Preparation: The Key to March Madness and Tax Season Success

The NCAA college basketball tournament is always an exciting and often maddening time for all of us.  While these teams are looking to play the part of bracket buster, your accountants are working hard to see to it that tax season is not a maddening time of year for you.  CPAs thrive on this time of year, and leave it all on the court..I mean…office, to make sure that their clients receive the best possible results.

Last second shots and unexpected upsets may be common in the NCAA tournament but are not common in our world.  Tax planning is the reason for this.  Tax season isn’t something that is done over the period of a couple months time, this is something that is worked on continuously throughout the year.  Accountants and clients alike must be equally prepared come tax season.  The quote of basketball coaching legend John Wooden sums it up best, “Failing to prepare is preparing to fail.” So let’s take a look at some steps that you can take to prepare yourself against the stressful affects of the April tax deadline:

Don’t Procrastinate … Be Proactive

Tax planning is not one single task, designated to one single month. Usually, when people finish their taxes, they breathe a big sigh of relief. Whew, glad that’s over. But it’s not over, in fact, tax planning for the next year should begin shortly after your taxes are filed for this year.

See what do we mean by adopting a proactive mindset? If you’re thinking ahead, and keeping your finances in order through the entire year (and not waiting for March to prepare them all) you’re avoiding unnecessary stress during tax season.

Collaborate With Your CPA

Most people attempt to prepare their taxes on their own. And most people miss out on golden financial gains. The average taxpayer does not have the expansive financial knowledge and insight of a professional accountant, nor should they, but that’s what makes do-it-yourself tax planning such a risky idea – you’re gambling with possible financial gains.

When you contact a CPA firm, not only do you receive the professional guidance needed to navigate complicated tax territory, you receive financial consultation catered specifically towards your company’s future.

Consider Wealth Management

Part of tax planning is considering your investment options. Most people shy away from investments because they strongly dislike the idea of possibly losing money. Investing is not a gamble, it is a calculated risk when consulting with a wealth management advisor.  The advisor takes in to account whether you are risk adverse and builds a plan that fits your needs and your desires. A wealth management service, along with your CPA and financial advisor, guide you in making the right decisions for building a sustainable financial future.

Discussion Before Decision

Even after you’ve learned a thing or two from your CPA firm, it’s still always a good idea to consult with them on significant financial circumstances. For example, if you’re thinking about selling your business, a CPA firm can give you the tax logistics, implications, and benefits behind all your possible options.

There are a number of financial factors that go into tax planning, and cramming them all into a one-month timeframe creates a chaotic mess of last-minute desperation. Being pro-active in your tax planning and consulting with professionals will help you avoid the stress and headache that are often associated with the April tax filing deadline.

Click the button below to begin your conversation with a coach..err…certified public accountant with LBA Haynes Strand and begin seeing the results of being prepared.

Property Management Companies Are Growing Through M&A

Mergers and Acquisitions have become an increasingly popular growth strategy among property management companies. In an earlier blog titled, “What Industries Are Growing Through M&A,” we mentioned property management companies as a top industry for mergers and acquisitions. So let’s dig a little deeper and learn what is being gained by M&A and what trends are driving M&A in the property management marketplace.

What Property Management Companies Are Trying To Gain Through M&A:
  • Size/Proximity to New Locations: In some cases, especially in the Charlotte area, management companies are looking to grow across State lines.  Rather than a Charlotte based management company opening a new location in South Carolina, they will often acquire other established management companies already based in South Carolina.  This is also true within the State as well (Charlotte -> Greensboro, Wilmington, Raleigh, etc.)
  • Economies of Scale: Management companies deal with many different service providers from landscapers and painters, to accountants and attorneys.  As management companies grow and manage additional communities through M&A, they are better able to pass cost savings (via economies of scale) onto their clients.  Doing so, theoretically, makes the management company more attractive in the market place as they are better able to offer attractive rates.
  • Additional Management Offerings: There are many local management companies who specialize in residential communities while others mainly do commercial associations.  Through M&A, management companies may be able to acquire residential work if they didn;t already have it, or vice versa.
What Trends Are Driving M&A In The Industry:
  • Real Estate Brokers Wanting Out: Community management is NOT a glamorous field. In lean times (2008 – 2012) many small/local real estate sales offices turned to property management when they were struggling to sell homes. With real estate “Hot” again, some real estate agents are looking to shed their portfolio of community associations to better focus their efforts on more lucrative selling activities.
  • Lack of Succession Planning: Similar to the CPA industry, some “mom and pop” community management companies simply have no succession plan, while other “younger” management companies are seeing this as a great opportunity for M&A.
  • National Players Coming To Charlotte: Up until 2008, community management in Charlotte was pretty much locally run (i.e. 20 or so management companies throughout the State and SC, perhaps). However, in the past 5 to 7 years, Charlotte has experienced an increase in nationally known management companies who often launch their local office by purchasing a locally-owned community management company.

