credit is limited to 10 days of wages per employee.

II. Credit for Qualified Family Leave (for Employees):

A separate refundable payroll tax credit applies for family-leave wages paid by an employer under the Coronavirus Response Act. The credit is 100 percent of the qualified family-leave wages, limited to $200 per day per employee, up to an aggregate of $10,000.

Wages, for purposes of both credits, include a portion of health plan expenses properly allocable to the qualified sick and family leave wages. The paid sick and family leave requirements and the related employer tax credits are temporary, expiring on December 31, 2020.

Self-employed persons may also benefit from the sick and family leave credits as if they were employees of an employer (other than themselves).

For self-employed persons, the credits are allowed against regular taxes.

III. Credit for Qualified Sick Leave (for Self-Employed Individuals):

The limit on sick-leave wages is determined by multiplying the number of days the self-employed person is unable to perform services in their trade or business by the lesser of $200 or 67% of the taxpayer’s average daily self-employment income. The number of days is limited to 10 for the tax year.

The limits are increased to 100% and $511, respectively, if the self-employed person is unable to perform services for the following reasons:

• The self-employed person is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
• The self-employed person has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19; or
• The self-employed person is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

The amount of the sick-leave credit is reduced by any sick-leave wages the taxpayer might receive as an employee exceeding $2,000 (or $5,110 in the case of days covered for the three reasons described above).

IV. Credit for Qualified Family Leave (for Self-Employed Individuals):

The same calculation is made for family-leave wages, with days unable to perform services multiplied by the lesser of $200 or 67% of the taxpayer’s average daily self-employment income. The number of days is limited to 50 for the tax year.

The amount of the family-leave credit is reduced by any family-leave wages in excess of $10,000 that the taxpayer might receive as an employee.

Average Daily Self-Employment Income: The taxpayer’s average daily self-employment income is defined as the amount of net earnings from self-employment for the tax year divided by 260.

These credits expire on December 31, 2020. The IRS is expected to provide additional guidance soon.

Please contact us if you have any questions regarding how these tax benefits may help you through a difficult time.

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How to minimize distractions while working from home

Working from home has increased in popularity over the past several years. But today, amidst the COVID-19 crisis, it’s not only popular, but required for many. Moving from a hustle-and-bustle professional workspace to a home office can be a major transition for many. To help you make the move successfully, here are a few tips to reduce distractions while working from home:

• Pipe in background music—Listening to relaxing, lyric-free music, like Mozart or classical piano, is not only calming for the soul, but offers white noise to kill the distraction of silence and help with focus.
  
  
• Keep a to-do list—Whether on a notepad or electronically, just mapping out your day via a to-do list will help keep you motivated and on track.
  
  
• Use other visual tools to stay organized—Put up a small dry erase board and make notes or sketch out processes as you brainstorm ideas in solitude.
  
  
• Get up and get out—Don’t sit at a desk all day. Taking short breaks throughout the day will keep you energized and reduce burnout. Take a short walk outside or even tackle a few small in-home tasks that may be distracting you.
  
  
• Create a true office setting—Don’t just set up shop at the dining room table. Create an actual workspace, complete with a desk, comfy chair, photos, candy jar—whatever you need to feel like you have a dedicated office or workspace.
  
  
• Stay off of social media—This can be a major distraction no matter where you are working, so try to keep social sites out of your browser tabs. And maybe even move social apps off of your phone’s home screen for a while.
  
  
• Close your door—If you have a dedicated office, reduce focus-killing noises from other rooms by simply closing your door. The more you feel like you are at the office, the better.

These are just a few proven tips to reduce home-office distractions. We hope you find them helpful!

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A Message About CoronaVirus

I. General Covid 19 Update:
At Fenton & Ross, we are keenly aware of the potential impact of the coronavirus (COVID-19). We are taking steps to provide for the continuity of our client services and the safety of our employees and clients as we navigate through the uncertainly of the outbreak.

We are staying up-to-date on the latest developments. The actions we are taking include monitoring resources such as the Centers for Disease Control and Prevention (CDC); the World Health Organization; the Occupational Safety and Health Administration (OSHA); and our local public health department.

As you know, this is one of the busiest times of the year for accounting firms with tax filings and financial statement regulatory deadlines rapidly approaching. Disaster preparedness is an integral part of our firm's risk management program and includes a viable pandemic response plan. Below are some of the features of the plan and the actions we are taking:

Understanding the risk: This is a rapidly evolving situation, and we are monitoring reports from the CDC and other health agencies to enhance our knowledge and understanding of the spread of the coronavirus. We are tracking regional transmission in affected areas, and are actively taking steps to support our employees, clients and our surrounding communities.

We have frequent communications with our employees, which include instructing them to stay home if they feel sick, how to recognize COVID-19 and its symptoms, the benefits of social distancing, and reminders about proper hygiene and other mitigations strategies.

Our firm is also prepared in the event we need to operate from outside of our office(s) with the necessary equipment, as well as backup systems and technical support, that will allow our workforce to work remotely in compliance with our Disaster Recovery Plan and other policies. We remain committed to maintaining our firm's quality control standards.

Our top priorities are the health and safety of our employees and clients. We will continue to monitor guidance from health experts and government recommendations, and will do our very best to maintain the quality and timeliness of our services to you. We appreciate your flexibility and support during this time, and our thoughts remain with everyone affected by the COVID-19 crisis.

II.            IRS Issues Guidance On Tax Payment Deferrals, Confirms That Tax Filing Due Dates Have Been Extended
According to the guidance, on March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration).

As a result of the Emergency Declaration, any person with a federal income tax payment due April 15, 2020 (the normal tax filing season due date), is eligible for relief. That means that the due date for making federal income tax payments due April 15, 2020, is postponed to July 15, 2020.

• The amount eligible for relief for most taxpayers is up to $1,000,000 regardless of filing status. That means, for example, that the relief is essentially per return, granting the same for a single individual as for married individuals filing a joint return.
• The amount eligible for relief for each consolidated group (as defined in §1.1502-1) or for each C corporation that does not join in filing a consolidated return is up to $10,000,000.

Interest, penalties and additions to tax will accrue on tax in excess of the these amounts due but not paid by April 15, 2020.

• The relief applies to federal income tax payments including payments of tax on self-employment income due on April 15, 2020, for the 2019 taxable year.
• The relief also applies to federal estimated income tax payments, including payments of tax on self-employment income, due on April 15, 2020, for the 2020 taxable year.
• The relief does not extend to the payment or deposit of any other type of federal tax.
• The relief also applies to the filing of any tax return or information return. In other words, filing dates have been extended. The official deadline for filing your individual federal income tax returns is now July 15, 2020.

III.        FTB Issues Guidance On Tax Payment Deferrals, Confirms That Tax Filing Due Dates Have Been Extended
The Franchise Tax Board (FTB) today announced special tax relief for California taxpayers affected by the COVID-19 pandemic. Affected taxpayers are granted an extension to file 2019 California tax returns and make certain payments until July 15, 2020, in line with Governor Newsom’s March 12 Executive Order.

This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through July 15, 2020, to July 15, 2020. This includes:

• Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 120-day extension to file and pay by July 15.
• Individual filers whose tax returns are due on April 15 now have a 90-day extension to file and pay by July 15.
• Quarterly estimated tax payments due on April 15 now have a 90-day extension to pay by July 15.

The FTB’s July 15 extended due date may be pushed back even further given that the Internal Revenue Service has granted a longer relief period.

The FTB will also waive interest and any late filing or late payment penalties that would otherwise apply.

IV.       Additional Legislation/Future Updates
Due to ongoing national emergency the federal government has been enacting measures for the economic well-being of the country. At this point these include:

Paid leave for those employees affected by the virus or have children who are staying at home due to the school closings. This leave will be paid by the employer but there will be a federal tax credit for the amount paid. We will be sending out a separate analysis of these provisions.

Additionally, the Federal government is considering direct payments by the federal government to each adult American.

As more information becomes available, we’ll keep you updated.

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Why file your tax return early? Lots of good reasons...

If April 15 always seems to sneak up on you, get out in front of this year’s tax deadline and file early. Here are a few top reasons why you should…

1. Reduce your stress. When you wait until the last minute, it can spike stress levels. The dread of the impending tax deadline, the worry of compliance—it all adds up to tax season anxiety. Make this the year you file early and cut back on the stress of the season.
   
   
2. Reduce the risk of identity theft. Once your return is filed with the IRS, personal information (such as SSNs) is locked and cannot be used again by anyone. Filing your taxes early really can help reduce or eliminate the risk of identity theft.
   
   
3. Expedite your refund. If you believe you are due a refund this year, the sooner you file the sooner you’ll receive your refund. And who doesn’t want that?!
   
   
4. Additional time to identify other potential tax savings. When you supply our team with all your documentation early, it offers extra time to prepare your return and identify any additional savings. Filing earlier also affords you more time to gather your documentation and search for any additional paperwork needed.
   
   
5. More time to pay your tax bill. If you owe the IRS money, filing early gives you more time to save in order to pay your tax bill by the individual tax return deadline.

Questions? Reach out to us soon. We want to ensure you receive all the value of filing your return early!

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What you need to know about changes to retirement and 529 plans

The new budget bill passed by Congress on December 20, 2019 impacted both retirement and college savings plans. While many are still waiting for further guidance from the IRS on several details of the bill, we compiled a short list of the major changes that may affect you.

Retirement plan changes:

• The rule that restricted deposits to an IRA after the age of 70 and ½ has been repealed. Under the new bill, starting in 2020, any person of any age can make a deposit to an IRA with earned income (e.g., wages or self-employment).
  
  
• The mandatory age to begin distributions has changed from 70 and ½ to 72.
  
  
• Recipients of stipends and fellowships can now use these funds to make IRA contributions.
  
  
• Up to $5,000 can be withdrawn without penalty for the birth or legal adoption of a child up to one year after birth or adoption. Withdrawals are taxable; however, if redeposited within 60 days, funds will not be taxed.
  
  
• If an IRA is inherited from someone who passed in 2020 (other than a spouse and a few other exceptions), funds must now be distributed within 10 years.
  
  
• Long-term part-time workers will be able to join their company’s 401k plan. Except in the case of collectively bargained plans, the law now requires employers maintaining a 401k plan to offer one to any employee who worked more than 1,000 hours in one year or 500 hours over 3 consecutive years.
  
  
• Small business owners can receive a tax credit for starting a retirement plan—up to $5,000.

College saving (529) plan changes:

• Withdrawals of up to $10,000 during one’s lifetime can be used to repay student loans of an account beneficiary (or their siblings) without tax or penalty, making it a qualified expense.
  
  
• Withdrawals can be made to pay for an apprenticeship program once approved.
  
  
• The tuition and fees deduction has been retroactively restored from 2018-2020.
  
  
• Children with higher interest, dividends or capital gain income are retroactively taxed at their parent’s tax rates rather than the potentially higher trust tax rates.

If you have any questions, please reach out to our firm. We are here to help!

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Smart tax tips for 2020

It’s that time of year when everyone can agree on one thing: Paying taxes is a drag. As we progress into a new tax season, follow these tips to help avoid a heavy tax burden this year:

• Adjust your withholdings as needed—The 2018 tax code overhaul lowered most individual tax brackets, which in turn put more money in many workers’ pockets. If you noticed a bump in your paycheck after the tax code changes went into effect, be sure that your withholdings have been adjusted appropriately to avoid any unwanted surprises come April.
  
  
• Maintain organized records—Be sure to keep all your business-related expense documents organized and current. Deducting qualified expenses is a benefit of being self-employed. Maintaining solid records helps ensure you don’t miss out on eligible deductions as well as helps you avoid claiming the wrong deductions.
  
  
• Keep up with your estimated payments—If you have side work that augments your income, make sure you are paying in throughout the year. You are responsible for making sure the IRS gets its fair share of your side hustle income.
  
  
• Take advantage of pre-tax saving options—If you don’t contribute to a traditional IRA, 401(k) or HSA (health savings account), you are missing out. These tax-advantaged savings plans allow you to contribute pre-tax dollars, which can save you quite a bit during the year and lower your tax burden.
  
  
• Work with a professional—Unraveling the tax code can be overwhelming. If you are not already, be sure to work with a tax professional who will ensure you receive the proper deductions, work to mitigate your tax obligation and ensure compliance.

If you have any questions, please reach out to our firm. We are here to help!

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5 tips for hosting magical meetings

Okay, so maybe not magical…but there are things you can do to rev up engagement in your meetings. After all, it’s likely that you spend at least 25 percent of your professional time in meetings, so why not put a little work into making them more appealing for all those involved. To get you started, give the following five tips a try:

1. Know your audience—Pay attention to every attendee as they walk through the door. Measure moods so you can adjust your approach. For example, if someone was stuck in traffic and appears irritated, give them a little space to decompress and then offer them coffee before starting. Little gestures can go a long way.
   
   
2. Remove distractions—It can be hard enough to keep people’s attention, especially in longer meetings. Host your meetings (as often as you can) in a room set apart from high-traffic areas or where customers are visible. Also, ask everyone to silence their phones. Finally, provide a short agenda so people know what’s in store and have an idea of when they can get back to work. This can sometimes quell the urge to get back to it and allow employees to focus on the topic being discussed.
   
   
3. Be prepared—There’s nothing more frustrating than sitting in a meeting where the host is completely unprepared—which can drag things out longer than need be. Come into your meeting armed with a structured agenda and stick to it.
   
   
4. Open with a question—This sets the tone that everyone’s voice is important. By posing a question to the group, you jumpstart participation and support a more collaborative culture. Don’t be the only one to talk…that can get old very quickly.
   
   
5. Put some focus on the big picture—Getting everyone passionate about individual projects and the business overall can be difficult. While you may be pitching a new product in a particular meeting, take some time to share a few reasons why employees should care about the project. Discuss revenue goals, product relevance or how customer pain points will be solved. A little big picture talk can quickly get everyone engaged and excited.

You don’t have to love them…but you can’t leave them either. Meetings are a part of the workday, so do what you can to improve the experience for everyone.

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Set your career goals for 2020

There’s no better time to talk about goals than the start of a new year. And what better topic than your career? The following are a few tips to help you set reasonable and achievable goals this year:

• Get out of your comfort zone—The theme here is pushing yourself to make bigger things happen. Apply for aspirational jobs (even if you might not meet all the criteria); tackle projects that you haven’t before and that may feel outside of your experience realm; or if you’ve never done so, sign up to present a topic of significance to your team.
  
  
• Work on a single skill—Making yourself an important asset is the idea here. Focus on improving a key skill this year that will help you grow as a professional and a person. To do this, you can take a course, read a book on a given subject or ask to be mentored by a respected colleague.
  
  
• Take mental breaks and just think—Taking time to clear your mind is key to staying focused. Set the goal to take at least two or three 15-minute breaks during the workday to simply be still. This will help reboot your brain and make way for new, innovative ideas.
  
  
• Seek out the right leader—Leadership is key in career growth. Do you have a boss that has your back when you make mistakes and challenges you with new tasks to help expand your experience and knowledge? If not, it might be time to assess a departmental move or even a company switch.
  
  
• Give back—Volunteering for a worthy cause offers you the opportunity to mentor others, which is great experience for future leaders. Being of service expands one’s ability to connect and be part of a meaningful community—all great attributes!

It’s a new year. Take some time to set some career goals, and then go get’em!

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Financial resolutions for 2020…Get on a healthy track as the New Year kicks off

The New Year is the best time to take stock of your finances. So, as you begin the season of self-reflection and goal-making, take the time to review your spending and start making plans for a financially healthy 2020! Here are a few tips to get you started:

• Start with your goals—Record what you want to achieve. Is it paying off credit card debt? Buying a home? Saving more for retirement or your child’s college fund? To achieve goals, you must first get specific and then plan your attack.
  
  
• Make a budget—Creating a budget allows you to identify where you might be overspending. Take some time to review year-end credit card reports, for example, to help pinpoint spending leaks.
  
  
• Check in on your credit rating—If you’ve ignored your credit score for some time, it’s probably time to check in. Request a free credit report and review it for potential issues. It’s better to find them now and work to correct mistakes before they turn into something big down the road.
  
  
• Identify cut-backs—Don’t go crazy and deprive yourself, which is the fastest way to fall off the wagon. Instead, identify easier, more digestible cut-backs. For example, plan one stay-cation this year where you and your family spend quality time at home. Or, instead of joining an expensive gym, create an exercise plan that you can execute on your own or with friends. You can also cut out small purchases, like that daily latte from an expensive café chain.
  
  
• Cut the cable cord—While this could be listed under “Identify cut-backs,” we thought it deserved a little spotlighting. Cable services can be very expensive. And with all the cost-effective streaming services available today, do you really need it? Consider dumping your cable and replacing it with Netflix, Amazon Prime, Hulu or even a digital antenna.
  
  
• Bulk up your HSA—Adding a little extra to your Health Savings Account is a tax-savvy way to save for future medical expenses. Check with us for current HSA contribution limits.
  
  
• Educate yourself—There are a lot of outstanding finance-based podcasts out there. Do some research to identify a few and then subscribe. Education is the key to smart financial action.

Start 2020 out right and get on track for a financially healthy year. Let us know if we can help you with your planning.

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A healthy twist on holiday dessert favorites

The holidays are all about spreading cheer…not calories and cavities. So, why not try a few dessert recipes that put a healthier spin on some holiday treat favorites. We offer a few tested (and delicious) recipe ideas for you here:

• Sugar cookies—Now, here’s a lead favorite among holiday treats! Who doesn’t love a butter-rich, sugar-topped cookie? If sugar cookies are a traditional holiday treat in your house, try going gluten-free this year by using almond or coconut flour. FitFoodieFinds.com has a great recipe! Try it; you just might like it.
  
  
• Gingerbread cookies—You can’t get more classic than your friendly faced gingerbread cookie. If you’re a gingerbread junkie, try the Ultimate Healthy Gingerbread Cookie recipe at AmysHealthyBaking.com. This guilt-free recipe eliminates butter and refined flour and sugar…and comes in at just 52 calories per cookie!
  
  
• Shortbread cookies—The dense, buttery deliciousness of shortbread is often a fan favorite around the holidays. CookingLight.com offers a healthier whole-wheat version that doesn’t skimp on the beloved buttery flavor. Give this Salted Chocolate-Topped Shortbread recipe a try.
  
  
• No-bake peanut butter cup bars—Peanut butter and chocolate is a classic and delicious combo. This healthy recipe from Detoxinista.com offers a Paleo- and vegan-friendly recipe.
  
  
• Cheesecake—Who doesn’t love cheesecake? It’s dense, decadent and delicious! Offer a lighter version this year by trying Foodnetwork.com’s Chocolate Truffle Cheesecake recipe that replaces most of the cream cheese with cottage cheese.

These are just a few healthy dessert ideas that you can try this holiday season. Visit any of the websites noted above to discover others. Here’s hoping your holidays are happy and healthy!

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Hosting an employee holiday party that is festive, frugal and free of stress

Hosting a holiday party for your staff is one of the best ways to show them you care—while also creating some meaningful, team-driven memories. Follow our tips below for hosting a memorable soiree that doesn’t push your stress or your budget past your limit.

• Make a list—Organization is a natural stress deterrent, so live by a list this holiday party season. Keeping a list will help you plan, stay on budget and identify where you can delegate work.
  
  
• Include your staff—Simply ask employees if they would like to be part of the planning process. This can promote a stronger feeling of being part of the team…while also providing some stress-reducing support. Those who love to plan parties will likely step forward.
  
  
• Stock up ahead of time—Start stocking up on needed items months ahead of time to take advantage of sales. Also consider purchasing several staple items in bulk, like plates, napkins, cups, nuts, chips and other non-perishables. By the time the party rolls around, you’ll be surprised at how many things you can have checked off your list and how much you’ve saved by not waiting until the last minute.
  
  
• Deck the halls—Don’t forget the festive part of throwing a holiday party. Decorations and music are key. Stocking up on decorations ahead of time can save you money. You can also use items you have at home. Consider simple but elegant table center pieces made from colorful ornaments stacked in a glass bowl. It’s also likely that you have a few crafty and creative employees who can help with innovative (and budget-friendly) decorations.
  
  And don’t forget the music! Simply pipe in a holiday station over a free service like Spotify or Pandora. If someone has an ad-free music subscription, ask them if they would be willing to log in and play music from their account. Selecting instrumental holiday playlists will add to the festive feeling without distracting lyrics that can detract from conversations.
  
• Create a feeling of comfort—If a formally catered meal is not in your budget, opt for a more casual buffet stocked with holiday comfort foods. Purchasing food for a buffet is often cheaper than catering a formal meal. You can also float out the idea of a potluck, so everyone can contribute and show off their favorite dishes.

The holidays should be fun and relaxing. Follow our tips to host a memorable holiday party for your staff, while staying on budget and keeping it fun and festive.

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Thinking about retiring? Here’s an easy 5-step calculation to see where you stand.

If you have retirement on your mind, the big question is this: Are you in a financial position to do so? While nothing replaces the advice of a seasoned advisor, you can take your first step to answering this question by applying a simple 5-step calculation.

In just five minutes, you can get to a simple Yes or No on whether you will have enough income and savings to cover your retirement expenses. Answer each question below in sequence:

1. What are your total annual contributions to retirement savings?
   
   
2. Multiply that number by the number of years left until retirement (the "when you want to retire" part).
   
   
3. Add your current retirement savings to that number.
   
   
4. Divide by the number of years you expect to live in retirement.
   
   
5. Add that to other guaranteed sources of income.

When you’ve completed your calculation, compare the answer to your current annual expenses to see if the amount you projected is enough to cover your normal living expenses.

While offering a highly simplified model, this exercise will get you thinking about what you need to do in order to retire.

Be aware that this model does not take into account such things as growth rate of investments or inflation. So, if you have questions about retirement, please feel free to reach out to our firm for guidance.

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Enjoy the deals without the Black Friday rush this year

If you’re not a fan of Black Friday chaos—you know…the crowds, the rush, the relentless search for a parking space—then ditch the onsite shopping this year while still enjoying the sweet deals.

Here are a few ideas to get in on the savings…without stepping foot in the mall:

Take advantage of Cyber Monday
Why even get in the car when you can find just about anything online? Cyber Monday is a great way to get in on some excellent online deals. Once the ads start rolling out, cross-reference your gift list with Cyber Monday advertisements. Make note of what company is offering the best deals on the gifts you need to purchase. Then, on Cyber Monday, be one of the first to visit vendor websites and purchase items at a discount.   
Beware of over-browsing, however. Don’t fall into the trap of buying items that are not on your gift list…just because there’s a good deal.

Shop local and negotiate
If you don’t want to do all your shopping online, shop local! Search out unique boutiques and consignment stores to find custom gifts at Black Friday prices. Sometimes, you can negotiate prices for even more savings.

Remember, gift giving should be fun. Use these tips to avoid the stress of Black Friday shopping if it’s just not your cup of tea.

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What you need to know about the new overtime rule

The Department of Labor (DOL) announced a final rule that allows a much larger pool of employees to earn overtime if they work more than 40 hours per week. Specifically, the DOL raised the salary level for employees who are counted as “exempt” (or unable to earn overtime pay).

According to the DOL (dol.gov) the final rule:

• Increases the minimum salary requirement from $455 to $684 per week ($35,568 per year) for the administrative, professional (including the salaried computer professional) and executive exemptions.
  
  
• Permits employers to use nondiscretionary bonuses, incentive payments and commissions (that are paid at least annually) to satisfy up to 10 percent of the minimum salary requirement for administrative, professional and executive exemptions.
  
  
• Increases the total annual compensation requirement for the “highly compensated employee” exemption from $100,000 to $107,432 per year (at least $684 must be paid on a weekly salary basis).

The new overtime rule is effective January 1, 2020. Please contact our firm if you have any questions. We are here to help!

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Launching another business? Be sure to cover a few business basics…

If you’re starting a second business, then you know everything that’s involved with a business launch. However, there are a few business basics that every entrepreneur should revisit before diving into another enterprise. Consider these business basics and then put them into a well-thought-out business plan:

• Determine the proper legal structure—Will you set up an LLC (limited liability corporation) or form a partnership? It’s important to determine the best option for your new venture, especially when it comes to reducing liability and keeping your personal assets protected.
  
  
• Develop a marketing strategy—How will you attract new customers? Who is your audience? What is your messaging? What communication delivery tools will you use to get your message out, and does your plan include social media? Expect to spend significant time figuring out how to market your new product or service, and be sure to work up a budget for your marketing program.
  
  
• Work through the financing—Will you need a business loan? Will you enlist the help of investors? Will you create a crowdfunding campaign? Think through all of your financing options before you move forward with your launch.

There are other aspects of a business plan that should be considered as well, such as your organizational structure, revenue drivers and staffing needs. So, if you have any questions, please reach out to our firm. We are here to advise you.

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3 cybersecurity tips to protect your small business

The 2019 small and midsized business (SMB) Cyberthreat Study from Keeper Security reported that nearly two out of three SMB owners do not feel threatened by or are not concerned about cyber attacks. Yet, in the previous year’s study, two out of three business owners reported falling victim to some level of data breach.

This should give business owners pause. And it is certainly grounds for offering a few sound cybersecurity tips to help keep your business safe from cybercriminals. Apply the following tips in your business to help fortify your defenses against cyber scams:

1. Develop a password policy (and stick to it)—Primarily, this policy will require regularly changing passwords. For those who have been using the same passwords for years, it’s highly likely that those credentials are out on the dark web somewhere…waiting to be purchased. Require all staff (and this includes owners) to change their passwords, for example, every 90 days. This helps prevent hackers from purchasing old login information that can be used to break into your organization’s network. There are password manager solutions out there that automate this task for you.
   
   
2. Implement two-factor authentication—This offers another gatekeeper for keeping your data safe. Two-factor authentication requires an additional form of identity validation beyond a password. This second layer can be a code or PIN number, commonly sent via SMS.
   
   
3. Get serious about education and training—No matter what security measures you implement, human error will always be the weakest link in your organization’s cybersecurity chain. Phishing scams continue to escalate, and it only takes one employee clicking the wrong link to put your entire database in jeopardy. Be sure to implement regular training on safe cyber behavior, including “testing” employees with “fake” emails, and then following up with education when tests are failed.

Hackers know all too well that some SMBs aren’t implementing even basic cybersecurity procedures. The tips in this article will help protect your business from falling victim to rising scams. Stay safe out there!

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De-stress your workday!

We can all get caught up in the day…meetings, calls, texts, emails and the myriad of other workday demands that pile up quickly and can create unwanted stress.

Take the time to review our tips for de-stressing your day. Here’s to making a happier you!

• Get a head start—Leave home at least 30 minutes earlier than normal. Studies show that the less rushed you feel in the morning, the less stressed you’ll be for the rest of the day.
  
  
• Eat—Fueling your brain with nutritious foods is a good way to reduce hunger and ward of the “hangries!” Healthy nonperishable snacks are always a good bet for satisfying late-afternoon hunger pangs without making you feel too full. Keep protein bars, dried fruit, and nuts or pretzels in your desk for those times you just need to quell the crave.
  
  
• Give yourself props—Take the time to give yourself proper praise now and again. For those times when you complete a big goal or pass a milestone, give a quick cheer for YOU.
  
  
• Take 10—Taking just 10 minutes during your busy workday to close your door and enjoy the silence can make all the difference in your mood. Also consider 10 minutes of meditation (there are lots of meditation apps available) or a walk outside in the sun (hello, vitamin D!).
  
  
• Manage communications—Incoming communications can be overwhelming on their own—considering all the emails, texts, IMs and meeting requests a person gets in a day. Cut back time spent responding to digital messages. For example, don’t waste a message simply acknowledging receipt of an email or pick up the phone if confusing topics can be handled swiftly with a quick chat.
  
  
• Enjoy your own personal 7th-inning stretch—This is especially important if you have a sedentary job. Get up and walk around your office or take a few minutes to lift your legs up and stretch them for 30 seconds at a time. Stretch your arms while you are at it by extending them above your head and pulling each wrist to its opposite side. Stretch for as long as it takes to reset your body and your brain.
  
  
• Socialize—That’s right…take time to be social! All work and no play makes anyone a dull (and stressful) individual. Just take a few minutes to socialize and talk about anything but work—such as upcoming vacations, kids’ events or outside adventures.

Just a few minutes a day can help you de-stress and enjoy life before, during and after work!

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About to get grillin' for Labor Day? Mind a few of our safety tips first.

Labor Day is upon us—a popular holiday that is dedicated to the millions of women and men who keep this country going strong. For many, it also means that it’s time to break out the grill for that big end-of-summer celebration. And because most of us aren’t Grill Masters, this is a good time for a refresh on some basic grilling safety tips to keep everyone safe and the party going.

Inspect wire brushes—Wire grill brushes need to be checked regularly for loose wires and cleanliness. Many hospital visits have been due to individual wires breaking off and being embedded in food, which can cause serious injury to the digestive system. Also, be sure to clean brushes regularly to kill bacteria.

Tend to the grill at all times—Never leave a hot grill unattended. This increases the risk of a fire—if stray embers escape, it could ignite nearby materials. Also consider that children can be seriously injured if they touch or overturn an unattended grill.

Mind the 10-ft rule—Whether you use a gas or charcoal grill, allow for a minimum of 10 feet clearance from your home or any other structure. It’s also smart to remove any overhanging branches or debris that could ignite from a stray ember.

Check meat temperatures—Always check the temperature of your grilled meat to ensure it's fully cooked. Consuming undercooked meat is a serious hazard that places everyone at risk for a food-borne illness like Salmonella.

Keep a fire extinguisher nearby—If a fire breaks out, you should have a fire extinguisher readily accessible. Don't assume that water alone is enough to put out a blaze.

Here’s to a festive and safe Labor Day for all! Now, go get your grillin’ on.

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Back to school on a budget: 4 solid tips to save you money

Let’s face it. Kids aren’t cheap, so you have to save money where you can. Back-to-school shopping is a good place to start because costs can add up quickly—especially if you have more than one child. Consider these tips for sending your kids back to school without breaking the bank.

1. Plan before you shop—Be prepared before you hit the stores. There’s nothing more dangerous than shopping without a structured list, because it often leads to impulse buys. Ask your child’s school or teacher for a shopping list of required items. This will take the guess work out of shopping and keep you to a defined list.
   
   
2. Stock up early—Take advantage of back-to-school sales. Instead of stocking up for only a few months, try to buy items for the entire school year. Plan for the long-term to make the most of early deals.
   
   
3. Buy used when you can—Kids might like new shiny things, but it makes sense to buy used for certain items. For example, items that your child may only need for the current school year—like an expensive calculator for calculus class. Instead of buying new, look for a cheaper, gently used option online. This is also a great tip for college-bound students—buy used text books!
   
   
4. Shop in your own home first—Remember to search your home first before you spend money on new items. Many supplies, like notebooks and pens, will often be sitting, forgotten and unused, in closets and desk drawers. Make use of what you already have. You can also reuse and repurpose items from the previous school year, like backpacks and binders.

Back-to-school time can be both frantic and expensive. Planning ahead will help you save more and stress less!

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$700 million is what Equifax will pay out as a result of its data breach. Make sure you get your share.

The 2017 Equifax data breach was the largest in history…with 147 million Americans affected. If you were one of them, you may be entitled to compensation.

The Federal Trade Commission ruled Monday, July 29, that Equifax will have to pay up to $700 million in individual compensation and civil penalties because of the hack.

According to the commission's online claims process, those whose personal information was exposed can opt for 10 years of free credit monitoring, which breaks down as follows: Four years via the three major credit bureaus (Equifax, Experian and TransUnion) and six years specifically through Equifax.

However, if you already have credit monitoring, you can choose to receive $125. For those who had to spend time and money as a result of the breach, Equifax can provide larger sums—up to $20,000. Losses can include unauthorized charges on your accounts, attorney or accountant fees, the cost of freezing or unfreezing your credit report, or the cost of credit monitoring.

You can file a claim through Equifax's data breach settlement page. Equifax has a website where you can quickly check if your personal information was exposed.

The deadline to file a claim is January 22, 2020 (this is the last day to file online and the postmark deadline for mailed claims).

Source: CNN.com

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Deducting kid’s summer camp and daycare costs under the Child and Dependent Care Credit

With all the tax law changes this year, be sure that you are getting your just deductions in the coming tax season. That is, qualifying deductions that fall under the Child and Dependent Care Credit. According to tax giant and trusted resource Intuit, here’s the skinny…

If you paid a daycare center, babysitter, summer camp or other provider to care for a qualifying child under age 13 or a disabled dependent of any age, you may qualify for a tax credit of up to 35 percent of qualifying expenses—up to $3,000 for one child or dependent or up to $6,000 for two or more children or dependents.

Qualifying criteria…

The Child and Dependent Care Credit is designed to assist working parents and guardians with some of the expenses involved in raising a child or caring for a disabled dependent. To qualify, you must meet several criteria, including the following:

• You (and your spouse, if you are married filing jointly) must have earned income for the tax year.
  
  
• You must be the custodial parent or main caretaker of the child or dependent.
  
  
• The child or dependent care service must have been used so that you could work or look for employment.
  
  
• Your filing status must be single, head of household, qualifying widow or widower with a qualifying child, or married filing jointly.
  
  
• Your child or dependent must be under the age of 13 or must be disabled and physically or mentally incapable of caring for themselves.
  
  
• The childcare provider cannot be your spouse or dependent or the child's parent.

Qualifying expenses for the Child and Dependent Care Credit

Most know that daycare fees qualify for the Child and Dependent Care Credit. However, qualifying expenses often overlooked include childcare provided by a babysitter or licensed dependent care center…as well as the cost of a cook, housekeeper, maid or cleaning person who provides care for the child or dependent.

Other qualifying expenses include day camp or summer camp fees. Even camps centered around a sport or activity qualify if the camp was selected to provide care while the parent or parents were at work. Please note that overnight camps do NOT qualify.

Additional qualifying expenses include costs related to before- and after-school care for children under the age of 13 and expenses related to a nurse, home care provider or other care provider for a disabled dependent. Keep in mind that expenses related to schooling or tutoring are not qualifying expenses.

Because every family is different, be sure to check with your advisor on IRS exceptions. Here’s hoping your summer is fun and festive so far!

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Traveling safe: Tips to keep you secure while on the road

These days, we seem to have endless articles on IT security while traveling, but far fewer on physical safety. Because summer can be big travel months for many businesses, we put together the following list of tips to help keep you safe while away from home.

• Prepare before leaving home—Leave expensive jewelry and accessories at home. Instead, replace these items with professional-looking substitutes that won’t draw unwanted attention.
  
  
• Share your itinerary with friends and family—This ensures others have a general idea of where you’ll be, as well as your arrival and departure times.
  
  
• Update your phone with your In Case of Emergency (ICE) contact—Identify one or more people to be your ICE contact and then update these contacts with “ICE” after their names in your phone.
  
  
• Take photos of your travel documents—Store backup photos on your cloud drive just in case you lose your documents and your phone while traveling. You can also send copies to a friend or a family member for safekeeping.
  
  
• Familiarize yourself with your rental car—Know how to use the lights, wipers, locks and alarm system before taking off.
  
  
• Bring a portable door lock—This offers added safety at a hotel. Even if you feel safe without this added security, always use the deadbolt and bar lock.
  
  
• Explore your host city during the day—Don’t wait until nightfall to check out local sites. Also, stick to well-populated areas and carry valuables close to your body. If going out after dark, go with a group.

These are just a few tips to help keep you safe and secure while traveling this summer. We hope you found them helpful. Safe travels to everyone!

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Get up, get out and have some cost-effective fun this summer!

As your trusted advisor, we are always looking for ways to improve your financial health—and that doesn’t stop at business activity. We also want to support you with tips to help you save money in your personal life as well.

Summer is here! And with it comes vacations, outings, and lots of other activities with family and friends—activities that can be costly and add up quickly. To help you save some money this summer, we put together a list of cost-effective summer fun ideas. Read on…and enjoy the season!

• Head to the library—Before you roll past this suggestion, keep an open mind. A lot of libraries offer summer programs and activities you can enjoy with kids. Many libraries host activities that include outdoor fun with music, arts and crafts and ice cream socials, as well as indoor fun that can include author readings, magic shows and book clubs.
  
  
• Visit playgrounds—It’s hard to find a child that says they hate the playground. Going to a local park gets the family outside to run, climb and enjoy picnic-style treats. Take some time to research other playgrounds in your area that you’ve never visited. You might be surprised at how much fun you can have.
  
  
• Host a sleepover—For parents looking for ways to entertain youngsters, a sleepover is an easy and cost-effective option. Short of supplying snacks and drinks, this is a fairly cheap activity. But why should kids have all the fun? Host an adult sleepover for friends and family, complete with games, a viewing of fun family movies, a bonfire (with s’mores) and good conversation.
  
  
• Research nature parks—Parks and greenbelts are great options for exploring…and usually for free. You can take the family or a pack of friends and hike all day. Some parks also offer low-cost tours where a guide will educate you on geological history and local flora and fauna. Who says you can’t have fun and learn, too?!
  
  
• Start a neighborhood wine and dessert crawl—This can be as easy as sending out a text to your favorite neighbors and asking if they want to participate in a fun house-to-house wine- and dessert-tasting activity. The rules are easy. The crawl starts at your house with your selected wine and dessert, and one-by-one you walk to each home on the crawl to sample a selection of wines and tasty delights.

Have fun this summer…without breaking the bank!

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June is National Safety Month! Tips for augmenting your marketing efforts.

June is national safety month, and it never hurts to remind your clients and community that safety always comes first. Our goal with this blog is to help you augment your marketing initiatives with a few ideas around safety. While we can’t cover every industry in a single post, we hope that you find the tips below useful and that they spark some innovative new marketing ideas!

