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National STEM Day: How Science, Technology, Engineering, and Math Shape the Future of Accounting

Thu, 06 Nov 2025 19:15:25 GMT

At Acumen MB LLC, we’re proud to celebrate National STEM Day—a day dedicated to inspiring curiosity and innovation in Science, Technology, Engineering, and Mathematics (STEM). While many people think of lab coats, robots, or complex equations when they hear “STEM,” the truth is that these disciplines are also the foundation of modern accounting and tax services.

Accounting Is a STEM Career

Accounting is more than numbers on a page—it’s a blend of mathematical precision, analytical thinking, and technological innovation. As the financial world becomes more data-driven, accountants rely heavily on the same STEM principles that power breakthroughs in other industries. From using algorithms to detect fraud to developing predictive models for business growth, STEM skills are at the heart of what we do.

Technology Is Transforming the Tax World

STEM innovations have revolutionized the way tax professionals serve clients. Cloud-based accounting platforms, data analytics tools, and secure online filing systems allow us to work more efficiently and accurately than ever before. At Acumen MB LLC, we embrace these technologies to deliver smarter solutions—whether it’s optimizing your tax strategy, automating reporting, or safeguarding your financial data.

Encouraging the Next Generation of Financial Thinkers

National STEM Day also reminds us of the importance of inspiring future professionals. Today’s students learning coding, data science, or advanced math could become tomorrow’s auditors, CFOs, and financial analysts. We encourage parents, teachers, and mentors to help young people see the exciting possibilities that exist at the intersection of STEM and accounting.

The Bottom Line

STEM isn’t just shaping the future of science—it’s shaping the future of finance. At Acumen MB LLC, we combine the power of technology and analytics with a deep understanding of tax law and accounting principles to help our clients thrive in an increasingly digital world.

So, on this National STEM Day, we celebrate not only the scientists and engineers, but also the accountants and tax professionals who turn numbers into knowledge and data into decisions.

Baby Safety Month: Protecting What Matters Most—Your Family and Your Finances

Fri, 19 Sep 2025 17:12:12 GMT

September is Baby Safety Month, a time dedicated to raising awareness about keeping the youngest members of our families safe and healthy. From baby-proofing your home to staying on top of car seat regulations, parents and caregivers go above and beyond to make sure little ones are well protected.

At Acumen MB LLC, we know that safety extends beyond the physical environment—it also includes creating a secure financial foundation for your family. Just like baby gates and outlet covers help prevent accidents, strong financial planning can help prevent unnecessary stress and risk down the road.

Safety at Home and Safety in Finances

Baby-proofing your home: Installing cabinet locks, outlet covers, and baby gates protects your child from harm.
Financial-proofing your future: Setting up savings accounts, college funds, and proper insurance coverage protects your family’s financial well-being.

Both require proactive planning. It’s always easier to take preventative steps now than to deal with avoidable challenges later.

Tax Considerations for Growing Families

Welcoming a baby into your family brings joy—and also some important financial changes. Here are a few key areas to keep in mind:

Child Tax Credit: Parents may be eligible for significant tax credits that help reduce their tax bill.
Dependent Care Credits: If you pay for childcare, you could qualify for credits that help offset those costs.
529 Plans: Contributions to education savings plans may provide tax advantages while securing your child’s future.
Flexible Spending Accounts (FSAs): Setting aside pre-tax dollars for dependent care or medical expenses can help stretch your family budget.

Building a Secure Future

Just as parents prioritize safety gear for their little ones, we encourage families to prioritize financial safety. Proper planning, tax strategy, and organization can provide peace of mind—knowing that you are protecting not just your child’s present, but also their future.

At Acumen MB LLC, we’re here to help guide families through these exciting (and sometimes overwhelming) transitions. From understanding tax credits to building long-term financial strategies, our team is committed to supporting you as you safeguard what matters most.

Celebrating National Civil Service Month

Thu, 11 Sep 2025 12:37:30 GMT

At Acumen MB LLC, we’re proud to join in honoring National Civil Service Month this September. It’s a time to recognize the dedication of the men and women who serve our communities every day—whether they’re firefighters, police officers, teachers, postal workers, or government employees keeping essential services running smoothly.

Why Civil Service Matters

Civil servants often work behind the scenes to make sure life runs as it should. They maintain our roads, keep our neighborhoods safe, educate our children, and support countless public programs. Their efforts may not always make headlines, but without them, our communities wouldn’t thrive.

The Connection Between Civil Service and Taxes

Taxes are what make civil service possible. Each time we file returns, make payments, or carefully plan for the future, we’re not just meeting financial obligations—we’re helping support the people who keep our communities strong. Public schools, emergency services, infrastructure, and health programs all depend on that funding, and civil servants are the ones who bring those services to life.

Our Message of Gratitude

This month, and every month, we want to say thank you to the civil servants who dedicate themselves to the greater good. Your commitment, compassion, and professionalism make a real difference in the lives of so many.

At Acumen MB LLC, we see financial responsibility as a partnership between individuals, businesses, and the public sector. Together, we create communities that work for everyone.

Happy National Civil Service Month—and thank you to all who serve.

National Nonprofit Day: Celebrating Impact & Supporting Organizations That Make a Difference

Fri, 15 Aug 2025 16:49:26 GMT

At Acumen MB LLC, we believe every dollar has the potential to make a difference — especially when it’s directed toward causes that transform communities. On National Nonprofit Day, we’re honoring the dedication, vision, and impact of nonprofit organizations, both here in Northeast Ohio and across the nation.

Nonprofits aren’t just about goodwill — they’re economic engines, employers, and vital service providers. From food security programs to educational initiatives, these organizations improve lives every day. And as accountants, we know that supporting nonprofits can also bring important tax benefits to individuals and businesses who give wisely.

The Tax Advantage of Giving

While the heart of charitable giving is generosity, there are also tangible financial benefits to consider:

Itemized Deductions – If you itemize your deductions on your federal return, donations to qualified 501(c)(3) organizations can reduce your taxable income.

Appreciated Assets – Donating stocks or other appreciated assets may allow you to avoid capital gains tax while still deducting the fair market value.

Corporate Giving – Businesses can deduct charitable contributions (within certain limits), and strategic giving can strengthen community ties while lowering taxable income.

Tip: Always keep detailed records and receipts, and confirm the organization’s IRS-qualified status before donating.

Spotlight on Local Nonprofits

Here in the Cleveland area, we’re fortunate to have nonprofits making a difference in every corner of the community:

Greater Cleveland Food Bank – Fighting hunger across Northeast Ohio by providing meals, resources, and advocacy.

Cleveland Metroparks Zoo’s Future for Wildlife – Supporting global conservation efforts and wildlife protection.

Providence House – Offering crisis nursery services to protect at-risk children and support families in need.

Cleveland Play House – America’s first regional theater, enriching our community through arts and education.

Connecting for Kids – Providing education and support to families with children facing developmental, behavioral, or learning concerns.

BlueWater Chamber Orchestra – Bringing world-class classical music performances to Cleveland audiences and promoting music education.

National Nonprofits Making a Global Impact

Beyond our local borders, these national organizations inspire change worldwide:

American Red Cross – Providing disaster relief, blood donation services, and humanitarian aid.

Habitat for Humanity – Building affordable housing and stronger communities across the U.S. and abroad.

Feeding America – Connecting surplus food with families in need through a nationwide network of food banks.

Charity: Water – Bringing clean and safe drinking water to people in developing countries.

How You Can Help — and Track It for Tax Purposes

Giving is more than writing a check — you can also volunteer time, donate goods, or offer professional services. While the value of your time isn’t deductible, out-of-pocket expenses related to volunteering (like mileage) can be. The key is documentation — something we at Acumen MB LLC can help you organize so you get the full financial benefit of your generosity.

Let’s Keep the Giving Going

National Nonprofit Day is just one day, but the impact of your generosity can last a lifetime. Whether you give locally or globally, your contribution is part of a bigger story — one where community, compassion, and financial stewardship work hand in hand.

If you’d like guidance on maximizing the tax benefits of your charitable giving or ensuring your records are audit-ready, contact Acumen MB LLC today. Let’s work together to make sure your generosity goes further — for you and for the causes you care about.

Celebrating National Financial Awareness Day: Smart Moves for Your Wallet and Your Taxes

Wed, 13 Aug 2025 18:17:55 GMT

August 14th marks National Financial Awareness Day, and here at Acumen MB LLC, we believe it’s the perfect moment to pause, take stock of your finances, and make sure your tax and accounting strategies are working for you—not against you.

Whether you're managing a household, running a business, or planning for retirement, financial awareness isn't just about budgeting—it’s about building a tax-savvy, future-focused plan.

Use Tax Awareness to Build Financial Strength

Being financially aware means knowing not only where your money is going, but also where it could be going—if you make smarter tax decisions.