This may be un-chartered territory for some management companies, and LBA Haynes Strand is here to help. We have a team that understands the needs and the financial issues associated with HOAs and property management companies. If your property management company is looking to grow through M&A, schedule a no-cost consultation with us and we will walk you through the steps for a successful merger or acquisition.

Protect Yourself Against The New Tax Refund Scam

The IRS has reported that the number of potential victims impacted by a tax scam has increased from a few hundred to several thousand in just a few days. Putting a new twist on an old scam, criminals are taking taxpayer information, filing fraudulent returns, and depositing erroneous refunds into real taxpayers’ bank accounts. The criminals then contact the victim and use a variety of tactics to attempt to claim the refund.

The scam appears to have originated from tax preparers’ offices, where computers that have been infected with malware provided criminals with access to thousands of consumers’ return data.

“Speed is critical,” the agency said in its advisory. “If reported quickly, the IRS can take steps to block fraudulent returns in a preparer’s clients’ names.”

As tax preparers increase their security settings to protect client tax and financial files, it is important that consumers also protect themselves by knowing identity theft warning signs.

Top Indicators of Tax-Related Identity Theft
  • More than one tax return was filed using your Social Security Number 
  • IRS records indicate you received wages from an establishment at which you never worked
  • You owe additional tax, receive a refund offset notice, or have had collection actions taken against you for a year you did not file a tax return
If you become a victim and notice an erroneous deposit in your account, take the following steps:
  • Contact your tax preparer immediately.
  • Contact the Automated Clearing House (ACH) department of the bank/financial institution where the direct deposit was received and have them return the refund to the IRS.
  • Call the IRS toll-free at 800-829-1040 (individual) or 800-829-4933 (business) to explain why the direct deposit is being returned.
  • Be aware that interest may accrue on the erroneous refund.
  • Communicate with your financial institution and be prepared to close your account, since the information has been accessed by criminals.

You can also access the steps for returning your erroneous refund directly on the IRS website.

Remember: The IRS does not initiate contact with taxpayers by email, text, or social media, or phone calls to discuss your account. If you receive a message, be suspicious!

LBA Haynes Strand is dedicated to alerting the public on any scam or fraudulous attempt to steal identities or gain access to important financial information. If you are interested in automatically receiving updates such as this, please subscribe to our blog.

Scam Alert: QuickBooks & Intuit Phishing Emails

Recently there has been a rise in the number of phishing emails that appear to be sent by QuickBooks and Intuit. These messages state that the customer has a payment due on an open invoice. The balance due on the fake email is a higher amount than the typical cost of the software and any subscriptions offered by Intuit.

3 Common Methods for Phishing:

  • Spoofed Email Address – We have seen fake email addresses such as intuit@hmrsss.com and quickbooks@bostonsat.com.
  • Fake Link – Never click on a link in a suspicious email. These links may take you to a site that asks you to log in, providing hackers with your account information. Use your mouse and hover over the link to see if you can spot a hidden web address that is different than the one on the surface. An example of a message that would be included with a fake link:

       “This invoice notification is being delivered to you by Intuit Invoice Services on behalf of Veri Facts Inc. Click the link above to find an invoice.”

  • Forged Website – Fake websites may appear like real sites by using company logos and images. When visiting financial sites, enter the known address into the browser field manually.

Phishing was listed as one of the top tax scams of 2017 and continues to be an issue.

If you receive these emails – do not click any links! Forward the email to spoof@intuit.com immediately. For more information and to learn steps to protect yourself from a phishing attack, see the Intuit forum article here.

LBA Haynes Strand is dedicated to alerting the public on any scam or fraudulous attempt to steal identities or gain access to important financial information.  If you are interested in automatically receiving updates such as this, please subscribe to our blog.

Fraud Alert: Identity Theft Fraudsters Targeting Small Businesses

In recent years, we have seen a marked increase in the amount of identity theft cases due to our increased use of the internet. Generally, as tax professionals we mainly see the impact on individuals from these schemes. However, there is an surge of small businesses being targeted now.

The Journal of Accountancy recently posted an article regarding this increase. The article highlights signs that you may have been a victim of identity theft and provides information on the ways both the IRS and state tax agencies are working to combat these fraud schemes. To read the full article click here.

LBA Haynes Strand is dedicated to alerting the public on any scam or fraudulous attempt to steal identities or gain access to important financial information. If you are interested learning more, contact us today.

QuickBooks Online: Is It Right For Your Business?