“Safety first!” is the mantra of the month. So, run with it as you brainstorm for new summer marketing ideas. Encourage people to stay safe in general and also address industry-specific situations where applicable. Here are a few ideas to chew on:

General safety—Promote common safety information to your clientele by providing a list of top 5 summer safety tips. Consider a few common summer safety topics such as: keeping kids safe around water, prevention of heat stroke, safety around graduation celebrations, the importance of staying hydrated and more.

Industry-specific safety—Here are few examples:

• Bike manufacturers and shop owners, promote helmet safety by offering articles on such topics as helmet buying tips for kids or top 10 things to watch out for when biking on the open road.
• Healthcare professionals, promote skin cancer prevention by offering free sunscreen samples in your office or encouraging preventative exams.
• Dental professionals, promote healthy oral care by advocating for more water this summer and less soda. You can tie in the theme of staying hydrated during hot summer months as well.
• Travel industry experts, promote top safety tips when traveling this summer. This topic can also serve as a general safety campaign.

These are just a few marketing ideas to use during National Safety Month. We hope they get your creative juices flowing!

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Tapping into a 529 plan for the first time? Tips for parents of college-bound grads…

It’s graduation season, and for many parents that means it’s almost time to start shelling out for college tuition. For those well-prepared parents with established 529 plans in place, the time has come to tap into that money pool. Of course, when it comes to tax-advantaged savings, trust that the IRS is keeping close watch, so it’s important to avoid making any rookie mistakes. It’s also important to keep saving as you move forward.

Consider the following tips:

• Withdraw only for qualified education expenses—Be very careful that you only make withdrawals for eligible expenses, including tuition, books and supplies, certain room and board expenses, and special equipment required by the school (e.g., an easel for an art student). When in doubt, err on the side of caution and check current 529 guidelines on the IRS website.
  
  
• Have your college student collect receipts and billing statements. Saving all source documents now may save you a few headaches later. All relevant documentation offers proof that 529 funds were used for qualified expenses. As the owner of the 529, you are responsible for any tax reporting, so you’ll need all supporting paperwork.
  
  
• Continue to make contributions and monitor investments. Just because you begin withdrawing from a 529 college savings plan, it doesn't mean you should stop contributing. It also doesn’t mean you should stop monitoring your investment allocations. It’s likely that now that your child is older, investments have become more conservative—but if not, you may want to review and make changes as needed.

If you are a first-time 529’er, these tips should help you avoid potential costly mistakes. Please reach out to our firm if you have any questions. Here’s to a fantastic graduation season!

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Tips for building a company culture that supports remote workers

Having a remote workforce can be challenging, especially if you are trying to build a positive, collaborative work environment. So, how do you create a sense of comradery when you have staff in remote locations? These tips can help:

• Design your culture to support remote workers. When you commit to having remote staff, you need to also commit to designing a culture that supports their success. Design employee experiences with remote workers as a priority, not as an afterthought.
  
  
• Include remote workers in company-wide events. If you have award presentations, quarterly all-staff meetings or issue weekly updates, for example, make sure you stream events so remote employees can watch or view on demand. If you host onsite employee events, such as a Friday Happy Hour or Bring Your Pet to Work Day, be sure to post photos on social media or within your internal staff communication solution. 
  
  
• Communicate important information in writing. It is easy to take for granted all of the communication that takes place verbally within a centralized office. Be cognizant of this and make sure that key information is shared with off-site team members.
  
  
• Talk face-to-face whenever possible. Face-to-face time is critical for building teams.  Use one of the many video chat technologies to meet face-to-face with everyone on your staff. In addition, make a point of seeing people in person when you can by scheduling regular visits and company gatherings.
  
  
• Mentor and coach remote employees with intention. Consider assigning your leaders to mentor specific remote employees, empowering them to discuss their career path and how it relates to overall company goals.
  
  
• Reiterate your shared vision and goals often. Communicating a shared vision to all staff is key when you are all working in different locations. Your progress should be tracked and discussed at all-employee meetings and in written company updates.

These are just a few ideas to help you keep your remote employees in the loop and feeling like they are part of your team. Fostering a strong, positive culture is key in any business, so make sure your remote workforce is part of that equation.

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Tax refund on the way? Use it to fortify your financial future.

If you are expecting a refund this year, you may be tempted to splurge on something not-so-practical. Before you do, take some time to think about ways to use your refund to bolster your financial health. We’ve put together a few ideas for you to consider:

• Start or increase your emergency fund: If you don’t already have at least six months of savings stashed away in case of an unforeseen financial emergency, use your tax refund to help build up your savings account.
  
• Eliminate or pay down high-interest debt: Paying off high-interest debt such as credit card balances, payday loans and debt consolidation loans with your refund is a smart move.
  
  
• Contribute to tax-sheltered accounts: Use your tax refund to top-up (or start) a Roth IRA or 529 college savings plan. You’ll compound dollars and interest for your future retirement or college tuition needs while scoring a tax deduction as well.
  
  
• Create a legacy: If you have always wanted to create your own foundation for giving back, use your tax deduction to get it started. You may even be able to use your new non-profit status to mitigate your tax bill for next year while doing good for others.
  
  
• Invest in yourself or your business: If you’ve taken care of savings and debts, consider enriching yourself by taking a class or purchasing a needed piece of equipment for your business.

These are just a few ways that you can fortify your financial future with your tax refund. Make a plan for using your money wisely this year.

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Take advantage of these Tax Day deals

Once your taxes have been filed, first, take a moment to breathe a big sigh of relief…and then enjoy some Tax Day (April 15, 2019) discounts. There’s nothing like a good deal to take the sting out of tax obligations. Below, we’ve compiled a short list of best food and drink deals, taken from offer.com.

• Applebee’s: Enjoy a Strawberry Dollarita for $1.
  
  
• Bruegger’s Bagels: April 10 to 15 get the Big Bagel Bundle (13 New York-style bagels with two tubs of cream cheese) for only $10.40.
  
  
• Firehouse Subs: Purchase a full-price medium or large sub, chips and a drink and get a free medium sub.
  
  
• Great American Cookies: Receive a free Original Chocolate Chip Cookie.
  
  
• Kona Ice: Spot a Kona truck and score free shaved ice on April 15.
  
  
• Menchie’s: Download their app by April 15 to get a free $5 frozen yogurt.
  
  
• Schlotzky’s Deli: Get a free small Original sandwich with the purchase of a medium drink and chips on April 15.

If you are looking to score some non-edible deals, Kohls, Macy’s, Holiday Inn Express and other companies are also offering discounts for taxpayers. Be sure to check out the Offer.com site and your local retailers to make sure you don’t miss anything.

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It’s spring! Reboot your enthusiasm with these tips…

The long stretch from the end of the winter holiday season until the next break in your routine can feel like eternity. If you feel the need to reboot your enthusiasm as the spring season arrives, try these tips:

Change your diet. Making just one step toward eating better can reboot your whole mindset toward how you feed your body. Consider adding one fruit or vegetable to each meal in place of one dessert or snack item. You’ll feel more energetic in just a few days.

Refresh your look. If you have been sticking to wintry colors, now is the time to break out some lighter hued clothing. Digging far back in your closet to find something brighter? You might want to tackle a closet clean out while you are at it.

Declutter. If you do tackle a closet clean out, why not another room? There’s nothing like a good room declutter to make you feel lighter and more in control. An obvious place to start is your office. Once you clean things out there, you’ll likely be more productive.

Indulge in a retreat. Taking even just a few days off can help you regain your perspective and feel more energetic. You don’t have to go far, either. Staying at home and having some “me” time can be just as productive as going on an exotic retreat.

Reboot your sleep routine. If you are consistently exhausted, consider establishing a regular sleep routine. Go to bed at the same time and get up at the same time during every 24-hour cycle. Stop eating 12 hours before you want to wake up, and avoid screen time starting a few hours before bedtime.

Cutback your calendar. Having too many commitments leads to stress and feeling overwhelmed. Make a plan to scratch anything from your schedule that doesn’t energize you, and then add things that are important to you so they don’t get pushed to the back burner.

Freshen up your finances. If your finances are stressing you out, consider talking to a professional who can help you get back in control of your money. Also, identify small changes you can make to slash expenses. From eating out less to nixing digital subscriptions, you’ll be amazed how much you can save.

Spring is just around the corner—the perfect time to apply a few of these tips to recapture your enthusiasm and fuel your energy!

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5 tips to dial down distractions

Our most precious commodity is time—and our attention is a close second. That’s why everyone can use some help on how to tune out daily distractions. We compiled the following helpful tips from copyblogger.com to get you started on dialing down distractions:

1. Go grayscale on your phone. Bright colors and fun graphics are the eye-candy that web and app developers use to keep us addicted to—and distracted by—our smartphones. Changing the visual display setting on your device to grayscale (at least on days where your time and attention are needed elsewhere) eliminates these visual rewards and reduces the distraction caused by your phone.
   
   
2. Keep your content clean. Be intentional about what you read online, selecting only content that adds value. In addition to being choosy about content worthy of your attention, you should also take steps to remove distractions during your reading time by using an ad blocker.
   
   
3. Have an unplugged place to explore and record your ideas. Stay focused by allotting some quality quiet time to brainstorm and write down your ideas. Consider carving out 15 minutes a week to close your office door and write down your goals, priorities and wishes.
   
   
4. Streamline your physical environment to reduce mental clutter. Quiet, organized spaces are great for detail-oriented thinking, while ambient noise-rich venues like coffee shops tend to be better for big-picture thinking. Consider these facts the next time you are struggling to stay focused. A quick switch of locations or spending 10 minutes to declutter your office may be highly beneficial in dialing back distractions.
   
   
5. Stay fresh with adequate sleep. It’s difficult if not impossible to stay focused for very long if you are exhausted. Experts agree that sleep deprivation (even at a moderate level) will adversely affect cognitive performance by impairing attention, decision-making, working memory and long-term memory. So, aim for at least seven to nine hours of sleep a night. If you must, you can get by on six hours—but not less!

Try implementing any or all of these tips to help preserve your time, attention and focus. When you do, you can reap the rewards of dialing down distractions on a daily basis.

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4 reasons to file your return early

The April 15 filing deadline is rapidly approaching, so we encourage you to send us your tax documentation as soon as possible to expedite the filing process. Here are four important reasons why you should file your return sooner rather than later:

1. Identity theft prevention. Once your return is filed with the IRS, personal information (such as your Social Security Number) is locked and cannot be used again by anyone else. So, filing your taxes early does help protect you against identity theft.
   
   
2. Faster returns. If you believe you are due a tax refund this year, the sooner you file the sooner you’ll receive your refund. Despite the recent government shutdown, the IRS is reviewing tax returns on a regular schedule.
   
   
3. More time to review for potential tax savings. Filing early provides our team with added time to prepare your return and ensure that all possible deductions are identified. Filing earlier also affords you more time to gather your paperwork and search for any additional documentation needed.
   
   
4. Additional time to save for a tax bill. If you owe the IRS money, filing early gives you more time to save in order to pay your tax bill by April 15.

If you have any questions, please contact us as soon as possible. We look forward to supporting you this tax season!

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A few key tax reform provisions every business owner should know about

This tax season is an important one for many business owners because it’s the first that will be impacted by the Tax Cuts and Jobs Act (TCJA). How big of an impact is dependent on your unique situation. We’ve compiled this short list of provisions that may affect the business community:

• New deduction for qualified business income of pass-through entities. This new provision, also known as Section 199A, allows a deduction of up to 20% of qualified business income for owners of some businesses. Limits apply based on income and type of business.
  
  
• Limits on deduction for meals and entertainment expenses. The TCJA generally eliminated the deduction for any expenses related to activities considered entertainment, amusement or recreation. However, under the new law, taxpayers can continue to deduct 50% of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant.
  
  Meals may be provided to a current or potential business customer, client, consultant or similar business contact. If provided during or at an entertainment activity, the food and beverages must be purchased separately from the entertainment. Or, the cost of the food or beverages must be stated separately from the cost of the entertainment on one or more bills, invoices or receipts. Notice 2018-76 provides additional information on these changes.
  
  
• New limits on deduction for business interest expenses. The change limits deductions for business interest incurred by certain businesses. Generally, for businesses with 25 million or more in average annual gross receipts, business interest expense is limited to business interest income plus 30% of the business’s adjusted taxable income and floor-plan financing interest. There are some exceptions to the limit, and some businesses can elect out of this limit. Disallowed interest above the limit may be carried forward indefinitely with special rules for partnerships.

Of course, there are many other provisions to be aware of. And given the magnitude of some changes under the TCJA, you may want to contact our firm for further guidance.

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Ways to skinny down Super Bowl Sunday

According to Forbes.com, Super Bowl viewers traditionally load up on millions of pounds of less-than-healthy foods during the big game—including ribs, pulled pork, tortilla chips, nuts, popcorn and bacon—all washed down with beer (the Super Bowl beverage of choice). If you are trying to stick to your New Year’s resolution to eat better, consider a few healthy substitutes for the traditional Super Bowl eats:

• Serve fresh over fried. Substitute deep-fried for a tray of fresh vegetables. Then be creative with a few tasty lower-calorie dips. Part of maintaining a healthy diet is making smart trade-offs.
  
  
• Customize your chip pick. Cut the fat by buying baked tortilla chips. If you are feeling extra creative, you can also make your own sweet potato fries or beet chips—both delicious alternatives!
  
  
• Trade ribs for skinless chicken wings and drumsticks. Everyone loves ribs, but if you want something healthier, baking skinless poultry on the bone is a good alternative. Baste with some barbeque sauce for a delicious treat.
  
  
• Sneak fat-free into your bean dip. Simply use fat-free black beans in your bean dip instead of traditional refried beans. You likely won’t be able to tell the difference.
  
  
• Be picky with pizza. There’s no rule that says you have to order greasy, meat-laden pizza. If your household is jonesing for pizza, order at least one pie with less cheese and more veggies—and keep the crust thin.
  
  
• Sub in soda for alcohol. Having one or two beers won’t derail your diet. However, if you tend to over imbibe, sticking to club soda, diet soda or just plain water will save you calories and leave you feeling better the next day.

The average football fan can easily consume 5,000-plus calories on Super Bowl Sunday. And with all that couch sitting, it’s likely that not many of those calories will be burned off. Consider incorporating some healthier snack choices and start a new Super Bowl tradition that celebrates the flavor of lighter fare with the excitement of the big game.

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On your mark, get set…GO prepare for tax season

The combination of running a business and your life and preparing for tax time can drive some people into a slight panic. But no need to get stressed if you are prepared. Now is the time to start organizing all documents required to file your tax return.

Also, consider going completely digital this year. Start by scanning in your paper receipts and other source documents and organizing them within a dedicated online folder. When the time comes, all you’ll need to do is upload your digital documents for our team.

The checklist below will help you start to compile the basics:

• Copy of last year's return (for first-year clients; include spouse’s return if applicable)
  
  
• Paperwork for dependents, including SSNs and DOBs
  
  
• All proof of income, including W-2s and 1099s
  
  
• List of deductions

Feel free to contact us with questions. We are here to help make tax season as stress-free as possible for you!

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5 tips to mitigate paying taxes on Social Security benefits

Like the old paraphrased saying goes: In this world, two things are certain—death and taxes. The recent federal tax overhaul changed a lot of rules, so it’s as important as ever to understand your tax obligations, including those on Social Security benefits.

According to the Social Security Administration, some will be obligated to pay federal income taxes on Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return).

No one can avoid the long arm of the tax man altogether, but there are ways to reduce your income and lower (or even avoid paying) taxes on your Social Security benefits. Consider the following tips:

1. Consider withdrawing money from a Roth account:
   If you need additional cash during the year, consider withdrawing it from your Roth IRA or Roth 401(k), Taxes are not due on Roth distributions and will not impact your adjusted gross income. Be aware of the minimum required distribution (RMD), however. Taxes are not due on Roth distributions as long as you have contribution basis. 
   
   
2. Distribute your RMD to charity: Giving money to charity is a great way to help make the world a better place. While doing good for others, you can also lower the odds that your Social Security benefit will be taxed. You can transfer up to 100k per year to qualified charities.
   
   
3. Reevaluate working a part-time job: Money earned working a part-time job pushes you a little closer to owing taxes on Social Security benefits. If your part-time wages make little difference in your quality of life and/or you don’t like the work, consider ditching the part-time gig.
   
   
4. Reconsider municipal bonds: People are often attracted to municipal bonds as a way to lower their tax bill because they are not subject to federal and state income taxes. However, municipal bond income is included in the formula that determines whether or not you will pay taxes on your Social Security benefits.
   
   
5. Delay benefit collection: Delaying benefits until full retirement age (or beyond) is the best way to avoid paying taxes on Social Security benefits, at least for a while. Waiting to file for benefits also means a bigger check each month once you finally do start collecting.

Of course, be sure to consult with our firm if you have questions and to ensure the best tax strategy. Here’s to a happy and financially healthy New Year!

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7 Updates for Real Estate Investors and Rental Properties

The Tax Cuts and Jobs Act has made various changes for real estate investors and rental properties. If you fall into this category, some of the changes are in your favor, some are unfavorable, and one of them creates a problem for companies planning on making renovations.

Here are seven of the changes you should know about as related to your rental properties and real estate investments:

1. A 20 percent pass-through deduction.

Prior to the new tax law, income owned by your partnership or S-Corp was passed through to you and taxed at your personal income tax level. Under the TCJA, and notwithstanding certain exceptions, you may be able deduct 20 percent of your “pass-through income” if your real estate is owned by you individually, as a partnership, or as an S-corp. (The default treatment of an LLC with more than one owner is a partnership, and would therefore be qualified.)

We wrote about the pass-through deduction in an earlier email, which is available on our blog. You can read the full blog here. In summary, the 20 percent deduction is limited if the taxpayer’s taxable income before the deduction is greater than $315,000 (married) or $157,500 (all others). For taxpayers whose income falls above these thresholds, the 20 percent deduction is limited to the greater of:

• 50 percent of W-2 wages paid by the entity, or
• The sum of 25 percent of W-2 wages, plus 2.5 percent of the original cost of any depreciable property.

That said, the deduction comes with a giant caveat: rental income does not qualify for the exemption unless it is: 1) rental property that fits the definition of “trade or business”; or 2) property that is rented to a related trade or business under common control.

How can you tell whether your rental property is a “trade or business”? The IRS ruled this:

“The issue of whether the rental of property is a trade or business of a taxpayer is ultimately one of fact in which the scope of a taxpayer’s activities, either personally or through agents, in connection with the property, are so extensive as to rise to the stature of a trade or business.”

(If you are a partner in a partnership, the issue of “trade or business” is determined at the partnership level. In other words, if the partnership “rise[s] to the stature of a trade or business,” then your income from the partnership qualifies for the deduction, regardless of your personal level of involvement.)

Now let us consider the second part of the exception: Rental income from property that is rented to a related trade or business under common control (the self-rental rule) does qualify for the deduction. What does this mean? If you own a company and own a separate entity that owns the real estate leased to your company, your property falls under the “self-rental rule,” and it would therefore qualify for the deduction.

(As an aside, the pass-through deduction has different rules for service businesses. Because this writing is directed to real estate investors, we are omitting this discussion. You can find more information about this deduction as it applies to service businesses here.)


2. Three changes in depreciation law.

• Generally, depreciation recovery periods remain the same: Residential real property depreciation recovery periods are set at 27.5 years and non-residential real property recovery periods are set at 39 years. (However, the Tax Cuts and Jobs Act altered the depreciation system for those using the Real Estate Interest Exception, as described in #6 of this writing. For those who elect to use the Real Estate Interest Exception, nonresidential depreciable real property and residential depreciable real property are set at 40 years and 30 years, respectively.)

The law was expanded for bonus depreciation to include both new and used personal property, and to increase the maximum depreciation available.

To understand this change, let’s start by taking a look at the old law. With some exceptions, real estate investors were able to deduct 50 percent of the cost of new tangible personal property in the year it was purchased and placed into service. The remaining basis in the asset had to be depreciated over the remaining life.

Under the new law, real estate investors in commercial properties (non-residential) can deduct 100 percent of the cost of both new and used tangible property. This includes furniture, fixtures, appliances, equipment, and various other items with useful lives of less than 20 years, so long as the items are put into service between September 27, 2017 and January 1, 2023.

But Congress erroneously omitted one category of property, which brings us to our second point.

• The new legislation erroneously eliminated the words “any qualified improvement property” from the list of eligible items. This means that building-renovation costs must be depreciated over the course of 39 years.

So what does this look like? The law intended to include interior-renovation costs, meaning that the full $100 of a $100 renovation could be deducted. Instead, Congress excluded this category, leaving it subject to a 39-year depreciation. This means that for every $100 in improvement costs paid, a company can deduct only $2.56 a year over the next 39 years.

Lawmakers have agreed that they made a mistake: They intended to include qualified improvement property in the list of items eligible for 100 percent depreciation. We will keep you posted if the law is changed, but as of now, you will have to either postpone renovations, or risk having less-than-favorable depreciation deductions.

• Finally, if you are unable to use the 100 percent bonus depreciation provision, you might be able to deduct 100 percent of the cost of some new and used depreciable property as an expense pursuant to IRC §179, so long as it was placed in service after December 31 of last year, up to your net income (losses are not allowed under this provision). The Tax Cuts and Jobs Act increased the expensing limitation to $1 million, with a $2.5 million phase-out. Qualifying property includes depreciable tangible personal property to furnish lodging (e.g. refrigerators or appliances in a residential rental property), as well as non-residential real property—such as heating and a/c systems, new roofs, fire protection and security systems—so long as it was placed in service later than the real property was first placed in service.

3. Like kind exchanges no longer apply to personal property but solely to real estate.

Until 2018, and under Section 1031 of the tax code, you could postpone paying taxes on gains of personal property by reinvesting the proceeds in a similar property. For instance, if you sold a zero-basis (fully depreciated) refrigerator for $2,000, you previously could have rolled-over that $2,000 gain, tax-free, into the purchase of a new refrigerator.

Under the new law, however, Section 1031 tax-deferred exchanges are limited solely to real estate. Personal property is disallowed.

This means that any like-kind exchange of real estate, which might otherwise have included small amounts of personal property—like refrigerators, stoves, or movable modular office units—must exclude the cost of personal property.

4. Carried interest is largely untouched, with one exception.

Favored treatment for carried interest is still granted, but to receive favorable long-term capital gains treatment, any gain allocable to the carried interest must be attributed to assets held for more than three years when the underlying partnership property is sold.

What is “carried interest?” Real estate partnerships commonly give managers, general partners, or promoters promotional or partnership interest without having contributed any funds to the partnership. This is called “carried interest.”

If the new three-year holding requisite is not met, long-term capital gains treatment will be denied. Income from a manager’s or partner’s carried interest will be taxed as short-term capital gains.

5. Losses are limited.

Rental properties and other real estate investments often have a first-year loss, so this change is important. We cover two aspects of the new law in this writing.

• First, The Tax Cuts and Jobs Act disallows carrybacks of net operating losses in most circumstances. Under the old law, taxpayers could carryback net operating losses for two years and carryforward for twenty years. Beginning January 1, 2018, carrybacks are no longer allowed (with exceptions for farming losses and casualty and property insurance company losses), carryforwards are allowed indefinitely, and the net-operating loss deduction for the tax year is limited to 80 percent of your taxable income in that year.
  
• Second, for tax years beginning January 1, 2018, a non-corporate taxpayer’s aggregated net business loss will be capped at $250,000 ($500,000 married filing jointly) in the current year. Per the new tax law, excess business losses (those over $250,000 or $500,000, if married filing jointly) must be converted into a net operating loss carried to the following tax year.

Imagine, for instance, that you have a net loss of $400,000 in 2018. The cap on your business loss is $250,000 (assuming single). You have an excess business loss, therefore, of $150,000 ($400,000 minus the $250,000 cap). If you have taxable income of $500,000 from other nonbusiness sources, you will only be allowed to offset your income by the cap—$250,000. The remaining $150,000 loss will be carried over to the next year, 2019, as a net operating loss.

6. The new law places limitations on interest deductions.

That said, this law applies only to businesses with average annual receipts of at least $25 million for the last three years.

For C-corps, partnerships, and sole proprietors who meet this requirement, the Tax Cuts and Jobs Act limits your net interest expense deduction to thirty percent of your adjusted taxable income. From January 1 of this year ending January 1 of 2022, adjustable taxable income is defined as taxable income without regard to interest, taxes, depreciation, and amortization.

This is where the “Real Estate Interest Exception” comes into play. Taxpayers who elect to use the Real Estate Interest Exception for their interest-tax deductions will be limited in their use of the new more favorable depreciation rules described in #2 of this writing. Instead, for those who elect to use the Real Estate Interest Exception, residential real property depreciation recovery periods will be set at 30 years and nonresidential depreciable real property recovery periods will be set at 40 years.

7. Finally, the Tax Cuts and Jobs Act created Opportunity Zones.

In an effort to spur economic development and job creation in distressed communities, the Tax Cuts and Jobs Act created “Opportunity Zones,” which are designated economically-distressed communities whereby new investments could be eligible for preferential tax treatment.

Under the law, investors can defer tax on any prior gains so long as the gain is reinvested in an Opportunity Fund within 180 days. If the taxpayer holds the investment for at least a decade, the taxpayer is eligible for an increase in basis.

California alone currently has approximately 850 Opportunity Zones, making this is a big opportunity for real estate investors. Here is our detailed analysis of Opportunity Zones.

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Opportunity Zones - A Strategy to Consider Before Dec 31, 2019

Here is another opportunity for investors to take advantage of the Tax Cuts and Jobs Act and delay paying some capital gains on their federal taxes.

Under the new law, if you invest previous gains in an Opportunity Zone, you can defer paying capital gains tax, so long as certain conditions are met. If you hold the Opportunity Zone investment for at least a decade, then any gains from this investment will be tax-free.

What Are Opportunity Zones and Opportunity Funds?
Opportunity Zones are low-income communities (per the census tract) nominated by state governors and the U.S. Treasury Department. This designation was created by the Tax Cuts and Jobs Act in an effort to spur economic development and job creation in distressed communities.

California currently has approximately 850 Opportunity Zones.

An Opportunity Fund is a corporation or partnership held as the investment vehicle for receiving the preferential tax benefits. If an investor has triggered a capital gain by selling an asset, such as a stock or real estate, rolling the gain into an Opportunity Fund within 180 days of receiving the gain allows for preferential tax treatment.

Think of it like this: The Opportunity Zone is the geographical location of the investment. The Opportunity Fund is the account used to pay for the investment, which could include business property (such as rental real estate), or stock or partnership interest in a business located within an Opportunity Zone and designated as such.

Preferential Tax Treatment
If you invest unrealized capital gains from your investments into an Opportunity Fund, you can:

1. Defer payment of capital gains tax for the year it was realized until December 31, 2026, at the latest,
2. Reduce your taxable gain by up to 15 percent after seven years; and
3. Pay no tax on gains earned by the Opportunity Fund, so long as it is held for at least ten years.

Under Proposed Treasury Regulations, capital gains recognized by a partnership can be deferred via the Opportunity Zone rules either directly by the partnership or by the individual partners.

Payment of capital gains is determined by the length of time between the investment into the Qualified Opportunity Zone and the sale or exchange of that investment. The longer the investment is held, the less capital gains the taxpayer must pay.

1. A taxpayer will include 100 percent of the deferred capital gains in income on his or her federal taxes when the following conditions apply: If the investment is sold or exchanged less than five years after it was purchased, or if December 31, 2026 occurs less than five years after the investment was purchased.
2. A taxpayer will include 90 percent of the deferred capital gains in income on his or her federal taxes when the following conditions apply: If the investment is sold or exchanged between five and seven years of its purchase, or if December 31, 2026 occurs between five and seven years of the investment’s purchase.
3. A taxpayer will include 85 percent of the deferred capital gains in income on his or her federal taxes when the following conditions apply: If the investment is sold or exchanged, or if December 31, 2026 occurs, seven years after the investment is purchased.

Regardless of which of these conditions is met, the basis of the investment is stepped up to match the amount included. If the investment is held for at least a decade, the basis becomes equal to fair market value, and the investment does not recognize gain or loss on sale or exchange.

With this in mind, it might make sense for investors to roll capital gains into Opportunity Funds before December 31, 2019 so that they can be held for at least seven years, thereby allowing the taxpayer to include only 85 percent of the gains in his or her income. (Likewise, the basis in the investment would equal 85 percent of the deferred gain included in income on federal taxes.) A taxpayer can further take advantage of this new tax law by keeping the investment in the Opportunity Fund for the remainder of the ten-year period, thereby avoiding any gain for further appreciation of the investment.

Qualified Opportunity Fund
Note: Recent regulations clarify that a Qualified Opportunity Fund must be either a corporation or an entity taxed as a partnership for federal tax purposes. In other words, individuals or single member LLCs do not qualify.

The fund must hold at least 90 percent of its assets in Qualified Opportunity Zone Property, which includes Qualified Opportunity Zone Stock, Qualified Opportunity Zone Partnership Interest, or Qualified Opportunity Zone Business Property. Each form of Opportunity Zone Property must meet the specifications set forth below.

Recent regulations specify that a Fund has defined the “reasonable period” for investing funds into an Opportunity Zone as 31 months. So, a Fund could hold onto the cash for 31 months before being subject to the 90% test.

Stock: Qualified Opportunity Zone Stock is any stock of a domestic corporation that was obtained by the fund after Dec. 31, 2017 from the corporation, either directly or through an underwriter, solely in exchange for cash. The corporation must be a Qualified Opportunity Zone Business, as defined below, when the stock is purchased. If the corporation is a new corporation then it must be organized for the purpose of being a Qualified Opportunity Zone Business. The corporation must qualify as a Qualified Opportunity Zone Business for a substantial duration of the Fund's holding period.

Partnership interest: A Qualified Opportunity Zone Partnership Interest is any capital or profits interest in a domestic partnership that was acquired after Dec. 31, 2017, by the fund in exchange for cash. Similar to Qualified Opportunity Zone Stock of a corporation, the partnership must be a Qualified Opportunity Zone Business when the interest is purchased or, in the case of a new partnership, it must be organized for the purpose of being a Qualified Opportunity Zone Business. Lastly, the partnership must qualify as a Qualified Opportunity Zone Business for a substantial duration of the fund's holding period.

A Qualified Opportunity Zone Business means a business that owns or leases substantially all of its tangible property in a Qualified Opportunity Zone. (Recent regulations state that “substantially all means at least 70%.) The difference between the 90% requirement for a fund and the 70% requirement for a “business” is explained in the IRS regulations as follows:

The 70 percent requirement for a trade or business will give QOFs an incentive to invest in a qualified opportunity zone business rather than owning qualified opportunity zone business property directly. For example, consider a QOF with $10 million in assets that plans to invest 100 percent of its assets in real property. If it held the real property directly, then at least $9 million (90 percent) of the property must be located within an opportunity zone to satisfy the 90 percent asset test for the QOF. If instead, it invests in a subsidiary that then holds real property, then only $7 million (70 percent) of the property must be located within an opportunity zone. In addition, if the QOF only invested $9 million into the subsidiary, which then held 70 percent of its property within an opportunity zone, the investors in the QOF could receive the statutory tax benefits while investing only $6.3 million (63 percent) of its assets within a qualified opportunity zone.

The business must also generate at least 50 percent of its total gross income from active business conduct with "a substantial portion of the intangible property of such entity used in the active conduct of any such business," and "less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity attributable to nonqualified financial property." Lastly, the business cannot be a "private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises."

Business property: Qualified Opportunity Zone Business Property is tangible property acquired after Dec. 31, 2017 that is used in a Qualified Opportunity Zone trade or business and either the use of the property in the Qualified Opportunity Zone originates with the fund, or the fund substantially improves the property so long as "during substantially all of the Qualified Opportunity Fund's holding period for such property, substantially all of the use of such property was in a Qualified Opportunity Zone." Property is considered substantially improved if "during any 30-month period beginning after the date of acquisition of such property, additions to basis with respect to such property in the hands of the qualified opportunity fund exceed an amount equal to the adjusted basis of such property at the beginning of such 30- month period in the hands of the qualified opportunity fund."

Recent IRS regulations clarify that the basis of the land is not included in this calculation. For example: Fund purchases building and land in the Opportunity Zone for $500,000. Of this $500,000, $350,000 is allocated to the building and $150,000 is allocated to the land. In order to meet the substantial improvement test, the Fund must expend more than $350,000 on improvements.

Odds and Ends
Here are a few caveats:

1. This preferential tax treatment applies to Federal taxes. California state tax law does not recognize Opportunity Zones.
2. You must roll gains into an Opportunity Fund within 180 days of the sale or exchange that triggered the gains.
3. You can take advantage of this preferential tax treatment only once per capital gain, meaning this: If you invest only a portion of your gains into an Opportunity Fund, you cannot later invest the remainder.
4. Investments must be made before December 31, 2026.
5. The sale or exchange that triggered the capital gains must be with an unrelated party.
6. If the investment cost exceeds the amount of the capital gain, only the amount of the capital gain can be deferred.
   
   Keep This in Mind
   Obviously, the benefit of deferring capital gains, and of potentially realizing tax-free gains, both seem very attractive. However, tax-incentivized investment strategies often result in poor performance because these strategies are created to attract investors who would otherwise invest their money elsewhere.
   
   In fact, many real estate developers we have spoken to do not want to hold investments for ten years, nor do they want to chase a tax-savings only to lose money on the investment in the end.
   
   In other words, talk to your financial advisor to make sure the risk of the underlying investment is as good as any other real estate investment. The trade-off of chasing tax preferences for high-risk investments might not be worth it.

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New IRS warning: Email scams will surge this holiday season

Unfortunately, cyber scammers never take a vacation. In fact, the IRS has issued a warning of a surge in fraudulent emails that bait potential phishing victims with fake tax transcripts. Links within these emails lead recipients to documents containing the well-known malware, Emotet.

Fraudulent emails will look as if they are coming from the IRS and specific banks and financial institutions. These emails usually have an attachment labeled "Tax Account Transcript" or something similar with a subject line that uses some variation of the phrase "Tax Transcript." Be warned that scammers will likely also use other subject line verbiage.

This season’s scam targets not only individual taxpayers but businesses as well. If an employee opens the malware, it can spread through a company’s network requiring a time-consuming and expensive fix. Employers should be sure to educate employees on this newest scam and offer a refresher course on how to spot fraudulent emails.

Remember, the IRS never sends unsolicited emails or sensitive information via email. If you think that you have received a malicious email, do not click on the message. Instead, forward the potential fraudulent email to phishing@irs.gov and then promptly delete it. If you receive such an email at work, do not interact with it and alert your IT department immediately.

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Clarifying the 20% Deduction for “Specified Service Businesses”

For business owners and entrepreneurs, one of the most welcoming changes to the tax code is a 20 percent deduction on net business income from partnerships, S-corps, and sole proprietors. (See our original blog on this deduction here.)

Note that the 20% deduction is not allowed at all for employees. In addition, the law restricts the deduction for so-called “specified service businesses.” Income derived from a specified service business does not qualify for the full deduction unless the taxpayer’s taxable income before the deduction is $315,000 or less (married), or $157,500 or less (all others). Once income reaches these levels, the deduction is limited. It is phased out entirely at $415,000 (married) and $207,500 (single).

This begs the question …

What is a specified service business?

The law, as passed, specifies that “specified service businesses” include:

1) Accounting,
2) Actuarial sciences
3) Athletics
4) Consulting
5) Health
6) Law
7) Performing arts
8) Brokerage services
9) Financial services
10) Investing and investment management
11) Trading
12) Dealing in securities, partnership interest, and commodities.

It noted that engineers and architects are not considered specified service businesses, but that specified service businesses do include:

13) Businesses whose principal asset is the reputation or skill of one or more of its employees or owners.

As signed into law, the definition of a “specified service business” was confusing, vague, and at times contradictory.

Fortunately, on August 8, 2018, the United States Department of Treasury released proposed tax regulations that would provide guidance on the definition of a specified service business. Though some questions remain unanswered, this is our best understanding of service businesses, as broken down by profession, and oftentimes quoted verbatim from the proposed guidelines.

1) Accounting

In the field of accounting, specified service businesses are described as those that have “the provision of services by accountants, enrolled agents, return preparers, financial auditors, and similar professionals in their capacity as such. Provision of services in the field of accounting is not limited to services requiring state licensure as a certified public accountant (CPA). The aim of [the proposed regulation] is to capture the common understanding of accounting, which includes tax return and bookkeeping services, even though the provision of such services may not require the same education, training, or mastery of accounting principles as a CPA. The field of accounting does not include payment processing and billing analysis.”

2) Actuarial Sciences

In the field of actuarial sciences, specified service businesses are described as those that have “the provision of services by actuaries and similar professionals in their capacity as such. Accordingly, the field of actuarial science does not include the provision of services by analysts, economists, mathematicians, and statisticians not engaged in analyzing or assessing the financial costs of risk or uncertainty of events.”

3) Athletics

In the field of athletics, specified service businesses are described as those that have “the performances of services by individuals who participate in athletic competition such as athletes, coaches, and team managers in sports such as baseball, basketball, football, soccer, hockey, martial arts, boxing, bowling, tennis, golf, skiing, snowboarding, track and field, billiards, and racing. The performance of services in the field of athletics does not include the provision of services that do not require skills unique to athletic competition, such as the maintenance and operation of equipment or facilities for use in athletic events.

“Similarly, the performance of services in the field of athletics does not include the provision of services by persons who broadcast or otherwise disseminate video or audio of athletic events to the public.”

In other words, it appears that those who broadcast video or audio of performing arts or athletics, such as news and sports broadcasters, are not included in the definition of “specified service businesses,” meaning they can take the full 20 percent deduction, regardless of their income.