Have you checked your withholdings lately? If you're getting a large refund or surprise bill each year, it's worth reevaluating.
Are you taking advantage of deductions and credits? From education expenses to home energy improvements, there are ways to reduce your tax liability legally and effectively.
Are your business records audit-ready? Clean books aren't just good practice—they can save you serious time and money during tax season.

Financial awareness also means being proactive—not reactive—about your accounting. That’s where we come in. Our team helps clients across Ohio and beyond stay on top of their tax planning, budgeting, and reporting, so they can make informed decisions year-round.

Today’s Bonus Tip: Ohio’s Sales Tax Holiday Ends Tonight!

If you’ve been meaning to stock up on school supplies or grab that extra pair of shoes, today’s your last chance to take advantage of Ohio’s Sales Tax Holiday. Qualifying clothing, school supplies, and instructional materials are sales tax-free through midnight tonight.

Not only does this provide immediate savings at checkout, but it’s also a great example of using tax knowledge to stretch your dollars—one of the many small, intentional choices that add up to greater financial control.

Want to learn more before time runs out? Check out our full blog post on the Ohio Sales Tax Holiday:
https://www.acumenmb.com/ohio-sales-tax-holiday

Let’s Talk About Your Financial Future

Financial awareness doesn’t happen in a day—but today is a great day to start. If you’re ready to get more intentional about your money, taxes, or business accounting, let’s have a conversation.

Give us a call or reach out via our contact page .

From all of us at Acumen MB LLC—happy National Financial Awareness Day, and here’s to a more empowered financial future!

Honoring the Hands That Feed Us: Financial Advocacy for Farmworkers on Farmworker Appreciation Day

Wed, 06 Aug 2025 16:48:41 GMT

Every August 6th, we pause to recognize the incredible contributions of farmworkers across the country. At Acumen MB LLC, we understand that appreciation goes beyond words—it includes advocating for the financial well-being of those who labor to keep our communities nourished.

Farm work is one of the most physically demanding and essential jobs in our economy, yet many farmworkers face unique challenges when it comes to navigating the U.S. tax system. This Farmworker Appreciation Day, we want to shine a light on the financial side of farm work and explore how accounting professionals can support and empower this vital workforce.

The Tax Realities of Farm Labor

Farmworkers—many of whom are seasonal or migrant workers—often deal with:

Unfamiliarity with U.S. tax laws , especially if English is not their first language.
Complex income reporting , especially when income is paid in cash or by multiple short-term employers.
Misclassification as independent contractors , which can shift the burden of employment taxes unfairly onto the worker.
Limited access to tax credits and refunds they may be eligible for, like the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC).

These issues can lead to overpayment, underpayment, or missed opportunities for financial stability. Our firm believes tax literacy and ethical accounting practices are essential tools in advancing equity for farmworkers.

Our Role: Advocacy Through Accuracy

At Acumen MB LLC, we believe that one way to truly honor farmworkers is by supporting fair and accurate financial practices in agriculture. That means:

Helping agricultural employers stay compliant with payroll tax laws and proper worker classification.
Partnering with organizations that offer multilingual tax preparation assistance or free filing services to farmworkers.
Educating small farms and agribusinesses about the benefits of responsible bookkeeping and employee tax reporting.
Highlighting tax incentives for farms that invest in their workforce, such as those that provide housing, transportation, or educational programs.

We’ve worked with a number of agricultural clients and small farms, and we know firsthand how clear, ethical financial management benefits everyone—from the farm owners to the people in the fields.

Celebrating with Purpose

Farmworker Appreciation Day isn’t just about gratitude—it’s about action. If you run a farm or agribusiness, consider using this day to:

Review your payroll systems for compliance.
Set up a meeting with your accountant to discuss year-end tax planning.
Donate to organizations that provide legal and financial aid to farmworkers.
Ask your tax professional how to support workforce development through compliant, tax-savvy strategies.

At Acumen MB LLC, we are proud to support the backbone of our agricultural system by helping employers do right by their workers and helping workers understand their rights.

Because behind every basket of produce is a person—and they deserve not just our thanks, but also our advocacy.

Ohio Sales Tax Holiday

Fri, 01 Aug 2025 19:39:22 GMT

Ohio’s Sales Tax Holiday runs for a full 14 days in 2025—from 12:00 AM on Friday, August 1 through 11:59 PM on Thursday, August 14. During this period, all tangible personal property priced at $500 or less per item is exempt from Ohio state sales tax (5.75%) and most local taxes.

What's Covered—and What's Not

Eligible items include (but aren’t limited to):

Back‑to‑school supplies and clothing

Electronics (tablets, TVs, computers)

Furniture, kitchenware, home décor, and indoor/outdoor plants

Sporting goods, books, pet supplies, and even dine‑in food and beverages—as long as each item is under $500

Not eligible for the exemption:

Items priced over $500

Motor vehicles, watercraft/outboard motors, alcohol, tobacco, vapor products, and items containing marijuana

Services—except when repair or installation parts are individually itemized under $500

Tax Savings in Practice

Residents of Cuyahoga County usually face a combined sales tax of around 8%. That means, on a $500 eligible purchase, you can save about $40 in tax alone. If you make multiple purchases under $500, each fully qualifies, so total savings can significantly stack—especially for bulk items or multiple family members.

How to Plan Effectively

From a tax-wise standpoint, here's how to get the most value during the holiday:

Identify eligible purchases: Review your back‑to‑school or household shopping list and ensure each item is priced at $500 or less.

Use discounts smartly: Apply coupons or in‑store promotions to bring a product under the $500 threshold—it then qualifies for exemption

Track item-by-item pricing: If items are bundled but exceed $500, the bundle is fully taxable—even if shopped separately

Buy online or offline freely: Purchases made and paid for during the holiday qualify—even if shipping or delivery happens later. If your order combines exempt and non-exempt items, shipping charges need proportional allocation.

Keep receipts and monitor returns: Save proof in case a retailer improperly charges tax. Exchanges within the window should remain tax-free for eligible items. However, returns after the holiday or exchanges for non-eligible items could trigger sales tax

Why It Matters from a Tax Perspective

As an accounting firm, we see families and small businesses struggle with rising costs—from inflation to rising tariffs. The expanded Ohio Sales Tax Holiday helps alleviate some of that burden by offering direct tax relief on everyday purchases.
It’s a one-time tax benefit—not a deferral—meaning consumers keep more of their earnings. For families doing back‑to‑school shopping, launching college, or updating household essentials, this holiday offers immediate savings.

How Businesses Should Prepare

Ensure POS systems are ready to automatically exempt qualifying items

Train staff on the $500-per-item rule and eligible vs. excluded categories

Communicate policies clearly around layaways, exchanges, and how tax is allocated when mixed baskets are purchased

Prepare UST‑1 forms properly during tax filings to report exempt vs. taxable sales accurately

Final Tips from Acumen MB LLC

Plan purchases ahead, especially if multiple family members are involved.

Maximize exemptions by breaking larger bundles into smaller units under $500.

Shop for essential items early—especially electronics, clothing, or school gear.

Document everything—save receipts, note exchanges, and if incorrectly taxed, ask for a refund or contact the Ohio Department of Taxation.

Supporting Those with Chronic Illness: Tax Tips & Financial Strategies for National Chronic Disease Day

Wed, 09 Jul 2025 18:44:49 GMT

At Acumen MB LLC, we believe that good accounting goes beyond numbers—it supports real people navigating real challenges. Today, on National Chronic Disease Day, we want to recognize the strength and resilience of those living with chronic illnesses and shed light on how thoughtful tax planning and financial strategies can provide some much-needed relief.

Understanding the Financial Impact of Chronic Illness

Chronic diseases—such as diabetes, heart conditions, arthritis, and autoimmune disorders—can take a serious toll not just physically, but financially as well. Between ongoing medical appointments, treatments, prescriptions, assistive devices, and sometimes even necessary changes in employment, the cost of managing a chronic condition can quickly add up.

How the Tax Code Can Help

Fortunately, there are several tax benefits and deductions available that may help ease the burden:

1. Medical Expense Deductions

If your unreimbursed medical expenses exceed 7.5% of your adjusted gross income (AGI), you may be eligible to deduct them. Qualifying expenses may include:

Doctor visits and hospital care

Prescription medications

Medical equipment (wheelchairs, hearing aids, etc.)

Travel costs for medical appointments

Home modifications for accessibility

We can help determine which of your expenses qualify and how to properly document them.

2. Health Savings Accounts (HSAs)

If you’re enrolled in a high-deductible health plan (HDHP), contributing to an HSA allows you to set aside pre-tax dollars for medical expenses. HSAs offer triple tax benefits: contributions are deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free.

