Planning for a Fabulous 2015

Posted on December 24, 2014 by accelerate

The holiday month of December brings celebration as well as reflection for all the events that occurred in 2014.  It also gives us great hope for a new fabulous start in 2015.  Here are three ideas to start 2015 with a bang.

  1. Find a focus for the year.

    Instead of getting into the rut of making and breaking resolutions, consider having a focus for the entire year.  Choose your focus from among things like:

    • Developing a department in your business, such as your sales, marketing, operations, HR, admin, or another.  The focus will be on building or expanding the department you’ve chosen to work on.
    • Changing your company culture to a trait or aspect you want to be known for.  Developing the trait will be your focus.
    • Building a relationship with an individual or a group of people related to your business.  The relationships are the focus.

  2. Live by a theme for 2015.

    Your theme could be an emotion or expression such as gratitude or compassion.  It could be a color – purple – just for fun.  You might adopt a favorite quote or religious verse or even song.  Your goal for the year will be to embody your theme and/or bring it into other’s lives as well.

  3. Do the one big thing.

    Are you holding back on a huge dream for yourself?  Then take steps in 2015 to move closer to it.  Make 2015 your year to do the one big thing that’s been weighing heavily on your mind.  Just think how you’d feel if you finally did it; your life would be forever altered.

Happy 2015Write your focus, your theme, or your one big thing on dozens of sticky notes, and plaster them everywhere.  Mark your calendar and to do list with reminders and milestone checks.  Make art out of your sticky notes, and post them on the refrigerator door and your office walls.  That way, the reminder will be physically with you all year.

We wish you a happy and healthy new year to you and yours.

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It’s Bonus Time

Posted on December 11, 2014 by accelerate

Year-end is a great time to think about rewarding your staff for a job well done in 2014.  Here are a couple of quick tips to help you make the most of bonuses while protecting your business and cash flow.

  1. Timing.  Would you be better off timing bonuses in this year to reduce 2014-year taxes or to wait until next year so they impact the 2015 tax year?  It’s something to consider before you dish them out.  Do what’s best for your business.
  2. The pretty holiday envelope.  It might be tempting to hand out envelopes of cash but it’s oh-so illegal.  Making payroll in cash is illegal in most states, and bonuses are part of payroll.  Stick to the payroll system to generate your bonuses even if it’s boring, and you’ll stay out of trouble.
  3. Pesky deductions.  Bonuses are subject to payroll deductions just like any other payroll check, so please don’t forget that.  If you write a check for $1,000 to an employee, you will be liable for taxes on the gross-up, and this ranges between 20% to 30%.  So that $1,000 bonus just turned into $1,200 or $1,300, which is quite generous but might not be what you really meant!
  4. Sticking around.  Bonuses are a great motivator and can help keep employees from leaving, thereby reducing your turnover costs.  If possible, announce a bonus structure ahead of time so employees will have something to work toward and “earn.”
  5. Invisible costs of bonuses.  Bonuses will drive up your workers compensation, state and federal unemployment costs, and any other costs that are related to gross wages, so do take all of that into consideration when issuing bonuses.
  6. Beyond money.   Money is a great motivator, but you may want to provide non-cash bonuses to your employees for extra special memories.  If you do, your tax accountant can help you get the transaction recorded properly.         

Bonuses are fun for everyone, and we hope these tips will help you make the most out of them in your business.

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Catching Up with Your Contractors Before 1099 Time

Posted on November 26, 2014 by accelerate

In a little over a month, it will be 2015 and time for year-end accounting chores.   One of those chores is getting your 1099s out, and now is a good time to tie up loose ends so the year-end process can go smoother.  Here are some tips to do just that:

  1. Go through your vendor list and make sure each contractor that you are paying is marked in your accounting system as a contractor eligible for a 1099.

  2. Obtain a W-9 form from each contractor if you haven’t already, and update the address and federal EIN for each contractor.  This will ensure that you have the most current information for each contractor and that they will receive their 1099 promptly.

    If you need to make any changes in the way you are paying them or withholding taxes, you’ll have a chance to update that information as well.

  3. Ask your contractors for a worker’s compensation certificate.  If you don’t have one, you might need to add their payment totals to your payroll amounts on your worker’s compensation audit worksheet.