4) Consulting

In the field of consulting, specified service businesses are described as those that have “the provision of professional advice and counsel to clients to assist the client in achieving goals and solving problems. Consulting includes providing advice and counsel regarding advocacy with the intention of influencing decisions made by a government or governmental agency and all attempts to influence legislators and other government officials on behalf of a client by lobbyists and other similar professionals performing services in their capacity as such.

“The performance of services in the field of consulting does not include the performance of services other than advice and counsel. This determination is made based on all the facts and circumstances of a person's business.

“Additionally, the Treasury Department and the IRS are aware of the concern noted by commenters that in certain kinds of sales transactions it is common for businesses to provide consulting services in connection with the purchase of goods by customers. For example, a company that sells computers may provide customers with consulting services relating to the setup, operation, and repair of the computers, or a contractor who remodels homes may provide consulting prior to remodeling a kitchen. As described previously [the proposed law] provides a de minimis rule, under which a trade or business is not [considered a service business] if less than 10 percent of the gross receipts (5 percent if the gross receipts are greater than $25 million) of the trade or business are attributable to the performance of services in a specified service activity.

“However, this de minimis rule may not provide sufficient relief for certain trades or business that provide ancillary consulting services. The Treasury Department and the IRS believe that if a trade or business involves the selling or manufacturing of goods, and such trade or business provides ancillary consulting services that are not separately purchased or billed, then such trades or businesses are not in a trade or business in the field of consulting. Accordingly, [the proposed law] provides that the field of consulting does not include consulting that is embedded in, or ancillary to, the sale of goods if there is no separate payment for the consulting services.”

5) Health

In the field of health, specified service businesses are described as those that have “the provision of medical services by physicians, pharmacists, nurses, dentists, veterinarians, physical therapists, psychologists, and other similar healthcare professionals who provide medical services directly to a patient. The performance of services in the field of health does not include the provision of services not directly related to a medical field, even though the services may purportedly relate to the health of the service recipient. For example, the performance of services in the field of health does not include the operation of health clubs or health spas that provide physical exercise or conditioning to their customers, payment processing, or research, testing, and manufacture and/or sales of pharmaceuticals or medical devices.”

6) Law

In the field of law, specified service businesses are described as those that have “the provision of services by lawyers, paralegals, legal arbitrators, mediators, and similar professionals in their capacity as such. The performance of services in the field of law does not include the provision of services that do not require skills unique to the field of law, for example, the provision of services in the field of law does not include the provision of services by printers, delivery services, or stenography services.”

7) Performing Arts

In the field of performing arts, specified service businesses are described as those that have “the performance of services by individuals who participate in the creation of performing arts, such as actors, singers, musicians, entertainers, directors, and similar professionals performing services in their capacity as such. The performance of services in the field of performing arts does not include the provision of services that do not require skills unique to the creation of performing arts, such as the maintenance and operation of equipment or facilities for use in the performing arts. Similarly, the performance of services in the field of the performing arts does not include the provision of services by persons who broadcast or otherwise disseminate video or audio of performing arts to the public.”

Though this certainly does provide some clarification for actors, singers, entertainers, and the like, it leaves us wanting more clarity for behind-the-camera workers, such as editors, producers, and writers.

8) Brokerage Services

In the field of brokerage services, specified service businesses are described as those “in which a person arranges transactions between a buyer and a seller with respect to securities (as defined in section 475(c)(2)) for a commission or fee. This includes services provided by stock brokers and other similar professionals, but does not include services provided by real estate agents and brokers, or insurance agents and brokers.”

This last clarification will surely be welcomed by real estate brokers and agents, who appear to be excluded from the definition of a “specified service business,” and therefore able to take the full 20 percent deduction, regardless of income.

9) Financial Services

In the field of financial services, specified service businesses are limited to “services typically performed by financial advisors and investment bankers and provides that the field of financial services includes the provision of financial services to clients including managing wealth, advising clients with respect to finances, developing retirement plans, developing wealth transition plans, the provision of advisory and other similar services regarding valuations, mergers, acquisitions, dispositions, restructurings (including in title 11 or similar cases), and raising financial capital by underwriting, or acting as the client’s agent in the issuance of securities, and similar services. This includes services provided by financial advisors, investment bankers, wealth planners, and retirement advisors and other similar professionals, but does not include taking deposits or making loans.”

10) Investing and Investment Management

The proposed regulation provides that investing and investment management “means a trade or business that earns fees for investment, asset management services, or investment management services including providing advice with respect to buying and selling investments. The performance of services that consist of investing and investment management would include a trade or business that receives either a commission, a flat fee, or an investment management fee calculated as a percentage of assets under management. The performance of services of investing and investment management does not include directly managing real property.”

11) Trading

In the field of trading, a specified services business is one with “a trade or business of trading in securities, commodities, or partnership interests. Whether a person is a trader is determined taking into account the relevant facts and circumstances. Factors that have been considered relevant to determining whether a person is a trader include the source and type of profit generally sought from engaging in the activity regardless of whether the activity is being provided on behalf of customers or for a taxpayer’s own account.”

12) Dealing in Securities, Partnership Interest, and Commodities

The proposed regulations suggest that specified services businesses include those that are “regularly purchasing securities from and selling securities to customers in the ordinary course of a trade or business or regularly offering to enter into, assume, offset, assign, or otherwise terminate positions in securities with customers in the ordinary course of a trade or business. For purposes of the preceding sentence, a taxpayer that regularly originates loans in the ordinary course of a trade or business of making loans but engages in no more than negligible sales of the loans is not dealing in securities for purposes of [the regulations].”

13) Any Trade or Business Where the Principal Asset of Such Trade or Business Is the Reputation or Skill of One or More of Its Employees or Owners

And yet another welcomed set of clarifications narrows the definition of a “trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners.”

The Treasury Department and the IRS believe that the “reputation or skill” clause … “was intended to describe a narrow set of trades or businesses, not otherwise covered by the enumerated specified services, in which income is received based directly on the skill and/or reputation of employees or owners. Additionally, the Treasury Department and the IRS believe that ‘reputation or skill’ must be interpreted in a manner that is both objective and administrable. Thus, [the proposed law] limits the meaning of the ‘reputation or skill’ clause to fact patterns in which the individual or [pass through entity] is engaged in the trade or business of:

“(1) receiving income for endorsing products or services, including an individual’s distributive share of income or distributions from [a pass through entity] for which the individual provides endorsement services;

“(2) licensing or receiving income for the use of an individual’s image, likeness, name, signature, voice, trademark, or any other symbols associated with the individual’s identity, including an individual’s distributive share of income or distributions from [a pass through entity] to which an individual contributes the rights to use the individual’s image; or

“(3) receiving appearance fees or income (including fees or income to reality performers performing as themselves on television, social media, or other forums, radio, television, and other media hosts, and video game players).”

Anti-Abuse Rules

Some taxpayers are considering strategies to separate activities that fall under the category of “service business” from those that do not, such as creating a new company to handle the administrative functions of a service business, thereby qualifying for the full, unrestricted 20 percent deduction.

The preamble of the proposed tax regulations states this:

“The Treasury Department and the IRS are aware that some taxpayers have contemplated a strategy to separate out parts of what otherwise would be an integrated [service business], such as the administrative functions, in an attempt to qualify those separated parts for the [full] deduction. Such a strategy is inconsistent with the purpose of section [the law].”

Therefore, the proposed regulation states that a specified service business “includes any trade or business with 50 percent or more common ownership (directly or indirectly) that provides 80 percent or more of its property or services to [a service business]. Additionally, if a trade or business has 50 percent or more common ownership with [a specified service business], to the extent that the trade or business provides property or services to the commonly-owned [specified service business], the portion of the property or services provided to the [specified service business] will be treated as [a specified service business] (meaning the income will be treated as income from [a specified service business]).”

The law goes on to give this example: If a dentist owns a dental practice and an office building, of which the dentist rents 50 percent to the dental practice and 50 percent to unrelated persons, the renting of 50 percent of the building to the dental practice will be treated as a service business.

In Conclusion

We will continue to update you as the regulations are clarified and adopted. And remember: If your pass-through income does not fall into the category of “specified service business” income and if your income is above the income-cap threshold ($315,000 or less (married), or $157,500 or less (all others)), the 20 percent deduction will be limited to:

• 50 percent of W-2 wages paid by the entity, or
• The sum of 25 percent of W-2 wages, plus 2.5 percent of the original cost of any depreciable property. (Businesses primarily in real estate will benefit from this.)

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Important Update: 1099 Reporting for 2018

The Protecting Americans from Tax Hikes (PATH) Act of 2015 requires Forms 1099-MISC reporting non-employee compensation (NEC) in box 7 to be filed by January 31.

All filing deadlines are as follows:

• Reporting NEC, whether filed on paper or electronically: January 31
• Not reporting NEC and filed on paper: February 28
• Not reporting NEC and filed electronically: March 31

Important changes for filing in 2018:

1099-MISC forms reporting NEC must be submitted in a single submission. This means if additional 1099-MISC forms with NEC are required after originally submitting them to the IRS and after the January 31 due date, then ALL 1099-MISC forms with NEC have to be reprocessed and filed together. If they are not filed as one submission, the IRS Section 6721 penalty will apply to all forms that were not included in the single submission.

In addition to submitting all 1099-MISC with NEC in one submission, if our firm does need to file after the January 31 due date, any 1099-MISC without NEC need to be a separate submission as well.

For us to serve you best, we strongly recommended that you aggregate all vendors requiring a 1099 prior to the January 31 deadline. Failure to submit data in a timely manner can result in penalties and processing fees that we want to help you avoid.

If you have questions, please contact us.

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Reminder: Q3 Tax Estimate is Due Soon!

This is a friendly reminder that the Q3 tax estimate payment deadline is coming up fast. Be sure to make your payment by September 15, 2018 to avoid penalties. Currently, penalties for late or no payment average about 4 percent. And wouldn’t you rather keep that money in your pocket?

Staying current on your estimated payments is good business practice. If you are due to make a Q3 payment and have questions, feel free to contact our firm.

Have a great month. And remember, we are here to help!

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Sadly, You Might Need To Go To the DMV Soon

Beginning October 1, 2020, your driver’s license or identification card must be “REAL ID compliant” to be accepted as identification for boarding a domestic flight. Same goes for entering military bases and most federal facilities.

If you have a valid U.S. passport, passport card, or military ID, these documents will still be accepted to board a domestic flight, but if you are using a state-issued license or identification card, be sure it is REAL ID compliant.

The California DMV began offering REAL ID identification and licenses on January 22, 2018, so unless you have been to the DMV in the past six months, it might be time to make an appointment and update your driver’s license.

What Is the REAL ID?
In response to the September 11 terrorist attacks, the 9/11 Commission recommended that the Federal Government “set standards for the issuance of sources of identification, such as driver's licenses.” In 2005, Congress passed the REAL ID Act, which established these standards and created a phased plan for bringing about compliance. Airports, military bases, and federal buildings will be unable to accept state-issued licenses and identification cards that do not meet these standards.

If you live in California, this gives you two + years.
You have until October 1, 2020 to replace your licenses or identification card with a REAL ID, but we thought we should give you a heads up so that you can make an appointment and tackle this often-unpleasant task when you have the time and patience for dealing with the DMV.

All that said, keep in mind that the REAL ID Act doesn’t affect other uses.
If you have a valid passport, passport card, or military ID, you can get by without a REAL ID. And, keep in mind that the REAL ID Act doesn’t apply to other uses of driver’s licenses and identification cards. For instance, you can still vote, register to vote, and apply for Federal benefits using your old license or card.

But, once you make it through the long DMV line, your life might be easier if the driver’s license or identification card you carry in your wallet is REAL ID compliant.

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California Supreme Court Establishes “ABC Test” for Classifying Independent Contractors


One of employers’ most common areas of stress is this: “Should I pay workers as employees or independent contractors?”

Fortunately—or unfortunately, depending on your circumstances—on April 30, the California Supreme Court came down with a comprehensive ruling on this issue that applies to employers of California workers.
 
Under what is being called the “ABC Test,” the California Supreme Court held that a worker in California is assumed to be an employee of a company unless each of three criteria can be demonstrated. In effect, the ABC Test narrows the guidelines for considering whether a worker can be categorized as an independent contractor and expands the number of workers who must be categorized as employees.
 
As a result, companies will have to pay additional social security taxes, payroll taxes, and workers compensation—all expenses that are avoidable with workers who are categorized as independent contractors.
 
The ABC Test
 
Here is the ruling from the court (Dynamex Operations West, Inc. v. Superior Court of Los Angeles).
 
Under this test, a worker is properly considered an independent contractor … only if the hiring entity establishes:
 
(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact.
 
Does this mean that, to be considered an independent contractor, the worker must complete the job with no direction, supervision, or set hours? It seems hard to imagine that any company would commission an independent contractor entirely “free from … direction.”
 
(B) that the worker performs work that is outside the usual course of the hiring entity’s business.
 
Under the second criteria, to be considered an independent contractor, the worker must be engaged in work that none of the company’s employees do and for which the company does not advertise. Workers who engage in roles that are “clearly comparable” to employees within that organization must be considered employees and treated as such.
 
This criterion seems to put some companies in a bind. Consider, for instance, delivery companies or ride-sharing companies who hire independent contractors who set their own hours. And how about “gig” companies who hire, for instance, musicians to play at various events? It seems that these workers will now be considered employees as their work is central to the business of the company.
 
The final test for naming someone an independent contractor is:
 
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.
 
This means that to be considered an independent contractor, the worker must otherwise be engaged in the work, which can be proven if he or she advertises similar work to the general public, or has employees of his or her own engaged in the work.
 
If a company or hiring entity fails to satisfy any of the three “ABC Test” requirements, the worker must be treated as an employee.
 
The Old Guidelines
 
Certainly, the ABC Test has created more stringent guidelines for employers of California workers: It assumes all workers to be employees unless all three prongs of the ABC test are met.
 
Under the old rules, called the Borello standard, the test was more subjective. California courts looked at twelve or more factors applied in various combinations and contingent upon differing circumstances. The degree of control exercised over the worker was the main focus, but other factors also played into a court’s decision: Did the worker supply his or her own equipment, set his or her own hours, or contract for projects rather than contract indefinitely? If so, the worker might be considered an independent contractor
 
What does this mean for workers?
 
At first glance, this might seem like a win for workers. After all, they will have more benefits: workers compensation, social security, and the like. However, the Tax Cuts and Jobs Act has eliminated business-related deductions for employees, which means that workers who are newly categorized as employees might be in for a shock when they realize they cannot write off their business-related expenses. As well, due to the accompanying expenses, firms are less likely to hire employees than they are to contract with independent contractors, meaning workers might lose opportunities as the number of firms willing to hire them narrows in tandem with the stricter guidelines. 
 
Are existing 1099 relationships grandfathered?
 
Absent from the ruling was this: Is the decision retroactive? The California Employment Law Council has requested clarification of the ruling to determine whether existing companies with existing independent contractor relationships must reclassify their 1099 workers as W2 employees.
 
If you hire independent contractors, consult your legal counsel to determine whether you should reclassify these workers as employees. Although this is something Fenton & Ross must account for with its clients, whether you can keep your workers classified as independent contractors is ultimately a legal issue.
 
What about the IRS?

Here’s the kicker: The recent “ABC Test” from the California Supreme Court ruling applies to cases filed through the California Employment Development Department (EDD), and most employee-versus-contractor issues are filed through the EDD. However, the Federal government has different standards for determining whether a person should be considered an employee or an independent contractor for IRS purposes.
 
In other words, California laws and Federal laws are not identical.
 
Generally, the IRS looks at three categories: whether the worker is under direct control or the company; whether all business aspects of the worker’s jobs are controlled by the payer; and what type of relationship the worker and the company have. Unlike the strict ABC Test, under federal law, the standards are a little more subjective. “There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor, and no one factor stands alone in making this determination,” says the IRS on its website.
 
A safe bet is this: Follow the strict ABC Test established by California, and you will most likely be compliant with the more lenient IRS guidelines as well.

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Two Strategies for Using Charitable Donations to Your Advantage

The new limitations on itemized deductions are harsh: Under the Tax Cuts and Jobs Act, home mortgage interest, property taxes, and miscellaneous itemized deductions have been either severely limited or fully eliminated.

This naturally elicits the question: Are there any good itemized deductions left?

Yes. In fact, the TCJA increased the adjusted gross income limit from 50 to 60 percent for charitable contributions of cash (which includes checks and credit cards) to public charities.

Here are a couple of charitable donation strategies that allow you to maximize your charitable giving tax deductions.

Give Long-Term Appreciated Securities

When you donate long-term appreciated securities, you can deduct the fair market value of the asset on the contribution date without paying capital gains taxes. For instance, let’s say that you bought stock two decades ago for $10,000. Today, the stock is worth $100,000. If you donate the stock today, you can deduct $100,000 from your taxable income.

By donating the stocks instead of selling the stocks, you avoid the $90,000 capital gains on which you would otherwise have to pay taxes.

Let’s see how this plays out: If you donated $100,000 in cash to a charity, you can take a $100,000 deduction on your federal and state returns.[1] If your top combined tax rate is 50 percent, this saves you $50,000 in federal and state taxes.

If, on the other hand, instead of donating cash, you donate stock worth $100,000 today that was purchased two decades ago for $10,000, you still get the $100,000 deduction for a $50,000 savings.[2] You also avoid paying $33,000 in capital gains taxes. Overall, this means you save $83,000.

(Keep this in mind: If the donated asset is not a publicly traded security, and the fair market value of the donation is over $5,000, you will need to have the asset appraised to determine fair market value.)

Consider Giving to Donor-Advised Funds

A donor-advised fund is essentially a charitable investment account whereby you are eligible to take an immediate tax deduction without requiring an immediate payout. Money from a donor-advised fund can support any IRS-qualified public charity and, unlike private charities, there is no minimum required annual distribution, meaning this: If you make a donation to a donor-advised fund, the donation can grow for years before a payout is given.

Of course, if you want to support a charity immediately, making a direct cash donation is fine. But, if you want to maximize your charitable tax deduction now while maintaining control of the funds over the coming years, donating to a donor-advised fund is a wise strategy. Remember, the original donation is a tax deduction, and, should you donate securities, you will not pay any taxes on gains in the account. At the same time, and for the rest of your life, you will maintain control over when, how much, and which qualified charities receive the funds.

When you donate to a donor-advised fund, you will receive a tax receipt upon donating any of the following: cash and cash equivalents, publicly traded stocks, mutual fund shares, bonds, private company stock. (Other charities may be unable to receive non-cash donations, but all charities supported by a donor-advised fund can.)

When setting up a donor-advised fund, we work with your financial advisor, who can assist with the account setup and transfer of assets. Most financial advisors can set this strategy into motion at a low-cost basis.

Final Thoughts

The Tax Cuts and Jobs Act increased the adjusted gross income limit from 50 percent to 60 percent for public charities for cash and cash equivalents. That said, the California state law keeps the limit at 50 percent.

By donating long-term appreciated assets, you will not pay capital gains, and you can generally take an income tax deduction in the amount of the full fair-market value, up to 30 percent of your adjusted gross income for both federal and state taxes.

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Come 2019, Alimony Tax Laws Will Impact Divorce Agreements

If your divorce is executed after December 31, 2018, alimony will no longer be deductible in your federal taxes if you are the payor, and it will no longer be included in your gross income if you are the recipient.

This is a change to the tax code, per the Tax Cuts and Jobs Act.

That said, alimony agreements executed on or before December 31, 2018 are grandfathered into the old law, meaning the payor spouse can deduct his or her payments, and the recipient spouse must report these payments as part of his or her gross income.

What are the requirements for alimony?

Before we discuss the technicalities of the law, let’s take a moment to define alimony. Under the agreements of a divorce, various payments from one ex-spouse are directed to the other ex-spouse, which might include property division payments, alimony (also known as spousal support), child support, and voluntary payments to the ex-spouse.

In ordered to be considered alimony for tax purposes, alimony payments must:

• Be stipulated in the divorce decree or legal separation.
• Paid in cash (which includes checks).
• Stop at the ex-spouse’s death.

In addition, the ex-spouses cannot live together.

What happens to existing and modified alimony agreements under the new law?

Existing alimony agreements that are modified after December 31, 2018, will be grandfathered into the old law, meaning the payor will deduct the payment and the recipient will include alimony as part of his or her old income. However, the modified agreement can expressly ask to have the new rules apply, meaning payment will not be deductible, and receipt of alimony will not be included in gross income.

But wait, your state taxes might be different.

The Tax Cuts and Jobs Act applies to federal taxes only, meaning that in California, when the federal change takes place on January 1, 2019, your state alimony payments will still be deductible on state taxes if you are the payor and included in gross income on your state taxes if you are the recipient.

California might change this in tandem with the TCJA, but as of today, state and federal laws will be inconsistent come January 1, 2019.

If this is confusing, here is a quick summary…

California State Taxes

Alimony is deductible if you are the payor, and it is included in gross income if you are the recipient.

Current Federal Taxes

Alimony is deductible if you are the payor, and it is included in gross income if you are the recipient.

Federal Taxes Beginning January 1, 2019

For alimony agreements executed on or after January 1, 2019, alimony will not be deductible if you are the payor, and it will not be included in gross income if you are the recipient.

Unless the modified agreement expressly asks to have the new TCJA rules apply, alimony agreements executed before January 1, 2019 and modified after December 31, 2018 will be grandfathered into the old law. If an agreement modified after December 31, 2018 expressly asks to have the new TCJA rules apply, the payor will be unable to deduct the payment from federal taxes, and the recipient will not include the payment in gross income.

Here is an example…

Sarah and Mike divorce in 2017. Under the agreement, Sarah pays Mike $15,000 a year in alimony.

 In 2019, Sarah continues to receive a deduction every year on her personal income tax return (both federal and state) of $15,000, and Mike must this include $15,000 alimony in his gross income for both federal and state taxes.

In 2020, Sarah and Mike modify their alimony agreement. They do not expressly provide that the TCJA applies to their new modified agreement. Therefore, Sarah continues to deduct her payments, and Mike continues to include the alimony payments in his income.

 In 2021, they modify their alimony agreement again. This time, they include in the written agreement that the TCJA applies to their modified agreement. At this point, Sarah stops deducting payments from her federal taxes, and Mike stops including the payments in his income for his federal taxes. However, as the state law stands, Sarah continues deducting payments on her California tax returns, and Mike continues including the alimony in his income on his state tax returns.  

Here is another example…

Bill and Jamee divorce in 2019. They agree that Bill will pay Jamee $24,000 a year in alimony payments. Because the divorce was executed after December 31, 2018, they have no choice but to follow the TCJA regulations for federal taxes: Bill cannot deduct the payments, and Jamee does not include them in her gross income. However, as the state law stands, Bill deducts payments on his California tax returns, and Jamee includes the alimony in her income on her state tax returns.

A final note…

Remember that in California, there is a minimum six-month waiting period from the time a divorce is filed until the date it is final. This is true even if the couple is in agreement about the settlement. This means that a divorce filed after July 1, 2018 will not be final until 2019, at which point the TCJA will be in effect.

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The 20 Percent Deduction You May Be Eligible For

One of the most favorable changes to the tax code for entrepreneurs and business owners is this: A deduction of 20 percent on net business income from pass-through entities and sole proprietorships.

What this means is that you may be able to deduct 20 percent of your net income reported on your Schedule K-1 or Schedule C.

Of course, rarely are the IRS’s rules straightforward. The deduction is subject to certain limitations, some of which are currently vague, undefined, or lacking sufficient guidance. The IRS has not yet released its guidelines for the deduction, and more than a few business owners, entrepreneurs, and analysts are unsure of whether they qualify.

In fact, in a February 21 letter to the IRS, the American Institute of CPAs asked for “immediate guidance” on the provision. One article from Bloomberg cited law professor Reuven Avi-Yonah as saying the deduction creates “an unworkable, unadministerable mess.”

Still, the advisors at Fenton and Ross want to help you make informed decisions regarding tax planning and choice of entity, so here is a simplified explanation of the law, to the best of our understanding.

Who qualifies for the deduction?

First, the deduction is generally available to individuals who have pass-through income from a partnership or an S-corp. (An LLC is normally taxed as a partnership and therefore qualifies.)

Pass-through income is income that passes through a partnership or an S-corp without being taxed; instead, it is reported on a Schedule K-1 and taxed at the individual level.

For this reason, the deduction is being called a “pass-through deduction,” but this is a bit of a misnomer because the deduction is also available to sole proprietors who report their income through 1099s, as well as rental real estate income. In this writing, I will refer to the deduction as the Qualified Business Income deduction (or QBI deduction).

In summary, the QBI deduction is available for:

• Individuals with pass-through income from a partnership or S-corp,
• Sole proprietors, and
• Rental real estate income.

What are the limitations of the deduction? 

1. The QBI deduction has specific regulations for “service businesses.”

Income derived from these businesses does not qualify for the full deduction unless the taxpayer’s taxable income before the deduction is $315,000 or less (married), or $157,500 or less (all others). Thereafter, up to $415,000 (married) and $207,500 (single), the QBI deduction is limited and then phased out entirely. 

What is a “service business?”

The law specifies that “service businesses” include accounting, law, actuarial sciences, consulting, health, performing arts, brokerage services, financial services, investment management, trading, dealing in investments and commodities.

That said, the law specifically noted that engineers and architects qualify for the QBI deduction without this restriction, which creates a huge grey area. For instance, how do you tell an interior designer (whose income would not qualify for the deduction) from an interior architect (whose income would qualify for the deduction)?

This limitation also applies to income on service business’s whose principal asset is the reputation or skill of one or more of its employees or owners, which begs a few questions. How do you know whether a person is an asset? For instance, does the limitation apply to restaurants headed by celebrity chefs, but not restaurants headed by non-celebrity chefs? And … can a person be considered an asset? Traditionally, an asset is something owned by a business, and no business can own the skills of an employee or owner since it does not own its employees.

Of course, this makes the law rather complicated if a person has more than one business, particularly if one entity falls under the restrictions on service businesses and the other does not.

2. For general businesses, not including service businesses, the 20 percent QBI deduction is limited if the taxpayer’s taxable income before the deduction is greater than $315,000 (married) or $157,500 (all others).

For taxpayers whose income falls above these thresholds, the 20 percent QBI deduction is limited to the greater of:

•  50 percent of W-2 wages paid by the entity, or
• The sum of 25 percent of W-2 wages, plus 2.5 percent of the original cost of any depreciable property. (Businesses primarily in real estate will benefit from this.)

Planning for 2018 Taxes

More than a few issues are outstanding, particularly with respect to the definition of a service business. The IRS has promised more guidelines by June 30, but we doubt all of the questions will be answered.

For now, here are some issues you might want to consider:

• “How can I aggregate or segment my business interests to best position my income to take advantage of the QBI deduction?”
• “Does my business qualify as a “service business,” thereby facing restrictions on the QBI deduction?”

Again, many of these client-specific questions will not be able to be adequately answered until the IRS guidance is released. As additional information from the IRS becomes available, we will send updates on this subject.

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Congress Paves the Way for Business Owners and Entrepreneurs; Penalizes Non-Business Owners

If you aren’t an entrepreneur or business owner, Congress has two words for you.

Too bad.

Under the changes made to the tax code under the Tax Cuts and Jobs Act, C-corps, entrepreneurs, and business owners, such as partnerships and sole proprietors, are generally favored, while individuals—particularly those in states with high state and local taxes—are at a disadvantage. 

Here is how it works:

1. C-corps now have a 21 percent flat-tax rate, down 40 percent from the previous top rate of 35 percent.
   
   

2.  Business owners, including S-corps, partnerships, and many sole proprietors, could enjoy a 20 percent “pass through deduction,” meaning they can deduct 20 percent of their net business income. This is a complicated subject that I will cover in-depth in coming blogs. Essentially, it means that taxpayers in the highest bracket—now 37 percent—could have up to a 7 percent savings from last year’s taxes.

Of course, many other factors play into a tax return, but when looked at in isolation, C-corps could enjoy a 40 percent tax-cut, and other business owners a 7 percent cut at most.

What about individuals working as employees/non-business owners? Prior to the Tax Cuts and Jobs Act, individuals could deduct (among other things):

• Property, state, and local taxes
• Home mortgage interest
• Miscellaneous itemized expenses

In 2018, this changes:

• Property, local, and state tax deductions are capped at $10,000. This is a big hammer to individuals in high-income-tax states like California.
• The itemized deduction for home mortgage interest is limited to home mortgage acquisition debt of $750,000. This applies to residences purchased after December 15, 2017.
• Miscellaneous itemized deductions—such as unreimbursed employee business expenses, investment advisor fees, and other legal and professional fees—are no longer allowed under the Tax Cuts and Jobs Act.

In other words, it’s a bad time to be an employee …

But it’s a great time to be an entrepreneur or business owner. 

If you are a non-business owner, it might be time to consider becoming a sole proprietor, an S-Corp, partnership, or C-Corp to take advantage of the favorable tax laws. And if your business entity is already favored under the new law, be on the lookout for future discussion about how to best position your business for the 2018 tax changes. 

In the coming months, we will be releasing more details on how the Tax Cuts and Jobs Act will impact entrepreneurs, business owners, and real estate.

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A note about your 2018 meals and entertainment

With tax season behind us, it’s time to focus on changes to the 2018 tax law per the Tax Cuts and Jobs Act.

In 2017, we sent an email summarizing the changes to the tax code per the Tax Cuts and Jobs Act. (Here is a link to this summary in the event that you did not see our original email.) Going forward, we will send more in-depth topical updates with analysis of the new law and how it impacts you and your business.

First up is this: Changes to the meals and entertainment deduction. In short, “entertainment” expenses are no longer deductible, which might at first seem to be a blow to small and big businesses. Based on our analysis, though, this change might not be as severe as you think. In fact, much of the media coverage is reporting on pre-law drafts of the Tax Cuts and Jobs Act instead of the legislation President Trump signed.

Here is Fenton & Ross’s analysis of the new law as it pertains to meals and entertainment expenses for businesses.

A Broad Summary of the Changes to the Meals and Entertainment Expenses

Through 2017, 50 percent of your business-related meal and entertainment expenses were deductible, but per the Tax Cuts and Jobs Act, this changed in 2018.

Beginning in January of 2018, entertainment expenses stopped being deductible.

Although the new law is poorly defined, it appears you can still deduct 50 percent of your qualifying business-related meal expenses. The media, and even so-called “tax specialists,” have reported contrary information, but the changes to the deduction apply specifically to entertainment-related expenses and not meals. For instance, you cannot deduct Lakers tickets, golf outings, and Hollywood Bowl tickets. You can deduct 50 percent of the bill if you take your client to dinner to discuss business.

Given that California has not conformed to the elimination of the entertainment deduction, your business should still pay for business-related entertainment expenses from a business account or business credit card.

Additionally, when you file your Federal return, the accountants at Fenton & Ross will evaluate these expenses to determine whether they more accurately fall under marketing, promotions, or special events and, as a result, can be deducted.  

What Are the Requirements for Meal Deductions? 

To qualify for the 50 percent meal deduction, substantial business discussion must occur before, during, or directly after the meal, or you must expect some income or business benefit to occur from providing the meal.

Of course, no meal is deductible if there is no reasonable business purpose for it, so be sure to document the reason for the meeting. Keep a receipt for costs exceeding $75, and steer clear from overly extravagant costs that might be considered entertainment. The environment you choose should be conducive to business. Do not include the costs of non-business guests.

Are Any Meals Still Deductible at 100 Percent?

Yes. Meals and entertainment provided primarily for the benefit of rank-and-file employees, such as company picnics, banquets, holiday parties, and the like, are fully deductible.

For more nuances, download the chart here. 

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Facing the Facts: How to Interpret Facial Expressions at Work

You may be completely proficient at decoding emojis on social media and in text messages, but for many of us, figuring out what other people’s facial expressions mean can be quite a challenge. Here’s a quick rundown of how to interpret different facial stances based on research from people-communicating.com:

1. A smile—The lips can lie, so to truly know if a smile is genuine check to see if the eyes of your subject are also smiling. If they aren’t chances are that the smile is fake.
   
   
2. Pursed lips—Usually, this is a sign that your comrade or client is holding back their dislike for something. It might be worth asking them if they agree with what is being proposed.
   
   
3. Pouting lips—Going beyond the pursed lips into pouting, as you may guess, generally means that the person you are with is unhappy, hurt or dissatisfied in some way. Asking gentle questions can help to uncover the issue.
   
   
4. Biting lips—This expression is often a sign of worry, or a dry mouth. Suggesting a break and a glass of water can be a way to ease both of these possibilities.
   
   
5. Tight jaws—If the person you are with is stressed about something they may clench their jaws. If you are discussing a particularly hot topic consider taking a breather or asking them if a compromise could help alleviate their tension.
   
   
6. Frowning—Unhappiness is a common reason for frowning, but some people may just have a natural lip position that looks like a frown. If you are not sure, ask if something is upsetting them, if not, just move on with the meeting or talk you are having.

Whether you are face to face with your co-workers or clients in real time or via a video call, knowing what their faces are telling you can help avoid miscommunication and create better working relationships…no emojis needed!

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Summer is Just Around the Corner— And So Are Potential Childcare Tax Credits

Summer will be here before you know it! If you are a working parent with school-aged children, you know that it can also mean pretty steep bills for childcare and summer camp. However, you may be able to soften the hit to your family’s budget if these services qualify for the Child and Dependent Care Tax Credit.

This credit reduces your tax liability dollar for dollar when you deduct the cost of day care provided by a day camp, day care, preschool, babysitter or nanny. Keep in mind, expenses for sleep away camps and tutoring are not eligible for this tax credit.

Here are the other qualifications for deducting the cost of these services on your next tax return:

• If you are married and filing a joint return, both spouses must be employed, or one spouse may be a full-time student.
   
• If you are looking for employment, you can claim the cost of childcare provided during your job search—with the caveats that a) you have also earned some income during the year and b) your child is under 13 years of age.
  
  
•  You can claim up to $3,000 in eligible childcare expenses if you have one child and up to $6,000 if you have two or more children.
  
  
•  The amount of these expenses you can claim with the credit ranges from 20 to 35 percent, depending on your income.
  
  
•  The maximum of 35 percent of eligible expenses is available for those earning $15,000 or less.
  
  
•  The credit decreases to 20 percent of eligible expenses if you earn $43,000 or more, with no maximum income limit.
  
  
•  It doesn’t matter whether you file your taxes as married jointly, single, or head of household in regard to the income stipulations for the credit. However, you cannot file as married filing separately and also claim the credit.

Another note: You cannot double dip between a dependent care flexible spending account (DCFSA) and the childcare tax credit for the same expenses. However, if you have maxed out funds from your DCFSA, you can use the tax credit up to the limit for any additional childcare expenses.

For more information on the Child and Dependent Care Tax Credit contact our firm.

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Employee Recognition – A Great Way to Motivate Your Staff!

Quite often we can get so wrapped up in checking projects off the company’s to-do list that we forget to recognize the labor that went into each accomplishment. Acknowledging milestones provides opportunity to show appreciation to the employees who helped you achieve them. This will go a long way in retaining top-tier staff. Use a few of our fresh ideas to recognize your team members:

• Surprise them. A totally unsuspecting employee will be blown away when they receive unexpected acknowledgment for their work. Take it up a notch by having friends and family show up for your employee’s spontaneous celebration.
  
  
• Capture celebratory moments. If you have regular award ceremonies or even during spontaneous surprise moments, capture the celebration on video or in a photo so you can share it with your team and even your clients.
  
  
• Do something thoughtful for the employee's family. Offer tickets to an amusement park or a sporting event. When your employee is working, they are spending time away from their –so you are acknowledging the family’s contribution to your company as well.
  
  
• Share personal anecdotes. When it comes to motivating employees, the recognition of their peers is very effective. Ask staff to nominate an employee for recognition and to write down outstanding qualities of the nominated staff member. Then share these comments during the recognition event.
  
  
• Create a scrapbook. This might take a little work, but it will be one of most memorable acknowledgements you can offer an employee. Have pees and even clients write comments about the difference this employee has made. Along with some photos have it all printed within a scrapbook (print or digital).

Getting into the habit of recognizing your dedicated employees is well worth the effort in terms of employee productivity, motivation and loyalty. Use the ideas above as a springboard for creating your own employee appreciation traditions.

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Receiving a Tax Refund? Spend It Wisely With These Tips!

Are you expecting a tax refund? If so, don’t treat your tax refund as ‘bonus’ cash. Rather look at it as simply a return of taxes paid beyond your actual obligation. This will help you think about using this money purposefully. Here are some ideas to try:

• Start or increase your emergency fund: By stashing away your refund into rainy day fund, you’ll build both a financial safety net and peace of mind.
  
  
• Eliminate or pay down high-interest debt: Once you have established an emergency fund, paying off any high-interest debt such as credit card balances, payday loans and debt consolidation loans is one of the best things you can do to improve your financial situation.
  
  
• Consider refinancing your mortgage: With relatively low mortgage rates available, you may want to consider refinancing your mortgage to lower your monthly payment and save money. Your refund can provide the funds to pay closing costs and other refinance fees.
  
  
• Contribute to tax-sheltered accounts: Using your tax refund to top-up (or start) a Roth IRA or 529 college savings plan offers you a double bonus. Not only will you be compounding dollars and interest for your future retirement or college tuition needs, but you’ll be creating a tax deduction as well.
  
  
• Improve the lives of others: If you have your own financial bases covered, then making a charitable donation is another good use of your return. The less fortunate will benefit from your generosity while offering you a tax deduction.
  
  
• Reinvest in yourself or your business: Is there something you would like to improve in your business? Or would you like to take a class? If you have funds leftover after taking care of savings and debts, these are a few more smart choices to invest in.

While it is tempting to use your tax return as a windfall, it is important to remember that you earned it. Also, if you are receiving a sizable refund, consider adjusting your tax withholding amount, so you have more of your income to use to cover expenses throughout the year.

Questions? Please contact our firm.