3. Disability and Income Considerations

If a chronic condition limits your ability to work, you may receive Social Security Disability Insurance (SSDI) or other income support. These benefits may have tax implications depending on your total income. Our team can help you navigate how this affects your tax return and ensure you're not overpaying.

4. Itemizing vs. Standard Deduction

Many individuals with chronic illnesses find that itemizing their deductions—particularly for medical expenses—yields more tax savings than the standard deduction. We can help evaluate which option is best for your specific situation.

Planning Ahead

Chronic conditions often come with unpredictable costs. That’s why proactive tax planning is essential. At Acumen MB LLC, we work closely with our clients to:

Create budgets that account for ongoing medical needs

Track deductible expenses throughout the year

Plan for future care needs through tax-advantaged savings tools

You're Not Alone

National Chronic Disease Day reminds us that many in our community face daily health battles that often go unseen. If you or a loved one is managing a chronic illness, know that you're not alone—and that there are financial tools available to support your journey.

Let us help you make the most of what the tax code has to offer. If you have questions or need help navigating deductions or planning for long-term care, contact us today. At Acumen MB LLC, we're here to support your financial health every step of the way.

Investing in Knowledge: How Higher Education and Smart Tax Planning Go Hand in Hand

Wed, 04 Jun 2025 18:34:04 GMT

At Acumen MB LLC, we believe that education is one of the most valuable investments a person can make. That’s why we’re proud to recognize National Higher Education Day —a day dedicated to promoting the importance of higher learning and expanding access to educational opportunities.

But beyond the personal and professional growth that comes from a college education, there’s another angle we think is worth highlighting: the financial and tax benefits tied to higher education . Whether you're a student, a parent, or a graduate repaying loans, the tax code offers several incentives that can ease the cost of investing in your future.

1. Education Tax Credits

Two of the most common tax breaks for students and families are the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) .

AOTC allows up to $2,500 per year for qualified education expenses during the first four years of higher education.
LLC offers up to $2,000 per year for post-secondary education, with no limit on the number of years you can claim it.

Each credit has specific eligibility requirements, so it’s important to consult with your tax professional to determine which one is right for you.

2. Student Loan Interest Deduction

If you’ve started repaying your student loans, you may be able to deduct up to $2,500 in interest paid on qualifying student loans— even if you don’t itemize deductions . This deduction can be a welcome relief, especially for recent graduates managing new financial responsibilities.

3. 529 College Savings Plans

For families saving for a child’s education, 529 plans offer a tax-advantaged way to build an education fund. Earnings grow tax-free, and withdrawals are also tax-free when used for qualified education expenses. In many states, contributions to a 529 plan are deductible on your state income tax return.

4. Tax Planning for Scholarships and Grants

While most scholarships and grants are tax-free when used for tuition and required expenses, portions used for room and board or other non-qualified expenses may be taxable. Understanding how these funds are reported can help avoid surprises at tax time.

We’re Here to Help You Make the Most of Every Educational Opportunity
At Acumen MB LLC, we’re not just your accounting team—we’re your financial partners. Whether you're applying for college, repaying loans, or planning for your child’s future, our team is here to help you navigate the tax implications and maximize every available benefit.

Have questions about how higher education impacts your taxes? Contact us today to schedule a consultation.

Because smart education choices deserve smart tax strategies.

National Fibromyalgia Awareness Day: Understanding the Tax Benefits of Medical Deductions

Mon, 12 May 2025 17:56:27 GMT

May 12 is National Fibromyalgia Awareness Day—a time to raise awareness, show support, and recognize the daily challenges faced by millions living with fibromyalgia. At Acumen MB LLC, we understand that chronic illnesses like fibromyalgia don't just take a toll on the body and mind—they can also place a heavy burden on your finances. That's why it's important to understand how the tax code may offer some relief through medical expense deductions .

What Is Fibromyalgia?

Fibromyalgia is a chronic condition that causes widespread pain, fatigue, cognitive difficulties, and sleep disturbances. Because it’s often an “invisible illness,” those who live with it may struggle not only with physical symptoms but also with the emotional and financial weight of managing long-term care.

Tax Relief for Medical Expenses

If you or someone in your household is being treated for fibromyalgia, certain medical costs may be deductible on your federal tax return , provided they exceed 7.5% of your adjusted gross income (AGI). This deduction applies whether you have been formally diagnosed or are undergoing evaluation and treatment for symptoms consistent with fibromyalgia.

Common Deductible Expenses for Fibromyalgia Patients

Eligible expenses may include:

Doctor and specialist visits (including rheumatologists, neurologists, and pain management clinics)

Prescription medications

Physical therapy and occupational therapy

Mental health services such as therapy or counseling

Travel expenses related to medical treatment (e.g., mileage, bus fare, parking fees)

Alternative treatments recommended by a medical provider (such as acupuncture or chiropractic care)

Medical equipment and supplies (e.g., TENS units, braces, ergonomic furniture)

Don’t Forget About FSAs and HSAs

If you’re enrolled in a Flexible Spending Account (FSA) or Health Savings Account (HSA) , you may be able to pay for many of these expenses with pre-tax dollars—providing another layer of financial relief.

How We Can Help

Navigating chronic illness is difficult enough without the added stress of figuring out what you can and cannot claim on your taxes. At Acumen MB LLC, we’re here to guide you through the process. If you or someone you care about is managing fibromyalgia and you'd like to better understand the tax implications, reach out to our team. We can help you track eligible expenses, maximize deductions, and keep your financial health strong.

Let’s work together to ease some of the burden—because no one should have to face chronic illness alone, especially at tax time.

Thank You, Teachers – You Deserve All the Credit (And Some Tax Deductions Too!)

Mon, 05 May 2025 19:11:42 GMT

At Acumen MB LLC, we know firsthand how much of a difference one person can make—and no one proves that more clearly than our teachers. From shaping young minds to creating safe and supportive learning environments, teachers wear countless hats: educator, mentor, counselor, cheerleader, and sometimes even superhero. You spend your own time (and often your own money) to make sure your students succeed. And today, on National Teacher Appreciation Day , we want to say thank you.

Thank you for showing up, even on the tough days.
Thank you for turning classrooms into communities.
Thank you for investing in the future—child by child, lesson by lesson.

A Little Tax Tip as Our Thanks

While we can never repay everything you do, we can make sure you know about a small way the tax system tries to show appreciation: the Educator Expense Deduction .

If you're a teacher, instructor, counselor, principal, or aide for students in kindergarten through grade 12—and you work at least 900 hours a school year—you may qualify to deduct up to $300 ($600 if married filing jointly and both spouses are eligible educators) of out-of-pocket classroom expenses. This includes:

Books, supplies, and classroom materials
COVID-19 protective items (like masks and sanitizers)
Educational software and subscriptions
Professional development courses related to your field

It's an above-the-line deduction, which means you don’t need to itemize to take it.

We're Here to Help

At Acumen MB LLC, we love helping educators understand their tax benefits and financial options. Whether you're navigating deductions or planning for your future, we're just a call or click away.

To all the incredible teachers out there: we see you, we appreciate you, and we’re here to support you—during tax season and all year long.

With gratitude,
The Team at Acumen MB LLC

Celebrating National Self-Employed Day: Tips for Mastering Your Taxes and Accounting

Sun, 04 May 2025 17:41:40 GMT

At Acumen MB LLC, we proudly celebrate the drive, creativity, and resilience of self-employed individuals—especially today, on National Self-Employed Day ! Whether you're a freelancer, gig worker, independent contractor, or small business owner, your role in our economy is invaluable. But with the freedom of self-employment also comes the responsibility of managing your own taxes and finances. That’s where we come in.

Understanding Self-Employment Taxes

Unlike traditional employees, self-employed individuals are responsible for both the employer and employee portions of Social Security and Medicare taxes—collectively known as self-employment tax. This often comes as a surprise to new entrepreneurs, and it can significantly impact your annual tax liability. Being prepared—and proactive—can make all the difference.

Tax Tips for the Self-Employed

1. Know Your Quarterly Estimated Tax Deadlines
If you expect to owe at least $1,000 in taxes for the year, you're likely required to make estimated payments quarterly. Missing these deadlines can result in penalties, so mark your calendar and plan ahead.

2. Track All Income and Expenses Diligently
Whether you use accounting software or work with a professional, having organized records makes tax time less stressful and helps ensure you're claiming all the deductions you’re entitled to.

3. Take Advantage of Deductions
From your home office and internet bill to business mileage and equipment, there are numerous tax deductions available to self-employed individuals. Every dollar you can deduct reduces your taxable income.

4. Consider an SEP IRA or Solo 401(k)
Self-employment doesn’t mean you have to miss out on retirement savings. These plans not only help secure your future, but they also offer current-year tax advantages.