  4. If your accounting system doesn’t break out payment type, you’ll need to do that on a separate spreadsheet before you input the 1099 amounts.  Contractors paid with a check will require 1099s.  Contractors paid via PayPal or credit card will not.   If you have paid them both ways, you will need to break it out.  You can do the bulk of the work now and post the remainder of the year after year-end.

  5. Consider re-evaluating each contractor as to whether they meet the employee versus contractor tests from the IRS.  If you are accidentally misclassifying a contractor who the IRS defines as an employee, you will be responsible for social security, withholding, and other payroll taxes, which can add up to huge numbers for small businesses.

    This is a “red flag” area for the IRS, meaning they are looking to “bust” employers.  However, they also have a Voluntary Classification Settlement Program for people who have been misclassifying workers in the past and want to come clean.

Following these five steps will put you in great shape for year-end.  And if you need help catching up with your contractors or with any related issues, please let us know.

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What Is Real-Time Accounting (and Why Should You Care)?

Posted on November 13, 2014 by accelerate

Real-time accounting is when your books are caught up to the present and you know exactly where you stand with your account balances, revenue, and profit.  It’s truly doing your accounting in real time.

The opposite of real-time accounting is getting your books done once a year (or worse, being years behind).  When you wait to do your books once a year, say at tax time, you lose the power of being able to monetize opportunities in real time.   Some examples are realizing your prices are too low and your profit margins need adjustment, seeing what’s selling well and restocking sooner than later, or discovering a worker is not productive based on your pay rates and prices.

Today’s cloud accounting systems and bank feeds allow you the potential for real-time accounting, where the benefits include:

  • Better cash flow management
  • Faster correction of pricing, hiring, stocking, and margin mistakes, saving money and increasing profits faster
  • Faster identification of any tax liabilities as well as the ability to reduce or eliminate penalties from paying late or underestimating taxes due
  • Ability to see whether you are making a profit or a loss
  • Potential to catch fraud or identity theft much faster if you become a victim
  • Lower accounting costs when errors snowball over time
  • More peace of mind
  • Ability to be more proactive in your business management, capitalizing on opportunities that show themselves in the numbers

Consider moving to real-time accounting if you haven’t already.  For example, if your books are done annually, moving to quarterly or monthly services will begin to provide the advantages listed above.

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How Understanding Assets vs. Expenses Can Make You Rich

Posted on October 30, 2014 by accelerate

Assets and expenses both have a “debit” balance on the financial statements, but that’s where their similarities end. Spending on one can make you rich and spending too much on the other can leave you broke.

An expense is money you may need to spend, but after a year, there is nothing lasting to show for it. An asset is a tangible resource that is still worth something after a year or more and that belongs to you or your business. The best assets grow in value over time, but some lose their value too. Real estate typically goes up in value, while a car loses value, or depreciates heavily, in its first few years.

The best example of an asset versus an expense is spending on a mortgage versus rent. When you pay a mortgage, you own more of the property than you did last month. One day, you can sell your ownership in the property and get cash or another asset in trade. When you pay rent, there’s nothing left at the end of the month. There’s no accumulated value.

Generally speaking, spending on an asset builds or at least better preserves your wealth. Spending on an expense drains your worth because you don’t own anything at the end.

The path to building your wealth is to spend on assets when you have a choice and minimize expenses when you can.

In the book “The Millionaire Next Door,” one of the top examples to build wealth is to avoid replacing your car as long as you dare. It used to be a habit for some families to replace their car every two years. With today’s reliable models, you can go between five to ten years without having to replace your car. Although a car lasts more than a year and is considered an asset, it still loses value every year.

Investing in assets and reducing expenses will build your business’s net worth and increase profits. Look for ways you can apply this to your business and watch your money grow. As always, reach out if you’d like to know more.

Posted in Business Development, Business Tips, Management Tips, Profitability Tips | Leave a comment

What’s Your Hourly Worth?