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Spring Cleaning Time is Here! An Easy 3-Step Checklist for Cleaning Your Office

The spring season is here! In addition to taxes, many of us want to take care of some overlooked cleaning tasks. Procrastination often creeps in when it comes to cleaning—especially our offices. It can feel overwhelming and somewhat unproductive to spend time decluttering and cleaning your workspace, but once complete, most people feel a sense of relief and calm. Use this handy checklist to expedite your office cleaning:

1. Your computer

• Clean your keyboard and computer vents with compressed air.
• Disinfect monitor keyboard, mouse and any devices on your desk.
• Untangle and label computer cords and cables.
• Backup files to the cloud, delete trash files and perform necessary updates.
• Defragment your hard drive and/or perform a disk utility cleanup.

2. Your Desk

• Dust and disinfect the surface.
• Trash any broken office supplies and nonfunctional pens and pencils.
• Enter contact information from business cards to your digital contacts.
• Clear all unnecessary documents and file, shred or recycle them.

3. General Housekeeping

• Dust the room, all window treatments and lights.
• Clean area rugs and carpets.
• Clean air vents, ducts and baseboards.
• Wash the windows and clean the floor.

By breaking down tasks into the manageable groupings, you’ll be more efficient as you clean your office. Keep this checklist handy—knowing that a cleaner office offers a sense of relief and calm.

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Disappearing Tax Deductions! Don’t Miss Them on Your 2017 Tax Return

Have you filed your 2017 taxes yet? If not, you still have the opportunity to make sure that you lower your tax obligation as much as possible. With new tax laws in effect for 2018 and beyond, the following deductions will disappear after this tax season—check them out to see which ones may help you lower your taxable income:

1. Personal and dependent exemptions. The $4,050 in potential personal and dependency exemptions are being replaced in 2018 with a higher standard deduction. This tax season is the last chance to use them.

2. Uncapped state and local tax deductions. Starting this year, you can only claim $10,000 in deductions for state and local taxes. There is no cap on these deductions on your 2017 tax return. Check to see how much you are eligible to claim before filing this year’s taxes.

3. A larger mortgage interest deduction. After the 2017 tax year, the ability to deduct interest on up to $1 million in mortgage debt will be phased out. The new tax laws cap this deduction at $750,000.

4. General deductions for home equity loan interest. Your 2017 tax return is the last one on which you can deduct all of the interest paid on a home equity loan. Next year, unless the money you borrow is used for home improvements, you cannot deduct interest on a home equity loan.

5. Deductions for unreimbursed employee expenses. Another deduction ending this tax season: unreimbursed purchases related to your employment (the total must exceed 2 percent of your 2017 adjusted gross income).

6. Itemized deductions. With the introduction of a higher standard deduction, there are several itemized deductions that are being eliminated after the 2017 tax year, including unreimbursed qualified employee education expenses, some professional services fees, and professional dues. You may want to ask a tax professional to see if there are others that you should claim this year.

7. Moving expenses. Did you move for work in 2017? Then you may be able to deduct your moving expenses if they meet the IRS guidelines. Unless you are in the armed forces, going forward, moving expenses will not be deductible.

These are just some of the deductions and exemptions that are impacted by tax reform. Now is the time to see which ones you should take advantage of as you prepare to file your taxes. If you need help preparing your 2017 tax return, contact our firm for assistance.

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Tips to Boost Client Appreciation Efforts… Even When Time is Tight

When you are super busy running a business, it can be easy to let customer appreciation slide to the bottom of your long to-do list. The problem is, if you don’t show your customers love on a regular basis, they’re going to feel neglected, which can put their continued loyalty at risk.

Good news! You don’t have to spend a lot of time to make your customers feel appreciated. The following ideas coupled with your genuine gratitude makes it easy to show how much you care.

Send an unexpected treat. Imagine receiving an unexpected gift card or a sampler of delicious local fare. Offering a simple treat “just because” will show your appreciation and go a long way toward keeping your customers loyal. Time involved: Maybe five minutes to buy something online or to call a local bakery or food delivery service.

Give a shout out on social media. When your clients achieve an important milestone, take a minute to recognize it by posting your congratulations on Facebook, LinkedIn or Twitter. You can also share your customers’ content to add an extra level of engagement. Time involved: One minute or less.

Pick up the phone or schedule a video conference. While sending emails and texts is great, picking up the phone or having some virtual face time once in a while is important. Schedule a short “check in” call every quarter to show your clients that you appreciate their feedback. 
Time involved: 10 to 15 minutes.

Profile them. Here’s a win-win strategy for appreciating your clients and growing your business. Ask them if you can write a success story for your website or other marketing channel about how they are benefiting from working with you. They’ll get exposure and you’ll get social proof to help win more clients. Time involved: 90 minutes to interview, write the profile and post it on your website.

Offer referrals. The best business relationships are mutually beneficial. One of the best ways to appreciate the business your customers do with you is to return the favor, either by using their services yourself or by referring them to others.  Time involved: 10 minutes to either reach out yourself or to make an introduction.

Author Kevin Starts wrote, “Every contact we have with a customer influences whether or not they’ll come back.” Even if you are short on time, these tips can help you and your staff create meaningful contacts with your customers that show how important they are to you!

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Considering Hiring a Cybersecurity Professional? Here’s What to Look For.

With the occurrence of cybercrimes affecting businesses increasing daily, many companies are looking for outside expertise to help them mitigate their risks. If your company has never engaged a cybersecurity professional before, you may be unsure of what to look for. The IRS suggests businesses use the following four steps when evaluating and selecting a cybersecurity professional:

1. Ask other business owners or professionals for recommendations and references.

2. Keep trust at the forefront of your selection process. Since any cybersecurity professional you hire will have access to sensitive data and systems within your organization, it is essential that you feel comfortable granting such access to them.

3. When interviewing candidates, make sure you learn how much experience they have in data protection. The IRS suggests asking questions such as:

• How does ransomware work and what can we do to protect our systems?
• What are the best options to securely back-up data and why are those options the best?
• Do you have suggestions regarding the following: data encryption, malware, firewalls, disaster recovery and remote access tools?
• Have you ever created a security plan for a similar business?
• Can you do an assessment of my systems and processes to find vulnerabilities or weaknesses? If so, will you then provide recommendations to strengthen my security?
• Will you conduct security simulation tests with our staff? 
• What resources do you have to provide continuous staff education regarding security?
• Will you provide ongoing monitoring of my systems as security threats evolve? If so, how often do you recommend changes?

4. Once you have identified the cybersecurity professional or firm that you wish to engage, make sure that you execute a written agreement or engagement letter to ensure both parties understand how you will be working together.

For businesses that do not have an internal resource to help them safeguard their sensitive data and computer systems, hiring an independent cybersecurity professional or firm can be a wise decision. If your business decides to engage this type of resource, use the steps above to help you find the right fit for your company’s unique needs.

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Need Help Trying to Make New Habits Stick? Try These Simple Tips…

Even if you are not a New Year’s resolution maker, it’s likely that at some point in your life you’ll want to adopt healthier or more productive habits. When you do want to make a change for the better, consider trying the following tips from lifehack.org to increase your chances of making your new good habits stick:

1. Identify the root of the resistance you may be feeling when adjusting to your new habit. If you are having trouble making a change to your routine last, take some time to journal how you feel about the new activity. This can lead you to uncover unconscious barriers that may be keeping you stuck and allow you to find ways around them. For example, if you find it hard to get out of bed and get to the gym, you may resent that you are losing extra rest time. If that is the case, consider going to bed a little earlier so you don’t shortchange yourself on sleep.

2. Try to change complementary habits at the same time. Many of our habits are intertwined, which means if you try to change one, you may be more effective if you also change a related behavior. For example, if you want to read more this year, you may want to reduce your TV-watching time to make room in your day for your new book-loving habit.

3. Monitor your progress. Tracking how successful you are at consistently practicing your new habits keeps you accountable and can also provide a visual reminder of your commitment. You can track the times that you reinforce your habit on a simple piece of paper, calendar or whiteboard. Or, you can use one of the many apps available for smartphones if you prefer to monitor your progress digitally.

4.  Recruit cheerleaders. It can be very difficult to change deeply ingrained habits without a supportive environment, so don’t be shy about sharing your goals with friends, family and co-workers to keep you on track and encouraged. Plus, for habits that may impact other people (like you getting up early to go to the gym while your partner is tasked with getting kids off to school), having supportive cheerleaders is even more critical.

It can be very challenging to make new habits stick, but whether you attack your goals now or sometime in the future, keeping these simple tips in mind should make it a little easier. Also, be sure to share these tips if you know someone who could use a little encouragement while trying to achieve their own goals.

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Quick Tips to Help You Tackle Your Taxes with Ease

Tax season is approaching quickly. It’s just a few weeks until the IRS officially starts accepting returns, which means now is the perfect time to use the tips below to help you net some last-minute tax-savings and tackle tax season with ease.

1. Top up your retirement accounts. You still have until April 17, 2018 to make a contribution to a traditional IRA or a Roth IRA and reduce your taxable income. If you have a Keogh or SEP IRA, you have until October 15, 2018 to top them up. Note that the maximum IRA contribution you can make for the 2017 tax year is $5,500 ($6,500 if you are age 50 or older by the end of the year). For self-employed individuals, the maximum annual addition to SEPs and Keoghs for 2017 is $54,000.
   
   
2. Ready your tax records. You will likely start seeing tax documents such as your W-2, investment account summaries and other receipts or information return copies come in your mailbox. Or you will receive notifications that they are ready to access via email over the next few weeks. Put these items in a safe place with your tax receipts and other tax documentation so you can avoid the stress of searching for documents. This will also allow you to expedite the filing of your tax return by beating the April rush.
   
   
3. Be aware of the tax deadlines. Our firm will work to keep you on track for meeting the filing deadlines. However, if you don’t think you’ll be able to make the filing deadline, just let us know in advance and we can file an extension on your behalf, giving you until October 15, 2018 to file your personal taxes. Be aware that you will still need to make a reasonable estimate of your tax liability for 2017 and pay any balance due with your extension request.
   
   
4. Let us know if you need help. Our tax experts are here to help. If you have questions about the information you need to submit in order for us to handle your taxes, please let us know. We are happy to answer any questions you may have about this year’s taxes and the impact of tax reform. We may also be able to identify areas of additional tax savings as well.

The key to easy tax filing is to get organized early and to reach out to our firm as soon as you can. This will help expedite any potential refund you may be entitled to—which is a great incentive to tackle your taxes now!

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5 tips to mitigate paying taxes on Social Security benefits

Like the old paraphrased saying goes: In this world, two things are certain—death and taxes. The recent federal tax overhaul changed a lot of rules, so it’s as important as ever to understand your tax obligations, including those on Social Security benefits.

According to the Social Security Administration, some will be obligated to pay federal income taxes on Social Security benefits. This usually happens only if you have other substantial income in addition to your benefits (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return).

No one can avoid the long arm of the tax man altogether, but there are ways to reduce your income and lower (or even avoid paying) taxes on your Social Security benefits. Consider the following tips:

1. Consider withdrawing money from a Roth account:
   If you need additional cash during the year, consider withdrawing it from your Roth IRA or Roth 401(k), Taxes are not due on Roth distributions and will not impact your adjusted gross income. Be aware of the minimum required distribution (RMD), however. Taxes are not due on Roth distributions as long as you have contribution basis.
    
2. Distribute your RMD to charity: Giving money to charity is a great way to help make the world a better place. While doing good for others, you can also lower the odds that your Social Security benefit will be taxed. You can transfer up to 100k per year to qualified charities.
   
   
3. Reevaluate working a part-time job: Money earned working a part-time job pushes you a little closer to owing taxes on Social Security benefits. If your part-time wages make little difference in your quality of life and/or you don’t like the work, consider ditching the part-time gig.
   
   
4. Reconsider municipal bonds: People are often attracted to municipal bonds as a way to lower their tax bill because they are not subject to federal and state income taxes. However, municipal bond income is included in the formula that determines whether or not you will pay taxes on your Social Security benefits.
   
   
5. Delay benefit collection: Delaying benefits until full retirement age (or beyond) is the best way to avoid paying taxes on Social Security benefits, at least for a while. Waiting to file for benefits also means a bigger check each month once you finally do start collecting.

Of course, be sure to consult with our firm if you have questions and to ensure the best tax strategy. Here’s to a happy and financially healthy New Year!

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New Tax Law: What You Need to Know

The Tax Cuts and Jobs Act of 2017 became law on December 22nd. Please download and review the documents below for more information on how this could affect you or your business's taxes in the coming years.

• Highlights of the Tax Cuts and Jobs Act
• Special Study on the Individual Tax Changes in the New Law

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Tips to Help You Truly Enjoy the Most Wonderful—and Overwhelming—Time of the Year

It’s amazing how much festive fun can be packed into a few weeks. While the holidays truly can be wonderful, they can also feel overwhelming with too much to do and too many temptations that derail us from enjoying what is truly important. To help you make your holidays feel more fulfilling and less frantic, try these suggestions:

1. Be intentional. Staying focused in the midst of the hectic holiday season can seem like a daunting task, but it's key to staying relaxed. Be mindful of what your priorities are and act with intent to make sure you keep focused on what you really need and want to do.

2. Give yourself a break. Funny how we call this time of year the “holidays” and it can feel anything but relaxing. Make a vow to carve out time to give yourself the break that you deserve.

3. Take vacation time. Rather than trying to cram personal errands into your workday, schedule a personal day to focus solely on those domestic and personal holiday preparations. This will allow you to focus 100% of your energy on work when you are at the office and help you feel more in control.

4. Just say no. It’s simple to do, but not always easy to say “No”…especially around the holidays. However, accepting an invitation because you don’t want to hurt someone’s feelings can have you burning the candle at both ends. So, practice politely and graciously declining invitations, and then put this skill into action.

5. Manage your own expectations. While you can do everything—you can’t do it all at once. This is an important mantra to keep in mind during the holiday rush. You and those around you can only do so much, so set realistic expectations about what you are willing to do and then be at peace with your decisions.

We hope you take these tips to heart in order to truly enjoy this special time of the year and avoid that overwhelmed feeling. Happy Holidays!

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Tax Reform Update: A Snapshot of Key Proposals in the GOP Bill

On November 16, the House passed a new tax reform bill that moves the GOP closer to bringing the legislation to fruition. Now the Senate is preparing its own tax reform package. If passed, it must be reconciled with the House before any final legislation goes to the White House. Here is a snapshot of some of the key changes proposed in the tax reform bill:

• Individual tax rates would be reduced and there would be four revised brackets of 12, 25, 35 and 39.6 percent. There is also a new maximum rate on business income for individuals of 25 percent.
• The standard deduction would be almost doubled, but personal exemption deductions would be repealed.
• The mortgage interest deduction would be capped at $500,000 of debt for newly purchased homes, but the $1 million cap will remain for current home owners.
• State and local sales and income tax itemized deductions would be eliminated and the property tax deduction would be limited to $10,000.
• Several personal deductions would be eliminated including those for medical expenses, alimony and student loan interest.
• Many education incentives would be consolidated.
• The child tax credit would be increased; and a temporary family tax credit would be introduced. The child and dependent care credit and the adoption credit would remain.
• Also, families of four or more would have fewer standard deductions and exemptions combined under the new plan which may or may not be offset by the increase in child tax credits or new tax brackets, depending on income levels.
• The estate tax exemption amount would be doubled and the rate would be lowered with the estate tax repeal not taking effect until 2024.
• The top corporate tax rate would drop to a flat 20 percent which will eliminate the graduated rates up to 35%.
• A new pass-through entity tax structure would be created, and the rules for deducting business interest would be modified.
• The individual and corporate AMT would be repealed.
• The Work Opportunity Tax Credit and many other business tax preferences would be eliminated.

These are just some of the latest changes outlined in the draft tax reform bill. We will continue to provide updates on this legislation as it progresses. If you have questions, please contact our firm.

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Tips to Simplify Your Thanksgiving Spread

With just days to go before Thanksgiving, the clock is ticking down to some of the most memorable meals of the year. However, for many of us, the pressure of preparing a perfect Thanksgiving feast can be overwhelming. If this is true for you, consider these tips to simplify your seasonal spread.

Take a potluck approach. If you’re charged with feeding a houseful of guests, there’s no reason why you can’t make a meal out of shared dishes. Just be sure to ask guests in advance to bring a dish to pass so everyone has time to prepare their favorites.

Breakdown the bird. A roasted turkey, the traditional centerpiece of a Thanksgiving feast, can be an absolute beast to prepare, cook and carve. So instead of tussling with a whole turkey, try cooking just a turkey breast or a breast and some legs if you like having both white and dark meat.

Put your slow cooker to work. There’s no reason that everything you make has to involve you slaving over a hot stove. Line up a slow cooker (and ask friends and family if they can bring theirs, too) and use it to cook meat, vegetables or even mull cider.

Buy pre-prepped foods. Yes, vegetables that are peeled and cut and ready-made mashed potatoes are more expensive than doing the prep yourself. However, if you’re short on time and want to have time to visit with family, the extra cost may well be worth it.

Create a “must-have” list. The holidays are often tied to memories of specific recipes, which can make it hard to prepare everything on your traditional menu. To avoid culinary overwhelm, have family members make a wish list of favorite foods and then enlist their help to make the dishes.

The tips above can help simplify preparation of this year’s Thanksgiving meal. Remember, while the perfect turkey and trimmings are delicious, they’re much less satisfying than the time you can spend with family and friends.

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Plan Now and Take Advantage of 2017 Tax Savings

The end of the year is often hectic, which is why it’s important to take some time now to reduce your tax bill. Our firm can offer additional strategies to further mitigate your tax burden; however, the following 5 tips are an excellent starting point:

1. Defer income. Because income is taxed in the year it is received, it may be beneficial to postpone income to lower your tax obligation. For example, ask your employer to postpone your annual bonus to pay in 2018, or if self-employed, bill your clients after the end of the year.
   
   
2. Look at last-minute tax deductions. Accelerating deductions can help lower your income. Charitable contributions is one way to do this…just be sure that you have a receipt. You may also be able to take advantage of additional deductions if you plan to itemize instead of claiming the standard deduction.
   
   
3. Use loss harvesting to offset investment gains. This is an important year-end strategy for taxpayers who have low-performing investments, such as stocks and mutual funds that they can sell at a loss. Losses can be used to offset taxable gains dollar-for-dollar. If your losses are more than your gains, you can use up to $3,000 of excess loss to reduce your total taxable income, and any other losses can be carried over year-after-year for your lifetime.
   
   
4. Maximize your retirement contributions. Using tax-deferred retirement accounts such as 401(k)s and IRAs to reduce your taxable income is win-win. You can both reduce your taxable income and increase your retirement nest egg. If you are employed and have a company-sponsored 401(k) plan with matching contributions, it’s advised to contribute the maximum ($18,000 for 2017 for those up to age 49 or $24,000 for those age 50 and over). If you can’t afford the maximum, be sure to contribute enough to qualify for your employer’s matching contributions.
   
   
5. Focus on your Flexible Spending Account (FSA). An FSA allows you to use tax-sheltered funds to pay for child care and medical bills and can help save tax dollars—but only if you use the funds by the end of the year. So, be sure to review your FSA balance so you can make a plan for last-minute qualifying expenses. You may also want to see if your employer is offering the IRS- approved grace period, which allows you to spend 2017 FSA funds through March 15, 2018.

The tips above offer a few ways to save significant money by putting a tax plan in place before the end of the year. You can also schedule an appointment with our firm to develop a customized tax strategy and perhaps reap additional savings.

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Simplify Seasonal Staffing with these Smart Strategies

Whether your business needs temporary workers to get through the holiday season or you hire short-term help on a regular basis, the process of finding the right candidates can be challenging. Try applying these strategies to make seasonal staffing easier:

1. Create an ideal employee profile. Even though temporary help may not be with you long, it’s still important you find the right fit for your business. Spend a few minutes to jot down the kind of characteristics a successful candidate should possess.
   
   
2. Detail the job description. If you regularly hire seasonal or temporary staff, be sure to consistently update job descriptions based on changes in your business or to add the ideal employee profile information mentioned above. If this is your first time hiring short-term help, ensure your job descriptions are clear about specific duties and expectations.
   
   
3. Create a recruitment network. Relying on only one source to find good seasonal help can limit your potential for finding great employees. Consider creating a recruitment network including current employees, trusted referral sources, social media, local higher education institutions, recruitment agencies and online job sites.
   
   
4. Standardize your screening process. Comparing potential candidates is much easier when you have a set of standard interview questions for each position. In addition, make sure you perform appropriate background and reference checks—this will help you protect your business and avoid potential issues.
   
   
5. Invest in onboarding. You may think it’s not worth taking seasonal employees through a formalized onboarding process. However, by doing so, you’ll save time and money in the long run by not having to answer simple questions, redo work or explain how your company operates. This will also make your candidate feel valued, which is an important part of increasing productivity.

Once you’ve identified your ideal seasonal employees, you can also apply these strategies to complement your existing recruitment process for full-time employees.

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5 Tips to Reset Your Stress Response

Because stress related to work, family issues and other events is something that affects many of us, it’s important to reset your own stress response to protect your health and productivity. Sharon Melnick, Ph.D., a business psychologist, offers these tips:

Act don’t react. According to Melnick, “Stress occurs when we feel that situations are out of our control.” This feeling activates stress hormones affecting our confidence, concentration and well-being. Since you can only control your own actions and responses, Melnick advises doing the best you can to make your own actions positive and letting go of what you cannot change. 

Breathe deeply. While this advice may seem simple, it can be very effective. Simply inhale for five seconds, hold and exhale in equal counts through your nose. This practice will help you restore calmness and clarity.

Avoid interruptions. Emails, phone calls, spontaneous meetings and texts leave us distracted—but they don’t have to. Melnick offers a three-point strategy: 1) Accept the interruption, 2) Ignore it if it’s not important or relevant and 3) If it is important, make a plan to address it after you’ve completed your priority tasks.

Work when energy and focus are at their peak. Working longer than a regular eight-hour day doesn’t necessarily make you more productive. When you are constantly pushing yourself, productivity tends to decrease and stress levels increase—depleting your overall energy. If possible, do your most important work when you are fresh and energized, take breaks every 90 minutes throughout the day, and wind down your work at a reasonable hour.

Take care of yourself. It goes without saying that a poor diet, poor sleep and little exercise are going to add to your body’s stress level. So, make sure that you put some energy into ensuring that your lifestyle helps you combat the external stressors that are out of your control.

While it’s virtually impossible to eliminate stress completely, you can control your reaction to it and take steps to reduce its negative impact. Follow these tips and be well!

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Proposed Tax Reform Plan: What Could It Mean for You?

Tax reform, one of President Trump’s key legislative agenda items, is moving closer to fruition. Based on the outline of his proposed tax reform package, which he unveiled on September 27, 2017, we’ve compiled this brief overview of the President’s major tax proposals:

Individual tax changes:

• There would be only three tax brackets including one at 12%, one at 25% and one at 35%. Legislators would have the option of adding a fourth bracket as a safeguard should wealthy taxpayers be in the position to pay less than they do in the current system.
  
  
• The standard deduction would be doubled to $24,000 for married couples and $12,000 for single filers.
  
  
• Personal exemptions would be eliminated. In addition, many itemized deductions would be eliminated or modified with the exception of mortgage interest and charitable contribution deductions.
  
  
• The proposal encourages lawmakers to keep tax incentives for home ownership, retirement savings, charitable giving and higher education.
  
  
• The child tax credit would be significantly increased from the current $1,000 per child under 17 years of age.
  
  
• The estate tax and the alternative minimum tax (AMT) would be eliminated.

Business tax changes:

• The C-corporation tax rate would be lowered from 35% to 20%. The deduction for net interest expense incurred by C-corporations will be partially limited.
  
  
• Sole proprietors, partnerships and S-corporations would have a maximum tax rate of 25%. Measures will also be implemented to prevent wealthy taxpayers from avoiding the top personal tax rate by re-characterizing their personal income as business income.
  
  
• A one-time low tax rate on existing overseas profits will be offered to companies in an attempt to have them move corporate money back to the United States.
  
  
• Future international earnings will not be taxed by the United States when paid as dividends from a foreign subsidiary if the U.S. parent company owns at least a 10% stake in the foreign subsidiary.
  
  
• A lower tax rate will be implemented on the foreign profits U.S. multinational companies to discourage them from sheltering profits in overseas tax havens.
  
  
• The proposal allows for the immediate expensing of the cost of new investments in depreciable assets, other than structures, that are made after September 27, 2017.
  
  
• The Section 199 production deduction will be eliminated based on the premise that it is no longer necessary in light of the lower corporate and individual income tax rates.
  
  
• The research and development credit and low income housing credits will be retained.

If you have any questions about these potential changes to the tax code and how they may impact your tax situation or your business, please contact us.

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Impacted by the Equifax Hack? Take These Steps Now!

If you were a victim of the recently announced Equifax hack, you need to take action to mitigate any negative impact it may have on your finances and credit. If you’re not sure if you were affected, you can use Equifax’s Potential Impact tool to find out. You will need to input your last name and the last six digits of your social security number to use this tool.

Unfortunately, hacks like this one are likely to happen again, so it’s vital to prepare by protecting your digital information as much as possible. Here are some steps you can take to begin the process:

1. Set up fraud alerts with the three major credit reporting agencies (Equifax, Experian and TransUnion) to alert you if someone tries to apply for credit in your name.
   
   
2. Use the fraud alerts that are available for your credit and debit cards, if you don’t already.
   
   
3. Consider credit freezes to lock your credit files to stop any new credit information releases. This will prevent any new accounts being opened in your name by an identity thief.
   
   
4. Check your credit report. You can get one free credit report every year from all three major reporting agencies at annualcreditreport.com. It is advisable to check in every four months, using one of your “freebie” reports rather than using them all at once. When you get your credit report, look for any suspicious activity. This should be a regular part of your financial self-monitoring.
   
   
5. Consider a credit monitoring service. Equifax is offering one free year of credit monitoring. However, before signing up you should review the terms of the agreement—and those of any other credit monitoring services that you may consider.

The Equifax hack is one more reminder of how critical it is to regularly monitor your financial and personal information for potential theft and misuse. If you do suspect that your information has been compromised, contact one of the credit reporting agencies mentioned above and the FTC Identity Theft Hotline at (877) IDTHEFT (438-4338).

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Tips for Maximizing the Value of Your Next Staff Retreat

Staff retreats can offer companies a lot of value. They can also be expensive and, unless managed effectively, not particularly productive. Before you plan your next (or first) staff retreat, review the following key factors to help you make the most of it.

1. Atmosphere. From physical conditions and dress code to receptivity to new ideas, think through all aspects of atmosphere to ensure everyone is comfortable and understands that the retreat offers a safe space to share and exchange concepts and viewpoints. The right atmosphere will encourage openness and spark creativity. Also consider timing. After a long day, you may want to cap things off with social events that run into late evening. However, be sure to build in breaks and offer staff time to recharge.
   
   
2. Participation. Make sure that everyone has the chance to participate. If there are a few employees who tend to monopolize conversations or exclude others in decision making, plan for this in advance by coordinating exercises where everyone has a part to play. You may also want to assign pre-retreat homework to further encourage participation. Finally, be sure to weave in a few fun activities that further motivate people to join in.
   
   
3. Relevance. For those facilitating the retreat, make sure you’ve planned thoroughly. Activities and content must be timely and relevant to your team. Spend time on identifying clear goals and objectives for your retreat, and then build your agenda accordingly.

Report on results post-retreat

In addition to the tips above, be sure to analyze results and plan next steps to maximize the value of your staff retreat. Follow-up on action items and direction that came out of your retreat by regularly checking in with your staff on progress. This will keep your team accountable for changes required. Combined, all of these tips will help you generate the greatest value from a company retreat.

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Free Money-Saving Apps for Every College Student

There likely aren’t many college students who don’t have a smart phone loaded with helpful apps. However, it is unlikely that any of these apps are dedicated to helping them build their financial fortitude. This is why we created our list below—chock-full of apps designed to make it easier for college students of any age to save money.

Mint—This personal finance app from Intuit is a great tool to easily track spending and learn how to budget…and can also help cut down on calls to the “Bank of Mom and Dad.”

Square Cash—Small debts are often accrued in college, but now it’s easier than ever to make good on paying them back—or collect on them. A few bucks borrowed or lent for a beer or a latte is easily repaid or collected using Square Cash. This app allows a user to send from or receive money to their bank account with no fee.

ATM Hunter—ATM fees can add up. MasterCard’s ATM Hunter helps students locate the nearest ATM and enables them to filter locations based on hours of operation, fees and more.

mySupermarket—Using this app allows students to avoid impulse buys and find the best deals on supermarket items. The app is great for food shopping online or in a store.

Big Oven—Getting great deals on grocery items is a good way to save money, but not if food is wasted by tossing leftovers. The Big Oven app helps students figure out ways to thriftily use food they’ve purchased. The app also offers more than 350,000 recipes and the ability to manage grocery lists.

Share our list with a college student you know. It’s a great start toward managing money wisely while in school.

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Expert Advice to Keep Your Internet-Enabled Devices Safe from Cyber Criminals

Did you know that your webcam and even your home or office internet router can be the gateway through which cyber criminals gain access to your most sensitive data? If not, don’t panic—we have helpful tips below from the experts at the National Cyber Security Alliance to ensure that you head off this type of malicious action.

1. Educate yourself about maintaining the security of all your devices. We’ve all read about the need to reset passwords on our smartphones, tablets and home computers—and not to connect to unsecured networks. The same precautions should be taken with all the devices you use to connect to the web, such as web cams and routers.

2. Keep up with your apps. We’ve all done it…downloaded an app that we no longer use and allow to sit on our device. Hackers are always looking for easy ways to access data and a “stale” app is one way to do it. To prevent this, check your devices periodically and delete apps you no longer use.

3. Know what you are buying. Before you purchase any device, conduct your own research to see if it has a reputation for security issues. Look for an alternative product if the one you are considering has been compromised in the past.

4. Revisit your home and office router regularly. Cyber security experts advise that every business and home owner who uses an internet router should schedule routine maintenance for it. This is as simple as using a strong password and changing it regularly, but it’s a step that too many people fail to take—leaving them vulnerable to a cyber attack.

Take a few minutes out of your schedule on a monthly basis to keep your home and office protected by following these tips. It just might save you and your business from a costly and disruptive cyber crime.

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Be Alert and Aware: Tax Scammers Don’t Take a Summer Vacation

The IRS has identified several new variations of standard tax scams involving fake tax bills and demands for payments. Many of these scams involve purchasing and transferring information using a gift card or iTunes card. Other scams to be aware of include:

Electronic Federal Tax Payment System (EFTPS) Scam
This scam involves con artists claiming to be from the IRS. Scammers call and demand immediate tax payment and threaten arrest if a payment is not made immediately by a specific prepaid debit card. Victims are also warned that they should NOT talk to their tax preparer, attorney or local IRS office until after the payment is made.

“Robo-call” Messages Demanding Payment
It is important to remember that the IRS does not call and leave prerecorded messages requesting a call back, but scammers do! According to the IRS, scammers tell victims that if they do not call back, a warrant will be issued for their arrest. Those who do respond are told they must make immediate payment either by a specific prepaid debit card or by wire transfer.

Private Debt Collection Scams
The IRS recently sent letters to taxpayers whose overdue federal tax accounts are being assigned to one of four specific collection agencies. Scammers are aware of this and are now calling taxpayers posing as private collection firms. If you receive a call like this and you have not been notified by the IRS about a tax debt, it is safe to consider the call a scam.

Protect Yourself: Know the Signs of a Scam
Given the level of sophistication and perseverance of scammers, it is sometimes difficult to determine legitimate contact by the IRS (and its authorized private collection agencies) versus ploys to get your money and personal information. Protect yourself by understanding that the IRS will:

• Never contact you initially by phone or demand immediate payment by prepaid debit cards, gift cards or wire transfers.
  
  
• Never threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for non payment.
  
  
• Never demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
  
  
• Never ask for credit or debit card numbers or other sensitive information over the phone.

Remember, the IRS will mail a bill to taxpayers who owe. And all tax payments should only be made payable to the U.S. Treasury and never to third parties.

If you are contacted via phone by a scammer this summer, do not give out any information. Hang up immediately and report the scam to the Treasury Inspector General for Tax Administration at this site or call the hotline at 800.366.4484. If you are unsure about any potential outstanding tax obligations, it is also a good idea to check with your tax preparer.

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Tips for Implementing a Successful Flex-time Schedule this Summer

Now that summer/vacation season is here, your business may be enjoying a more relaxed vibe with employees taking time off or leaving early. If you’ve ever thought about implementing a flexible work program, now may be the time to pilot one, especially if your business is a bit slower this time of year. To help, we offer the following tips:

Start with a strategy—Think through which departments and job functions can successfully work on a flex schedule. Then create a strategy that identifies which positions are suitable for flex time, the levels of flex time to be offered, and who will manage flex-time arrangements.

Make metrics matter—Studies have shown that flex-work arrangements are great for employee retention and engagement. However, these arrangements also have to support your business productivity. Be sure to identify which metrics you will track to ensure your flex schedule is beneficial for everyone.

Take a trial run—Before adopting a full-scale flex program, perform a trial run in one department or with a few select employees. This will help you work out issues related to technology, connectivity and communication—as well as help you gauge overall impact on your business before launching the program business wide.

Train your managers—Managing a flexible workforce is very different than managing employees on-site. Make sure managers know how to motivate remote and flex-time workers and understand how to best communicate with remote employees. In addition, encourage managers to hold regular meetings to keep your business on track.

Flexible work programs are a highly valued benefit for most employees. This kind of program also has many benefits for businesses, including cost savings, lower employee turnover and higher productivity. Consider using the tips above to trial your own flex work program this summer.

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Four Money-Saving Mid-Year Financial Planning Tips

It’s almost exactly the mid-point of the year, which makes it prime time for a mid-year financial review. If you need some monetary motivation for evaluating your financial progress so far this year, you may want to think of mid-year planning as a series of potential money-saving opportunities, for example:

1. Save tax dollars by evaluating your 401(k). Take a look at your current 401(k) contributions to see if you are on track to maximize your annual contributions. Making the maximum contributions this year is not only good for your retirement fund, but will also save you money by lowering your tax bill.
   
   
2. Trim your budget. Make one or two small changes to your weekly or monthly expenditures. Skipping a meal out or your daily coffee run can save you a lot of money over the next six months.
   
   
3. Fight financial fatigue from fees. Banks and credit card companies (not to mention all those online subscriptions you have) are always changing their fee structures—which may mean you aren’t even aware of some of the things you are paying for. Now is the time to take stock and cancel or downgrade the services you no longer need. Doing so will help you reduce fees and may save you considerable money.
   
   
4. Ask about your tax estimate. You may be thinking that April wasn’t that long ago—and you are right—but the end of the year is already half-way here, and after that, you can’t impact your 2017 taxes. Now is the time to talk to our firm about your current tax situation and make any changes to increase your tax savings.

These are just four financial planning tips that can save you money before the end of the year. There are many other mid-year planning strategies that can increase your savings, too. Not sure where to start with your plan? Let us help you. Contact our firm today.

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How to Protect Your Business from the Next “Wanna Cry” Attack

The recent “Wanna Cry” ransomware attack that paralyzed several large organizations in the U.S. and Europe is a solemn reminder that the risk of cyber security breaches is real. Every business owner should take steps to assess the type of cyber security threats their business could be subject to and how to avoid them. The tips below are a good place to start:

• Don’t underestimate the risks. Many small business owners are too busy taking care of day-to-day responsibilities to keep cyber security top of mind. This is a mistake—the greatest weapon against attacks is awareness and having a plan in place to prevent them. Reinforce prevention by incorporating a plan into employee onboarding and offering ongoing training.
  
  
• Make updating software a priority process. As the “Wanna Cry” attack taught us, updating your computer software is an essential prevention strategy. Many of the infected computers at large organizations were not updated—leaving entire networks vulnerable when just a single computer was compromised. A regular schedule and protocols for updating software can help mitigate cyber security risks.
  
  
• Learn the signs of an attack and what to do about them. The most effective way to avoid falling victim to another Wanna Cry-like attack is to be aware of the type of emails that may contain ransomware or other viruses. These emails typically include an attachment (often a .zip file) that you didn’t ask for, and may come disguised as an email from someone you know. If in doubt, the best course of action is to delete the email immediately.

With the risk of cyber attacks growing by the day, it’s time to take action to protect your business. Educating your employees is key, as is updating your software on a regular basis. You may also want to ask an IT professional to help you evaluate and mitigate risk in this area.

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Tips to Help You Stem the Flow of Potential Risks This Flood Season

Whether from heavy rains or hurricanes, this time of year can bring with it the risk of floods across many parts of the United States. While you may not be able to predict the likelihood of a flood in your area, with these tips you can help to mitigate physical and financial damage if a flood occurs where you live.

1. Treat structural damage seriously. In any flood situation, the Federal Emergency Management Agency (FEMA) advises to look for any visible structural damage at the site of your home or office including warping, loosened or cracked foundations, cracks, and holes. If you aren’t sure if your home or office is safe, do not return to it until you have it evaluated by a flood remediation professional.
   
   
2. Turn off your electricity. If you experience severe flooding from a storm and power is lost, it is critical to immediately turn off the main electrical source and all individual fuse connections at your home or office to avoid electrocution. In addition, check your water, gas, electric, and sewer lines and notify the appropriate utilities if you suspect they are damaged.
   
   
3. Document any damage. Before cleaning up from a flood, be sure to fully document any damage if you plan to make an insurance claim using notes, digital photographs and video. Keep in mind, homeowners and business property insurance often do not cover flood damage, unless you have a special waiver.
   
   
4. Avoid flood-related health hazards. Flood water is often contaminated, so it’s important to protect yourself and others before coming into contact with it by using protective clothing, waterproof gloves and boots. FEMA also recommends boiling water for drinking and other uses until authorities declare the water supply to be safe.