5. Don't Overlook the QBI Deduction
The Qualified Business Income (QBI) deduction may allow you to deduct up to 20% of your business income. This can be complex depending on your industry and income level, so it’s wise to consult with a tax professional.

Why Accounting Support Matters

Running your own business is a full-time job (and then some!). Managing your finances and taxes shouldn’t be something you do alone. At Acumen MB LLC , we specialize in helping self-employed individuals build smart financial systems, stay compliant with tax laws, and make informed decisions year-round—not just during tax season.

We understand the unique challenges and opportunities that come with being your own boss. Our team is here to help you simplify your finances so you can focus on what you do best—running and growing your business.

Are you self-employed and ready to take control of your finances?
Reach out to Acumen MB LLC today and let’s make sure your business is on solid financial ground—this National Self-Employed Day and beyond.

Spreading Kindness: How Small Acts Make a Big Difference

Wed, 12 Feb 2025 22:47:49 GMT

Celebrating Random Acts of Kindness Week with Acumen MB LLC

Kindness has the power to transform lives, communities, and even businesses. At Acumen MB LLC, we believe that generosity and goodwill go hand in hand with financial success. That’s why we’re celebrating Random Acts of Kindness Week by encouraging small gestures that make a big impact—both in our personal lives and in the financial world.

The Power of Random Acts of Kindness

Random Acts of Kindness Week, observed each February, reminds us that even the smallest gestures—holding the door open, leaving an encouraging note, or buying coffee for a colleague—can brighten someone’s day. In business, kindness fosters stronger relationships, improves workplace morale, and creates a culture of trust and support.

How Kindness and Finance Intersect

You may not immediately connect accounting with kindness, but the two go together more than you think! Here are a few ways kindness plays a role in financial well-being:

Helping Others Plan for the Future – Offering financial guidance to friends, family, or small business owners can provide them with peace of mind and a sense of security.
Supporting Local Businesses – Shopping locally, recommending a trusted service, or leaving a positive review can make a huge difference for small business owners.
Donating to Causes That Matter – Whether it’s a local charity, a scholarship fund, or a non-profit, giving back financially is a powerful way to spread kindness.
Sharing Knowledge – If you have financial expertise, sharing budgeting tips, tax-saving strategies, or investment advice can empower others to take control of their finances.

Ideas for Random Acts of Kindness This Week

If you're looking for ways to spread kindness this week, here are some ideas:

At Work: Express gratitude to a coworker, mentor a new employee, or surprise the office with treats.
In Your Community: Pay for someone’s meal, donate to a food bank, or volunteer at a local organization.
For Small Businesses: Refer a friend to a business you love, leave a positive review, or show appreciation to service workers.
Financial Kindness: Offer to help someone create a budget, educate others about tax deductions, or contribute to a financial literacy program.

 Join Us in Spreading Kindness

At Acumen MB LLC, we strive to create a culture of kindness—not just during this special week, but every day. We encourage our clients, employees, and community members to participate in small acts of generosity that make a lasting impact.

What will you do to spread kindness this week? Share your ideas with us in the comments or tag us in your acts of kindness on social media. Let’s make the world a little brighter, one small act at a time!

Maximize Financial Wellness and Get Organized with QuickBooks

Tue, 14 Jan 2025 20:35:10 GMT

January marks both Financial Wellness Month and Get Organized Month—a perfect combination for setting your business up for success in the new year. At Acumen MB LLC, we understand that juggling finances, taxes, and everyday business operations can be overwhelming. That’s where QuickBooks, one of the most powerful accounting tools available, comes in.

Why Financial Wellness Matters

Financial wellness isn’t just about paying your bills on time; it’s about creating a sustainable system for managing cash flow, reducing debt, and planning for future growth. For businesses, financial wellness directly impacts your ability to make strategic decisions, secure loans, and stay compliant with tax regulations.

Get Organized with QuickBooks

QuickBooks is a game-changer for businesses looking to streamline their accounting processes. Here’s how it can help you stay organized and financially healthy:

1. Centralized Financial Data

QuickBooks allows you to keep all your financial information in one place. From tracking income and expenses to managing invoices and payments, everything is easily accessible. No more sifting through piles of paper or juggling multiple spreadsheets!

2. Real-Time Insights

The platform offers real-time insights into your financial health. With customizable dashboards and reports, you can monitor key metrics like cash flow, profit margins, and overdue invoices. These insights empower you to make informed decisions and identify potential financial risks before they become major issues.

3. Automation for Efficiency

Automation features like recurring invoices, automatic payment reminders, and bank reconciliation save you time and reduce errors. This efficiency allows you to focus on growing your business rather than getting bogged down in administrative tasks.

QuickBooks and Tax Compliance

One of the biggest challenges for businesses is staying compliant with ever-changing tax regulations. QuickBooks can:

Automatically categorize expenses to ensure proper deductions.
Generate reports that meet IRS requirements.
Help track payroll taxes and sales tax liabilities.

With QuickBooks, you can reduce the risk of costly mistakes and audits.

Partner with Acumen MB LLC

While QuickBooks is a robust tool, it’s most effective when tailored to your specific needs. That’s where we come in. At Acumen MB LLC, our team of experts can help you:

Set up QuickBooks for your business.
Provide training to ensure you’re maximizing its features.
Regularly review your financial data to keep you on track.

Our goal is to help you achieve financial wellness and organization, setting the foundation for long-term success.

 Let’s Start the Year Right

Ready to take control of your finances and get organized? Contact Acumen MB LLC today to learn how QuickBooks can transform your business. Together, we can make 2025 your most successful year yet!

National College Financial Prep Week: Accounting and Tax Tips for Families

Wed, 08 Jan 2025 19:55:17 GMT

Planning for college is an exciting yet overwhelming journey for students and their families. As tuition costs continue to rise, financial preparation is critical to making higher education more affordable and less stressful. At Acumen MB LLC, we understand the importance of financial planning and its intersection with accounting and taxes. In honor of National College Financial Prep Week, we’re sharing key insights to help you navigate this pivotal stage with confidence.

1. Leverage Tax-Advantaged Savings Accounts

One of the best ways to prepare financially for college is by utilizing tax-advantaged accounts like 529 plans. Contributions to these accounts grow tax-free, and withdrawals used for qualified education expenses are also tax-free. Some states even offer tax deductions or credits for contributions. Work with your accountant to determine the best savings strategy and ensure you’re maximizing these benefits.

2. Understand Education Tax Credits

The U.S. tax code provides valuable credits for families paying for college:

American Opportunity Tax Credit (AOTC): Offers up to $2,500 per eligible student for the first four years of higher education.
Lifetime Learning Credit (LLC): Provides up to $2,000 per tax return for post-secondary education expenses.

Eligibility depends on factors such as income and enrollment status. Our team can help you determine which credits you qualify for and how to claim them.

3. Track Education Expenses for Tax Purposes

Keeping detailed records of tuition payments, textbooks, and other qualifying expenses is crucial. Accurate tracking ensures you can claim all applicable tax benefits. Consider creating a dedicated folder or digital system to organize receipts and statements.

4. Explore FAFSA and Other Financial Aid Options

The Free Application for Federal Student Aid (FAFSA) is essential for accessing federal grants, loans, and work-study opportunities. Many colleges also use FAFSA data to determine institutional aid. Filing early can increase your chances of receiving aid. Remember, certain tax information, such as income and assets, will be required for the application.

5. Deduct Student Loan Interest

If you or your child take out student loans, you may be eligible to deduct up to $2,500 in student loan interest annually. This deduction applies even if you don’t itemize deductions. However, there are income limits, so consult with your accountant to understand how this impacts your tax situation.

6. Involve Your Student in Financial Planning

Encourage your student to take an active role in financial planning. Discuss topics such as budgeting, managing part-time job income, and understanding the impact of student loans. These lessons will empower them to make informed decisions during college and beyond.

7. Work with a Trusted Accounting Partner

Navigating the complexities of college financial prep can be daunting, but you don’t have to do it alone. At Acumen MB LLC, we specialize in providing personalized accounting and tax solutions to help families achieve their financial goals. From optimizing savings strategies to maximizing tax benefits, our team is here to guide you every step of the way.

Ready to Start Planning?

National College Financial Prep Week is the perfect time to take proactive steps toward securing your family’s educational future. Contact Acumen MB LLC today to schedule a consultation and ensure your financial plan is as robust as your student’s aspirations.

Year-End Tax Planning for Businesses and Corporations

Fri, 20 Dec 2024 14:46:36 GMT

As the calendar year winds down, businesses and corporations have an invaluable opportunity to optimize their financial position through strategic year-end tax planning. At Acumen MB LLC, we understand the importance of taking proactive steps to minimize tax liabilities, maximize deductions, and set the stage for a successful year ahead. Here are key strategies and considerations to help your business close the year on a strong financial note.