QuickBooks Online has become a widely used alternative to the traditional desktop versions of QuickBooks. With up-to-date bank and expense information that is accessible by both the business owner and CPA (once the CPA is granted accountant access to the company) it’s easy to see the immense benefits. Business owners have no down time as they wait for their CPA to do monthly, quarterly or yearly work and CPAs have the most recent data in order to efficiently and effectively assist their clients in day-to-day business dealings.

Unlike the desktop versions of QuickBooks, QuickBooks Online provides users with the most current version without the yearly added cost of upgrading software. The highly secure QuickBooks Online servers provide immediate backup of your company files and is accessible from virtually anywhere you can access the internet. There is even an awesome app for the iPad that enables you to take photos of receipts and enter them into your bank or credit card register on the go. The portability and functionality of the program makes keeping your company’s financial records a breeze.

QuickBooks Online is allowing us at LBA Haynes Strand to stay ahead of the curve by achieving results through a fully engaged approach and diligent planning. To see a visual guide on converting to QuickBooks Online, click here or contact our office for additional information on the benefits and limitations of the software. 

Recent Change For Small Business: Something You May Want To Do

The President signed the 21st Century Cures Act on December 13, 2016. This law allows small businesses with fewer than 50 full-time equivalent employees to use health reimbursement arrangements (HRAs) after 2016. HRAs allow employers to pay or reimburse employees for qualified medical expenses. Employers can deduct the expense on their business tax returns but employees generally do not have to include the expense in their income.

Employers must offer the arrangement to all employees and distribute a written notice to all employees at least 90 days before the beginning of each tax year. For 2017, a notice must be distributed before March 13. The amount of the expense may not exceed $4,950 ($10,000 for family) per year.

No mention was made on how to treat 2% owners of S corporations.

Please click the button below for a no-cost consultation to discuss more detailed information on health reimbursement arrangements.

Recent Tax Changes That Will Affect Individual Taxpayers

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was passed by the US House and the US Senate and signed into law by the President on December 18, 2015.  Some of the provisions in the act are permanent and others are for a limited amount of time.

The following are some of the provisions that may affect you:

Charitable Distributions for IRA’s:

The PATH Act permanently extends the ability of individuals aged 70 ½ to exclude from income up to $100,000 per year of distributions transferred directly to a qualified charitable organization for 2015 and succeeding years.

American Opportunity Tax Credit: 

The Path Act makes the credit permanent.  The credit is increased to $2,500 per year for four years of post-secondary education.  A phase out starts at $80,000 for single taxpayers and $160,000 for married taxpayers.  Taxpayers with income in excess of the phase out amounts have a reduced amount of credit allowable.

Deduction of qualified tuition and related expenses:

The above the line deduction for qualified tuition and fees has been extended through 2016.

Deduction for elementary and secondary school teachers:

The above the line deduction for elementary and secondary school teachers’ classroom expenditures has been permanently extended for years after 2014.  The $250 deduction will be indexed for inflation for years starting in 2016.

Deduction of State and Local general sales taxes:

The election to claim an itemized deduction for state and local general sales tax has been permanently extended for 2015 and subsequent years.

Deduction of State and Local general sales taxes:

The treatment of mortgage insurance premiums as deductible qualified mortgage interest subject to AGI phase-out is extended for 2015 and 2016.

Exclusion of mortgage debt cancellation:

The Act excludes from income cancellation of mortgage debt on principal residence of up to $2,000,000 through 2016.

To discuss these changes and learn how they may affect you, contact LBA Haynes Strand today by clicking the button  below.

Recent Tax Changes That Will Affect Your Business Decisions

There have been two recent changes in tax laws that affect business decisions.  One is the increase in De Minimis Safe Harbor Expensing Threshold in IRS Notice 2015-82 and the other is the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).

De Minimis Safe Harbor Expensing Threshold: 

There was a change in the repair and expensing rules in 2014.  Under those rules many of you signed a policy to expense items that cost under the de minimis safe harbor of $500.  This allowed you to deduct the cost of items under $500 instead of capitalizing and depreciating those items.  The IRS now allows you to change your policy so that you may deduct in 2016 the items costing less than $2,500.  If you did sign a policy under the previous rules, you may want to change your policy to deduct items costing up to $2,500.  This policy should be in writing and signed as soon as possible. 

PATH Act:

The PATH Act was passed by the US House and the US Senate and signed into law by the President on December 18, 2015.  Some of the provisions in the act are permanent and others are for a limited amount of time.  The following are some of the provisions that may affect you.

Code Section 179 Depreciation:

The Code Section 179 expensing was scheduled to revert back to a limit of $25,000 for 2015.   The Path Act permanently sets the expensing limit at $500,000 with a $2,000,000 investment limit for tax years beginning in 2015 and subsequent years.  These amounts will be indexed for inflation for 2016 and subsequent years.