Hopefully you or your business won’t be affected by a flood now, or in the future. However, by making note of the tips above, you’ll know just what to do if flooding occurs and how to mitigate the associated physical and financial risks.

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How to Really “Clean Up” at Your Next Yard Sale

This time of year is when you often see yard sale signs popping up. For some, holding a yard sale is a means of clearing out unwanted items. For others, it’s an opportunity to get some great “finds.” Whichever side of the yard sale fence you’re on, these tips can help you “clean up”:

Choose your timing carefully. Research continues to show early morning on Saturday is the best time for high volume traffic. If you are looking to shop yard sales, be prepared to set your alarm early on the weekend.

Tune to your local community. If you want to get the word out about your sale (or find one to go to), social media and online community yard sale listings are very effective. You can also post signs if your neighborhood permits this. Also, tell your family, friends and co-workers.

Pay attention to prices. After all the time and effort you put into your yard sale, you don’t want to be stuck with a lot of leftover items—so price your merchandise competitively. Do a little comparison shopping by looking on eBay or other auction sites to get a feel for what prices make sense. For yard sale buyers, you may want to see if the seller is willing to barter a little to get items off their hands—but be realistic, and respectful if you do this.

With these tips and a little bit of luck, whether you’re buying or selling, you should be able to really clean up at your next yard sale!

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Take Your Spring Cleaning to the Office with These Tips

Window washing, carpet cleaning, garden grooming—these are all popular spring cleaning chores for homeowners. However, with year-end and tax season behind you, this time of year is also perfect for spring cleaning at the office. These tips will help you and your staff get—and keep—that “just cleaned my office” feeling:

Start with a clean sweep of your desk. Take an hour or two and ruthlessly cut the clutter by emptying all of your desk drawers, sorting out only what you need, and shredding or recycling the rest of your papers.

Knock-out the knick-knacks. If your desk “mementos” are covered with dust and rarely given a glance, you know what to do: take them home or, if appropriate, donate them to a charity.

Digitize your documents. If you haven’t already, move your files to cloud storage. Make a list of the documents you need to store or access on a regular basis, then evaluate your cloud-based file storage options to see which platform will best suit your needs.

Corral your online credentials. LastPass and other online password-saving applications can save you time, while also eliminating the need to keep sticky notes and paper lists of passwords on your desk.

Declutter your desk daily. Once you have invested the time to spring clean your desk and office, spend a minute or two at the end of each day to do a quick tidy up in order to preserve your pristine work area.

Spring cleaning your office is not just a feel-good activity. Studies have shown that a neat and orderly office space leads to improved productivity and efficiency, which means you may be able to leave the office a few minutes early to enjoy warmer weather or to continue your cleaning spree at home.

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These Tax Day Treats Shine Light at the End of the “Tax Season Tunnel”

With just a few weeks to go until Tax Day on April 18, it’s time to make sure that you’re on track to get your individual return filed. If you haven’t already engaged our firm to help you with your taxes and you need assistance, don’t delay…it’s time to let us know!

While tax season can be stressful, Tax Day itself can be quite rewarding if you consider some of the Tax Day freebies that are available across the country. For example, according to the website DealsPlus.com—Kona Ice, Great American Cookie, Boston Market, Target and many other businesses are offering discounts or free items to help ease the pain associated with paying taxes.

If you need a little light at the end of the proverbial “tax season tunnel” as April 18 approaches, keep these Tax Day treats in mind. You may want to check your local area for other free or discounted goodies available that day, too.

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Do You Sit All Day? Take a Stand Against a Sedentary Lifestyle

The average American sits a lot. Many of us sit while we work, while we relax and while we learn. Over the long term, this sedentary way of life can have a negative impact on our health, increasing the risk of diabetes, heart disease and cancer—in addition to shortening life spans. To counteract these negative effects, it’s important to get up, get active and get moving!

Even if you engage in a formal exercise program, it’s usually not enough to reverse the negative health effects of sitting most of the day, but it is a big step in the right direction. If your physician clears you to exercise, try doing a daily workout or at least exercise as often as you can throughout the week. Then use these tips to incorporate more movement throughout your day:

• Set a timer to get up every 30 minutes and stand, walk or stretch.
  
  
• If you sit at a desk, try a standing desk.
  
  
• Swap out your chair for an exercise ball to engage your muscles.
  
  
• Use part or all of your lunch break to take a walk.
  
  
• Walk places that are within a reasonable distance instead of sitting in a car.
  
  
• Use the stairs; they require extra effort, which helps to improve your health.
  
  
• Instead of fast forwarding through commercials when you watch your shows, use this time to take a break from sitting.

Taking a stand against excessive sitting may take a little bit of effort, but it will add years to your life and make you feel more energized while improving your health.

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Set the Stage to Help Your Home Sell This Spring

Spring is in the air...which means peak home-selling season isn’t far away. In fact, according to recent market data, 60 percent of all home sales in the United States will occur in the spring and summer months. If you’re thinking about putting your home on the market, now is the time to get prepared—which includes considering how you will “stage” your home to make it more attractive to potential buyers. These tips can help:

• Cleaning your home thoroughly is one of the most important things you can do to stage it effectively. If you don’t have the desire or time to clean, it’s worth hiring someone to help you.
  
  
• Pay special attention to sprucing up the interior and exterior of your home’s front entrance to make a great first impression.
  
  
• De-clutter all rooms and consider putting excess furniture and other items into storage.
  
  
• In addition to visual appeal, don’t forget to make your home smell good. Use sweet, but subtle, air fresheners or set out freshly baked goods, like cookies or muffins, to create that comforting smell of home. Your visitors will appreciate the treats as well.
  
  
• Be sure that the exterior of your home offers that all important curb appeal. This is especially true during the spring and summer months when plants—and weeds—are growing. Keep your lawn manicured and clean up outdoor clutter.

The aim of staging your home is to make it memorable to potential buyers—in a good way. Home buying is often an emotional process and, according to real estate experts, buyers often decide within the first minute of a home showing if it is “the one.” Use these tips to bring out your home’s full market potential.

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Avoid March Madness—Why You Should File Your Taxes Now

For sports fans, this time of year is an exciting one. First the Super Bowl, and then the buildup toward the NCAA March Madness tournament. While tax season isn’t quite as exciting as these events, you’ll still want to make the effort to get ahead of the game—and the April 18 deadline—to score the benefits of early filing.

Avoiding identity theft.
Filing your tax return early helps you sidestep criminals who want to steal your sensitive information. With identity theft related to tax returns on the rise, this is an important early filing benefit. Once your return is filed with the IRS, your social security number is locked, preventing it from being used again by someone other than yourself.

Dialing down stress.
One obvious benefit of early completion is crossing it off your to-do list and avoiding the prolonged anxiety that comes with the approaching tax deadline. Beat the “March Madness” and “April Angst” of last-minute tax filing for your business and individual taxes by having us file them for you now.

Expediting any potential refunds.
If a tax refund is in your future, the earlier you file your taxes, the sooner you will see your refund check. Keep in mind, the IRS reports some delays are expected this year for filers claiming the Earned Income Tax Credit or the Additional Child Tax Credit.

Maximizing all deductions.
Filing early allows us to have the time required to prepare your return and research all the tax deductions you may be entitled to. Starting the return process earlier gives you more time to gather your supporting paperwork and get any additional documentation you may need to claim a deduction.

Having time to pay outstanding tax bills.
If you owe taxes, filing early gives you time to save for payment if needed. It also removes the last-minute element of surprise—you’ll know exactly where you stand with the IRS.

Ready to tackle your taxes and take advantage of these early-filing benefits? Start uploading your tax documents to your portal today, or contact our office for assistance.

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Small Businesses Can Restart Health Reimbursement Accounts in 2017

Although the fate of the Affordable Care Act (aka Obamacare) is not yet clear, thanks to the passing of the 21st Century Cures Act at the end of 2016, employers with fewer than 50 employees can now start funding stand-alone health reimbursement accounts (HRAs) again. Employees can use HRAs to pay for medical expenses, including health insurance coverage on the Obamacare health insurance exchange market.

Until this year, employers were not allowed to offer stand-alone HRAs under the Affordable Care Act because they didn’t meet credible coverage rules. Now employers can restart stand-alone HRAs, and if they failed to halt them despite the Obamacare mandates, they will also receive retroactive penalty relief. However, there are some new regulations related to HRAs that business owners should be aware of including:

• A new limit to annual employer contributions of $4,950 for employee-only coverage and $10,000 for family coverage.
  
  
• Employees cannot contribute to these HRA accounts, only employers can.
  
  
• HRA funds can be used by employees to pay for insurance premiums or bills from physicians.
  
  
• The Obamacare premium tax credit will be reduced dollar for dollar by the HRA amount if an employee uses both.
  
  
• Any HRA reimbursements for health insurance purchases which fail to satisfy the “minimum essential coverage” requirements of Obamacare for will be considered income for employees.

For more information about the rules related to the reintroduction of HRAs, please review the Department of Labor fact sheet here.

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Tips to Defend Your Business from Cyber Attacks

You need only tune into the news to see that cybercrimes are a very real threat. From viruses to malware, everyday computer use and online browsing can leave you vulnerable to hackers who want your valuable information. If you have a small business, your risk of a cyberattack is likely even higher, especially if you do not have the resources or know-how to enact effective security policies. In addition to engaging an IT professional to help you identify and mitigate your cyber risks, consider using these tips from Entrepreneur.com to keep your business safe:

1. Analyze your email security to identify potential threats. If you’re not protecting your company emails and other electronic communications with encryption, you should. This will make it harder for hackers to succeed in accessing your data.
   
   
2. Do the obvious: Install malware, spyware and firewall programs. There are many good, cost-effective software programs you can use to protect your business from incoming cyberattacks such as those made by Malware Bytes, McAfee and Norton. Part of the protection plan for your business should be to install these programs on every work-related computer to help catch and eliminate threats.
   
   
3. Power up your password policies. Passwords are your first line of defense against cyber criminals, so make sure that you and your employees know how to use them effectively. While using longer, complex passwords and changing them frequently may be a bit of a hassle, it’s a crucial strategy for avoiding a devastating cyber attack.
   
   
4. Train your employees to recognize suspicious online activity. It’s definitely a good idea to school yourself on how to avoid being a victim of a cyber attack, but unless you’re a solopreneur, you need to make sure that your employees know how to protect themselves and your business, too. Be sure to provide formal computer and online security procedures and information that will help your staff spot and stop potential threats before they do damage to your business.

Protecting your company against cybercrimes is an absolute must in today’s business environment. Use the tips above to help you get started and be sure to reevaluate your cyber protection plan at regular intervals to defend your business against new and emerging threats.

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Break Barriers in 2017 with These Mind-Changing Mini Resolutions

There’s a reason why the regular New Year’s resolutions like losing weight, exercising more and sticking to a budget are popular—so many of us need to do them! There’s also a common reason why so many of us fail to meet our goals in these areas: we haven’t developed the mindset to support the changes that we want to make.

Instead of setting a big, audacious goal right now, consider making some of what Jacob Geers of the ThoughtCatalog.com terms “mini-resolutions.” They’re little changes that can have a big impact on your mindset, and which can ultimately allow you to break the barriers holding you back from reaching bigger goals, such as losing 25 pounds this year. Here are a few examples:

1. Get enough sleep. If you think sleep is a waste of time, consider that most people need between 7 and 8 hours a night to operate at peak performance. Getting less sleep can cause you to overeat, make poor choices when it comes to dealing with stressful situations, and just be plain cranky.
   
   
2. Just say “no.” If you’re always taking on one more thing to help other people out, you may be sabotaging your own health and happiness in the process. Being more mindful about how you spend your time will give you the opportunity to do things that will move you closer to your own goals.
   
   
3. Take a social media holiday. Research has shown that heavy use of social networks can actually cause feelings of negative self-worth, which is counterproductive in making good on self-improvement resolutions. Taking a break from social media will also free up your time to focus on your goals.
   
   
4. Give yourself space. It’s amazing how much calmer, in control, and focused you’ll feel if you simply give yourself a little time and space to connect with nature, or even just allow some extra breathing room between meetings and other obligations. This can have a positive impact in other areas of your life which may need some tweaking, too.

While these mini resolutions may seem too small to make a difference at first, once you try them, it’s likely you’ll find yourself feeling more ready and energized to break down the barriers that lie between you and achieving the bigger goals you have for this year.

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Keep the Holidays Merry with These Simple Stress Relievers

The holiday season can be wonderful, but they can also be one of the most stressful times of the year. Fortunately, the experts at Psychology Today also offer these simple stress relievers to put the joy back in this special time of year:

1. Take a time-out. Time-outs aren’t just for toddlers who have a tantrum. In fact, rather than being a punishment time-outs (a.k.a. quick relaxation breaks) can be a positive addition to calming adults with frenetic schedules. So, when you feel overwhelmed during the day, do one to five minutes of a relaxing activity to restore your sense of calm.
   
   
2. Opt for optimism. If you find yourself getting annoyed with friends or family over the holidays, try to shift your negative thoughts to positive ones. This can help you view the situation at hand with gratitude instead.
   
   
3. Fit in fitness. Even if you are tight on time, squeeze some exercise into your schedule. You will feel better and calmer if you get your body moving. Even just a 20 minute walk once a day will help you keep stress at bay.
   
   
4. Eat smart. Okay, easier said than done this time of year, but if you make a concerted effort to control your portions and balance your diet, you will avoid sugar crashes and the other negative effects of overdoing it on holiday treats. This will not only help to stabilize your mood, but it will keep your energy up, too.
   
   
5. Make a ‘to-do’ list—then cut it.  Writing down all that you have to do during the holidays can be overwhelming, but it can also help you realize how do-able your tasks are. Be realistic as to what you put on your lists. Then lighten your load by cutting items that are not absolutely necessary.
   
   

It’s easy to become overwhelmed by economic and social pressures to live up to unrealistic expectations for what you are supposed to do, give and feel during the holidays. Use the tips above to help you beat seasonal stress and truly enjoy this special time of year.

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Obama’s New Overtime Pay Rule is On Pause—What Does it Mean for Your Business?

Just days before it was scheduled to be implemented on December 1, a federal judge in Texas has blocked the implementation of the new Department of Labor (DOL) federal overtime rule, which would have doubled the Fair Labor Standards Act’s (FLSA’s) salary threshold for exemption from overtime pay. According to an NPR report, this extension of overtime eligibility would have affected 4 million Americans and required employers to pay time-and-a-half to their employees who worked more than 40 hours in a given week and earned less than $47,476 a year.

Lawsuits objecting to the overtime rule were filed by 21 states, the U.S. Chamber of Commerce, and other business groups concerned about the negative impacts of the legislation on businesses—including higher payroll costs and reduced staffing flexibility. The DOL plans to challenge the decision and argues that the new rule would have helped to offset income erosion due to inflation and that the rule would deliver fairer pay to lower-wage employees who are currently exempt from overtime pay. The DOL also stated that the salary level was set purposefully low to screen out obviously nonexempt employees such as executives and higher-level professionals.

Although the overtime extension rule will not take effect in December, it could still be implemented in the future. Employers should continue to follow the existing overtime regulations until a final decision is reached. For those employers who have already raised exempt employees’ salaries to meet the new threshold or who have reclassified employees who are still earning less to nonexempt status, the Society for Human Resources Management (SHRM) recommends leaving such decisions in place because they would be difficult to reverse. However, employers may want to postpone making any further moves until a final ruling is made.

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Take Note of New Business Tax Deadlines in 2017

As a result of the highway funding extension bill signed into law by President Obama in 2015, there are important changes coming in 2017 to deadlines for business tax filings including:

1. W-2 and 1099 filings are due January 31 in 2017 instead of March 31. These forms are still due employees and contractors by January 31, so it’s important to prepare and file them early if possible.
   
   
2. S-corps, partnerships, LLPs and multi-member LLCs filing Form 1065 must file by March 15 or the 15th day of the third month following the end of the organization’s fiscal year. The previous deadline was April 15. Extensions are available for up to six months, filed no later than September 15, 2017.
   
   
3. C-corps filing Form 1120 must file by April 15 (previously March 15) or the 15th day of the fourth month following the end of the organization’s fiscal year. Extensions can be filed no later than September 15. After 2026, C corporation extensions will be available for up to six months after the initial due date.
   
   
4. Trust and Estate filing Form 1041 the extension due date has changed from September 15 to September 30.
   
   
5. Exempt organizations filing Form 990 now have only one extension until November 15.

If you have any questions about the above changes please do not hesitate to contact our office.

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Five Key Areas Every Business Owner Should Review Before Year End

We’re well in to the fourth quarter of the year, which means year end is fast approaching. Here are five important areas of your business to review before the calendar turns to 2017.

1. Tax planning opportunities. November and December are prime time for tax planning, which can pay big dividends when filing time arrives. Touch base with our firm now to reduce your business tax obligations as much as possible.
   
   
2. Payroll. Make sure you have all information updated, employees are properly classified, and that you are in compliance with all payroll regulations. Plus, you’ll want to ensure that all employee information is securely stored.
   
   
3. Cash flow. As you well know, cash flow is the lifeblood of your business, so if you’re having trouble controlling it, now is the time to analyze why and ask for assistance if needed.
   
   
4. Estimated tax payments. If you've paid estimated taxes throughout the year, review your totals so that you have the information on-hand for tax season and you can make up any shortfall before the end of the year.
   
   
5. Your overall progress. Take a step back and consider if you have met your annual projections for profitability and growth. If you’ve gotten off-track it’s time to make a plan to rectify the situation. If you’re satisfied with where you are, take time to lay out next year’s plan.

By reviewing these five areas now, you’ll be able to lower your taxes, reduce potential payroll-related penalties, and have a good handle on how to move your business forward in the coming year. If you need any help in the process, please contact our firm.

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Start Holiday Gift Giving for the Kids with an IRA Contribution

If you’re like many parents and grandparents, you may already be thinking about what kind of gift to get the children on your list this holiday season. For teens and young adults especially, it can be challenging to come up with truly unique and meaningful gifts. One idea with long-lasting impact is to make a contribution to either a traditional or Roth IRA on your children or grandchildren’s behalf.

IRS rules state that the maximum that can be contributed to an IRA each year is the lesser of the child’s earned income or $5,500 (the 2016 limit for an individual under age 50). So if your child or grandchild already has an IRA, you’ll need to know if they’ve already contributed to it this year.

If your child or grandchild does not have an IRA account already, you’ll need to decide on the type of IRA you would like to use for your gift (i.e. a traditional or Roth IRA). Traditional IRA contributions are tax deductible with taxes paid when the funds are withdrawn at retirement. Conversely, Roth IRA contributions are not tax deductible. However, the distributions, including earnings, are tax-free at retirement.

As long as your contribution to an IRA is below the annual $14,000 gifting exemption, it is not subject to any gift tax unless you give additional reportable gifts throughout the year. Keep in mind that such a contribution will not hold any benefits for you on your own income tax return.

If you have questions about an IRA holiday gift for your children or grandchildren, please contact our office.

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Don’t Let Year-End Cost-Cutting Derail Your Business Goals

Many businesses need to adjust their spending to meet the reality of their cash flow during the last few months of the year. While it can be tempting to just cut expenses across the board, this strategy may actually backfire if you cut in the wrong places. Here are four budget areas you should try to preserve to avoiding derailing your long-term business goals:

1. Marketing—It’s one of the easiest things to cut, but doing so will eliminate your ability to grow. The smarter strategy is to continue doing the marketing initiatives that bring you results so you don’t miss opportunities to gain new customers.

2. Training—Instead of eliminating employee education opportunities, look for cost-effective options such as online training or in-house peer-to-peer training to reinforce skills. Regular training is especially important for frontline employees who can make an immediate difference in maintaining and winning business.

3. Safety—Cutting your budget should not mean increasing the risk for workplace injuries or creating an unsafe work environment, which can expose your business to potential workers’ comp claims. Consider safety an “untouchable” area when it comes to budget cuts.

4. Quality—Another area where shortcuts should be avoided is your product and service quality. Reducing resources to the point that it affects your end product is not going to help drive more business—in fact, it may have a significant negative impact on sales.

If you keep these four key expense areas steady, how can you make up budget deficits? The best way is to look at all of your expenses, line by line, and identify unnecessary or hidden costs that can be eliminated. It’s also important to maintain an in-depth view of your financials throughout the year—not just when your budget is tight—so you can take proactive steps to avoid future cash crunches and keep to financial goals.

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Wondering About Tax Deductions for Political Contributions? Here’s the Lowdown

With election season in full swing, you may be wondering, “Are political contributions tax deductible?” Here’s the lowdown:

Whether it’s your county mayor or the future President of the United States, the rules on taking advantage of tax deductions for political contributions are the same: Donations are deductible if the organization you give to is a 501(c)(3) tax-exempt charity. This means that the organization you give to must have tax-exempt status, which is a special designation obtained from the IRS, in order for you to claim a tax deduction.

Many political organizations are automatically disqualified from this status. For example:

• Any donation to a political party, campaign, or action committee is non-deductible.
  
  
• Other non-deductible contributions are those to individual people, labor unions, business associations, for-profit schools, for-profit hospitals, foreign governments, and fees paid to associations or state or municipal governments.

Despite these rules, you can still reap the benefits of a tax deduction if you support 501(c)(3) tax-exempt political organizations that are non-partisan, in compliance with IRS guidelines on charitable contributions. Such organizations are allowed to communicate with politicians to ask them to make an issue a priority and educate them about why they should do so.

The bottom line: While you can’t make a tax-deductible donation directly to a candidate or campaign, you can make a tax-deductible donation to an organization that lobbies candidates about issues that are important to you. Just remember that in order to reap the benefits of a tax-deductible contribution, you’ll need to itemize the deductions on your tax return.

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Take Note! The Filing Deadline for W-2s and 1099s is January 31 in 2017

Consider this blog post as early notice that the date by which employers must file their W-2s and 1099s with the Social Security Administration (SSA) and IRS will change to January 31 in 2017.

Previously, W-2s and 1099s were not due to governmental agencies until March 31, so this new deadline will significantly reduce the window for making any necessary changes. These forms are still due to the recipient by January 31.

In order to meet the new deadline, it is important to keep your payroll and employee information as up to date as possible. Please keep in mind that if our firm will be filing your W-2 and 1099 forms, we will need your data in a timely manner in January. Additionally, if you are notified of any incorrect information contained on these forms, it will need to be corrected right away.

The new filing deadline for W-2s and 1099s represents a significant change and makes it imperative that payroll and employee information is accurate and up to date. If you have any questions about this information, please contact our office.

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The World is Chipping Away at Credit Card Fraud—But Individual Vigilance is Still Key

EMV chip technology, which is the first major upgrade for credit card fraud protection in many years, is slowly being rolled out by merchants around the world, including in the United States. While this technology has the potential to provide better security for your credit card data, it still has its limits and it is not completely hacker-proof or secure. As such it is still important to be vigilant about protecting your personal information and your credit card whenever you use it. A few key points to keep in mind:

• Double check the whereabouts of your credit card often. This may sound silly at first, but the instances of people forgetting their cards in credit card terminals and bank machines is actually increasing according to industry sources (partly because chip card processing takes a little longer), so try to remember to take your card back after leaving a store so that it doesn’t get stolen….and double check that your credit card is in your possession on a regular basis.
  
  
• Create account alerts. If someone does get unauthorized access to your credit card information, you’ll want to know asap. Most financial institutions and credit card companies have free text message and email notifications that can alert you to suspicious account activity so please, sign up!
  
  
• Take data breach notifications seriously. With so many stories in the news about retail data breaches, it’s easy to tune them out. However, according to AARP (American Association of Retired Persons) 1 in 5 data-breach victims suffered fraud in 2015, up from 1 in 7 in 2014. Clearly, this is a growing problem and you should take any news or notices of a breach where your card has been potentially compromised seriously and take the actions recommended by authorities to avoid losses.

Payment industry research shows that more than $16 billion was lost in worldwide credit card fraud in 2014 and 48 percent of the losses occurred here in the United States, making it more important than ever to keep tabs on your credit card and use the tips above to avoid having your credit card and other sensitive information compromised.

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Before the First School Bell Rings, It’s Time to Reset the Alarm Clock

It’s August and children and parents everywhere are facing a grim reality: back to school season is just around the corner. At this time of year, many parents struggle to get their kids back into a regular sleep routine. To help, we offer these tips to reset your family’s alarm clock before the first school bell rings:

1. Start tonight. While child health experts advocate keeping children on the same sleep schedule all year, the reality is that over the summer break many kids get up and go to bed later than usual. It generally takes three weeks to adjust to a new sleep routine, so start now.
   
   
2. Stay strong. Set regular waking and sleeping times, then stick to them. Most kids and teens need at least 10 hours of sleep a night, so take this into account as you establish your routine.
   
   
3. Eliminate evening electronics. While you may think that playing games on a phone or tablet is relaxing, it can actually stimulate children and disrupt bedtime routines. Establish a time when electronics must be put away each night and don’t allow them in bedrooms.
   
   
4. Set a good example. It’s harder for kids to stick to a routine if they see their parents doing otherwise. While you may not want to go to bed at 8 p.m., you can still set a good example by participating in a more low-key nighttime routine and not staying up until all hours.

Now is the time to start settling into a more school-friendly sleep routine. By making it a priority now, it’s more likely that everyone will be well-rested as the school year starts.

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Getting Married this Year? Here’s Your Tax Tip Sheet

While most couples go to great lengths to ensure that their wedding day is perfect, far fewer think about how their nuptials will impact their tax liability. The truth is, the moment you get married, no matter what time of the year it is, in the eyes of the government you are considered to have been married for the entire tax year. With this in mind, here are some tax tips to consider as you prepare to walk down the aisle:

• A prenuptial agreement may impact your filing status and complicate your tax filing, so you may wish to speak with a tax professional.
  
  
• Once you combine incomes, you and your spouse may be subject to a higher tax bracket. This may eliminate tax benefits for which you were previously eligible.
  
  
• If marriage involves a name change for either party, contact the Social Security Administration to advise them and to get your Social Security card and records updated. This helps avoid delays in the processing of your tax return or potential refund.
  
  
• Review your current withholding and estimated tax payments in light of your new marital status. This will help you avoid any unexpected tax bills next tax season.
  
  
• The Affordable Care Act (ACA) may complicate your tax filing if you and/or your new spouse purchased health insurance through the ACA marketplace because any premium tax credits you have received may be impacted.
  
  
• If your new spouse owes child support or back taxes to either the IRS or the state, they may become your obligation unless you complete the IRS’ injured spouse allocation form.

Don’t let tax stress put a damper on your big day. Take a few moments to talk about taxes with your partner before your wedding, or schedule some time to consult with one of our professionals after the honeymoon.

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Key Lessons from the Financial Fallout of the ‘Brexit’ Vote

It’s fair to say that the recent ‘Brexit’ vote by Britons to exit the European Union (EU) has shaken global financial markets to their core, at least in the short-term. Financial analysts say that it’s too early to tell what the long-term impact of this historic vote will be. But one thing is for certain, the Brexit offers several important lessons that individual investors and business owners can take to heart as they review their own situation at mid-year.

1. Prepare for the unexpected. One of the reasons why the Brexit vote has people and the financial markets so on edge is that it was unexpected. No one really thought that the ‘Leave’ camp would actually win the referendum. Well, they did…and no one is prepared to handle the situation. This is not a pattern that you want to repeat with your own finances. If you do nothing else, plan ahead for unexpected shifts such as job losses or your child not getting a full-ride scholarship for college.
   
   
2. Take a long-term view. Many experts agree that the Brexit is going to create some short-term financial pain. However, things are likely to stabilize and, hopefully, improve over time. This is an important tenet for any investor or business owner to follow for their own financial sanity and planning. Working with a financial professional who can offer guidance and an objective perspective based on their experience and market data can be invaluable in this regard.
   
   
3. Seek the support of allies. In the days immediately after the Brexit vote, Britain no doubt felt somewhat ostracized by the rest of the EU. However, once the initial shock wore off, it rallied the support of its usual allies to determine what the next steps would be in the process. The parallel for individuals and businesses: having a financial advisor in your corner can help you work through difficult decisions and challenging circumstances to find the best solutions.

It is likely to be years before we know how the Brexit will affect the financial strength of our domestic and world markets. This makes it more important than ever to keep the above tips in mind, and to consider doing some proactive mid-year planning to protect your own individual and business finances this year, and in the years to come. Need help with your mid-year planning? Contact our firm today, we look forward to assisting you.

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Smart Strategies to Handle the “Downfall” Problem 1 in 4 New Businesses Experience

One of the most (if not the most) important indicators of business health is its cash flow. Even if your business is profitable and growing, if you don't have a consistent stream of cash coming in, you'll run into financial trouble. Lack of cash flow is the primary reason that more than one quarter of new businesses fail—29 percent to be exact. Here are some smart strategies that can help ease the cash flow crunch.

1. Reduce your business overhead. While this may seem obvious, trimming fixed costs is something that many business owners overlook, getting stuck in a this-is-how-we've-always-done things rut. Take a fresh look at your operations with the goal of maximizing efficiency.
   
   
2. Be proactive about securing credit. If you wait until you're financially strapped before you line up credit sources, you may be in for an unpleasant surprise (e.g., you can't get the credit you thought you could or the credit you can get is too expensive). Know how you can secure funding before you need it.
   
   
3. Know your numbers. This is so important—you should have a dashboard of key performance indicators that you follow closely so that you can head-off any cash flow issues before they happen. You can use a DIY approach with business accounting software, or work with our firm to keep you on track.
   
   
4. Encourage quick payments. An essential key to cash flow management is to keep the cash coming in from customers. Aside from keeping your invoicing current, consider incentives such as early payment discounts on large invoices or discounts for cash payments when appropriate.

With the stakes so high in today’s economy, it's not surprising that many new businesses struggle with cash flow issues. However, by implementing the strategies above and working with our professional team, you'll have a better chance to keep the cash coming in and your business going strong.

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IRS Fights Scammers – Instructs Staff to Initiate All Future Audits by Mail; Never by Telephone

With a rise in IRS phone scams, the Agency changed its policy on contacting taxpayers whose tax records are subject to an audit. The new policy instructs IRS agents to contact affected taxpayers only by mail—never by phone (which used to be the IRS’ go-to method of contact). As such, we urge all of our clients to adhere to the following guidelines should you receive a call from someone claiming to be from the IRS and you’ve NOT received a contact letter prior:

• If you receive a phone call that you suspect to be a scam, hang up right away. If you receive multiple calls, try to record them and turn the recordings and any other related information that you have over to the IRS and local law enforcement.
  
  
• If you receive emails claiming that the sender is from the IRS, save the emails, do NOT click on any links or open files contained within the email, and forward these emails to the IRS at: phishing@irs.gov.
  
  
• Never share your personal information over the phone or by email with someone claiming to be from the IRS. The IRS will never e-mail or call you to ask for this type of information or to ask you to send money right away.
  
  
• Protect your personal information. Any type of documentation that contains your sensitive data is a treasure trove for tax thieves and identity scammers. Keep documents containing your Social Security Number, bank account numbers, and other sensitive information in a secure location. Electronic forms should be stored on a password-protected or encrypted external drive or disk.

If you have any questions about the risks related to tax and financial scams, please contact our office.

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No Time to Garden? Try These Time-Saving Tips

While many of us appreciate the glory of a beautiful garden, there’s no denying that having one is a time-consuming endeavor. That’s why we’ve compiled these tips to help you make the most of your yard in less time:

1. Start with a plan.
A well-thought-out plan for your garden that utilizes low-maintenance plants and flowers will save you time throughout the season. You can even map out what you are going to plant while you’re watching Netflix!

2. Take out weeds with ease.
When low-growing weeds grow into a mat, don’t spend time taking them out one at a time. Instead, use a sharp spade to slice beneath them and turn them over to bury the leaves, which will decompose, enriching your soil.

3. Water without wasting time.
Don’t spend time filling a watering can—use soaker hoses instead! Set the pressure on low to slowly irrigate sections of your garden while you do something else.

4. Garden-on-the-go.
Make every minute you are outside of your home count! Use the time when you let your dog out or your kids are waiting for the bus to pull a few weeds or dead-head flowers. This will cut what could be a long weeding and maintenance session on the weekend into more manageable mini-sessions throughout the week.

Whether you have a green thumb or not, use these tips and you’ll have more time to enjoy a beautiful yard—and the other things you like to do.

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Overtime Pay Eligibility Expanded – What Businesses Need to Know

President Obama, declaring that “Americans have spent too long working more and getting less in return,” ordered the Labor Department to revise federal rules on overtime pay for salaried workers that log more than 40 hours a week. The long-awaited rule change will extend overtime pay to an estimated 4.2M workers.

Under current federal regulations, only salaried employees who make no more than $455 a week, or $23,660 a year, are guaranteed to receive overtime after working more than 40 hours a week. The new rules would raise that threshold to $913 a week, or $47,476 a year, giving salaried workers who are higher up the income scale the ability to work less or earn more for long hours.

The ruling also establishes a mechanism for automatically updating the salary and compensation levels every three years.

You can find detailed information on this new ruling on the United States Department of Labor website: https://www.dol.gov/whd/overtime/final2016/index.htm

Please feel free to contact our office if you have questions.

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Sleep on This! Think Quality Not Quantity When It Comes to Shut-Eye

We’ve likely all heard the news—Americans are incredibly sleep-deprived. However, according to recent research, achieving better quality sleep may be more important than actually increasing the number of hours of sleep. In fact, experts report that 6 hours of deep refreshing sleep is more beneficial than 8 hours of light interrupted sleep.

May is Better Sleep Month, so with that in mind, consider the following ways you can improve the quality of your sleep and reap the benefits of improved health and productivity:

• Establish a consistent sleep schedule by sleeping at the same time each day of the week (including weekends).
• Before bed, relax and limit any stimulating activities such as exercise and work.
• Avoid alcohol, nicotine and caffeine close to bed time, as they can disrupt sleep.
• Make the area where you sleep dark, well-ventilated, and at a comfortable temperature.
• Remove any distractions such as computers, mobile devices and televisions from your bedroom.

The key to better sleep is to create an environment that supports these habits. It may take a few weeks to do so, but the effort is worth it!

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Be $1,000 Richer by Next Year with These Simple Savings Strategies

Wow! May is already here—and if you’re like many Americans your savings account balance is still stuck where it was at the beginning of the year. So what to do? You can’t make up for lost savings opportunities…or can you? We believe that you can with a little bit of discipline. For example, saving $125 a month can be as easy as:

• Renegotiating your mobile phone, cable and other subscriptions.
• Reducing the number of takeout meals you consume.
• Relying on yourself to clean your home or mow the lawn instead of paying for third-party services.

Try these and a few more simple tips for saving serious dollars over the course of the next eight months and you can easily save at least $1,000—which you can deposit directly into your savings account for a kick start to your 2017 financial goals.

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5 Actions to Reduce Cyber Liability Risks in Your Business Today

A quick glance at the news is all it takes to realize that the threat of cyber attacks is increasing for businesses. So how can your business beat the odds and avoid becoming another victim of cybercrime? Try putting the following five action items at the top of your priority list:

1. Encrypt your data. Whether it's bank routing digits, credit card accounts or employee social security numbers, company-held information is what hackers use to steal money, so make sure it is adequately encrypted.
   
   
2. Secure your hardware. Obviously, cyber criminals use the internet to steal information, but others may actually try to steal physical hardware as well. To prevent this, make sure your business has a security system and physically lock down your computers (to desks) and servers (behind controlled-access doors) to make it harder to remove them from your premises.
   
   
3. Secure your network. Unlocked Wi-Fi networks are like an open door to your company’s data. One solution is not to have Wi-Fi at all at your company. The more practical solution may be to disable the service set identifier (SSID) broadcasting function on the wireless router. This creates a cloaked or hidden network, invisible to casual Wi-Fi snoops and accessible only to users with the exact network name.
   
   
4. Install anti-malware and anti-virus protection. Email phishing and apps that access social media accounts are popping up with increasing regularity. Loading anti-malware and anti-virus protection on your computers and mobile devices can help protect your business. In addition, keeping programs and hardware updated is key.
   
   
5. Educate your employees. If just one computer on your network becomes compromised, your entire operation is at risk. Employees are your first line of defense, so make sure you educate them about what to look for and what to avoid (a formal internet policy can help) to keep your business secure.

The risk businesses face from cybercrimes is greater than ever. Implementing these tips will help you mitigate risk and ensure that your company avoids a potentially devastating data breach or other malicious acts, which can compromise both security and business viability.

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Final Check – Did You Claim Every Eligible Tax Deduction?

Every year, American taxpayers leave millions of dollars on the table for Uncle Sam—in the form of unclaimed tax deductions. With Tax Day just around the corner, it’s time to do one final check to make sure that you are not missing out on three of the most common deductions:

• Retirement contribution deductions for single-income couples and the self-employed. It’s not too late to open an IRA account and make a contribution for a non-working spouse or yourself if you’re self-employed to gain an additional tax deduction—plus some additional retirement funding. Simply do it before the tax deadline and keep in mind the maximum annual contribution is $5,500 per person, or $6,500 for people 50 and older.
  
  
• Sales taxes on big ticket items. Tax law allows individuals to deduct the larger of the amount paid in either state income tax or sales tax. While you should check the specific rules for your state, it’s worth checking this potential deduction out, especially if you made a major purchase such as a new car, truck or boat in 2015.
  
  
• Deductions for charitable contributions. Many people contribute to charities throughout the year and incur out-of-pocket expenses. This includes clothing donated to a local shelter or miles driven (14 cents per mile deduction) while volunteering for a charity. Just remember you need a receipt for any contribution over $250.

If you have yet to file your taxes, consider asking your tax professional if you qualify for any of these deductions and take that hard-earned money off the table so you can put it back in your pocket!