1. Review Financial Statements

Your financial statements provide the foundation for effective tax planning. By analyzing your profit-and-loss statement, balance sheet, and cash flow, you can identify areas for improvement and ensure all transactions are recorded accurately.

· Tip : Ensure expenses are categorized correctly and revenue recognition complies with IRS standards. Accurate records reduce the risk of audits and penalties.

2. Maximize Deductions and Credits

Take advantage of every tax-saving opportunity available to your business. Common deductions include:

· Section 179 Expensing : Deduct the full cost of qualifying equipment or software purchased this year.

· Depreciation Deductions : Review assets eligible for bonus depreciation.

· Employee-Related Tax Credits : Look into the various options available such as the Work Opportunity Tax Credit (WOTC).

· R&D Tax Credit : If your business invests in research and development, this credit can significantly reduce your tax burden.

3. Consider Timing Income and Expenses

Deferring income or accelerating expenses can lower your taxable income for the current year:

· Defer Income : Delay invoicing until January if your cash flow permits.

· Accelerate Expenses : Prepay certain expenses like rent or utilities to claim the deduction this year.

· Year-End Bonuses : Pay employee bonuses before December 31 to include them as deductions.

4. Optimize Retirement Contributions

Contributing to employee retirement plans can lower taxable income while providing long-term benefits for your workforce.

· Tip : Maximize contributions to plans like a 401(k) or SEP IRA. If you don’t already have a plan in place, consider establishing one before the year ends.

5. Perform a Tax Loss Harvest

Offset gains by selling underperforming assets before year-end. This strategy, known as tax loss harvesting, can reduce taxable income.

· Tip : Coordinate with your financial advisor to ensure this aligns with your long-term investment goals.

6. Evaluate Your Business Structure

Your tax obligations can vary significantly based on your entity type (e.g., LLC, S Corporation, C Corporation). Year-end is an excellent time to assess whether your current structure is still the best fit for your business.

· Tip : Consult with a tax advisor to determine if restructuring could provide tax savings for the upcoming year.

7. Review Your Estimated Tax Payments

Underpaying estimated taxes can result in penalties. Verify that your quarterly payments align with your projected tax liability for 2024.

· Tip : If you’re unsure, a tax professional can help you calculate and adjust your payments.

8. Stay Compliant with State and Local Taxes

Don’t overlook state and local tax obligations, such as sales tax, use tax, or franchise tax. Ensure you’ve met all filing requirements to avoid costly penalties.

9. Schedule a Consultation with Acumen MB LLC

Year-end tax planning is not one-size-fits-all. Every business has unique needs, and having a trusted advisor by your side can make all the difference. At Acumen MB LLC, our team of experienced accountants is here to help you navigate the complexities of year-end planning. From identifying tax-saving opportunities to ensuring compliance with new regulations, we’re committed to helping your business thrive. Contact us today to schedule your year-end consultation and start the new year with confidence.

Maximize Your Savings: Year-End Tax Planning Tips for Individuals

Mon, 16 Dec 2024 19:16:40 GMT

As we approach the close of another year, it’s time to take a strategic look at your finances. Year-end tax planning can help individuals maximize deductions, minimize tax liabilities, and set themselves up for a successful financial year ahead. At Acumen MB LLC, we’re here to guide you through some essential steps to streamline your tax planning before the clock strikes midnight on December 31 ^st .

1. Maximize Retirement Contributions

Contributing to retirement accounts is a win-win: you’re securing your financial future while potentially lowering your taxable income.

· Traditional IRA and 401(k) : Contributions to these accounts may be deductible, reducing your taxable income for 2024.

· Catch-Up Contributions : If you’re 50 or older, take advantage of higher contribution limits for added savings.

2. Review Charitable Giving

The season of giving is also an excellent time to reduce your tax bill.

· Donations : Cash donations to qualified charities are deductible if you itemize your deductions.

· Non-Cash Donations : Donating appreciated assets like stocks can provide additional tax benefits.

3. Harvest Capital Gains and Losses

Take a look at your investment portfolio to determine if selling some assets could benefit your tax situation.

· Offset Gains with Losses : Selling losing investments can offset capital gains and up to $3,000 of other income.

· Long-Term Gains : If possible, take advantage of lower tax rates on long-term capital gains.

4. Plan for Education Expenses

Education-related tax benefits can make a significant difference.

· 529 Plans : Contribute to a 529 plan for tax-advantaged savings on future education expenses.

· Education Credits : Consider whether you’re eligible for the American Opportunity or Lifetime Learning Credit.

5. Review Your Withholding and Estimated Payments

Ensure you’re on track with tax payments to avoid surprises.

· Withholding Adjustments : If your income changed significantly in 2024, update your withholding through your employer.

· Estimated Taxes : Self-employed or investors should check their quarterly estimated payments.

6. Take Advantage of Tax Credits

Don’t overlook valuable tax credits that can reduce your tax bill dollar for dollar.

· Energy-Efficient Home Improvements : If you’ve made energy-efficient upgrades, you may qualify for a credit.

· Child and Dependent Care Credit : Offset childcare expenses if you qualify.

7. Bunch Deductions

If you’re close to the standard deduction threshold, consider bunching deductible expenses into one year. This strategy allows you to itemize deductions one year and take the standard deduction the next.

8. Consult a Tax Professional

Tax laws change frequently, and what worked last year may not be the best strategy for 2024. Consulting with a professional can ensure you’re taking full advantage of available tax-saving opportunities.

Let Acumen MB LLC Help You Prepare

At Acumen MB LLC, we’re dedicated to helping our clients navigate the complexities of year-end tax planning. Whether you need guidance on optimizing deductions, managing investments, or preparing for future tax changes, we’re here to help.

Contact us today to schedule your year-end tax planning consultation. Let’s work together to ensure a smooth and successful tax season ahead.

Unlocking the Power of Health Savings Accounts (HSAs) for National HSA Day

Fri, 06 Dec 2024 16:22:15 GMT

At Acumen MB LLC, we believe in leveraging every tool available to maximize your financial well-being, and Health Savings Accounts (HSAs) are one of the most powerful tools in your financial toolkit. In honor of National HSA Day, let’s dive into the tax benefits and implications of using an HSA, and why it’s a smart move for your health and your wallet.

What is an HSA?

An HSA is a tax-advantaged savings account designed for individuals with high-deductible health plans (HDHPs). It allows you to save for medical expenses while enjoying significant tax advantages.

Triple Tax Advantage of HSAs

1. Tax-Deductible Contributions

Contributions to your HSA are either pre-tax (if made through an employer) or tax-deductible (if made personally). This reduces your taxable income, which can lower your overall tax liability for the year.

2. Tax-Free Growth

Funds in your HSA grow tax-free. Whether your HSA balance earns interest or is invested, all growth is sheltered from taxes, allowing your savings to compound more effectively over time.

3. Tax-Free Withdrawals for Qualified Expenses

Withdrawals used for qualified medical expenses are tax-free. These can include a wide range of expenses, from doctor visits and prescriptions to dental and vision care.

Contribution Limits for 2025

For 2025, the contribution limits are:

- Individual coverage : $4,350

- Family coverage : $8,750

- Catch-up contributions (age 55+): Additional $1,000

These increased limits provide even more opportunity to save while reducing taxable income.

HSAs: More Than Just Medical Savings

One unique aspect of HSAs is their flexibility:

- Retirement Savings : After age 65, you can withdraw funds for any purpose without penalty (though non-medical withdrawals are taxed as income).

- Long-Term Care and Medicare Premiums : HSA funds can be used for these expenses in retirement, making it a versatile tool for long-term financial planning.

Potential Tax Implications

While HSAs offer numerous benefits, it’s important to consider the following:

- Non-Qualified Withdrawals : If you withdraw funds for non-qualified expenses before age 65, you’ll face a 20% penalty and income taxes on the amount.

- Record-Keeping : To avoid penalties, keep detailed records of your medical expenses.

Maximize Your HSA Benefits with Acumen MB LLC

Understanding how to effectively use an HSA can make a significant difference in your financial health. Whether you’re planning for today’s medical expenses or looking ahead to retirement, Acumen MB LLC is here to help you navigate the tax advantages and ensure you’re making the most of this powerful savings vehicle.

On National HSA Day, take a moment to review your contributions, maximize your savings, and plan for a healthier, wealthier future. Contact us today to learn more about HSAs and other tax-advantaged strategies tailored to your financial goals.

Celebrating National Volunteers Month and International Volunteer Day with Acumen MB LLC

Wed, 04 Dec 2024 19:23:53 GMT

At Acumen MB LLC, we know that giving back to the community is more than just a noble endeavor – it’s a cornerstone of a thriving society. As we celebrate National Volunteers Month and International Volunteer Day, we invite you to explore meaningful ways to make a difference. Whether you want to volunteer locally here in Cleveland, nationally across the U.S., or even internationally, there are countless opportunities to lend a hand and share your talents.