Posted on October 16, 2014 by accelerate

Time is the most precious resource on the planet, but sometimes we don’t treat it that way. In our businesses, it’s important to get everything done, but we can also get overwhelmed with all the little things that need to be done to take care of customers. One of the big differences between highly successful entrepreneurs and less successful ones is how they manage their time: the more successful simply value it more and treat it as the scarce commodity it is.

A great exercise to bring this home is to track what you do in one day. You can write a diary as you go through the day or simply recall what you did at the end of the day. List the tasks you did; then write the hourly market rate of each task you did next to the task.

Did you spend time on low-level tasks such as email cleanup, filing, order-taking, order filling, or handling routine customer questions? Or did you spend time calling up power partners, dreaming up new products or services, or restyling your marketing message so that it’s more impactful and reaches more customers?

What was the average hourly rate of the tasks you did today? Multiply that by 2,000 hours and compare it your gross revenues. If your gross revenues were higher than the value of the tasks you did today, then your revenue might be stagnant. If your annualized day was worth more than your gross revenues, then congratulations; you’re moving up and giving yourself a raise. Your business is likely growing.

If you’d like a raise, then the first thing to do is to start delegating the lower level tasks that are eating up all your time. They might be a comfortable way for you to pass the time, but they could also be keeping you stuck, overwhelmed, and moving toward burnout.

We all have the same amount of time each day. If we can free up our time to focus on more powerful action items that move our business forward instead of the chores that clog our progress, then our success will accelerate.

Posted in Bookkeeping Tips, Management Tips, Time Management Tips | Leave a comment

Navigating Nanny Taxes and Household Payroll Compliance

Posted on October 2, 2014 by accelerate

Time is precious for most of us these days, and often, we need help at home so we can have more time to run our businesses or careers.  That may mean hiring help for personal tasks such as caregiving for the young, elderly, or special needs family member.  When you first hire a household worker, there’s a whole different set of rules to follow compared to hiring for business.

Underground Payroll

There is a whole industry of “underground” payments made to domestic workers.  Individuals such as housekeepers, regardless if they live with you full time or work once a month, are wrongly paid as contractors, and often in cash, most of the time.  According to the IRS, in court case after court case, these workers should be paid as household employees, even if they are part-time.

Cracking Down

One of the focus areas for the IRS is this area of household payroll.  The current and strong drive to bring this underground payment system to the light is caused by several new pieces of legislation.  A few states have recently passed a domestic workers bill of rights.  Changes in minimum wage and overtime requirements are going into effect in 2015.  And the health care act requires workers to document their wages before they can qualify for a subsidy, so this can bring more workers asking you to get them fully documented on your books.

Getting It Right

The need to hire household workers is rising due to the silver tsunami – a term describing the aging of the populous Baby Boomer generation and their growing need for health care, which will truly stretch our system based on their numbers.

Expert Guidance

When your family makes the decision to hire household workers, seek expert guidance so that you can get through the maze of compliance in this area.  You’ll want to be sure you learn about the risks and compliance issues in this area so that you can properly protect your personal wealth as well as your peace of mind.  And if we can help, please reach out and let us know.

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Resources

Posted on September 17, 2014 by accelerate

Employee Payroll Calculator

Historical Stock Prices

Historical Currency Conversion

LEGAL INDUSTRY

Thomas, Quinn & Krieger, LLP
Simon Sigalos & Spyredes, PA
Simon Lesser, PC

COMPUTER PROVIDERS

Palm Tech Computer Solutions
Userscape Corp

FINANCIAL SERVICES

Materetsky Financial Group, Inc
LBR Group, Inc
Cap Visor Associates, LLC 
Golish Financial Group, LLC

REAL ESTATE SALES, SERVICES & CONSTRUCTION

JSM Realty Services, Inc
Easy Life Style Real Estate, Inc.
JK Development Corp
Metro Builders Corp
Katonah Management Group – HOA Property Management
Marshall Weinerman Real Estate – Property Mgt
Quest Workspaces Executive Suites
Metro Grass – Artificial Grass
Alliance Business Centers Network
Gasparri Realty

WHOLESALE DISTRIBUTION

Patient Safety Gear dba G-Sleeve
Summit Electronics Corp
Explorer Satellite Communications, Inc
LED Optics, Inc
Snap On Smile, LLC
Poorboys World, Inc
Boca Semiconductor, Inc