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Five Snacks to Spring Clean your Body and Mind

Spring is here and the season for new beginnings. This is a good time to re-think "spring cleaning" and choose snacks that can cleanse our bodies from the inside out.

These five snacks are guaranteed to feed your mind, detoxify your body, and satisfy your palate!

1. Guacamole - High in fiber and “fat” but don’t worry, it’s good fat! Spread it on toast or eat it with veggies. This fruit is not only delicious but contains a ton of antioxidants and glutathione, a nutrient that can block up to 30 carcinogens and detoxify your liver.

2. Kale chips - Kale is king. It’s loaded with antioxidants, vitamins, and minerals and boosts metabolism while providing cancer fighting compounds. Baked Kale chips satisfy the “crunch” we all crave and taste delicious.

3. Raw almonds - Almonds are the perfect grab–and-go snack. Almonds are rich in vitamins and minerals such as magnesium, which helps break down glucose into energy.

4. Greek yogurt - Greek yogurt has fewer carbohydrates and sugar while boasting more protein than other yogurt. It’s a great source of vitamin B12 and potassium, which helps to decrease blood pressure and muscle cramps while increasing energy. Try plain yogurt and add your own fruit or a drizzle of honey.

5. Dark chocolate - Sometimes chocolate is the only thing that will satisfy your craving, so you might as well give in. Dark chocolate is one of the best sources of antioxidants on the planet, plus it has half the sugar and four times the fiber of milk chocolate. Choose 70 percent cocoa content or higher for optimal antioxidant benefits.

Whichever of these snacks you choose, planning ahead is the key to success. Make time to pack your snacks in portion-controlled containers and bring them with you so that when hunger strikes, you aren’t left having a face-off with the vending machine.

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Make Your Spring Break Worry-Free with These Home Security Tips

If you’re packing your bags for a spring break getaway, take a little time before you leave to implement the tips below—they’ll help keep your home safer while you’re gone, and free your mind of worry so that you can truly enjoy your trip.

1. Tell your neighbors that you will be away. Inform your neighbors and friends of the dates that you will be gone and ask them to keep an eye out for any suspicious activity around your home.
   
   
2. Clean up the kitchen. Dispose of any food that will spoil and take out the garbage and recycling. Any food left in the trash or even the sink can rot and may even attract unwanted, four-legged animal or insect scavengers into your home.
   
   
3. Turn off the water. If you live in an area of the country where your pipes might freeze, or if you’re concerned about a plumbing leak occurring while you’re gone, it’s a good idea to turn off the water while you are away so you can avoid a potential indoor flood.
   
   
4. Invest in simple security measures. These easy and inexpensive security tips can make your home more secure: install a light switch timer that can turn your house lights on and off on a schedule; park a car in your driveway to make it look like you’re home; make sure all windows and doors are locked before you go; and just to be safe, put valuables away out of plain sight.

Spring break should be a time to get away and relax, not to be worrying about your home. With these tips, you’ll be able to reduce your risk of theft or damage occurring at your residence, and have peace of mind as you travel.

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Tax Season is Scam Season... Keep Your Information Safe!

The IRS has joined with industry and states on a public awareness campaign to provide taxpayers with easy tips to better protect themselves. For some quick tips, you can watch an informative video here.

Tax-related identity theft occurs when someone uses your stolen Social Security Number to file a tax return claiming a fraudulent refund. To prevent becoming another victim of identity theft, the IRS has compiled the following tips to help keep you safe:

1. Don't carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
2. Don't give a business your SSN or ITIN just because someone asks. Give it only when required.
3. Monitor your financial information regularly, including your credit report. You can get a free report yearly at annualcreditreport.com, and several financial services now offer free monitoring at any time.
4. Review your Social Security Administration earnings statement annually.
5. Secure any personal information kept in your home.
6. Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
7. Don't give personal information over the phone, through the mail, or via the Internet unless you have initiated the contact or you know who you are dealing with.

If you have any questions about the security of your tax information, please contact our firm.

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Identity Protection PIN Letters List Incorrect Tax Year

According to a recent IRS notice, due to an error, taxpayers are receiving Identity Protection (IP) PIN letters with an incorrect year listed. If you received the CP01A Notice dated January 4, 2016, be aware that the PIN contained in it is valid for use on all individual tax returns filed in 2016.

The IRS notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return.

If you have any questions, please contact our office.

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Getting Over It… Quick Tips for Beating the Post-Holiday Slump

It’s a stark reality that millions of us face once the holiday season is over: the post-holiday slump. Even just a few days off can make coming back to the office seem excruciating—there’s all that work to do, the anticipation and cheer of the holidays are gone, and for many people the next vacation day is a long way off. Yes, being a working adult is tough, but getting over the post-holiday slump doesn’t have to be with these tips:

Keep the special treats coming. There’s no reason to go cold-turkey on self-kindness just because the holidays are over. Why not savor a festive mug of hot cocoa instead of coffee at your desk? Or bring that nice hand cream you received as a gift to the office and use it when you need a little pampering during the workday.

Flex your schedule, if possible. You know when you’re most productive and energized at work… so try not to fight your natural rhythm. If you’re not as perky first thing in the morning, see if you can start your workday a little later and rejuvenate with some extra sleep. If you like to get things going early, take advantage of this energy and get a head start, then leave a little earlier if you can.

Lighten your load a bit. The start of the new year often means a renewed sense of urgency to get things done. To avoid feeling completely overwhelmed and cranky, try to pace your schedule so that you have time to breathe and get things done as opposed to running from one meeting to the next.

Get on with your goals. If you find it hard to resume the regular routine after the holidays, try to respect your feelings while avoiding getting mired down in self pity. You may find that reevaluating your professional goals can be quite energizing. Break down your objectives into manageable tasks and, “Just do it!” Sometimes getting started is difficult, but once you have momentum you’ll recapture your pre-holiday mojo.

Transitioning back to post-holiday can be tough, but as we all know, all good things must come to an end. So be kind to yourself—and your co-workers—ease back into your regular workdays and tackle the goals that will make 2016 one to remember!

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Customer Service Goes Social—Is Your Business Prepared?

If your business engages in social media, you may have noticed an uptick in the number of customers who are posting questions on your Facebook page, tweeting comments or engaging with your company on other social platforms looking for customer service support. It’s a trend that is affecting just about every type of business—and using social media as a customer service channel will continue to grow in the future. So prepare your company to handle social customer service effectively with these tips:

1. The number one way to preserve your company’s reputation in the social sphere (and beyond) is to continually monitor your social media channels so that you can respond swiftly to questions and comments—especially the negative ones.
   
   
2. Create a Frequently Asked Questions (FAQ) section on your company’s website and link to it in your social media profiles (i.e. the “About” area that is available on many social platforms). This will provide an easy way to for customers to “self serve” and for you and your staff to refer customers to “standard” information when needed.
   
   
3. When it comes to negative comments (and you are likely to receive them no matter how great your business is), no matter how you feel about the complaint, you need to respond publicly, professionally, and immediately. Your objective should be to try to diffuse the situation by acknowledging the customer’s feelings and then to encourage a resolution in private by asking the customer to direct message or email you. Don’t engage in a debate on social media…that will only hurt your business.

Just like in other customer service scenarios, consistency and professionalism are key when you're using social media for customer service. Keep this in mind as you prepare yourself and your team to implement the tips above and master social customer service!

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IRS Simplifies Filing and Recordkeeping for Small Business – Hooray!

In an ongoing effort to keep you informed of IRS changes, we have a new and important one to report. And this time, the change eases your filing burden.

Within the last month, the IRS significantly simplified the paperwork and recordkeeping requirements for small business by raising the safe harbor threshold for deducting certain capital items from $500 to $2,500. This applies to money spent to acquire, produce, or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item substantiated by an invoice. As a result, small businesses will be able to immediately deduct many expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions.

For more detail on this new change, please read the full IRS article here.

And, as always, contact our firm if you have questions. We are here to help!

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Tis the Season! Avoid Common Holiday Scams with These Tips

As cybercriminals begin to take advantage of the holiday season, it’s important to take extra precautions to avoid having your money, credit card information, social security number, or identity stolen. E-commerce thieves, at this time of year especially, will try to create holiday-related websites, scams, and other phishing e-mails that can trick even the most alert consumers. The following tips can help:

Don’t let your generosity leave you vulnerable to criminals. Many cybercriminals want to take advantage of your generosity by sending e-mails that appear to be from legitimate charitable organizations. Do not click on links in any such email—instead, go directly to the website of charities that you know and trust to make a legitimate online donation.

Make sure things are really signed, sealed, and delivered. During the holidays, cybercriminals often send fake email invoices and delivery notifications appearing to be from Federal Express, UPS, or the U.S. Customs Service. These e-mails may ask for credit card details or require users to open an online invoice or customs form to receive a package. Such actions can result in stolen information and/or malware being installed on your computer. It is best to check with the specific delivery service directly before answering these emails.

Stop before you shop. It’s important to think about where you are doing your holiday shopping—even if it’s online. You may be used to shopping on your tablet or phone, but if you’re doing so on an unsecured Wi-Fi network or an open hotspot, a hacker can easily steal your personal information…so wait until you get home to shop online.

Be merry and wary when doing festive online searches. It’s sad but true. During the holidays, hackers often create fraudulent holiday-related websites based on popular searches for holiday ringtones or wallpaper, Christmas carol lyrics, or festive screensavers. Downloading such files may infect your computer with spyware, adware, or other malware, so be careful in your quest for holiday fun online.

While it pays to be vigilant about protecting your personal and financial information all year round, it’s especially important to do so during the holidays when criminals are counting on us to be hurried, distracted, and more active online. Use the tips above to help prevent being the victim of an unexpected holiday cybercrime.

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The Key to Scoring on Black Friday? Create a Pre-Game Plan

The countdown is on to the what retailers hype as the best shopping day of the year—the day after Thanksgiving dubbed by Americans as ‘Black Friday’—represents the kick-off to the holiday shopping season. However, given the explosion of retail competition and the Internet in the past several years, Black Friday is really not what it used to be. And if you’re not careful, you can end up spending more than what you planned on poor quality merchandise.

The key to scoring real deals is to go into the holiday shopping season with a pre-game plan. Retail analysts offer this advice: Do the homework by researching deals and create a game plan in advance. In addition to the copious number of direct mail and email offers you’re likely receiving now, don’t forget to checkout social media for exclusive deals as well. Then make a list of the absolute best deals on the items that you need to check off your holiday gift, décor, and entertaining lists.

The bottom line is that while you can certainly find some great deals on Black Friday, you need to be aware that much of the advertising is just hype—so don’t let it overtake your logic when it comes to your spending. Set a Black Friday budget prior to heading out to the stores or to your favorite retail websites, stick to your list, and take a moment to think through your purchases before making them—but by all means, take the opportunity to score some big savings if given the opportunity!

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It’s Tax Planning Time—Here Are Some Money-Saving Tips for Individuals and Businesses

With just a few short weeks to go before the end of the year, it’s important to take a look at your tax situation and consider ways to decrease your tax obligations. In other words, it’s time for tax planning. We put together the following tips for you to support smart tax decisions:

1. Stay apprised of potential tax provision extensions. Congress still has time to extend some popular tax provisions before the end of 2015, so keep an eye out for news on provisions including (but not limited to): taxpayers 70.5 years and up can make tax-free charitable contributions, businesses can deduct half of eligible equipment placed in service, and more!
   
   
2. Track the time you spend on business activities. Business owners may be exempt from the 3.8 percent Medicare tax on business income if you are active enough in the business to avoid being a “passive investor.”
   
   
3. Keep on top of information reporting. Make sure you complete your mandatory reporting on time this year to avoid potentially large penalties.
   
   
4. Make good on your state and local tax obligations. Remember that State and local governments impose their own filing and payment responsibilities with income, sales, and property taxes to avoid added penalties.
   
   
5. Accelerate deductions and defer income. When it comes to taxes, you want to accelerate deductions and defer income. How? Consider deferring bonuses, consulting or self-employment income; also consider accelerating state and local income taxes, interest payments, and real estate taxes.
   
   
6. Do you anticipate a tax shortfall? Take care of it with increased withholding. Check your withholding and estimated tax payments now while you still have time to fix the issue. If you face an underpayment penalty, you can eliminate the shortfall by increasing withholding on your salary or bonuses.

Our firm can help you take an in-depth look at your current tax position, explain how changes to the tax code will affect you and your business, and help you implement strategies to reduce your tax bill. Contact us today so you can benefit from advance planning this coming tax season.

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4 Steps to Finding the Sweet Spot for Success

Ah, the sweet smell of success! Achieving goals and bringing our vision to fruition is the end-game for most of us, especially in our business lives. Unfortunately, success can sometimes elude us to the point where we have to start looking at what, exactly, is going wrong. Perhaps, though, the question we ought to be asking is this: What is going right? By honing in on what is bringing you or your company the results you want, instead of focusing on the things that are taking you further from where you want to be, you can discover your sweet spot—the place where you can find true success.

So how do you find your sweet spot? We’ll get to that in a minute, but first, let’s define what we mean by sweet spot. The sweet spot (for an individual or a business) is the intersection of the things that you are good at and come (relatively) easily to you or your team, and the things that the market (or an employer) is willing to pay for.

Finding your sweet spot as an individual professional and as a business owner is important because it allows you to operate with efficiency, strength and, usually, profitability. Surprisingly, many people and even entire companies continue to struggle without ever finding or leveraging their sweet spot. If you haven’t found your sweet spot yet, then now is the perfect time to start looking by following these four steps:

1. Cultivate your core competencies
Finding your sweet spot is really an inside job. It’s not about trying to add to what you have, it’s about leveraging your existing core competencies. You (or your business) made it this far, so you must have some valuable competencies that you can leverage into a viable career, company, or new product or service.

2. Seize on your strengths
Making a list of what you love to do (or what your company does well and profitably) is a great way to hone in on your strengths and identify your sweet spot. Maybe you love to design websites, create winning proposals, sell, write, do financial analysis, or sew cushions—whatever it is, it’s likely something that can lead you to your sweet spot. The other important thing to keep in mind is that you need to match up your strongest skills and talents with market demand. For example, while you may love to crochet potholders, the market may not support building an entire empire on that one activity alone.

3. Listen to your fans
Do people always tell you that you have an aptitude for art? Or do your customers rave about the unique flavors of cupcakes that your bakery only offers periodically? Make notes about what people praise you or your business for—and chances are, the exceptional things that others notice likely reside at the center of your sweet spot.

4. Start seeing your sweet spot
Now that you’ve identified your core competencies, your strengths, and the things that you are objectively good at (according to your fans), put them all together and start seeing where your sweet spot lies. Once you do this, consider if there are things that you are innately good at that can be monetized (i.e. people have a need for what it is you provide and will pay decent money for it). Once you have these figured out, create a plan to bring them to market. (Or, if you’re an individual, highlight them on your resume.)

If you’re seeking success and it seems to be eluding you, consider working toward identifying your sweet spot…the place where the things that you (or your team) are good at and the things that the market (or an employer) is willing to pay for come together in sweet harmony. While it may take a little bit of work on your part, the dividends of doing something you truly love and are well-suited for will be well worth the effort.

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Ease Aches, Pains and Worker’s Comp Claims with These Ergonomics Tips

The Human Factors and Ergonomics Society has designated each October as National Ergonomics Month (NEM). Ergonomics is an applied science that incorporates principles of usability into the design process with the goal of making finished products more effective and safe for people to use.

In the workplace, proper ergonomic practices can play an important role in reducing pain, injuries, loss of productivity and the resulting Worker’s Comp claims. One of the most common ailments involved in Worker’s Comp cases, according to the Bureau of Labor Statistics are musculoskeletal disorders (MSDs) such as low back injuries, carpal tunnel syndrome, and soft tissue damage, which can increase the risks of accidents and repetitive strain injuries. With October almost here, it’s the perfect time to consider the following tips for reducing MSDs from the Occupational Health & Safety Administration to make your workplace safer and more productive:

• Provide Management Support - A strong commitment by management is critical to the overall success of an ergonomic process. Management should define clear goals and objectives for the ergonomic process, discuss them with their workers, assign responsibilities to designated staff members, and communicate clearly with the workforce.
• Involve Workers - A participatory ergonomic approach, where workers are directly involved in worksite assessments, solution development, and implementation is the essence of a successful ergonomic process. Workers can:
  • Identify and provide important information about hazards in their workplaces.
  • Assist in the ergonomic process by voicing their concerns and suggestions for reducing exposure to risk factors and by evaluating the changes made as a result of an ergonomic assessment.
• Provide Training - Training is an important element in the ergonomic process. It ensures that workers are aware of ergonomics and its benefits, become informed about ergonomics related concerns in the workplace, and understand the importance of reporting early symptoms of MSDs.
• Identify Problems - An important step in the ergonomic process is to identify and assess ergonomic problems in the workplace before they result in MSDs.
• Encourage Early Reporting of MSD Symptoms - Early reporting can accelerate the job assessment and improvement process, helping to prevent or reduce the progression of symptoms, the development of serious injuries, and subsequent lost-time claims.
• Implement Solutions to Control Hazards - There are many possible solutions that can be implemented to reduce, control, or eliminate workplace MSDs.
• Evaluate Progress - Established evaluation and corrective action procedures need to be in place to periodically assess the effectiveness of the ergonomic process and to ensure its continuous improvement and long-term success. As an ergonomic process is first developing, assessments should include determining whether goals set for the ergonomic process have been met and determining the success of the implemented ergonomic solutions.

Ergonomics tools and practices can help to keep workers healthy, reduce the costs of Worker’s Comp claims, and increase productivity, quality, and employee morale. Implementation may take some time and effort, but the benefits are well worth it.

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Spending Less Cash on Gas? Use Your Savings to Rev-Up Your Finances

If you did any road trips over the summer—or you commute to work—you’ve likely noticed that filling up your vehicle doesn’t necessarily empty your wallet anymore. Thanks to lower gas prices, the average American is on track to save approximately $750 on gas this year.

While it’s not life-changing, $750 can make a difference to your personal finances if you use it wisely. Here are some smart ideas for taking the money you save on gas for the remainder of this year (or as long as gas prices continue to stay low) and revving-up your financial situation.

1. Pay down credit card debt. Credit cards have some of the highest interest rates, so reducing any balance you have on your credit card will save you additional money in the long run.
   
   
2. Make an extra payment on a lower-interest loan. Although interest rates on mortgages, car loans and student loans are typically much lower than on credit card debt, you can still save money by reducing the principal on a lower-interest loan with a lump sum payment or by making an extra payment, if your creditor allows you to do so.
   
   
3. Pump up your holiday savings. Thanksgiving and the winter holiday season are just a few short months away—why not take the money you save every time you fill up your car and put it in a special savings account to use to buffer your holiday budget?
   
   
4. Put money away for a rainy day (or for a future gas price increase). What goes down, will likely go up again, especially when it’s something like gas prices that are impacted by market forces. To ease the pain of facing higher fuel prices in the future, put the financial differential of your current fuel costs compared to what you used to pay for gas into a rainy day account so you can access it when you need it.

It’s unlikely that gas prices will remain low forever, so instead of frittering away the money you’re saving on fuel now, make a conscious effort to use it to accelerate your personal financial goals with one of the tips above.

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New Tax Law More Than Doubles Fines for Failure to File Information Returns and Failure to Provide Payee Statements

The Trade Preferences Extension Act of 2015 was recently signed into law. Part of this new law includes a provision that more than doubles the cap on penalties from $1.5 million to $3 million for 1) failure to file correct tax information returns and 2) failure to provide payee statements. In both cases, fines have been increased from $100 to $250.

These changes are effective for returns and statements required to be filed after December 31, 2015.

The impact of these increased penalties is likely to be significant given that the penalties apply to a wide range of information returns and statements, including W-2s, 1099s, and Forms 1042 and 1042-S (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons). In addition, the IRS has formed special units to address information reporting issues both within the Large Business and International (LB&I) Division and within the Office of Associate Chief Counsel (International). These actions may suggest heightened IRS interest in information reporting audits that could lead to adjustments to which the increased penalties would apply.

In light of these changes, it is critical that businesses be vigilant about filing information returns and providing payee statements to all applicable parties. If you have any questions about these requirements related to your business or your personal situation, please contact our firm.

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Highway Funding Bill Ushers in New Tax Return Due Dates and Other Important Changes

As reported by The Journal of Accountancy on July 31, the short-term highway funding extension passed by the Senate—and signed by President Obama—at the end of July contains several important tax provisions (H.R. 3236). The bill was passed by the House of Representatives, 385–34. The bill modifies the due dates for several common tax returns, overrules the Supreme Court’s Home Concrete decision, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries. Here is a summary of the changes:

Due date modifications for business and other tax returns

• The act sets new due dates for partnership and C corporation returns, as well as FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), and several other IRS information returns.
• For partnership returns, the new due date is March 15 (for calendar-year partnerships) and the 15th day of the third month following the close of the fiscal year (for fiscal-year partnerships). (Currently, these returns are due on April 15 for calendar-year partnerships.) The act directs the IRS to allow a maximum extension of six months for Forms 1065, U.S. Return of Partnership Income.
• For C corporations, the new due date is the 15th day of the fourth month following the close of the corporation’s year. (Currently, these returns are due on the 15th day of the third month following the close of the corporation’s year.)
• Corporations will be allowed a six-month extension, except that calendar-year corporations would get a five-month extension until 2026 and corporations with a June 30 year end would get a seven-month extension until 2026.
• The new due dates will apply to returns for tax years beginning after Dec. 31, 2015. However, for C corporations with fiscal years ending on June 30, the new due dates will not apply until tax years beginning after Dec. 31, 2025.
• The due date for FinCEN Form 114 is changed from June 30 to April 15, and for the first time taxpayers will be allowed a six-month extension.
• The due date for Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, will be April 15 for calendar-year filers with a maximum six-month extension.

Additional information is now required on returns relating to mortgage interest

The bill also amended Sec. 6050H requiring new information on the mortgage information statements that are required to be sent to individuals who pay more than $600 in mortgage interest in a year. These statements will now be required to report the outstanding principal on the mortgage at the beginning of the calendar year, the address of the property securing the mortgage, and the mortgage origination date. This change applies to returns and statements due after Dec. 31, 2016.

Consistent basis reporting between estate and beneficiaries

The act also amends Sec. 1014 to mandate that anyone inheriting property from a decedent cannot treat the property as having a higher basis than the basis reported by the estate for estate tax purposes. It also creates a new Sec. 6035, which requires executors of estates that are required to file an estate tax return to furnish information returns to the IRS and payee statements to any person acquiring an interest in property from the estate.

These statements will identify the value of each interest in property acquired from the estate as reported on the estate tax return. The new basis reporting provisions apply to property with respect to which an estate tax return is filed after the date of enactment.

Our firm will keep you informed on these and other changes that affect your tax planning and reporting. If you have any questions about the changes outlined here, please contact us.

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Not Sure Which Metrics Are Right for Your Business? Help is Here!

As legendary business author Peter Drucker once said, "What's measured improves." If you've been in business any length of time, you know that creating meaningful measurements that tell you how your business is doing (a.k.a. Key Performance Indicators or KPIs) can be challenging. The good news is, you only need a few KPIs to really get a handle on the financial pulse of your business.

Rick Smith, Director of Business Analysis and Process Improvement at Yale University says the best place to start is by clarifying what should be included in the "critical few" measurements that business owners focus on. He suggests using a problem-solving perspective and asking three key questions:

1. How are you doing?
2. How do you know?
3. Where must you improve?

While this approach is simple, it does require you to dig deep and ask probing questions in order for it to be effective.

Smith also says that it's important to differentiate between KPIs and metrics. A KPI equals a metric, but a metric does not equal a KPI. A metric is simply a data point such as 300 calls per day. That doesn't tell you if it's good or bad. A KPI includes two points to measure: 1) where you are and 2) where you should be as defined by your business objectives, service level agreements, or company specifications.

Smith also points out that businesses often create both operational and customer experience metrics, and they can get out of sync. Operational metrics show everything is working fine, but the customer experience metrics tell a different story. This is usually caused by not measuring the right things or not measuring correctly. To counteract this problem, Smith developed an indicator called the FVI (FACE Value Index). A high FVI is a good indicator that your business practices are in harmony with established KPIs.

The FACE components include:

F = Fast (i.e. Are you being efficient?)

A = Accurate (i.e. What is your error ratio?)

C = Cost Effective (i.e. Are you meeting profitability goals?)

E = Easy (i.e. Can you maintain the process without excessive effort or resources?)

By using Smith's two-part process for establishing and measuring KPIs you can more easily determine metrics for your business processes, beginning with the three key questions above to narrow down the "critical few." Then use the FACE components to establish your metrics. Two to three metrics in each major area of your business to determine how you are doing should be sufficient.

Our financial experts have a wealth of experience in helping business owners measure and improve their KPIs. Please contact us if we can be of assistance in this regard.

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Plan in Advance to Help Aging Parents Manage Their Money

For many adult children, it’s hard to contemplate the fact that their once seemingly invincible parents may now—or at some point down the road—become dependent on them to take care of their everyday needs. If you don’t feel prepared to take on these tasks, this scenario can be very stressful—especially when part of your duties involves taking care of your parents’ finances. Even if you're not at this point with your parents yet, it is important to engage in some basic planning and start preparing in case you do have to take control of their financial affairs later. Follow these tips to help you prepare:

Be proactive—talk to your parents now. If your parents are still mentally and physically fit, now is the time to have a conversation about what they would like to see happen if they eventually need you step in and manage their finances. A critical part of this kind of preparation is to encourage your mom and dad to assemble a document that details the location of their financial accounts and safe-deposit boxes, as well as the names of their financial professionals. They may not be comfortable with you knowing how much money they have, but you need to have access to account numbers, contact information, and names of financial institutions so that you have them in case of an emergency. If you don’t need it right now, make sure this information is kept somewhere secure.

Find out what their financial obligations are. Knowing where your parents stand with bank accounts, their relationships with financial institutions, and their overall assets is only half the story when it comes to being proactive about helping your parents manage their finances. You also need to know what their financial obligations are. Have your parents create a list of all their expenses, so you’ll know what bills need to be paid on a regular basis in case you have to make payments on their behalf. Writing down the specific names of utilities, credit card companies, and the like on this list may seem like a pain, but you’ll be glad you have them if you have to start paying your parents’ bills suddenly—especially if you live far away and aren’t familiar with your parents’ local service providers.

Learn who your parents’ trusted advisors are. In addition to being familiar with the actual transactions of your parents’ financial affairs you should also know which financial professionals they have relationships with. If your parents are still capable of actively managing their finances, but are open to you at least meeting their CPA, investment advisor, and attorney, it may be worthwhile taking advantage of the opportunity to meet them and introduce yourself, in case you need to step in. If your parents aren’t open to the idea of making these introductions, make sure you at least have the information you need to contact your parents’ advisors in the event that you need to act on their behalf.

Having a parent who becomes dependent on you can be a burden that takes its toll on you in many ways. However, with a little bit of advance planning, you should be able to prepare the information you need to manage your parents’ finances effectively, and reducing your stress when it comes to handling the financial piece of their affairs.

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Four Ways Mid-Year Financial Planning Can Pay Off

Tax season is over and one of the biggest American celebrations—the Fourth of July—is just around the corner.  Maybe you’re looking forward to a little downtime this summer, so perhaps working on your financial plan has slipped to the bottom of your to-do list. It’s understandable, but putting your finances on cruise control at mid-year is not an ideal strategy. Here are four reasons why you should put a mid-year financial review at the top of your priority list…

1. Looking at your finances mid-year means you still have time to meet your goals

Mid-year is an ideal time to do a financial review because a) you’re not under the gun trying to get your taxes done and b) there are some important planning opportunities that you can benefit from now that won’t be available if you wait until the end of the year. For example:

• Are there any life-changing events occurring soon such as marriage, the birth of a child, retirement, or a career change?
• Will your income or expenses substantially increase or decrease this year?
• Are you on track with your savings goals?
• Are you comfortable with the amount of debt that you have?
• How is your investment portfolio doing?

These are all areas to review at mid-year to ensure you can reach your goals and not end up with costly surprises once it is too late to take corrective action.

2. You may be able to reduce your taxes now—and pay less next April

Sure, you may have digitally filed your tax return away for the year, but taxes are not meant to be a once-a-year task. Having an ongoing tax plan is the best way to reduce your tax burden—and relieve the pain of tax season.

Your tax professional can help you do a mid-year estimate of your tax liability, which may reveal tax planning opportunities. Using last year’s tax return as a basis, you can make adjustments to your income and deductions that will pay off next tax season. In addition, you can check to make sure that you are withholding the correct amount of tax on your income—especially if you owed a lot of money or received a big refund this past April.

3. You’ll really be ready for retirement

Do you look at your investment account statements when you receive them, or do you put them in a drawer unopened? Are you in a set-it-and-forget-it investment mindset? If either of these scenarios sound familiar to you, then make this summer the time to take a good look at how your investments are doing and make any necessary adjustments to your investment strategy.

If you are an active investor and you received a pay increase this year, consider increasing your retirement plan contributions by asking your employer to set aside a higher percentage of your salary. In 2015, you can usually contribute up to $18,000 to your workplace retirement plan ($24,000 if you’re age 50 or older).

Already retired? Then a mid-year review is equally important for you to ensure you have the income you need and that your current investments and distribution strategy are ideal for your situation.

4. Enjoy the summer with financial peace of mind

One of the most important things that a mid-year financial review can do for you is provide peace of mind. By taking a little bit of proactive action now and working with our team to make sure you are on track with your financial goals, you’ll be able to really relax and enjoy all the summer season has to offer—knowing that you’ll be in great shape when year-end and next tax season come around again.

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Summer Break for Your Kids Could Mean a Tax Break for Your Business

School’s out for many kids, and if you run your own business, you may be able to turn your child’s summer break into a tax advantage—and some extra help—for you.

Hiring your offspring as an employee to do legitimate work in your business provides several tax benefits:

• You can deduct the salary you pay your child from your business income as a business expense.
• You can shift part of your business income from your own tax bracket to your child’s bracket, which often creates substantial tax savings.
• Your child only pays tax on the money they earn in excess of the standard deduction amount for the year.
• If your child is a minor, in most cases (see the exceptions below) you don’t have to withhold or pay any FICA (Social Security or Medicare) tax on the salary due to the federal employment tax exemption for under-age-18 employees.

Sounds great…doesn’t it? Keep your kids busy all summer, get additional assistance at your business, and reap the tax savings. However, the IRS does keep close tabs on parents who employ their children to ensure that the situation is legitimate and in keeping with these three rules:

Rule 1: Your child must be a bona fide employee
The work your child does must be common and necessary for your business and their pay must be for services actually performed. Their services don’t have to be indispensable, but they do need to be appropriate for your business. Any real work for your business can qualify, but personal services such as babysitting or lawn mowing at your residence do not.

How young can a child be to qualify as an actual employee? According to recent reports, the IRS accepts children seven and older as being able to perform useful work for a business. You should keep track of the work and hours your children perform by having them fill out timesheets with the date, the services performed, and the time spent performing the services.

Rule 2: Keep compensation reasonable
Your child’s total compensation (salary plus fringe benefits) must be reasonable. This is determined by comparing the amount paid with the market value of the services performed. In order to keep track of what you pay your child, use checks (not cash) once or twice a month just like you would for any other employee. The funds should be deposited in a bank account in your child’s name.

Rule 3: Legal requirements for employers still apply
Even if you are hiring your child, you must comply with the same legal requirements as you do when you hire any other employee. This includes completing IRS Form W-4 and U.S. Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. You must also record your child’s Social Security Number and complete and file IRS Form W-2 showing how much you paid your child.

An important note: The federal employment tax exemption for minors employed by their parents mentioned above, is only available when the parent’s business (the employer) is conducted as: (1) a sole proprietorship, (2) a single-member LLC (SMLLC) that’s treated as a sole proprietorship for tax purposes, (3) a husband-wife partnership, or (4) a husband-wife LLC that’s treated as a husband-wife partnership for tax purposes.

If your business is a corporation, the federal employment tax exemption is unavailable for wages paid to your child, but hiring them can still be a tax advantage because your child’s standard deduction will provide an income tax shelter and your business can deduct the wages and the employer’s share of employment taxes.

If you’re a business owner with a child capable of doing meaningful work, this summer may be the perfect time to introduce them to the concept of earning their keep—and helping mom or dad in the process!

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The IRS Confirms Hacking of Taxpayer Accounts—What You Need to Know

Last week, the Internal Revenue Service (IRS) announced that a "brute force" hacking attempt compromised approximately 104,000 taxpayer accounts through the utilization of the “Get Transcript” tool located on IRS.gov. In the attack, hackers utilized information gleaned from black market sources to answer identity verification questions and receive confidential information from the IRS system. 

The IRS reports that the system has been used 23 million times to provide taxpayers important information about their tax accounts as well as wage and earnings information. Although this hacking attempt is significant, as one industry source reports, less than one half of one percent of successful requests to the Get Transcript system were fraudulent—the hackers already had access to Social Security numbers, birthdates, and identity verification information like former addresses and phone numbers. They did not steal this information from Get Transcript.

Taxpayers whose accounts were compromised will be notified by the Internal Revenue Service. Individuals who believe their identities have been compromised in this, or any other attempt, should review the IRS “Taxpayer Guide to Identity Theft,” which advises the following course of action:

1. File a police report.
2. File a complaint with the Federal Trade Commission.
3. Contact one or more trade bureau and request a “fraud alert.”
4. Close any financial accounts opened without your permission.
5. Respond immediately to any IRS notice.
6. Complete IRS Form 14039, Identity Theft Affidavit.
7. Continue to file your tax return, even if by paper.

Source: CPA Tax & Compliance Advisor email published by CPA Practice Advisor.

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Take Time to Really Live Offline

It’s no secret that the majority of Americans are spending a lot of time online. While some of the time we spend on the Internet is productive, there’s a lot of it that’s not—and it’s crowding out some of our higher value offline activities, according to research from the National Bureau of Economic Research (NBER).

In a recent NBER study, each minute of online leisure time is correlated with 0.29 fewer minutes on all other types of leisure—with about half of that coming from time spent watching TV and video, 0.05 minutes from (offline) socializing, 0.04 minutes from relaxing and thinking, and the balance from time spent at parties, attending cultural events, and listening to the radio. While these may seem like really small increments of time, they do add up over the course of weeks and months. As such, you may want to consider replacing some of your offline time to do the things that really make life worth living. Here are a few ideas to get you started:

• Talk to people face-to-face. Even in today’s connected world, digital communication is no substitute for in-person interaction. It’s simply not the same as in-person interactions with all of the emotion and body language cues.
• Take care of yourself. No time to exercise or to eat a healthy meal? No time to take a relaxing bath or to read a good book? If you spend time surfing the web or using social media, it’s likely that you have at least half an hour a day of leisure time that could be used to do these things or something else that’s good for you.
• Spend time in nature. Let’s face it; when we’re surfing the web or navigating social media, we’re generally being sedentary and unengaged with the world around us. Instead of spending your usual time on Facebook or Pinterest, why not take a walk outside, appreciating the beauty of the natural world around you—even better take a friend with you so you can really connect.
• Reconnect with relatives. Life is short, so taking every opportunity we have to enjoy time (offline) with our families should be a priority. Instead of exchanging messages on Facebook or through email, invite your relatives over for some real bonding time, including board games, a real meal cooked together at home, or just an afternoon of relaxation and recounting family stories.
• Do nothing. Part of the allure of the Web is that we can feel productive simply by surfing it. However, there’s nothing wrong with doing nothing—and it might actually do you a lot of good in terms of enhancing your problem-solving and creative abilities. So disconnect, unplug, and learn to be still with life on a regular basis.

There’s no doubt that the Internet has transformed our lives and, for the most part, it’s been for the better. However, like most things, balance is the key. Take time daily—or at least weekly—to do some of the activities suggested above or to incorporate some of your own favorite offline pursuits. Chances are, you’ll find that doing so will improve the overall quality of your life.

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Want to Improve the Efficiency of Your Business? Toss the To-Do List

When it comes to running a business, building as much efficiency as possible into your operations is the key to keeping things running smoothly and freeing up your own time to focus on the big picture. While employing the right team and the right technology are integral to boosting efficiency, so is having the right mindset when it comes to how you approach day-to-day tasks.

You may be surprised to learn that the traditional to-do list can actually hamper your ability to improve the efficiency of your business—and your own productivity. So what is the alternative for those of us who “Live by the list?” According to entrepreneurial efficiency and business experts, the key is to make sure that your to-do list is not just a vehicle for checking off mundane items, but instead that it remains a tool for helping you do the things that will have the greatest benefit to your business first.

Think in terms of priorities, not tasks.
Entrepreneur and author Mike Michalowicz writes, “The problem with a to-do list is that every entry has the same value.” Instead, he suggests business owners should use a priority list that has the following three symbols (you can substitute alternative symbols if you like), to help prioritize activities: The dollar sign ($), which is assigned to any task that generates revenue in the next 60 days; a smiley face, which is assigned to any task that pleases a current client; and a ∞ symbol for any task that creates a system—something that can run itself thereafter ∞.

The key to this type of priority list is that you can assign more than one value to each activity—or you can assign nothing to an activity, which means you may want to consider dropping it completely from your list. When you use your priority list the items with the most symbols should be addressed first. Those tasks without symbols are your lowest priority.

Another way to make a priority list is to divide your tasks into the following four categories based on Stephen Covey’s iconic Important/Urgent grid: Important and urgent, Not urgent but important, Not important but urgent, Not important or urgent. Using this convention, you would prioritize tasks falling in the “important and urgent” category first and perhaps reduce or eliminate tasks in the “Not important or urgent” category.