Local Opportunities in Cleveland, OH

1. Greater Cleveland Food Bank

Help fight hunger by volunteering at the Greater Cleveland Food Bank. You can assist with packing food boxes, distributing meals, or even offering administrative support.

2. Cleveland Animal Protective League

For animal lovers, the Cleveland APL offers opportunities to care for shelter animals, assist with adoptions, and provide much-needed companionship.

3. Habitat for Humanity of Greater Cleveland

Get hands-on by building homes and improving neighborhoods, providing safe and affordable housing for local families.

National Volunteer Opportunities

1. American Red Cross

From disaster relief to blood donation drives, the American Red Cross has numerous ways to get involved. Volunteers are essential in helping communities recover and thrive.

2. Big Brothers Big Sisters of America

Make a lasting impact in a child’s life by becoming a mentor. This program helps children across the country achieve their potential through guidance and support.

3. Feeding America

Join the fight against hunger by supporting food banks and meal programs nationwide. Volunteers can help sort donations, organize food drives, or assist with meal prep and distribution.

International Volunteer Opportunities

1. Doctors Without Borders

For medical professionals and support staff, this organization provides life-saving medical care in crisis zones around the world.

2. UN Volunteers Program

The United Nations offers a wide array of volunteer positions that support peace, development, and humanitarian efforts globally.

3. Habitat for Humanity Global Village

Combine travel with giving back by joining a Global Village trip to build homes and support sustainable development in communities worldwide.

How Volunteering Benefits You

Volunteering isn’t just about giving; it’s also about growing. It can improve your mental health, teach you new skills, and expand your network. Most importantly, it brings a sense of fulfillment as you make a positive impact on others.

As accountants, we know the value of time and resources. This Volunteers Month, we encourage our clients and community members to invest in what truly matters – helping others. Share your experiences with us, and let’s celebrate the spirit of volunteerism together!

National Scholarship Month: How Supporting SGOs Can Benefit You and Your Taxes

Mon, 18 Nov 2024 20:04:04 GMT

November is National Scholarship Month, a time to raise awareness about how scholarships hep students reach their educational goals. At Acumen MB LLC, we’re excited to spotlight Scholarship Granting Organizations (SGOs) and how your support can both empower students and provide valuable tax benefits.

What Are Scholarship Granting Organizations (SGOs)?

SGOs are nonprofit organizations dedicated to awarding scholarships to students, often for private or specialized school education. These scholarships can bridge financial gaps, offering students access to opportunities they may not otherwise have. As a donor, your contributions to SGOs can not only support education but also yield significant tax benefits.

Tax Benefits of Donating to SGOs

Supporting an SGO is more than a generous act; it’s a tax-savvy move. Here’s how your contribution can be mutually beneficial:

1. Federal Tax Deduction

Donations to qualified SGOs often qualify for a federal tax deduction if you itemize your deductions, helping to lower your taxable income.

2. State Tax Credits

Some states offer tax credits for SGO donations, which directly reduce the amount of state taxes you owe. The availability and limits of these credits vary by state, and we can assist you in determining what may apply to you based on your location.

3. Carry Forward Credits

If your donation exceeds your state’s annual credit limit, many states allow unused credits to carry forward to future tax years, ensuring you receive the full benefit of your donation over time.

To maximize these tax advantages, make sure your SGO donation is completed by December 31st of this year. Contributions made before year-end will count toward your tax return for the current year.

Additional Resources and Certification

In Ohio, you can find a list of certified SGOs and their requirements here . Checking this list ensures that your donation will meet state eligibility requirements for tax benefits.

A Win-Win for Your Taxes and the Community

Supporting SGOs is a powerful way to invest in our community’s future and help students receive the education they deserve. Through careful planning, your donation can also offer substantial tax savings, making the decision to donate a true win-win.

At Acumen MB LLC, we’re here to help with any questions about SGOs and tax benefits. Let’s work together to make the most of your charitable contributions this National Scholarship Month!

Celebrating Women Entrepreneurship: Insights from Erica Ishida, Founder & CEO of Yellow Cedar Group

Mon, 18 Nov 2024 19:52:37 GMT

In honor of Women Entrepreneurship Day, we’re thrilled to feature the inspiring journey of Erica Ishida, the founder and CEO of Yellow Cedar Group. At Acumen MB LLC, we are proud to spotlight women entrepreneurs like Erica, whose resilience, vision, and leadership exemplify the strength and innovation that women bring to the business world.

From Employee to Entrepreneur: Crafting a Vision

Erica’s journey to entrepreneurship began with a transformative realization. After stepping down as President of Apple Growth Partners, she knew she wanted more than just another role in someone else’s company. “I did not want to work for an employer,” she shares. Instead, she sought to create a business that aligned with her passion – coaching and advising others to build personal and professional resilience. Yellow Cedar Group was born out of her desire to work with people she loves, on her own terms, and to empower others to thrive.

Overcoming Challenges as a Woman Entrepreneur

Interestingly, Erica finds that the challenges she faced were more prominent during her career as an employee rather than as an entrepreneur. “I was looked at and treated as ‘less than’ for being a woman, and at times, for being young in a senior role,” Erica recounts. But these experiences only fueled her determination. A mentor once told her, “Cream always rises to the top,” a mantra that encouraged her to bring her best self to every challenge. By working smarter and harder, Erica overcame obstacles, proving that dedication and authenticity are key to long-term success.

Empowering Women Through Coaching and Mentorship

At Yellow Cedar Group, Erica is passionate about coaching women executives, guiding them through their personal and professional challenges. “I try to create a safe space for women to open up about their challenges and dreams so we can work together toward their desired future,” she explains. Her coaching approach focuses on helping women recognize their potential, embrace self-care, and set clear intentions, demonstrating that with the right support, anything is possible.

Pivotal Moments That Shaped Yellow Cedar Group

The decision to start her own business was not without its difficulties. Leaving her previous employer under challenging circumstances tested her confidence. Yet, it was in these moments of uncertainty that she found strength from her network of trusted colleagues. “Each of these people reminded me of who I am, how powerful I am, and the value I bring,” says Erica. Their encouragement and initial support not only bolstered her confidence but also helped her secure the first clients that would pave the way for Yellow Cedar Group’s success.

Core Values That Define Leadership

Erica leads Yellow Cedar Group with four guiding principles:

· Seek and Speak the Truth

· Protect the Good

· Relentlessly Pursue Potential

· Minimize Suffering

These values are not just words but the foundation of her coaching and advisory work. By aligning her business practices with these principles, Erica is able to create meaningful impact, both for her clients and the community.

Supporting Women Entrepreneurs: A Collective Effort

Women Entrepreneurship Day is a reminder of the incredible achievements of women business leaders like Erica Ishida. Her journey reflects the power of resilience, the importance of a strong support system, and the impact of leading with integrity. At Acumen MB LLC, we are committed to supporting women entrepreneurs in their quest to achieve their dreams. Whether it’s through sound financial advice or tax strategies, we’re here to help you thrive.

Let Erica’s story be a testament to the strength and potential of women in business. This Women Entrepreneurship Day let’s celebrate and support the women leaders who are breaking barriers and driving change.

Strengthening Your Fraud Defense: Essential Tips for Fraud Awareness Week

Thu, 07 Nov 2024 18:06:54 GMT

Fraud Awareness Week is the perfect opportunity to take stock of personal and business security measures. With evolving scams and fraud tactics, staying informed is crucial to safeguarding your finances and data. Here are key practices and tools – from credit freezes and fraud alerts to IRS PINs and cloud backups – that can help protect against fraud and keep your personal information secure.

-Freeze Your Credit to Limit Access

A credit freeze is one of the most effective tools for preventing identity theft. By restricting access to your credit report, a freeze makes it harder for fraudsters to open new accounts in your name. It’s free and can be easily set up through each of the three major credit bureaus (Equifax, Experian, and TransUnion). Remember to unfreeze your credit temporarily if you’re applying for a loan, mortgage, or new credit card.

-Fraud Alerts Add an Extra Layer of Security

Fraud alerts notify creditors to take extra steps in verifying your identity before opening any new accounts or making changes to existing ones. Unlike a credit freeze, fraud alerts don’t block access to your credit entirely, but they do act as an additional layer of protection. You can activate a fraud alert with any one of the credit bureaus, and they will notify the others on your behalf.

-Secure Your Tax Filings with an IRS Six-Digit PIN

The IRS Identity Protection PIN (IP PIN) is a six-digit code that helps protect against tax-related identity theft. If a fraudster tries to file a tax return using your Social Security number, they will be unable to proceed without this unique PIN. You can apply for an IP PIN through the IRS, adding a critical security layer to your tax information and protecting your refund.