OTHER CLIENTS

Mnuchin Art Gallery
Casino Job Center, Inc
Kimad Productions, Inc
Just Our Shoes
ScioInspire
Just Shoe n’ Me
WebItAmerica

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Obama Care for the Executive Office World

Posted on July 17, 2013 by accelerate

The Small Business Health Care Employer Mandate has been Delayed till January 1, 2015

What does the Employer Health Care Mandate mean for Executive Suite Owners?
For businesses with less than 30 full time employees or 50 full time EQUIVALENT employees (Full Time for this Mandate is defined as an employee that works equal to or greater than 30 hours per week) there are no potential penalties.

Multiple Location Owners be aware:
For purposes of sections 401, 408 (k), 408 (p), 410, 411, 415, and 416, under regulations prescribed by the Secretary, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. Make sure to confirm with your CPA, but it appears that if you have more than one location under common ownership, you will need to look at the number of employees in all locations, as if they were one company.

What is the affect in 2015 for your business(es) if you have more than 50 Full time equivalent employees?

  1. You will have to offer health insurance coverage for your employees, whereby the employee portion of the premium does not equal more than 9.5% of their wages, or you can be subject to a per employee penalty on all employees above 30. The coverage will need to cover the employee and their dependent children up to age 26, but NOT their spouse.
  2. You will pay a penalty if one or more of your full time employees receives a government subsidy; An employee can receive a government subsidy if you do not offer insurance or the insurance you provide costs the employee more than 9.5% of the employee’s wages.
  3. If you offer insurance, and you have an employee that receives a subsidy from the Health Insurance exchanges, you will pay a penalty equal to the LESSER of $2,000 for every full time employee above 30, or $3,000 per subsidized employee.
  4. If you do NOT offer insurance, you will pay a penalty of $2,000 per employee, though there is not any penalty on the first 30 full time employees.

It appears that most small Executive Center owners will not be subject to any of the potential penalties. But for owners with multiple centers, from 2015 and beyond, there will be interesting planning opportunities

See more at: http://www.officingtoday.com/2013/07/obama-care-for-the-executive-office-world/#

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Business Entities: Under Which Type Should You Own Your Business Center? Is it too Late to Change it?

Posted on October 31, 2012 by accelerate

One of the most frequent questions I get asked as a CPA for Executive Office Centers is “Under which type of entity should I form my Center?” Interestingly, most persons first ask their attorney. These days most attorneys suggest an LLC, which is not always the best answer, at least not from this CPA’s point of view.

My quick answer is that, unless you are non-US individual, you should NOT own your Center in either a Regular Corporation or as an “Unincorporated” entity. (Non US persons should contact your CPA for other alternatives.)

So the choice remains: should you form an LLC or a Sub Chapter S Corporation?

  • If your Center(s) are owned solely by one person, then my first thought is to use a Sub Chapter S Corporation. The reason for this is that it gets your business Income and Expenses off of your personal tax return. 

Fact: A business reported on a personal tax return has historically had the highest chance of being audited, and unless you have a fetish, and like audits, I would discourage you from being a Single Member LLC.
  • If you have more than one owner, then the reporting of the detail income and expense tax information is not on your personal tax return. There are, however, still some tax differences between the two: 
The main difference in taxation of a shareholder of a Sub Chapter S Corporation versus a “member” of an LLC is self employment tax:
  • If you are a member in an LLC you pay self employment tax on 100% of your allocated Net Income
  • If you are a shareholder in a Sub Chapter S Corporation you pay social security tax ONLY on your salary, NOT on your Net Income after your salary.

This difference in Self Employment Taxes can be significant every year! Here’s an example:

RG

The above shows an annual savings of $8,030. Of course the salary sample shown above may be higher or lower for you, so review this with your CPA.

Now for the second question: “Is it too late to change my Entity?” The answer is: NO! As a matter of fact, by simply filing the two forms (Possibly three, depending on what State you are in) you can convert the taxation of your LLC to a Sub Chapter S Corporation.

As with all tax questions, you should contact your CPA to see if this large savings is applicable in your situation, or you can simply contact our office.

Have a great month.
Roy F. Glassberg, CPA

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