Bonus Depreciation: 

The Path Act extends the bonus depreciation under a phase-down schedule for calendar years 2015 through 2019.  Bonus depreciation is 50% for 2015-2017; 40% in 2018; and 30% in 2019.

Other Tax Credits and deductions:

  • The research and development (R & D) tax credit has been permanently extended with an increase from 14% to 20% of qualified costs.
  • The 100% exclusion allowed for gain on the sale or exchange of qualified small business stock held for more than five years is made permanent.
  • The PATH Act makes permanent the 5 year recognition period for built-in gain following conversions from a C corporation to an S corporation.
  • The Work Opportunity Tax credit is extended through 2019.

These are important updates that could affect your 2016 business year.  If you have any questions, please click the button below to start your conversation with a CPA at LBA Haynes Strand today!

resources

Resources for Small Business News

Are you a small business owner without go-to resources for your business news? It is important to stay on top of industry updates, events, and ideas that may impact your small business. However, we know that running a small business is no easy feat. When you have five extra minutes, you do not want to spend them sifting through news outlets, deciding what is trustworthy and worth reading.

In order to help with this, we are sharing a blog post by Meredith Wood of Fundera. Meredith provides readers with an organized list of resources including websites, blogs, and social media pages to follow. When utilizing this list, business owners will save time and have easy access to helpful advice and information.The list provided includes sources that will share the latest news and updates in capital expenses, loans, budgeting, forecasting, marketing, social media, taxes, HR issues, government standards, etc.

For example, one of our favorite suggestions in the list is New York Times: Entrepreneurship & Your Taxes. The New York Times is common reading material for most people but the particular sections Meredith mentions, we find important. The first one being Entrepreneurship and the second being Your Taxes. Both of these sections highlight subjects like small business tax, healthcare reform, and credit scores.

Click here for the 37 Best Resources For Small Business News

Results of the Contractor Payment Survey

A CPA Firm should not just strive to be your accountant, but strive to be an industry resource to you. Your CPA Firm should be active in local trade organizations and in local chambers, to keep you up to speed with recent changes that may affect your business. As a firm that includes a large number of construction related clients, we are members of the Construction Financial Management Association (CFMA). We do this to be active in the local construction community as well as to represent our clients.

As a member, we receive valuable information, in many different forms, that we can in turn communicate to our clients. At the bottom of this blog, you can find the results of a survey titled, “Contractor Payment Survey.” This survey was put together by the Institute of Certified Construction Industry Financial Professionals. On August 10th, the survey was mailed to 925 CCIFPs and was also posted on the CFMA Cafe website that reached approximately 7000 members. The survey was then closed on August 17th with 142 respondents. 

Questions included in the survey are:
  • On average, how long does it take to collect payments?
  • How does your current collection time compare to last year?
  • How does your current collection time compare to three years ago?
  • Of all payment transactions you received during the last year, what percent were checks, ACH/wire, or credit card?
  • When considering your total revenue for the last year, what percent was received from checks, ACH/wire, and/or credit card?
  • What is your gross annual revenue?
  • What is your total number of employees?

Results of Contractor Payment Survey: CLICK HERE

Results of the Contractor Remittance Survey

A CPA Firm should not just strive to be your accountant, but strive to be an industry resource to you. Your CPA Firm should be active in local trade organizations and in local chambers, to keep you up to speed with recent changes that may affect your business.   As a firm that includes a large number of construction related clients, we are members of the Construction Financial Management Association (CFMA) and have access to The Institute of Certified Construction Industry Financial Professionals (ICCIFP).  We do this to be active in the local construction community, as well as to represent our clients.

As a member, we receive valuable information, in many different forms, that we can then communicate to our clients and prospects.

The ICCIFP, has released the results or their “Remittance Survey.”  The survey was posted on September 28th, 2015 on the CFMA Bottom Lines newsletter.  The survey reached approximately 7000 members and was emailed to 950 CCIFPs.  The survey was closed on October 14th with 165 respondents.  Since the sample was targeted at CFMA membership and CCIFPs, the results are skewed towards larger contractors. Questions included in the survey were:

  • On average, how long does it take your company to remit payment to subcontractors?
  • How does your current remittance time to subcontractors compare to last year?
  • How does your current remittance time to subcontractors compare to three years ago?
  • On average, how long does it take your company to remit payment to suppliers/vendors?
  • How does your current remittance time to suppliers/vendors compare to last year?
  • How does your current remittance time to suppliers/vendors compare to three years ago?
  • Of all remittance transactions you made during the last year, what percent were checks, what percent were ACH/wire, and what percent were credit card?
  • When considering your total remittances for the last year, what percent were checks, what percent were ACH/wire, and what percent were via credit card?

To see the results of the survey: CLICK HERE!