-Cloud Backup: A Safety Net for Your Data

Backing up your data in the cloud is crucial for personal and business resilience against data loss. Cloud storage not only secures your files from hardware failures but also adds a layer of protection against ransomware and other cyberattacks. Choose reputable cloud providers that offer encrypted storage and ensure you’re using two-factor authentication to further protect your files.

-Recognize and Avoid Online Scams

Scammers are always finding new ways to deceive, and it’s essential to know the warning signs. Here are some tips for spotting common online scams:

1. Phishing Emails : Look out for emails claiming to be from reputable companies but containing odd links, urgent messages, or incorrect grammar.

2. Suspicious Links : Hover over links before clicking to check their legitimacy. Scammers often use links that look similar to authentic URLs but contain small changes.

3. Too-Good-to-Be-True Offers : Be wary of unbelievable deals or prizes, especially when they require you to provide personal or financial information upfront.

4. Fake Customer Service Numbers : Scammers sometimes publish fake support numbers. Always go directly to the official website of a company to verify contact information.

Staying vigilant is key to fraud prevention. By implementing these practices, you not only protect your finances and personal data but also contribute to a safer financial environment for everyone. Fraud Awareness Week is a great reminder to review your security habits, update your passwords, and stay alert for any unusual activity.

National Day of Community Service: Giving Back in Cleveland

Mon, 04 Nov 2024 19:34:52 GMT

At Acumen MB LLC, we believe that giving back to our community is vital. National Day of Community Service is a reminder of the importance of volunteering and its powerful impact on Cleveland and surrounding areas. If you’re interested in lending a hand, here are some fantastic service opportunities in our community.

1. Cleveland Food Bank

The Cleveland Food Bank provides critical food assistance to those in need throughout Northeast Ohio. Volunteers can assist with sorting donations, packing boxes, or even participating in community distributions. It’s a great way to connect with people and ensure that families receive nourishing meals.

2. Cleveland Metroparks Cleanups

Protecting Cleveland’s beautiful green spaces is a rewarding way to contribute to the community. The Cleveland Metroparks host regular cleanup events across different parks. Volunteers pick up litter, clear trails, and help preserve the natural beauty of our area.

3. Greater Cleveland Habitat for Humanity

Habitat for Humanity builds homes for families in need, and volunteers are essential to make that happen. Whether you have construction experience or simply a willingness to learn, Habitat has a place for you. You can also volunteer at their ReStore locations, where proceeds help fund the construction projects.

4. Providence House

This crisis nursery cares for children at risk of abuse or neglect while parents seek stabilization. Volunteers help with everything from direct childcare to facility maintenance. It’s an incredible opportunity to support families and make a lasting impact in children’s lives.

5. Cleveland Public Library

Libraries play a crucial role in education and community enrichment. At the Cleveland Public Library, volunteers support literacy programs, assist with special events, and help manage collections. It’s a wonderful opportunity to promote lifelong learning and support one of Cleveland’s greatest resources.

6. Meals on Wheels Cleveland

With Meals on Wheels, you can deliver nutritious meals to homebound seniors and disabled individuals. In addition to meal delivery, the program offers companionship and a check-in for many who might otherwise be isolated. It’s a way to help meet both physical and emotional needs in the community.

Making an Impact Together

The National Day of Community Service is an opportunity for all of us to get involved. At Acumen MB LLC, we encourage our team and our clients to make a difference, whether for a day, a season, or even as an ongoing commitment. When we contribute to the betterment of Cleveland, we’re all building a stronger, more connected community.

Let’s make this National Day of Community Service one to remember. Together, we can turn small acts into big change.

Maximizing Your Health Savings Account (HSA): A Smart Financial Move

Fri, 11 Oct 2024 01:45:22 GMT

At Acumen MB LLC, we often talk about the importance of making your money work harder for you, and one of the best tools to help you save on both healthcare costs and taxes is the Health Savings Account (HSA). As we celebrate HSA Day, let’s explore how HSAs can be a powerful financial and tax-saving vehicle.

What is an HSA?

A Health Savings Account is a tax-advantaged savings account designed to help individuals and families save for qualified medical expenses. To be eligible, you must be enrolled in a high-deductible health plan (HDHP). The funds you contribute to your HSA can be used to pay for a variety of medical expenses, from doctor’s visits to prescriptions and even certain over-the-counter items.

The Triple Tax Advantage

What makes HSAs particularly appealing is the “triple tax advantage”:

1. Tax-deductible contributions – Contributions you make to your HSA are deductible from your gross income, reducing your taxable income.

2. Tax-free growth – Any interest or investment earnings on your HSA funds grow tax-free.

3. Tax-free withdrawals – Withdrawals for qualified medical expenses are tax-free, ensuring you maximize your healthcare savings without facing additional tax burdens.

Maximizing Contributions

For 2024, individuals can contribute up to $4,150 to their HSA, while families can contribute up to $8,300. If you’re over the age of 55, you’re eligible for an additional $1,000 catch-up contribution. By contributing the maximum, not only do you reduce your taxable income, but you also ensure that you’re better prepared for future medical expenses.

Why It Matters for Your Taxes

HSAs aren’t just a tool for covering medical expenses; they’re also a strategic tax-saving opportunity. Every dollar you contribute to your HSA reduces your taxable income, potentially lowering the tax bracket you’re in. And unlike a Flexible Spending Account (FSA), your HSA funds don’t expire at the end of the year – they roll over indefinitely, allowing you to build a healthcare nest egg.

Moreover, if you’re using an HSA as part of your retirement planning strategy, it can act as a backup retirement account. After age 65, you can withdraw HSA funds for non-medical expenses without penalties, though you’ll pay income tax on those withdrawals (much like a traditional IRA).

The Role of Accounting in Managing Your HSA

For business owners, incorporating an HSA into your company’s benefits package can provide significant tax savings for both you and your employees. And for individuals, tracking your HSA contributions and withdrawals properly is crucial to avoid penalties and ensure you’re maximizing your tax benefits.

At Acumen MB LLC, we work closely with our clients to help them understand how to best utilize HSAs, navigate IRS regulations, and make sure they’re taking full advantage of the tax benefits.

Need Help?

Whether you’re considering opening an HSA, looking to maximize your contributions, or simply want to understand how HSAs can fit into your overall financial plan, our team at Acumen MB LLC is here to help. Let’s work together to optimize your healthcare savings and lower your tax bill.

Maximize Your Savings: Smart Strategies for National Savings Day

Fri, 11 Oct 2024 01:39:57 GMT

At Acumen MB LLC, we know that National Savings Day is more than just a reminder to put a little extra cash aside – it’s an opportunity to revisit your financial strategies and optimize your approach to saving. One of the key ways you can maximize your savings is by ensuring your accounting practices and tax planning are working in your favor.

The Tax-Saving Power of Smart Accounting

Accounting isn’t just about tracking expenses; it’s about understanding how to position yourself for long-term financial success. Proper bookkeeping, strategic deductions, and thoughtful investment planning can all play a role in boosting your savings. Here are a few ways your accounting practices can help:

1. Tracking Deductible Expenses : Many people miss out on deductions simply because they aren’t tracking them. Whether it’s home office expenses, educational costs, or business-related travel, keeping a detailed record ensures you can take full advantage when tax season arrives.

2. Using Tax-Deferred Accounts : Maxing out contributions to tax-deferred accounts like 401(k)s or IRAs can reduce your taxable income and increase your savings for the future. It’s important to work with an accountant who can help you plan for these contributions in a way that balances your present and future needs.

3. Tax Credits and Incentives : Do you qualify for any tax credits? These can be a significant boost to your savings strategy. From the Earned Income Tax Credit (EITC) to energy-efficient home improvements, make sure you’re aware of credits that can help you save big.

4. Reviewing Your Filing Status : For both individuals and businesses, filing status plays a huge role in tax liability. Reviewing your filing status annually with a tax professional can uncover opportunities to save that you might not have considered.

Year-Round Tax Planning for Maximum Savings

While National Savings Day is a great reminder to take stock of your financial situation, true savings happen year-round. A well-thought-out tax plan ensures that you’re not just reacting to tax season but actively working to minimize your liability. Here’s how Acumen MB LLC can help:

1. Quarterly Tax Reviews : Instead of waiting until the end of the year, conducting quarterly reviews allows us to make adjustments in real-time, ensuring you’re always on track.

2. Maximizing Retirement Contributions : We can help you set up or adjust your retirement accounts to ensure you’re contributing enough to benefit from tax savings while planning for the future.