Use your list to organize action, not delay it.
Many business owners do find that lists are an essential way to track the numerous things they need to accomplish on a daily basis. Whether you toss your traditional to-do list for one of the alternatives mentioned here, or keep it, be sure that the process you are using to create lists actually enhances your ability to take action efficiently—rather than being an end in and of itself.

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Tax Day 2015 is Gone. Time to Ask These Three Questions.

Yes, Tax Day has come and gone for this year, but the memory of your tax return is likely still fresh. So before you move on, consider the following three questions that may point you toward areas you want to work on before next April 15 rolls around.

Do I need to start my tax filing earlier?
Ideally, you should engage in tax planning year-round. As your trusted advisors, we can help you identify tax savings strategies throughout the year, so set up an appointment to talk to us about how we can help you mitigate tax obligations and make sure that you are taking full advantage of the tax savings available to you.

It’s also worth noting that the introduction of new tax reporting requirements related to the Affordable Care Act added considerable complexity to many individual returns this year. This, combined with delays in receiving tax documents from employers and other entities compressed the amount of time available to file returns. For the future, this means that the earlier you start getting your tax documents in order the more likely it is that your return can be filed promptly. The best strategy is to file (or better yet scan and electronically store) your receipts and any other documents you’ll need at tax time as they come in to avoid having to rush to meet tax deadlines.

Does my tax withholding need an adjustment?
Once you are done filing your taxes, the answer to this question becomes quite obvious. If you found yourself in the position of writing a large, unanticipated check to the United States Treasury Department, you may wish to look at how much tax you are withholding through your employer. Or, if you are self-employed, you should consider increasing your estimated tax payments. On the other hand, if you are receiving a big tax refund, you may want to consider reducing your withholding or estimated tax payments to increase your take-home pay or to fund additional investments in eligible tax-sheltered retirement savings plans.

Is my retirement strategy effective?
On the topic of retirement savings plans, your tax return clearly shows whether you made the maximum allowable contribution to tax-advantaged retirement savings accounts. If you didn’t in the 2014 tax year, you may want to consider increasing your contributions now so you can reduce your taxable income on next year’s return while also improving your financial future.

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Control the Clutter! 5 Tips to Create a More Organized Life

If compiling all of your tax documentation this year triggered the thought that you really should try to be more organized, then the following tips are for you. Constantly searching for things you have misplaced, missing important dates, and not feeling like you have control over your days can waste your time and increase your stress level.

The following tips will help you take manageable steps toward strengthening your organizational skills, helping you feel less overwhelmed in the process:

1. Modify your mindset. While we often focus on the external tasks associated with becoming more organized, the first step you should take is to shift your mindset so you become committed to making changes that improve the way you function and how you manage your time and resources.
   
   
2. Create structure that works for you. Many problems related to disorganization are actually caused by a lack of structure. If the thought of a schedule makes you uncomfortable, think about applying this concept only to those areas of your life that need it most, such as your morning routine and the parts of your workday where you tend to get distracted. Start by breaking down the time you want to manage more effectively into 15- or 30-minute increments for completing specific tasks.
   
   
3. Identify your trouble zones. It’s likely that you are more organized in some areas of your life than others. Make a plan to tackle the places that give you the most trouble, such as your car or desk. Pick a specific day of the week or month to clean these areas and then use the “place for everything” mantra to keep them organized.
   
   
4. Compartmentalize the clutter. If you regularly spend time searching for keys, documents, and other items, it can make you very frustrated. The remedy for this problem is simple, but it does take some effort: A) Create specific places for all of the things you use daily. B) Set up designated places for your phones and chargers, hooks to hang your keys, and baskets to hold kids’ and adults’ miscellaneous items.
   
   
5. Technology can help. Digital tools can support you in your organization efforts and help you maintain the progress you make. Reducing or eliminating your paper trail by scanning and securely storing documents is just the beginning. For example, our firm offers you a convenient way to organize, exchange, and streamline key financial documents using a secure online portal on our website. There are also many smartphone apps you can use to create task lists and reminders to help you ensure that you know what needs to get done and that it fits into your newly implemented schedule.

The tips above offer a good starting point to become more organized, but it’s up to you to find the motivation and tools that fit your lifestyle and your long-term goals. Instead of trying to tackle all areas of your life at once, start with the areas that you can tackle relatively easily when you begin—such as organizing your desk or creating a place to hang your keys. Taking just a few small steps toward streamlining your routine will go a long way in helping you feel calmer and more in control.

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Keep Safe with These Spring Break Travel Tips

If you’re planning to travel this spring break, you have likely already spent time planning your trip—but have you spent time thinking ahead about how to reduce the chances of a mishap while you’re traveling? While no one wants to ruin their vacation worrying excessively, it is wise to take a few preventative steps to ensure that your time away is not marred by an easily preventable mishap. Check out these tips to keep you safe during your spring break travel:

1. Know the places you should avoid. Spend some time before you leave on your trip to learn as much as you can about the place you are going and any areas or activities that may be unsafe so you can avoid them.
2. Pack for function, not flash. It is best to avoid bringing anything that’s flashy or expensive (such as jewelry and cameras) on vacation to avoid being targeted by thieves. Instead of carrying large quantities of cash, use ATM’s (in well-lit public areas) to replenish if you need to. If you take credit cards, take only the ones you plan to use and make photocopies of the front and back of them to leave with someone at home. This will make it much easier to cancel your cards if they are lost or stolen while you are away.
3. Post your plans and pictures after your vacation. While it’s tempting to post about your vacation plans prior to your departure and share pictures from your trip in real time on social media, for safety’s sake, you should wait until you are home to do so. To avoid giving thieves clues that your home would be an easy target for a break-in.
4. Pack for emergency preparedness. Unfortunately, illness and injury do not take vacations—so you should be prepared for them, just in case. Consider whether you need any additional medical insurance while you are away and bring clearly labeled pain and fever relievers and any prescription medications you may need in your purse or carry-on luggage. It’s also a good idea to bring the name and number of your family physician and a travel-size first aid kit with you.
5. Have fun, but stay alert. While you definitely want to enjoy your trip, keeping alert and being aware of your surroundings will help you avoid unsafe situations. When traveling with children, discuss with them what to do if they get separated from you while away from home.


For many of us, a vacation offers the perfect opportunity to relax and enjoy time away from the regular routine. By exercising common sense and using the tips above, you’ll reduce your risk of any safety mishaps while you are away.

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IRS Offers Small Businesses Limited Relief for Health Coverage Reimbursement Arrangements

Some health coverage reimbursement arrangements offered by small employers (those with less than 50 full-time employees) are considered by the IRS to be non-compliant with the health coverage plan requirements set forth in the Affordable Care Act (ACA). Beginning January 1, 2014, employers who offer such plans were facing a significant penalty: an excise tax of $100 per employee per day, up to an annual maximum of $36,500 per employee. Employers should breathe a sigh of relief, however, because on February 18, 2015, the IRS issued notice 2015-17, which provides relief from this excise tax with the following provisions:

1. Transitional tax relief for employers who reimburse for health insurance premiums but do not have ACA qualifying plans. These employers now have until June 30, 2015 to change their plans to ACA qualifying plans without penalty. Alternate arrangements that reimburse employees for medical expenses, rather than for premiums only, do not qualify for this relief. In addition, employers covered by this exemption are not required to file Form 8928, regarding failures to satisfy requirements for group health plans, including market reforms, with their 2014 tax return.
   
   
2. Temporary tax relief for employers with S-Corp plans that reimburse more-than 2% shareholder employees for health insurance premiums. Essentially, these plans are still in violation of the ACA, but the IRS has yet to issue guidance for this type of situation so until further notice (likely until the end of 2015), these employers will have tax relief. S-Corp shareholders will continue to have health insurance premiums included in their gross wages, while receiving a deduction for self-employed health insurance and the IRS will not assert the Section 4980D penalty on S corporations that reimburses the insurance premiums of a more-than 2% shareholder.
   
   For S corporations maintaining more than one reimbursement arrangement for different employees (regardless of whether they are more-than 2% shareholders), the various arrangements are treated as a single arrangement covering more than one employee. The S corporation will then be classified as conducting a group plan, rather than a single employee plan, and will be subject to the penalty when transitional relief expires. An important note: Notice 2015-17 exempts S corporations with only one employee from market reforms.
   
   
3. Employers may keep their non ACA compliant health insurance reimbursement arrangement and give employees a raise instead of reimbursing them for health insurance premiums. If an employer opts to keep their existing non-ACA compliant plan instead of establishing a qualifying group plan, the only way to avoid penalties is for the employer to increase the salary of each employee which will be subject to increased income and payroll taxes. Importantly, an employer can in no way condition that the increased salary is dependent on an employee obtaining health insurance. An employee must be able to use their increased compensation at their discretion.

While Notice 2015-17 does offer some relief to businesses from the tax impact of the ACA, it is important to keep in mind that this relief is only temporary and that the IRS will be providing further clarification in the future. It is a good idea for employers to take this window of opportunity to review their employee healthcare plans and method of funding in order to make any adjustments necessary to avoid penalties. If you have additional questions, please contact our office, we are happy to help you.

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Don’t Be a Victim! Beware of Scams Targeting Taxpayers This Tax Season

With the rise of identity theft and tax and financial fraud, it is critical that we all remain vigilant about protecting our sensitive personal and financial information—especially during tax season. Being alert to any attempts by criminals to intercept your information is one important way you can protect yourself. The IRS recently issued the following alerts about a new crop of tax season scams. Take a few moments to review this information to keep yourself safe from scammers looking to target taxpayers.

1. An aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, is making the rounds throughout the country. According to the IRS website, callers claim to be employees of the IRS, but are not. These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.
   
   

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are threatened with arrest, deportation, or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting. Alternatively, victims may be told they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.
   
   The IRS urges taxpayers to note that they will never: 1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill; 2) demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe; 3) require you to use a specific payment method for your taxes, such as a prepaid debit card; 4) ask for credit or debit card numbers over the phone; or 5) threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
   
   
2. Be on guard against “phishing”—fake emails or websites looking to steal personal information. The IRS will not send taxpayers emails about a bill or refund without contacting them by mail first. Don’t click on an email link claiming to be from the IRS unless you are expecting the IRS to send you an email based on previous contact you have had with them.
   
   
3. Taxpayers need to watch out for identity theft especially around tax time. The IRS continues to aggressively pursue the criminals that file fraudulent returns using someone else’s Social Security Number. The IRS is making progress on this front, but taxpayers still need to be extremely careful and do everything they can to avoid becoming a victim.
   
   
4. Be on guard against groups masquerading as charitable organizations to attract donations from unsuspecting contributors. If you want to contribute to a charity, take a few extra minutes to ensure that the organization in question is actually a currently eligible charitable organization. Be especially wary of charities with names that are similar to familiar or nationally known organizations.

These are just some of the current tax season scams that you should be aware of. You can visit the IRS website to see additional scam alerts. If you have any questions, or you encounter any suspicious activity related to your financial or tax information, contact our office. We are committed to helping you protect yourself and your financial health.

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Four Easy Ways to Energize Your Employees

February can be a tough month when it comes to motivation and energy levels for many people. So it’s not surprising that employees may seem a little less productive at this time of year. Fortunately, the following four tips can help you put the spring back in your team’s step—and boost the productivity of your business.

Keep Sharing Your Vision
People want to have a goal to which they can aspire—and a shared vision of where your business is going can be a strong motivational force. By sharing your vision and reminding your team periodically about the important role they play in it, you can energize your workforce.

Stop Hovering
If you tend to micromanage, try stepping back and letting your employees’ creativity and morale soar. Unless you have new team members who really do need handholding, your employees will feel much more empowered if you simply let them do what you hired them to do.

Offer Ongoing Education
When it comes to energizing your team, providing periodic learning opportunities is key. Giving employees the chance to sharpen their skills will not only improve your business, but your willingness to invest resources in staff development will also elevate your employees’ enthusiasm for doing their best work.

Spread the Love
Encouragement is a powerful elixir for increasing employee engagement. Everyone wants to be recognized and appreciated for the work they do. Be sure to recognize people on your team, even informally, as often as possible.

Don’t let the post-holiday doldrums dampen the spirits or productivity of your team. Try implementing these tips to energize your employees—and your business.

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Keep This, Not That—Which Documents Should You File and Which Should You Toss After Tax Season?

If there’s one time of the year that may inspire you to finally come up with a filing system for all of your bank statements, receipts and other important documents, it’s tax season. Not only will keeping your documents organized make it easier and less stressful for you to find what you need on a daily basis (and when you are getting ready to have your taxes prepared), it will also ensure that if something happens to you, your loved ones will be able to quickly find essential information about your finances and other relevant items.

One of the major challenges that many people encounter when they start going through their documents is knowing what they should keep and for how long. The following list from Consumer Reports may help you determine what to keep and what to toss (remember to shred all sensitive documents before you put them in the recycling bin or trash) once tax season is over:

Documents to keep for a year or less

• Bank records: Keep deposit and ATM receipts until you reconcile them with your monthly statements. File your monthly checking and savings account statements. After you do your taxes, file any statements needed to prove deductions with your tax records; the rest can be shredded.
• Credit-card bills: Shred them after you've checked and paid them, unless you need a bill to support a deduction you'll be taking on your taxes, such as for a charitable donation (in which case you'll need to file the bill with your current-year tax records).
• Current-year tax records: Keeping your records organized can save you headaches and money at tax time. Place documents you'll need for your next return in a file.
• Insurance policies: Keep policies that you renew each year, such as those for your home, apartment, or car, until you get new policies, then shred the old ones.
• Investment statements: You can shred your monthly and quarterly statements from brokerage, 401(k), IRA, Keogh, and other investment accounts as new ones arrive. But hold on to annual statements until you sell the investments.
• Pay stubs: Keep the calendar year's records until you reconcile them with your annual W-2 form, then shred them.
• Receipts: If you're not doing anything with your receipts—like tracking your spending, itemizing tax deductions, or using them to return purchases—you don’t need to keep them.

Documents to keep for at least a year

• Investment purchase confirmations: You will need these to establish your cost basis and holding period when you sell investments. If this information appears on your annual statements, you can keep those instead of quarterly or monthly statements. Store the records until you sell the investments, at which time you should move the back-up records into that year's tax-return file.
• Loan documents: Keep closing documents for mortgage, vehicle, student, and other loans in a safe-deposit box. You can dispose of them after the loan is paid off.

Documents to archive for seven years

• Personal federal and state tax returns and their supporting records: These documents must be kept for at least seven years. Remember, your returns can be audited by the IRS up to three years after the date you filed the return. If you fail to report more than 25 percent of your gross income, the government has six years to collect the tax or start legal proceedings—and you can be audited at any time if the IRS suspects you of fraud.
• Tax records: If they are more than seven years old, tax records can be stored—or even better scanned—for your records.

Documents to keep indefinitely

• Essential records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept in a safe-deposit box.
• Permanent life insurance: Policies that have a cash value or investment component—keep documents and a list of the companies that issued them and their phone numbers in your safe-deposit box. If you have a term life policy, hold the documents until the term is over, then toss them.
• Pension-plan: Documents from your current and former employers and estate-planning documents including wills, trusts, and powers of attorney should also be stored in your safe-deposit box.

If you’ve already instituted a filing system for your key documents, kudos to you. If you haven’t, now is the perfect time to do so. If you have any questions about which financial records you need to keep or which ones you can safely dispose of, please let us know, we are happy to help.

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Ten Tax Changes That May Impact Your 2014 Tax Return

Tax season is here, and there are many tax changes that were implemented in 2014 and more to be introduced in 2015. From Obamacare to tax hikes and changes to standard deductions, there's a lot to keep track of. To help you get organized for this tax season and beyond, review this summary of some of the most significant tax issues and changes.

Obamacare Penalties Kick In
The Obamacare individual mandate goes "live" this tax season. The mandate requires that consumers purchase health insurance or face a penalty of $95 or 1% of their annual income, whichever is greater. The penalty is $47.50 per child, up to $285 for a family.

Changes to FSAs
2014 was a big year for health care-related tax changes. If you take advantage of a Flexible Spending Account (FSA) to help pay for future medical expenses with pretax dollars, you should note that in 2014 Congress made a change so that if you carry over funds (up to the $500 maximum carry over limit) into 2015, you will be disallowed from participating in an HSA in 2015.

Flexible Spending Account Limits
The annual limit on employee contributions to flexible spending accounts is now $2,550 for qualified health care expenses. That's up $50 from 2014, so make sure you opt in for this new maximum amount if you take advantage of a health care FSA.

Only One Annual IRA Rollover is Allowed
Up until now, individuals could use tax-free rollovers for each of their IRA's. Starting in 2015, only one tax-free IRA rollover will be allowed for a period of one year for any number of IRA accounts. This includes SEP, SIMPLE IRA's, Roth, and Traditional IRAs.

Income Tax Rate Changes
The American Taxpayer Relief Act of 2012, or ATRA, added a seventh federal income tax bracket (39.6%) in 2013, while the remaining six rates were unchanged. In 2014, taxable incomes above the following thresholds now fall into the 39.6% bracket: Married Filing Separately ($228,800), Unmarried Individuals ($406,750), Head of Household ($432,200), and Married Filing Joint Returns ($457,600).

Unified Credits, Gift Tax and Estate Tax

Additionally, ATRA increased the estate and gift tax rate from 35 to 40%. The gift tax and estate tax exclusion continue to be indexed for inflation and increase to $14,000 and $5.34 million respectively in 2014.

Standard Deduction Increases

The standard deduction—that is, the basic tax break extended to all Americans rises this year to $6,300 for single filers and $12,600 for married taxpayers filing jointly in 2015. That's up $100 and $200, respectively, from 2014 figures.

Tax Bracket Adjustments
For the new tax year starting in January, income tax thresholds have again been adjusted up for inflation. The highest tax rate of 39.6%, for instance, will now apply to single filers who make over $413,200 and married couples making $464,850. Both figures are up about 1.6% from tax year 2014. For more information on specific income tax brackets by filing status, check out the latest IRS revenue procedure document.

AMT Changes
The so-called "alternative minimum tax" is quite a headache for many middle-class Americans. Since certain breaks can significantly reduce your tax bill, the IRS created the AMT to set a limit on those benefits and ensure a minimum tax burden on you. The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 for individuals or $83,400 for joint filers. That's up slightly, about 1.5% from 2014.

Social Security and Medicare
As was the case in the past, all wages earned in a given year are taxed at the 1.45% rate for Medicare. On your 2014 tax return, wages paid in excess of $200,000 for Unmarried filers and in excess of $250,000 for Married filers will be subject to an extra 0.9% tax. The Social Security tax rate remains at 6.20%, while the wage limit, or Social Security maximum, increases from $113,700 to $117,000. The Cost of Living Adjustment (COLA) was 1.5% in 2014, raising the SSI limit to $2,642 per month.

With so many tax changes instituted last year and more coming this year, it is likely that you will notice the impact of several of them..Please be sure to contact us with any questions. We look forward to helping you.

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Tips for Achieving Your Financial Goals This Year

With 2015 just around the corner, it’s smart to take a few minutes to plan ahead for the coming year in terms of the goals you want to achieve. If managing your money more effectively in the year ahead is one of the things you want to tackle, it helps to break your goal down into manageable steps.

Figuring out your financial plan comes down to three essential steps: managing, growing, and protecting your money. Here are some tips to help you succeed in these three areas of your financial life.

1. Managing your money. If you can't figure out how to earn more, spend less, save more, and pay down debt, you won't have the assets you need to grow your wealth. From recent college graduates to baby boomers near retirement, learning how to live on less than you make, borrowing money and using credit responsibly, and saving money for unexpected situations are critical steps you must take.

2. Growing your money. When it comes to saving and investing, it’s never too early, or too late, to start. By putting money aside each month and investing it wisely, you can grow your money to help pay for your child's education, buy your first home or a vacation home, and fund your retirement. It may be helpful to talk to a financial professional to make sure your investment strategy is sound.

3. Protecting your money. Getting up to speed on the best retirement and tax and estate planning practices can make all the difference in being able to retire on your terms and leave a positive financial legacy for your loved ones. Federal income taxes can be a family's greatest annual expense, underscoring the importance of strategic tax planning. Knowing your tax liability before the annual April 15th deadline is critical to your overall financial plan, so get in touch with our office if you have any questions in this regard.

In addition, careful estate planning can prevent confusion and chaos for your family when you're gone. So make sure you have a will and a clearly articulated plan for how your assets should be handled in the event of your passing.

Being proactive about managing, growing, and protecting your money and other assets this year may be one of the best New Year’s resolutions you can make—paying dividends to you well beyond 2015. If you need any assistance putting your financial plans into action, please contact our office—we are happy to help you.

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Give Yourself a Last Minute Gift: Year End Tax Planning

It’s the most wonderful time of the year—and for many of us, it is also one of the busiest. While adding one more thing to your to-do list—like year-end tax planning—may induce a feeling of overload, it really is one task you shouldn’t skip, because it can give you the gift of a lower tax bill next April.

Here are a few tips to help you end 2014 with the good feeling of knowing that you are in good shape for the coming tax season.

Act now to accelerate deductions and manage your income for the current year. Depending on what your income level is this year, you may want to defer some income (through investments or other tax-deferral vehicles) if you think it will help keep you from reaching a higher tax bracket or if your income will be near the thresholds for the additional Medicare tax ($250,000 if married and filing jointly; $200,000 if single; and $125,000 if married and filing separately). On the deduction side, you may be able to accelerate your state and local income tax payments, real estate taxes, interest payments, or business investments, so think about paying these obligations before next year is here so you can claim the deduction on your 2014 tax return.

Keep up with estimated tax payments. Having the dates for estimated tax payments on your calendar is important—including the fourth 2014 estimated tax payment due this January 15. By calculating this payment and the first one due for 2015 (April 15 next year) you will have a preliminary idea of what your tax liabilities will be, giving you an idea of how much you'll need to set aside to make these payments.

Check your withholding and estimated tax payments now while you have time to fix a problem. If you’re in danger of an underpayment penalty based on the calculations you made above, try to make up the shortfall now instead of waiting until your next tax payment. If you need assistance handling delinquent taxes or other tax issues, contact our firm for professional guidance.

Now is the time to apply for health care tax exemptions. If you do not have health insurance, the Affordable Care Act mandates that you must pay the "shared responsibility payment" with your federal taxes. Exemptions are available, however, the process to qualify for one (which must be approved by the Health Insurance Marketplace) can take several weeks. Now is the time to apply.

Maximize “above-the-line” deductions. Above-the-line deductions are valuable because you deduct them before you calculate your Annual Gross Income or AGI. They are allowed in full and make it less likely that your other tax benefits will be limited. Common above-the-line deductions include traditional IRA and health savings account (HSA) contributions, moving expenses, self-employed health insurance costs and alimony payments.

Make the most of retirement account tax savings. In addition to any 401(k) contributions you may make if you are employed, depending on your income, you may want to make contributions to other retirement accounts—or start one if you haven’t already. Traditional retirement accounts like an individual retirement account (IRA) still offer some of the best tax savings. Contributions reduce taxable income at the time that you make them, and you don’t pay taxes until you take the money out at retirement. The 2014 contribution limits for an IRA are $5,500 ($6,500 for those 50 years of age and older). If you have questions about your investment strategy and tax savings contact us for assistance.

With just a few weeks left in 2014, now is the ideal time to look at your current financial situation and plan for the future, in addition to starting to get your tax documentation in order. If you have any questions, please contact our firm—we are happy to help you.

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Unique Ways to Share Your Gratitude This Thanksgiving

With Thanksgiving literally right around the corner, it’s the perfect opportunity to reflect on the abundance that we have in our lives and how we might express our gratitude to the people who mean the most to us.

If you are enjoying a gathering with family and friends this Thanksgiving, here are a few unique, fun activities from that can help you create an atmosphere of genuine gratitude during the traditional festivities.

Introduce the Annual Appreciation Awards at the end of your Thanksgiving feast. Make some fun, inexpensive turkey trophies and label them with an achievement accomplished by each guest, or give out awards based on why you’re thankful for each family member.

Make gratitude your secret ingredient. As your guests come in, have them write what they’re thankful for on small strips of parchment paper. Then lay each strip on top of store-bought crescent dough before rolling it up and baking. When dinner’s ready, your family and friends can read messages of gratitude out loud.

Share a jar of thanks. If you’re looking for a way to share gratitude with your immediate family, have each family member drop a note of gratitude into the jar each day leading up to Thanksgiving. Open the jar and read each note on Thanksgiving.

Create a Thanksgiving journal that expands each year. Pass a blank notebook around the Thanksgiving table each year and have your guests record what they are thankful for. You can then look back and see how your family has grown and changed throughout the years.

Our firm is thankful for the opportunity to serve the individuals and businesses in our community. We extend our best wishes for a safe and happy Thanksgiving to you.

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Five Things You Can Do to Reduce the Risk of Spreading Cold and Flu in Your Office

Late fall typically marks the beginning of cold and flu season, which can pose a real threat to businesses. While public health officials continue to push flu shots, the message isn’t inciting many people to act. Add to this those employees who are hesitant to take sick days, meaning they come to work and inadvertently spread germs, and the potential for a cold and flu outbreak heightens.

The impact such behaviors can have on businesses—especially small ones—is nothing to sneeze at. The website HealthyWorkPlaceProject.com, estimates a 25-employee company loses $33,000 every year to lost productivity, sick days, and temporary workers brought in to replace sick employees. So what can you do to keep your employees healthy? Here are five tips to reduce sickness in the workplace:

1. Advise sick workers to stay home. Keeping sick employees from becoming a drain on productivity often requires a company policy on illness—one that gives workers peace of mind that taking a sick day will not have a negative impact on their employment.
   
   
2. Encourage preventative care. Simply encourage employees to get vaccinated—in addition to other healthy habits such as eating well, exercising, getting plenty of rest, and proper sanitary practices for themselves and their work areas.
   
   
3. Remind employees to wash their hands often. Incorporating reminders into company emails, newsletters, and even signage can be a non-intrusive way of relaying the importance of hand washing.
   
   
4. Provide sanitizing products to keep workspaces clear of germs. Providing hand sanitizer, wipes, disinfecting sprays, and towels for employees to clean their desks and keyboards regularly will foster good sanitizing habits.
   
   
5. Plan for increased sick days during cold and flu season. If possible, prepare telecommuting options for employees who feel well enough to work, but who may be contagious. Unless they're laid low by a bad flu, most employees can work a little bit from home. This strategy can help slow or eliminate the spread of cold and flu during peak season.

Of course, it is unlikely that you and your employees will be able to escape illness altogether, so having a solid healthcare benefits plan in place is another smart strategy. If you have any questions about healthcare benefit options, contact our firm for assistance.

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Reaping the Rewards: Tips for Implementing an Effective Employee Incentive Program

For some employees, the satisfaction of doing a great job is a reward in and of itself. However, for many companies, implementing a rewards program for employees is necessary in order to maintain employee morale and productivity. While investing time and money to develop and implement an employee incentive program may seem like an inefficient use of resources that detracts from your bottom line, if you look at the big picture, quite the opposite is true.

The cost of unhappy workers to a business can be extremely high. A recent Gallup survey estimates that this kind of unhappiness is costing employers $300 billion annually due to decreased productivity, including more sick days and lackluster operational results. To help you avoid these negative effects, here are a few points to keep in mind when creating a rewards program for your business.

Rewards should appeal to your employees—not just your company leadership. Creating a work environment that boosts happiness, productivity, and morale requires more than a few free doughnuts every now and then. It requires genuine recognition, meaningful feedback, training, and support. However, these things will only improve employee morale so much—after you’ve recognized the efforts and output of your employees, you’ll need to start building an effective rewards program. Doing so will show your employees that there is a system in place that encourages their engagement and productivity with tangible and intangible incentives they value.

Your rewards programs should be customized and tailored to your unique company. Incentives that work for one company might not necessarily work for another, so it’s important that you create a program that fits your company culture and reflects your employees’ interests. For example, if your organization is very health-minded, offering rewards that include a lot of unhealthy foods are not likely to be appealing. Instead, you may want to offer rewards such as free fitness facility memberships or branded company workout gear. In addition to tangible rewards for special achievements, you can also offer employees additional vacation days and the reward of peer recognition by publicly announcing in person or in a company publication the details of their accomplishments.

A key component of any rewards program is measurement. Keeping track of employee progress and who has received rewards is important not only so you know who has performed well, but also because it can actually motivate other staff members to up their game to reap the rewards being offered as well. Leaderboards, periodic email updates, and sharing staff achievements via social media or newsletters can be powerful ways to quantify and publicize the progress or your internal rewards program.

Implementing a solid employee rewards program not only encourages and motivates employees, it can also pay huge dividends in terms of improving productivity, your bottom line, and employee advocacy. If you’re considering offering rewards to your employees, you may also want to involve them in the process of shaping and implementing your incentive program—another easy way to show that you value your employees’ contributions to your company.

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Do Your Employees Know What Customer Service Means to You?

If you own a business, you know that your customers are its lifeblood, so customer service is key. While you may recognize this fact, it may not always resonate with your employees. So how do you ensure that all your hard work to win customers isn’t undermined by poor customer service when they come face-to-face with your employees—especially if you can’t always be there to supervise?

The following tips may also be useful in making your customer service consistent and truly exceptional:

Provide customer service resources. Give your employees clear instructions for creating and maintaining service superiority—a written customer service policy manual for example. If your employees are unclear how customers should be served, they need to have resources available to help them learn. You can also offer resources such as FAQs in your employee manual, a manager or supervisor who can be a customer service coach, and of course, reminders of your own vision, as the business owner, for how customers should be treated.

Develop and communicate benchmarks for superb customer service. Be certain that your employees know the specific behaviors that constitute exceptional service at your company. Don’t take it for granted that your team knows what good service is—or what you consider good service. Measurable benchmarks that indicate great service should also be identified and shared.

Share the good, and the not-so-good. Make your employees aware that because customer service is so important to your business, you monitor it closely and want to share with them how everyone can work to make sure customers have the best possible experience. Meet with your employees regularly to talk about improving service and to reward employees who practice great customer service. The sharing should also be a two-way endeavor, so solicit ideas from employees—after all, they are likely the ones who are dealing with customers most often.

Formalize the customer feedback process. While many businesses rely on anecdotal comments to judge whether they are doing a good job serving customers, it can be helpful to formalize the customer feedback process so you can track trends over time and quantify results against your goals. Obtaining regular feedback using surveys or other tools also helps to show your customers that you care and are listening to what they have to say. You may even get some great ideas to help improve your service or other areas of your business.

By defining and communicating what your company’s specific customer service standards and policies are, involving your employees in the process, and quantifying the results of your efforts, you’ll have peace of mind knowing that everyone on your team is consistently “wowing” your customers with exceptional service.

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Is Your Business Prepared for the Next Phase of Obamacare?

In just a few short months, the calendar will read 2015—the year in which the next phase of the Affordable Care Act, known as Obamacare, will kick in for businesses with 100 or more employees. Under the law, businesses with 100 or more employees on their payroll will need to start providing health benefits to at least 70 percent of their full-time workers in 2015, and to 95 percent by 2016. Companies that fail to meet these targets will be subject to penalties that start at $2,000 per employee. Businesses with 50 to 99 full-time employees will need to start insuring workers by 2016.

One area of these new regulations that business owners need to be clear about is the Obamacare definition of a full-time employee: 30 hours a week or more, versus the historic 40-hour week recognized by other federal and state laws. Obamacare also requires employers to collect signed waivers from employees who opt not to sign on to a company insurance plan. Even if an employer opts not to offer insurance, they are still required to file forms to substantiate the number of full-time and part-time workers they employ.

The required documentation means that businesses need to be prepared to monitor their employees’ hours—especially part-time employees—to make sure that they don't average more than 30 hours a week. Employers must also have a process in place for documenting that they have offered coverage to their full-time workers.

The penalties for non-compliance with the next phase of Obamacare may be significant, so it pays to prepare now. Companies with 100 or more employees that don't offer coverage may be liable for fines of $2,000 and $3,000 per worker next year. This penalty will apply for businesses with 50 or more employees in 2016.

Businesses that fall under the new mandate should also be aware that if any one of their employees receives a premium tax credit from the Obamacare insurance marketplace because the coverage they offer is deemed unaffordable or does not cover 60 percent of total costs, the employer must pay a Shared Responsibility Payment of either $3,000 for each employee getting a credit or $750 for each of their full-time employees, whichever is less. Under the Obamacare law, insurance is considered unaffordable if an employee's share of the premium costs for employee-only coverage (not the entire family) is more than 9.5 percent of their yearly household income.

It’s clear that the next phase of Obamacare brings with it some considerable new responsibilities for business owners. Adding preparation for these new mandates on to your year-end planning list will help you avoid penalties and start 2015 off right. If you have questions about Obamacare and how it will affect your business, please contact our firm for assistance.

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Is Your Business Facing Back Taxes or Penalties? Take a Proactive Approach Before Next Tax Season.

While you may still be enjoying the last few weeks of summer thinking that it’s too early to start preparing your business for tax season, you may want to reconsider putting your tax planning on hold—after all, the peak of the tax preparation period is just a few short months away.

While it is wise to engage in tax planning strategically and consistently throughout the year, if you haven’t done that this year, then now is the time to be proactive and get organized—especially if your business has fallen behind on any tax payments.

Here are a few tips to help you put yourself in the best position possible when it comes to filing your business taxes next year:

Make a plan to pay back taxes. If you have fallen behind on any of your business tax payments, start today to right the situation by creating a plan to avoid further penalties by making payments. Accounting professionals are usually well-versed in IRS problem resolution—including those involving non-payment of taxes, so don’t be afraid to speak up and ask for help to create a plan that your business can afford.

Be proactive about payroll taxes. If your business is behind on payroll taxes, consider discussing with our firm the possibility of using an IRS installment plan to get back on track. If your business owes less than $25,000 in combined tax, penalties and interest, and has filed all required returns, this may be an option.

Avoid paying fines related to retirement plans. For businesses sponsoring retirement plans, failure to file Form 5500 for annual reporting can result in fines as high as $15,000, so be sure that you are up-to date on this requirement. If you do have a penalty and were legitimately unaware that you needed to complete this filing, you may be eligible for the U.S. Department of Labor’s program to reduce or eliminate these penalties.

Start organizing your tax records now. Organizing your business tax records now can make filing taxes much easier and faster come tax season. It can also show you exactly where you stand in terms of tax payments and any penalties that you may be facing. Compiling your documentation well ahead of time will reduce your stress and allow you to easily file a complete and accurate return and make any provisions for payment plans or IRS problem resolution.

If your business has fallen behind on taxes or you are facing tax-related penalties, don’t wait until tax season is here—please consult our office so we can help you prepare and make a plan ahead of time.

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Don’t Fall Back—Use These Tips to Get Ahead Financially Before the Year Ends

With the official start of the fall season almost here, it’s the perfect time to get your finances in shape before year-end, so you’ll be well-prepared when 2015 begins.

Increase your retirement contributions. If you’re not already saving for retirement, start now! If you know you need to save more, up the contribution you are making to your investment accounts this fall. If you are not sure what you need to do, speak with a financial professional for advice.

Start using your flexible spending account (FSA). If you don’t use your FSA before the end of the year, you’ll lose out on the funds you have in it. Now is the time to get new glasses, have dental work done, or take care of other qualified healthcare needs.

Review your health insurance. Many employers have open enrollment for health benefits in October and November. It is especially important to review your health benefits information at this time, because your employer may have made changes due to health care reform regulations.

Review your home, auto, and life insurance coverage. In addition to your health insurance, now is the perfect time to take a look at any changes you may need to make to your personal insurance coverage, which should be reviewed annually. If you have had any significant life changes (such as buying a new home or having a new baby) or have any additional assets (a new car, for example) then you may need to look at additional coverage.

Develop a budget for now and for next year. Do you feel like your bank account is always running on empty? Or perhaps you have some financial goals that you would like to achieve in 2015. Be proactive and think about what changes you need to make to feel a little more financially flush today, and get where you want to be in the year ahead.

Plan for vacations and holidays. It’s never too early to start saving for next year’s summer vacation—and by starting now you will be able to put money away without really feeling a pinch in your wallet. Plus, now is the perfect time to sock a little extra away in your savings account to cover the extra money you may need at the holidays.

Do good with donations. Fall is also the time to gather up any summer clothing you don’t need and donate it to charity. You may also want to clean out your basement and garage and take any items in good condition to your church or local charity. You’ll feel good about helping others and also get a tax deduction for this tax year.

Meet with your trusted financial advisors. The fall is a great time to set up an appointment with our firm to prepare for year-end and to start tax planning for the coming year. It’s also the ideal time to review where you are financially and develop strategies to make sure you are optimizing your finances.

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Re-energize Your Business by Getting into a Back-to-School Mindset

The back-to-school season is always an exciting time. You can feel it in the air…a time of new beginnings and opportunities. And while the kids are enjoying reconnecting with friends and teachers and the thrill of new school clothes, business owners can adopt their own form of back-to-school spirit to revitalize excitement around their business. Here are a few tips to help you get into this mindset…

• Establish new goals. If it’s all about new beginnings, then new goals are in order. Successful business owners are always looking for ways to improve and face change with a positive attitude, so make it a point to set new goals for your business as you re-energize.
  
  
• Continue your education. As business owners, you are life-long learners…because there is always something new to learn. Enroll in an online class, register for informative webcasts, or get involved in other events that serve to advance your business education. By sharpening your skills, you will ultimately grow your business.
  
  
• Expand your network. Like the kids reconnecting with friends, you can take this time to reconnect with your community—both on the personal and business side. Join in on community projects and make a visit to your local Chamber of Commerce. You never know where you might pick up a new customer or referral source.
  
  
• Plan your next break. It can be very cathartic to plan a getaway…away from the busy life of the business owner. Identify a period when you can carve out some “me time,” even if it is a ways out. Then make sure you actually get away. Days off, even if only a few, can do wonders for reducing business stress.

