Archive for November, 2017

Thursday, November 30th, 2017

Bad Dog! Tax Court Nips Dog Grooming School for Education Credit http://bit.ly/2BzGlPA

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Thursday, November 30th, 2017

Coinbase ordered to report 14,355 users to the IRS http://bit.ly/2Bz8dmD

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Thursday, November 30th, 2017

4 good reasons to go to that networking event http://bit.ly/2BC2Cw6

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Thursday, November 30th, 2017

4 financial benefits of single audit specialization http://bit.ly/2kbVSRq

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Thursday, November 30th, 2017

11 Strategies to Help You Win & Keep Accounting Clients http://bit.ly/2nhf0i3

Nonprofits: Get usable results when surveying constituents

Thursday, November 30th, 2017

To make sound decisions, your not-for-profit’s leadership should periodically survey donors and other constituents. But how do you design a survey to ensure a high response rate and constructive feedback?

Clarify goals

The first step is to define the survey’s purpose. Determine what you want to learn and how you’ll use the data you collect.

If, for example, you’re planning to build a recreation center, ask what activities survey recipients would like to see offered at the new facility. They might give you a wish list of activities, with “swimming” at the top.

But if you already knew swimming was popular and had anticipated this response, your survey results don’t really help your leadership make decisions. Instead, ask more specific questions, such as “What hours and days of the week would you most likely use the pool?” and “How much would you be willing to pay per visit?”

Stay focused and offer incentives

You’ll want to be sharply focused, isolating a single issue or initiative. And keep the survey short. Some experts suggest that, ideally, it should take no longer than five minutes to complete.

Also decide if you’re going to offer an incentive to respondents. Some research shows that people are more likely to complete a survey if they’re offered something in return. If you do offer an incentive, choose one that’s appropriate. A big reward, such as a dinner for two at an expensive restaurant, could skew survey results because respondents might give false demographic data to qualify.

Avoid bias and pledge privacy

One of the biggest challenges of survey writing is to draft unbiased questions. Take care not to lead respondents to answers you’d like to hear. Avoid loaded words and strong language, and consider seeking the services of a survey professional to ensure objectivity.

Finally, be sensitive to privacy concerns. Reassure survey recipients that their responses will remain confidential, and honor that promise.

Glad you asked

Getting feedback from constituents on the job you’re doing, or planning to do, is critical to the efficacy of your leaders’ decision making. Contact us for more information.

© 2017

Cutting costs when you’ve gone over budget

Wednesday, November 29th, 2017

Year end can’t get here soon enough for some business owners — especially those whose companies have exceeded their annual budgets. If you find yourself in this unenviable position, you can still cut costs to either improve this year’s financial picture or put yourself in a better position for next year.

Tackle staffing issues

It’s easy to put off tough staffing decisions, but those issues may represent an unnecessary drain on your finances. If you have employees who don’t have enough work to keep busy, think about restructuring jobs so everyone’s productive. You might let go of extra staff, or, alternatively, offer mostly idle workers unpaid time off during slow periods.

You also need to face the hard facts about underperforming workers. Few business owners enjoy firing anyone, but it makes little sense to continue to pay poor performers.

Take control of purchasing

Are you getting the most out of your company’s combined purchasing power? You may have different departments independently buying the same supplies or services (for example, paper, computers, photocopying). By consolidating such purchases, you might be able to negotiate reduced prices.

To strengthen your bargaining power with suppliers when seeking discounts, pay your bills promptly. Even if it doesn’t help you land reduced prices, you’ll avoid late payment fees and credit card interest charges.

But don’t just continue to pay bills mindlessly. Review all of your service invoices — especially those that are automatically deducted from your bank accounts or charged to credit cards — to confirm you’re actually using the services. Consider canceling any services you haven’t used in 90 days.

Redirect your marketing efforts

Advertising costs can take a significant bite out of your budget, and the priciest efforts often have the lowest returns on investment. Cut programs and initiatives that haven’t clearly paid off, and move your marketing to social media and other more cost-efficient avenues — at least temporarily. A single, positively received tweet may reach exponentially more people than a costly directory listing, print ad or trade show booth.

A caveat

Resist the urge to solve your budget shortfalls with one dramatic cut — the risks are simply too high. The better approach is to execute a combination of incremental actions that will add up to savings. Contact us for a full assessment of your company’s budget.

© 2017

Even if your income is high, your family may be able to benefit from the 0% long-term capital gains rate

Tuesday, November 28th, 2017

We’re entering the giving season, and if making financial gifts to your loved ones is part of your plans — or if you’d simply like to reduce your capital gains tax — consider giving appreciated stock instead of cash this year. Doing so might allow you to eliminate all federal tax liability on the appreciation, or at least significantly reduce it.

Leveraging lower rates

Investors generally are subject to a 15% tax rate on their long-term capital gains (20% if they’re in the top ordinary income tax bracket of 39.6%). But the long-term capital gains rate is 0% for gain that would be taxed at 10% or 15% based on the taxpayer’s ordinary-income rate.

In addition, taxpayers with modified adjusted gross income (MAGI) over $200,000 per year ($250,000 for joint filers and $125,000 for married filing separately) may owe the net investment income tax (NIIT). The NIIT equals 3.8% of the lesser of your net investment income or the amount by which your MAGI exceeds the applicable threshold.

If you have loved ones in the 0% bracket, you may be able to take advantage of it by transferring appreciated assets to them. The recipients can then sell the assets at no or a low federal tax cost.

The strategy in action

Faced with a long-term capital gains tax rate of 23.8% (20% for the top tax bracket, plus the 3.8% NIIT), Rick and Sara decide to transfer some appreciated stock to their adult daughter, Maia. Just out of college and making only enough from her entry-level job to leave her with $25,000 in taxable income, Maia falls into the 15% income tax bracket. Therefore, she qualifies for the 0% long-term capital gains rate.

However, the 0% rate applies only to the extent that capital gains “fill up” the gap between Maia’s taxable income and the top end of the 15% bracket. In 2017, the 15% bracket for singles tops out at $37,950.

When Maia sells the stock her parents transferred to her, her capital gains are $20,000. Of that amount $12,950 qualifies for the 0% rate and the remaining $7,050 is taxed at 15%. Maia pays only $1,057.50 of federal tax on the sale vs. the $4,760 her parents would have owed had they sold the stock themselves.

Additional considerations

Before acting, make sure the recipients won’t be subject to the “kiddie tax.” Also consider any gift and generation-skipping transfer (GST) tax consequences.

For more information on transfer taxes, the kiddie tax or capital gains planning, please contact us. We can help you find the strategies that will best achieve your goals.  

© 2017

Tuesday, November 28th, 2017

The Taxman Cometh: IRS Begins Assessing Employer Mandate Penalties | JD Supra http://bit.ly/2Bj2Kj0

Tuesday, November 28th, 2017

What are the rules to that gift exchange game, again? http://bit.ly/2BlqCCJ

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