You are now armed with some strategies to get into a “back-to-school” mindset and re-energize your business. You’d be surprised at the positive changes that can come from it.

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Delegation: The Ultimate Productivity Enhancer for Business Owners

As a business owner, one of the hardest—yet most beneficial skills to learn—is delegation. Many people who run businesses and have staff often find delegation of duties difficult for a number of reasons—two of the most common being a perceived lack of time (the “It’s faster to do it myself” excuse) or because they have a hard time letting go of their responsibilities and trusting that someone else can take care of them effectively. However, being able to delegate effectively is key for leaders. Only through delegation can they attend to higher-value responsibilities that will have a bigger impact on their company in the long run.

If you own a business, answer this question honestly: Do you spend most of your day performing tasks that will significantly and positively impact your company and support the vision you have for it? Or, is the better part of your day spent handling work that provides no real strategic value to your organization? Are you taking on tasks that are supposed to be completed by staff or third-party vendors? If so, you probably need a little help learning how to delegate. Consider these delegating tips:

1. Determine what to delegate. The first step in delegating is to choose what tasks can be delegated. Assigning critical, time-sensitive tasks may not be the best place to start. Instead, try selecting tasks that are ongoing, necessary processes that take up your time but are not high value. That being said, it is equally important not to delegate something you’re unwilling to do yourself, which may have negative consequences for your team’s morale.

2. Match the task with the team member. Making sure that you pick the right person to delegate a task to is paramount to delegating success. Taking time to understand the strengths and weaknesses of your staff will help you make the right project assignments and will also bolster the confidence of those who are taking them on.

3. Clearly communicate expectations. Open, clear communication is another critical component of effective delegation. At the start of any project hand-off, be crystal clear about your expectations, including timelines and deliverables, and give your team members all of the information they need to achieve those goals. Putting the project parameters and your direction in writing helps to reduce frustration and ensures a positive end result.

4. Be available, but don’t hover. The point of delegating is defeated if you micro-manage the work that is being done. So, while it’s important to be available to your staff should questions about their assignments arise, you also need to allow them autonomy and flexibility to accomplish the work. Checking in from time to time, especially when a task is new, may be helpful to make sure everyone is on the right track.

5. Practice patience. Delegating will take work off your plate over time, but it will likely require additional time at the beginning to detail the task and your expectations and answer questions. And, you may have to learn from a bit of trial and error as you learn which members of your team can handle additional responsibilities and which tasks fit them best. Remember, mistakes will happen. Be sure to address any problems as they arise so they can be corrected quickly. Also, give encouragement and positive feedback when tasks are well done.

At first, letting go of your daily duties may be difficult, but, the more you delegate, the more comfortable you will become with the process. Keep in mind that by allowing others to step-up and help you, you will benefit everyone in your organization by focusing more time and energy on the things that will move your business forward.

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Why “Set It and Forget It” is Not a Winning Website Strategy

So, you have a nice website for your business—you can check “web strategy” off the to-do list, right? Not so fast! While creating a website that is easy to navigate, visible to search engines, and true to your company’s brand is no small feat, it should be just the first step in your website strategy. To maximize your organization’s web presence, you can’t just “Set it and forget it.” Keeping your site updated and evolving with your business is critical—otherwise, you are unlikely to reap the full benefit of the investment you have made in developing it.

Updating and refreshing your website is a task that never ends, but it also pays dividends in terms of the search engine optimization (SEO) of your site, not to mention the attractiveness of your site to new and existing customers. Many of the changes or additions that a website needs regularly are content-based. Adding blog posts or articles periodically not only shows your web visitors that your business is committed to communicating in a timely manner, it also provides new content for search engines to index, which improves your site’s search rankings.

While creating new content for your site seems like a simple strategy, it is often something that businesses struggle with from both a time and creative standpoint. This is why having a plan for who is responsible for website updates and a calendar of what will be posted when (for several months in advance) is essential. If you use a third-party web developer to maintain your website, it is important that you communicate with them about the frequency and type of updating you want for your site. If you plan to manage your site updates internally, ensuring that you have an easy-to-use content management system is critical.

Beyond the logistics of getting fresh content online, many companies also struggle with what information makes for high visitor engagement and search engine fuel. Focusing on topics your existing clients would be interested in is usually a good place to start when developing content. Are there questions that your customers always ask? Perhaps a “Frequently Asked Questions” section on your site would be a good addition. A blog that you update regularly is also a great way to add fresh, relevant content to your site, while highlighting your business and providing useful information.

From an engagement perspective, visual content such as pictures and videos are usually better received by site visitors than pages of text. Of course, whatever content you add to your site should be useful to your target market, so always keep the customer in mind when thinking about website updates. Remember, too, that quality content is much more important than producing quantity content. And, don’t overlook the basics when it comes to refreshing your site. If you have recently made changes to your business hours or you have staff changes or products or services that you no longer offer or are new offerings, make it a priority to update that information as quickly as possible.

Building a quality website for your business is critical in today’s market, however, it is only half of an effective web strategy. Ensuring that you regularly update your site may take some time and thought, but it is well worth the effort when it comes to attracting new site visitors and potential clients as well as providing your existing customers information and resources that will keep them engaged with your business.

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Don’t Neglect Your Own Finances When Caring for Aging Relatives

As the number of seniors in the U.S. population continues to increase, so does the number of people taking care of an aging parent. In 2011, an estimated 10 million adult children over the age of 50 were caring for an aging parent. Having to take on this type of responsibility, especially during your prime earning years, can take a toll—not only emotionally and physically, but financially as well. Research has shown that working Americans who must reduce their working hours or leave their jobs to care for an aging parent can sacrifice their own financial stability to do so.

Ideally, before you step into a caregiver role, you should have a discussion with your parent(s) or the relative who needs your help about their wants and needs and how finances will work. You should you also determine in what situation you will become responsible with the legal power to make decisions for them. While this conversation may be uncomfortable, it is critical.

Balancing your own financial needs with the need to care for your aging relatives can be stressful and challenging, so consider the following tips to help you manage both of these priorities:

1. Think long-term before you give up a job. While it may be difficult to hold down a full-time job when you need to be able to take your relative to doctor appointments or tending to their well-being, the time you gain may come at the cost of your long-term financial security. Be sure to think long and hard before you cut your current income and reduce or eliminate your retirement savings. Also consider if you will need to get another job at some point and if your skills will still be sharp if you exit the workforce completely.
   
   
2. Create a caregiving budget. Before making any caregiving commitments, create a budget with your own expenses in light of potentially becoming a full-time caregiver. In addition, make a list of the resources that your relative has available to help you support the needed caregiving expenses.
   
   
3. Research the public benefits available. Do some research online and in your community to identify what public assistance may be available to help you reduce the costs of caregiving services. Websites such as The National Council on Aging (www.ncoa.org) have extensive information available that can help caregivers find help in their local area.
   
   
4. Know the limits of Medicare and Medicaid. It is important to know that Medicare and Medicaid offer only partial solutions to the financial burden of long-term care. For example, Medicare does not pay for caregiving services on a long-term basis and Medicaid will only cover long-term care services after the individual in need has exhausted most of their assets and qualifies for the program’s nursing home benefits. Therefore it is important to factor into your financial decisions what kind of Medicare and other medical coverage your parent or relative has and what kind of out-of-pocket expenses you may incur.
   
   
5. Don’t sacrifice your own retirement. Another piece of the financial picture that you need to consider before committing to caregiving is your own retirement plan. While it is noble and sometimes necessary to give up your own livelihood to care for a sick relative, make sure that you consider the impact this may have on your own retirement plans—and even the ability to pay for your own care should you need it in the future.

Having a parent or other relative with health problems is stressful, and the burden of taking on the role of caregiver or finding affordable long-term care solutions only adds to the challenge. While it may be difficult to do so, talking through the situation and potential options with the individual needing care is critical before you make decisions that could impact your own financial future. Our trusted advisors can help you look at the financial implications of caring for your loved one. Please contact us if you would like to talk.

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Is Your Company Ready to Take on the Telecommuting Trend?

Allowing employees to telecommute, also known as working remotely, is a major trend destined to reshape the way that companies recruit and manage employees in just about every industry. According to a 2013 survey conducted by the Society for Human Resource Management, more companies were planning to offer telecommuting in 2014 than any other new benefit. And, research by Global Workplace Analytics confirms the number of work-from-home employees has been rapidly increasing in America growing by 79.7% between 2005 and 2012. So if your organization does not yet have employees that work remotely, you may want to consider how you will respond when you do.

It is important to recognize that telecommuting is not just for Millenials and moms anymore. The U.S. Census Bureau’s annual American Community Survey shows that the typical telecommuter is a 49-year-old college graduate—man or woman—who earns about $58,000 a year and belongs to a company with more than 100 employees. As such, many organizations—large and small—are forgoing a central office entirely, which means that managers are increasingly tasked with overseeing workers scattered across cities, states, and time zones.

In their book, "Remote," Fried and Heinemeier Hansson offer many best practices for managing remote workers, including these key recommendations:

1. Hire for the work you want people to actually do.

Heinemeier Hansson says the single most important thing for remote work to succeed is creating a culture where the work itself matters. Employees need to be hired on the merits of what they produce. This might mean that during the hiring process you give candidates a sample project to complete or another test of their abilities so you are sure that you are making the right decision.

2. Create a culture that supports telecommuters.

Many companies have a mix of employees including some who work on-site and some who work remotely. However, your telecommuters are bound to run into difficulties if the culture and processes of your business are built around your physical office. If everyone else at the company comes into a central office, and one or two employees work remotely, it is unlikely that the arrangement will work well over the long term.

3. Don’t let telecommuters burn out.

While many people conjure up images of telecommuting as relaxing and not as stressful as traditional office jobs, employees working at home often have a harder time setting boundaries between their work and personal lives. Employers may fear that telecommuters will slack off if they are not under their watchful eyes, however, the opposite is usually the greater danger—employees who overwork themselves and burn out. Managers should take measures to reduce this risk, such as regular check-ins, as described below.

4. Schedule regular one-on-one check-ins.

On a regular basis, managers should check in with their remote workers, either by phone or video chat, or in-person if the distance allows. Keep the tone casual and ask questions about how things are going in general rather than just going through a list of project updates. This can help to maintain an open line of communication so that everyone is on the same page and can be productive.

5. Focus on building trust and respect.

Trust and respect between telecommuters and their employers and co-workers is critical. When you don’t see people on a regular basis it is important to invest time in building strong relationships—perhaps allocating a little more time to communications by phone and email and being responsive to questions. Even with several remote workers, having periodic in-person meetings can help everyone humanize the face behind the emails.

Many of these tips are the same principles that any supervisor should adhere to no matter where their employees are located. Therefore, if your organization is considering transitioning into telecommuting or hiring some remote workers, it is also important to ensure that you have the right management structure in place to ensure that your company can reap the benefits of these arrangements.

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Are Summer Vacations a Thing of the Past? Don’t Let It Hurt the Productivity of Your Business

While we’ve just celebrated the first official summer holiday weekend, studies show that almost 75 percent of employees do not take all of their allotted vacation time. In fact, many employees hesitate to take a break from work, and those that do often check in at least daily while on vacation, returning emails or taking calls. This may seem like true dedication to a job, but experts say that when employees don’t take time to recharge it can hurt both the productivity and the quality of work they produce, in addition to increasing both their stress and disengagement levels.

Research also shows that taking time off can help promote creativity and improve critical thinking skills and productivity when employees return to work. So with the summer season almost here, now is the perfect time to discuss with your team the current workload and how to best accomplish projects while still allowing everyone to enjoy some time off. In addition, consider the following ideas for ensuring that you and your employees feel comfortable when team members are taking their well-deserved vacations.

Have a Plan for Coverage
Of course, it’s critical that business needs are met while employees are away—and nothing kills the glow of a great vacation more than when employees know they will face piles of work when they return. Take some time upfront to detail a plan, with the help of your employees, to cover the work that needs to get done while each person is away. You may also want to do some cross-training of employees so they are prepared for any new duties they need to cover for a co-worker.

Make It ‘Safe’ to Take Vacations
Many companies spend time and resources applauding employees that go the extra mile for their job, which is a great way to recognize outstanding performance. However, few organizations (knowingly or not) create a culture that endorses the need for employees to take time off to recharge. Employees may worry that if they take a vacation they’ll be perceived by their peers or supervisor as less dedicated than those that don’t. Some individuals may also fear that their position of being ‘indispensable’ will be compromised if they take time off. To help counter these feelings, make it “safe” for employees to take time off without feeling guilty by encouraging them to do so, putting a plan in place to make sure their work is covered while they are gone, and asking them about their vacation when they return.

Set a Good Example
Don’t underestimate the impact that your own behavior and attitude about vacation has on your team. If you never take time off, your employees may feel that you don’t want them to either. Share what your vacation plans are and how important it is for everyone to take time to recharge. Don’t have a vacation planned? Maybe it’s time to think about taking a few days off to refresh—it’s likely you will come back to your business feeling more energized, productive, and with some great memories that you can share with your team.

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Employer-Owned Life Insurance Policy Holders—Take Note of this Potential Tax Implication

Many business owners are unaware of the Pension Protection Act passed in 2006 and its potentially costly tax implications for beneficiaries of employer-owned life insurance (EOLI) policies. This legislation enforces a tax rate of up to 50 percent on the death benefits of EOLI policies purchased after August 17, 2006. Normally, these benefits would be tax exempt—and they still can be if the proper notice and consent forms are completed before the policy is issued.

The IRS includes key man insurance, insurance funded buy-sell arrangements, some executive compensation programs, and policies held by family entities such as a family limited partnership or a limited liability corporation in its definition of EOLI contracts. More specifically, the IRS defines an EOLI contract as “a life insurance contract that (1) is owned by a person engaged in a trade or business, and under which such person (or a related person) is directly or indirectly a beneficiary under the contract, and (2) covers the life of an insured who is an employee of the applicable policyholder on the date the contract is issued. The term ‘applicable policyholder’ with respect to an employer-owned life insurance contract generally means the person who owns the contract.”

In its Bulletin 2009-24, the IRS also specifies the term “applicable policyholder” to include any person who bears a specific relationship (defined by the IRS) to the owner of the contract, or who is engaged in trades or businesses with the owner of the contract which are under their common control.

Many of the EOLI policies affected by the Pension Protection Act were sold to small businesses who may not be aware of the potential tax obligation. Given that it is the policyholder’s responsibility to make sure that the notice and consent rules are met, if you have purchased an EOLI policy for an employee, yourself, or another stakeholder of your business, such as shareholders, it is important to take steps to avoid the possible 50% tax rate on the policy pay out.

To comply with the notification and documentation requirements for EOLI policies, the IRS requires:

• Policy holders to notify the insured employee in writing that 1) they intend to insure their life; 2) what the maximum face amount for which the employee can be insured for at that time is; and 3) that the policyholder will be a beneficiary of any proceeds payable upon their death. This must be done prior to the contract being issued.
  
  
• The employee must provide written consent to be insured under the contract and that the coverage may continue after the insured terminates employment.

If you have not met these requirements for each EOLI policy, you may want to ask your insurance carrier if you should have the policies reissued so that you can meet the notification and documentation requirements. Another avenue you can try is to apply to the Internal Revenue Service for a private letter ruling if you feel confident that you have enough documentation to satisfy the IRS requirements. However, be aware that the filing fee for such a request can be upwards of $15,000.

If you are currently considering purchasing an EOLI policy or you may buy one in the future, keep the requirements of the Pension Protection Act in mind. Make sure to have a separately executed notice and consent form from the insured employee, so there is no question about compliance and the ultimate tax-free nature of the benefit. If you have any questions about the tax implications of EOLI policies, please contact our office.

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An Ounce of Prevention – Protect Yourself Against Identify Theft

According to the most recent U.S. Department of Justice data, approximately 7 percent of U.S. residents age 16 or older are victims of identity theft each year. While the overall percentage of Americans affected by identity theft has held steady since 2008, identity theft related to tax information is increasing rapidly. In fact, the Federal Trade Commission (FTC) recently released statistics showing that tax-related identity fraud was the single most reported type of identity fraud it received complaints about in 2013, comprising 30 percent of all of its identity theft complaints. This has prompted the IRS to pilot programs in a handful of states to combat this issue.

In addition to your tax documents, identity thieves are always looking for easy access to the information they need to commit crimes. Here are a few simple precautions you can take to keep your personal information safe and reduce the chances that you will have to deal with the fallout from having your identity stolen:

Monitor your credit reports
It is important to get a handle on where your credit stands by requesting a credit report from one of the three credit reporting services: Experian, TransUnion, or Equifax. Once you check to make sure your current credit report is accurate, sign up for a credit monitoring service to receive updates and alerts when there are any changes in your credit report.

Guard your Social Security Number
Think of your Social Security Number (SSN) as the key with which someone can steal your identity and create havoc with your finances. As such, it should be guarded closely. For example, do not carry your Social Security card in your wallet, and make sure that your bank does not print your SSN on your personal checks.

Carry only essential documents with you
In keeping with the previous point, carry only what you need with you—such as credit cards, your birth certificate or passport, or other identification. Your identity can be compromised during your daily routine and when you travel—with gas stations often being prime targets for identity thieves who may tap into data from credit card sales, or even steal your documents left in a car if you opt to pay inside for your fuel or other items.

Make a record of your important numbers
Create and keep a list of account numbers, expiration dates, and telephone numbers for contacting your credit card companies and financial institutions. File this document away in both hard copy and electronically. This document can prove to be invaluable if your wallet is stolen and you need to quickly alert your creditors to prevent or stop an identity theft.

Take time to select strong passwords
While it is tempting to create online passwords or PIN numbers that you can easily remember and to use the same one across all of your online activity, it is much more secure to create strong passwords out of a random mix of letters and numbers and to make sure that they vary from site to site.

Don’t give strangers your personal or financial details
Identity thieves will use many different channels to get access to your sensitive personal and financial information, including by phone and email. They may call, posing as banks or government agencies asking for your SSN or bank account information. They may also send official-looking emails asking you to click a link to provide similar information (a tactic commonly known as phishing). To prevent identity theft, do not give out your personal or financial information over the phone or by email unless you initiate the request.

In addition, identity thieves are not above looking for financial and personal information in the trash—so be sure to shred your receipts, credit card offers, bank statements, and other documents containing sensitive information before throwing them away.

Given the potentially devastating consequences of identity theft, taking steps to prevent yourself from becoming a victim of this crime is critical. Be assured that our firm takes the security of your personal and financial information very seriously. If you have any questions regarding this subject, please contact us.

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Don’t Spend Your Tax Refund Unless You’ve Considered These Tips!

Hopefully you have already filed your tax return and are anticipating at least a modest refund. But, before you get too excited about splurging with your IRS check, stop for a moment and remember that you earned that money! While many people view a tax refund as ‘bonus’ cash—it isn’t. It is simply a return of the funds that you earned and paid as tax beyond what your actual obligation was.

Keeping this in mind, think about using the money you receive from the IRS purposefully. Also, if you did receive a sizable refund, you may want to consider adjusting your tax withholding amount, so you aren’t shorting yourself on your regular income throughout the year.

The following list can help you determine some of the best ways to use your refund—ways that contribute to your long-term financial health:

• Start or increase your emergency fund: By using your refund to stash some money for a rainy day, you’ll be building both a financial safety net and peace of mind.
• Eliminate or pay down high-interest debt: Once you have established an emergency fund, paying off any high-interest debt such as credit card balances, payday loans, and debt consolidation loans is one of the best things you can do to improve your financial situation.
• Consider refinancing your mortgage: With relatively low mortgage rates available, you may want to consider refinancing your mortgage to save money each month with a lower mortgage payment. Your refund can provide the funds from which to pay your closing costs and fees when you refinance.
• Contribute to tax-sheltered accounts: Using your tax refund to top-up (or start) a Roth IRA or 529 college savings plan offers you a double bonus. Not only will you be compounding dollars and interest for your future retirement or college tuition needs, but you’ll be creating a tax deduction as well.
• Improve the lives of others: If you have your own financial bases covered, then making a charitable donation to help someone else is an excellent use of your return. It provides something priceless to those who will benefit from your generosity and offers you a tax deduction.
• Reinvest in your business: Is there something you would like to do in your business, but you just never seem to have the money to do it? If you have some funds leftover from your refund after taking care of savings and debts, making an investment in your business can stimulate business growth and enable you to claim a few more tax deductions next year.

While it is tempting to use your tax return as a windfall, it is important to remember that you earned it! Taking steps to secure yourself financially today is an investment that will pay dividends in the future— long after the glow of any spontaneous splurge has faded.

If you have any questions about this information, please contact our office. We are here to help.

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Does Your Business Need a Post-Tax Season Tune-Up?

With the business tax return deadline behind us, this is an ideal time to think about giving your business a little post-tax season tune-up with the intention of making next tax year easier and improving your financial situation. Here are a few key areas to consider analyzing now that your business taxes are filed:

Day-to-day accounting. With the rush of preparing for tax season, on top of the regular hectic pace of running your business, it can be tough to keep your financial records up-to-date. If you fell behind over the past several months, now is the time to get caught up, before the lag in your record keeping hinders your business.

Start by reconciling your business accounts, making sure that your balances are accurate, and that you are current on your bank deposits and bill payments. By investing some time to make sure your day-to-day accounting is on track, you will have the data you need to evaluate important metrics including your profit and loss statements, annual financial comparisons, and cash flow.

Your current financial and tax situation. In just a few short months, it will be time for a mid-year review to ensure your business is on track financially. Now is an ideal time to schedule a mid-year planning session with our firm to discuss your current business financials and your operational plans for the rest of the year. You should also plan to address any new business or personal developments that may affect your tax liability in the next year so we can work with you to lower your tax obligations.

Retirement plans. If you do not already have a retirement plan, consider opening a retirement account to defer income taxes and provide future income, beyond Social Security benefits. Our trusted advisors can help you select the right retirement plan for you, and, if you desire, help you set up a retirement plan for your employees as well.

Adjust estimated tax payments. If you had a large tax liability or a large refund this year, you may want to revisit your estimated tax payments and adjust your calculations to avoid owing too much at the end of the year, or leaving your business cash-poor due to overpayment of taxes. As the year progresses, monitor your bottom line and adjust your tax estimates accordingly.

Employee benefits. If your business has employees, you may wish to consider providing them with enhanced fringe benefits, while your business reaps tax savings as well. Adding pre-tax benefits such as health insurance, group term life insurance, and child care subsidies to an employee’s pay, saves your business money because you are not required to pay the employer’s share of payroll taxes on these forms of reimbursement.

While you are probably glad to have your business taxes filed for this year, it can be extremely beneficial to fine-tune your business finances and tax situation now, rather than waiting to see where you stand at the end of the year. By being proactive, you can benefit from valuable tax savings and opportunities to improve the accuracy of the financial information that you use to manage your business. Please contact our office with any questions you may have—we are here to help you.

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The Child Tax Credit Can Give Parents Some Relief

There’s no disputing the fact that raising children today is a costly endeavor. However, the American Taxpayer Relief Act of 2012 (ATRA) has eased parents’ tax burden and put a few dollars back in their pockets with the Child Tax Credit, which ATRA made permanent. This tax credit can be worth as much as $1,000 per qualifying child depending upon a parent’s income.

Because it is a tax credit rather than a tax deduction, which simply reduces taxable income, the Child Tax Credit reduces a parent’s tax liability dollar for dollar with the amount of the allowable credit. However, the credit cannot be taken for more than the amount of tax owed to the IRS.

To see if you qualify for the Child Tax Credit, the IRS provides the following seven tests:

1. Age test—The child being claimed must have been under the age of 17 at the end of 2013.
2. Relationship test—The child being claimed must also be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. A child can also be a descendant of any of these persons. For example, your grandchild, niece, or nephew will qualify. An adopted child includes a child lawfully placed with you for legal adoption.
3. Support test—The child must not have provided more than 50 percent of his or her own support for 2013.
4. Dependent test—The child must be claimed as a dependent on your 2013 federal income tax return.
5. Joint return test—A married child can’t file a joint return with his or her spouse if the couple is filing jointly only to claim a tax refund.
6. Citizenship test—The child being claimed must be a U.S. citizen, U.S. national, or U.S. resident alien.
7. Residence test—In general, the child being claimed must have lived with you for more than half of 2013 to be claimed. However, a child is considered to have lived with you for more than half of 2013 if the child was born or died in 2013 and your home was this child's home for more than half of the time he or she was alive.

It is important to note that your filing status and income may reduce or eliminate the Child Tax Credit. If your modified adjusted gross income is more than $110,000 (married filing joint), $55,000 (married filing separately), or $75,000 (single, head of household) you cannot claim the credit.

If you qualify to claim the Child Tax Credit, you will need to file IRS Form 8812 with your income tax return. Please contact our office if you have any questions about this tax credit.

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Is the New Simplified Home Office Deduction Right For You?

A nice home office is often one of the biggest perks of being a freelancer, and it can also provide you with a significant tax deduction if you qualify for it. Up until this tax year, the calculations needed to claim the home office deduction were complex and required meticulous record keeping and a separate form (Form 8829). However, starting with your 2013 tax return, the IRS has introduced a simplified method for calculating the home office tax deduction. This reduces the paperwork but also caps it at $1,500, which raises the question: Should you use it, or stick with the standard regular method?

The beauty of the new simplified home office deduction is that it easily allows individuals who have a legitimate home office (see the IRS website to see if you do) to take a tax deduction of up to $1,500. To calculate this deduction, multiply the square footage of your home office space by $5, to a maximum of 300 square feet, or $1,500. The deduction is then entered on Schedule C of your 1040 return. You don’t have to provide any documentation to claim it, unlike the old “actual expense” method, which involves calculating, allocating, and substantiating your home office expenses.

If you use the simplified method, you can also deduct your mortgage interest and real estate taxes separately on Schedule A if you itemize. However, because it imposes a cap of $1,500 and eliminates the opportunity to deduct depreciation or carryover any losses from a previous year, this new deduction may not necessarily be the best option—especially if you can claim a higher amount using the actual expense method and you keep good records of your eligible home office expenses, such as mortgage interest, insurance, utilities, repairs, and depreciation.

In contrast, the regular method allows deductions for a home office that are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you will need to figure out the percentage of your home devoted to your business activities. The bigger your home office is, and the more eligible expenses you have, the more likely the actual expense method will yield a larger tax break than the $1,500 ceiling imposed by the new simplified home office deduction.

This tax year, it may be worthwhile to compare the size of the deduction you can take using both the new simplified method and the regular method. It is important to note that with either method, you can only reduce your business income to zero; you can’t take a loss. However, if you find that you prefer one method over the other, or you think that you will exceed the $1,500 allowed by the simplified method one year, but not the next, you can switch the method you use to calculate the deduction from year to year.

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Take Advantage of the Invaluable Learning Opportunity Your Tax Return Provides

With tax season in full swing, you are likely busy compiling all of your tax documents and expense receipts to support the preparation of your return. When you think about it, there is a lot you can learn from preparing to file your tax return. It provides the perfect snapshot of where you stand financially, which can offer important insights into your money management habits. While there are many different components that impact your finances, three key questions to consider when it comes to your taxes include:

Are You Saving Enough for Retirement?
You can tell by looking at your tax return whether you made the maximum allowable contribution to tax-advantaged retirement saving options. If you didn’t this year, you may want to consider looking into setting up a Roth IRA, or another eligible investment account. Business owners who have SEP-IRAs but aren’t making their full contribution may also want to increase them.

Did You Maximize All Available Tax Deductions and Credits?
There are some deductions and tax credits that many taxpayers are aware of, and many more that they are not. By taking the time to review your tax return with our firm you can learn about all of the options you have available to you to lower your tax obligations.

How Should You Use Your Refund?
In addition to making sure that you take the appropriate steps to maximize your tax refund, you should also consider what you do with it once you receive it. One option is to have your refund deposited directly into a savings or retirement account, effectively reducing the temptation to spend it right away. Another smart use for your refund is to use it to pay down any debts that you may have.

If you have questions about your financial situation, remember that we can help. Our team of financial professionals are dedicated to working with clients like you throughout the year to help you ensure that your tax return represents the financial picture you desire.

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Business Owners, Be IRS Audit Savvy this Tax Season

With tax season here, you might be wondering just how likely you are to hear from the IRS after you file by means of an audit notice. While the chances you will be audited are relatively low if you file a straightforward personal tax return, the more complex your tax situation becomes (reporting business income or graduating to a high-income tax bracket, for example), the more likely it is that you will be audited.

As you look to file your taxes this year, it pays to be aware of some red flags that can draw extra IRS attention including the following:

• Claiming 100% business use of a vehicle. From the IRS’ perspective, it is rare for an individual to use a vehicle 100% of the time for business, especially if no other vehicle is available for personal use.
• Deducting business meals, travel, and entertainment on Schedule C. Writing-off big dollar amounts for business expenses that could also be personal entertainment, especially if the amount seems too high for the type of business that is claiming them.
• Hobby loss write-offs. If you have wage income and file a Schedule C with large losses, you become much more interesting to the IRS, especially if the business activity sounds like it could also be a hobby such as dog breeding or furniture refinishing.
• Claiming rental loss deductions. Real estate losses on rental properties is another area of interest for the IRS, especially those written off by taxpayers who claim to be real estate professionals. If you have a W-2 or other non-real-estate businesses that show high income this can also be a red flag for auditing.
• Operating a small business. Owners of cash-intensive small firms such as taxi companies, hair salons, pet groomers, etc. can often be the target of an audit, so be prepared to substantiate all of your income.
• Owning a foreign bank account. The IRS has been able to obtain the ownership information for offshore bank accounts, especially those in tax havens, and is committed to ensuring that income stored in these accounts is reported by U.S. citizens. Failure to report these accounts can lead to harsh fines.
• Taking higher-than-average deductions. The IRS may pull a return for review if the deductions shown are disproportionately large compared with reported income. But folks who have proper documentation shouldn’t be afraid to claim the write-offs.

While you should definitely take advantage of every tax deduction you are legally entitled to, sometimes it can be difficult to ascertain which deductions are applicable to your specific situation—that’s where our office can help you. Now is the time to contact us to have your return professionally prepared to reduce your chances of being audited for the red flags noted above. But, if you do receive an audit notice, don’t worry, our tax experts can also help you prepare an appropriate response.

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Does Your Business Need to File 1099s? The Initial Deadline of January 31 is Fast Approaching!

If your business spends $600 or more for services from another business or an individual contractor during the tax year, you may have to report the amount on a Form 1099. The requirement to file 1099s applies to all types of businesses, C-Corporations, S-Corporations, LLCs, all partnerships, and sole proprietorships. Forms 1099 are normally issued to unincorporated businesses, however, if your business made payments of $600 or more to a Corporation (C or S) for medical, health care, or fishing activities, or to any law firm, then a Form 1099 is required to be issued.

A 1099 form is typically given to independent contractors as a record of the income that he or she received from your business. There are many different types of 1099 forms, including those used to report income from interest, dividends, real estate and debt cancellation.

Some of the most common types of transactions that you must issue a 1099 for include:

• Professional fees paid to an attorney, doctor or other professional that are made in the course of doing business.
• Payments of $600 or more in rent for office space, machines, equipment or land in the course of your trade or business if the payment was made to an individual or partnership.
• Payments of $600 or more to physicians, providers of medical or health services, or other supplier. These 1099s for medical payments are required for all entities including Corporations.

If you own your own business, you are required to send 1099s to eligible vendors. Failing to do so, or missing the 1099 IRS filing deadline (Feb. 28 for paper filing or Mar. 31 for e-filing), can result in some stiff penalties. For example, filing your 1099s past the due date can result in fines that range from $30 to $100 per 1099 to an annual maximum of $500,000. Failure to issue and file any 1099s subjects you to a minimum penalty of $250 per 1099 with no annual maximum limit on the penalty.

In an effort to reduce the number of businesses avoiding 1099 filing, in 2011 the IRS added two new questions to all federal business tax returns to determine whether any payments were made during the year that would require Form 1099 to be filed and whether or not the business actually filed them. When you sign your tax return, you are stating that, under penalties of perjury, to the best of your knowledge your tax return is accurate and complete. Given how seriously the IRS takes 1099 filing—all business owners should too!

Filing 1099s can be a tedious and time consuming process. With only two weeks to go until the deadline to get 1099s to any eligible recipients you have worked with in the past year, please don’t hesitate to contact our office if you need assistance with your Form 1099 preparation.

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This Tax Year Includes a Baker’s Dozen of Changes to Digest

Happy New Year! Now that the holidays are over, it’s time to get serious about reviewing where you stand from a tax perspective. As you may recall, in 2013 Congress and President Obama made a budget deal to avoid the fiscal cliff which resulted in seven tax increases. In addition to these increases, the introduction of the Affordable Care Act (also known as Obamacare) also included six additional tax increases, for a grand total of 13 new tax hikes which may affect your 2013 tax bill.

The following list details these tax changes. It is worthwhile reviewing it to see which changes are most likely to impact you this tax year:

1. The payroll tax increased to 6.2 percent.
2. The top marginal tax rate increased from 35 percent to 39.6 percent for taxable incomes over $450,000 for couples ($400,000 for single filers).
3. Personal exemptions are being eliminated for taxpayers with adjusted gross incomes (AGI) of more than $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
5. The tax rate on dividends and capital gains has increased to 20 percent from 15 percent for taxable incomes over $450,000 ($400,000 for single filers).
6. Taxpayers who file Married Filing Jointly with AGI of more than $250,000 ($200,000 for those filing as Single) will see an additional 3.8 percent surtax on investment income and another payroll tax hike of 0.9 percent.
7. The "Death Tax" rate was also increased on estates larger than $5 million from 35 percent to 40 percent.
8. For businesses, the full expensing of investments will expire to be replaced by the immediate deduction of capital purchases.
9. Another payroll tax hike of 0.9 percent for the Hospital Insurance portion of the payroll tax will affect those with incomes over $250,000 ($200,000 for single filers).
10. The new medical device tax means that a 2.3 percent excise tax on all sales will be paid by medical device manufacturers and importers.
11. The medical expenses income tax deduction for individuals will be reduced.
12. The corporate income tax deduction for expenses related to the Medicare Part D subsidy is now eliminated.
13. The corporate income tax deduction for compensation that health insurance companies pay to their executives has been limited.

Do any of these 13 tax increases apply to you or your business? If you need help determining how these changes will impact you, please contact our office for assistance.

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IRS Eases the “Use-it-or-Lose-it” Rule for Flexible Spending Plans

With the end of the year on the horizon, many individuals with flexible spending accounts (FSAs) are scurrying to spend residual funds to avoid “losing” them, in accordance with IRS regulations. However, the regulations have now changed with the IRS easing the “use-it-or-lose-it” rule for health flexible spending plans. Individuals with FSAs can now carry over a maximum of $500 to the following year without forfeiture. So now, employees will not have to rush to clean out their accounts by the end of the year, or by March 15 of the following year, if their flexible spending plan has adopted this grace period.

It is important to note that an employer cannot offer a FSA carryover provision and an FSA grace period at the same time. In order to allow for this $500 carry over, employers must amend their plans to adopt the change. However, if an employer’s FSA plan currently allows for the grace period, that provision must be dropped in order to allow for the $500 carryover adoption.

Employers can implement the carryover for 2013 as long as the flexible spending plan is amended by the end of 2014. However, if the plan currently allows the grace period up until March 15, then the plan must be amended by the end of 2013 to formally eliminate this provision.

If you have any questions about this information, please contact us. We are always here to help.

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Should You Apply for Social Security When You Apply for Medicare?

If you’re nearing the customary retirement age of 65, you may be considering when to apply for Medicare and Social Security benefits. This is an important decision that can have significant impact on your financial situation down the road, so it is important to understand how these benefit programs work. In particular, if you are not planning to retire at the full retirement age (FRA) of 65 you should be aware that you are not obligated to apply for Social Security even if you opt-in to Medicare coverage when you are eligible. In fact, doing so can have negative financial consequences down the road.

If you are planning to apply for Medicare benefits soon, make sure you consider whether you would be better off applying for Social Security benefits later, taking into consideration your planned retirement age, your expected income (if you earn more than $15,120 a year when receiving social security you will be subject to the earnings penalty, under which one dollar of Social Security retirement benefits is withheld for benefits before FRA), and, if you are married, the spousal benefit. In many cases, if you plan to work beyond your FRA, delaying your Social Security benefits can mean a bigger payout later on.

Because Social Security retirement benefits are based on lifetime earnings, the size of the retirement benefit check that you collect will depend on your age when you apply for them. If you choose to receive benefits at the earliest retirement age of 62, you will receive less than what you would receive if you wait until 65. And, if you delay your Social Security benefits up to age 70, you will receive a Delayed Retirement Credit (a percentage increase in retirement benefits for each year beyond FRA that you do not take them).

There are several important factors to consider when deciding the best time to take Social Security benefits. If you need assistance determining what the right choice is for you from a financial perspective, please contact our office.

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Don’t Let the Delayed Tax Season Stop You from Being Prepared

The IRS recently announced that, for the second year in a row, it will delay the start of tax season. However, the April 15 filing deadline, which is set by statute, remains in place. Last year it was the fiscal cliff negotiations that pushed back the start of the tax filing period. This year, of course, it is the 16-day government shutdown that put the IRS approximately one to two weeks behind in preparing for the 2014 filing season.

According to an IRS news release, the government entity is “exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December.”  The original start date of the 2014 filing season was January 21, so with a one- to two-week delay, the IRS will potentially start accepting and processing 2013 individual tax returns no earlier than Jan. 28 and no later than Feb. 4.

Although the IRS is behind schedule, we encourage our clients to start preparing now in order to be prepared for filing as soon as the opening date of tax season arrives. Start organizing your tax documents and don’t hesitate to contact our office if you need tax planning advice or have questions about this tax season.