3. Strategic Tax Planning for Businesses : Whether it’s depreciation on assets or structuring your business to take advantage of specific tax benefits, our experts can provide you with year-round advice that keeps your bottom line healthy.

Start Saving Today

There’s no better time than National Savings Day to reassess your finances and put a savings plan in place that includes smart tax strategies. If you’re looking to get more out of your money, Acumen MB LLC is here to guide you through the complexities of accounting and tax planning so you can focus on building the future you’ve always envisioned.

Embracing Technology: The Intersection of Coding and Accounting During National Coding Week

Wed, 11 Sep 2024 14:08:11 GMT

As National Coding Week arrives, it’s the perfect time to reflect on how technology, particularly coding, is revolutionizing the world of accounting and taxes. At Acumen MB LLC, we recognize the importance of staying ahead of technological trends to provide our clients with the most efficient and accurate services.

The Role of Coding in Modern Accounting

Gone are the days when accounting was solely about ledgers and manual calculations. Today, coding plays a pivotal role in streamlining processes, improving accuracy, and enhancing the overall client experience. Whether it’s through the automation of routine tasks or the development of sophisticated financial analysis tools, coding has become an indispensable skill in the accounting profession.

Automation and Efficiency

One of the most significant impacts of coding on accounting is the automation of repetitive tasks. For example, data entry, invoice processing, and tax calculations can now be handled by software programs that reduce the risk of human error and free up valuable time for accountants to focus on more complex issues. At Acumen MB LLC, we utilize these technologies to ensure that our clients receive timely and accurate financial services.

Data Security and Compliance

In the world of accounting, data security is paramount. Coding helps in creating secure systems that protect sensitive financial information. By using encryption and other security protocols, accountants can ensure that their clients’ data is safe from cyber threats. Additionally, coding enables compliance with ever-changing tax laws and regulations by allowing accountants to update software programs quickly to reflect new rules.

Customized Solutions for Clients

Every business has unique financial needs, and coding allows accountants to develop customized solutions tailored to those needs. Whether it’s creating a specific tax strategy or designing a financial reporting system, coding skills empower accountants to deliver personalized services that align with a client’s goals.

The Future of Accounting

As we celebrate National Coding Week, it’s clear that the future of accounting is intertwined with technology. At Acumen MB LLC, we are committed to embracing these advancements to better serve our clients. By staying current with coding trends and integrating them into our practices, we ensure that we are not just keeping up with the industry but leading the way.

National Coding Week is a reminder of the ever-evolving landscape of accounting and taxes. As coding continues to influence our field, Acumen MB LLC is dedicated to leveraging these technological advancements to provide our clients with top-notch services. Whether you’re a business owner looking for efficient accounting solutions or an individual seeking accurate tax advice, we are here to help you navigate the complexities of the digital age.

Celebrate National Coding Week with us by exploring how technology can transform your financial management. Contact Acumen MB LLC to learn more about our tech-driven approach to accounting and taxes.

Maximize Your Retirement Savings: National 401(k) Day and the Role of Accounting and Taxes

Fri, 06 Sep 2024 02:37:31 GMT

As National 401(k) Day approaches, it’s the perfect time to revisit your retirement strategy. Whether you’re just starting out or already have a well-established 401(k) plan, understanding the tax implications and accounting practices associated with your retirement savings is crucial. At Acumen MB LLC, we’re here to help you navigate the complexities and ensure you’re on track for a financially secure future.

The Importance of a 401(k) Plan

A 401(k) plan is one of the most powerful tools for retirement savings, offering benefits like employer matching contributions and tax advantages. Contributions to a traditional 401(k) are typically tax-deferred, meaning you won’t pay taxes on the money until you withdraw it in retirement. This allows your savings to grow tax-free over the years, which can significantly boost your retirement funds.

Understanding the Tax Implications

While 401(k) contributions reduce your taxable income today, it’s important to remember that withdrawals in retirement are considered taxable income. Proper tax planning can help you minimize the tax burden when you start taking distributions. For instance, understanding how Required Minimum Distributions (RMDs) work and how they could impact your tax bracket is essential for avoiding unexpected tax bills in retirement.

Additionally, if you’ve reached the age of 50, you can take advantage of catch-up contributions, allowing you to contribute more to your 401(k) and further reduce your taxable income.

The Role of Accounting in Managing Your 401(k)

Keeping accurate records and staying informed about your 401(k) contributions, balances, and investment performance is critical. Accounting plays a vital role in ensuring that your contributions are reported correctly, your tax obligations are met, and your overall financial strategy is aligned with your retirement goals.

At Acumen MB LLC, we work with clients to provide comprehensive accounting services that include tracking contributions, ensuring compliance with IRS regulations, and optimizing tax strategies related to your 401(k) and other retirement accounts.

Planning for a Secure Retirement

National 401(k) Day is an excellent reminder to review your retirement plan and make necessary adjustments. Whether it’s increasing your contributions, adjusting your investment strategy, or considering the tax implications of your future withdrawals, proactive planning is key to achieving your retirement goals.

If you have questions about how your 401(k) impacts your taxes or need assistance with accounting for your retirement savings, our team at Acumen MB LLC is here to help. Let’s work together to ensure your financial future is as secure as possible.

Prioritizing Wellness in All Aspects of Life: A Holistic Approach to National Wellness Month

Wed, 21 Aug 2024 20:02:28 GMT

As we celebrate National Wellness Month, it’s important to recognize that wellness isn’t just about physical health. It’s a multidimensional concept that includes mental and financial well-being, all of which are interconnected and essential to a balanced, fulfilling life. At Acumen MB LLC, we believe in promoting overall wellness, not just for our clients, but for our entire community.

Mental Wellness: The Foundation of Success

Mental health is the cornerstone of overall well-being. In the fast-paced world of business, it’s easy to overlook the importance of mental wellness. However, stress, anxiety, and burnout can significantly impact your ability to make sound decisions, both personally and professionally. Here are a few ways to support your mental health:

1. Practice Mindfulness : Taking just a few minutes each day to focus on your breathing or engage in mediation can reduce stress and improve focus.

2. Take Breaks : Regular breaks during work hours can refresh your mind and increase productivity. Step outside, go for a walk, or simply change your environment for a few minutes.

3. Seek Support : Don’t hesitate to talk to a professional if you’re feeling overwhelmed. Mental health is just as important as physical health, and seeking help is a sign of strength.

Physical Wellness: The Engine of Productivity

Physical health is closely tied to how we perform in our daily tasks. Whether you’re crunching numbers, managing a team, or meeting with clients, your body needs to be in top condition to keep up with demands. Here are some tips to maintain physical wellness:

1. Stay Active : Incorporate physical activity into your daily routine. Whether it’s a morning jog, a yoga session, or even just taking the stairs instead of the elevator, staying active keeps your body strong and your mind sharp.

2. Eat Well : A balanced diet fuels your body and mind. Focus on whole foods, plenty of fruits and vegetables, and staying hydrated throughout the day.

3. Get Enough Sleep : Quality sleep is essential for mental and physical recovery. Aim for 7-9 hours of sleep each night to ensure you’re ready to tackle the day ahead.

Financial Wellness: The Unsung Hero of Well-Being

While physical and mental health are often at the forefront of wellness conversations, financial wellness is equally important. Financial stress can negatively impact both mental and physical health, making it crucial to manage your finances effectively. Here are some strategies to enhance your financial well-being:

1. Budgeting : Create a budget that aligns with your financial goals. Knowing where your money goes can reduce stress and give you more control over your finances.

2. Emergency Fund : Establish an emergency fund to cover unexpected expenses. This financial cushion can provide peace of mind and prevent debt accumulation.

3. Plan for the Future : Whether it’s saving for retirement, investing in your business, or planning for your children’s education, having a clear financial plan can help secure your future.

Bringing It All Together

At Acumen MB LLC, we understand the importance of balancing mental, physical, and financial wellness. Just as we help our clients maintain financial health through sound accounting practices, we encourage everyone to take a holistic approach to their overall well-being. By prioritizing mental, physical, and financial health, you can create a more balanced, fulfilling life.

This National Wellness Month, take the time to assess your wellness in all areas of your life. Whether it’s reaching out for professional support, incorporating more physical activity into your day, or creating a solid financial plan, every step you take toward wellness is a step toward a healthier, happier you.

Remember, wellness is a journey, not a destination. And at Acumen MB LLC, we’re here to support you every step of the way.

Celebrating Commerce Day: The Roles of Accounting and Taxes in Business Success

Mon, 05 Aug 2024 17:57:57 GMT

Happy Commerce Day! At Acumen MB LLC, we celebrate this day by acknowledging the vital role commerce plays in our daily lives and the economy. Commerce isn’t just about buying and selling; it’s the lifeblood of our communities, driving innovation, creating jobs, and fostering growth. As we honor this day, we want to highlight the critical intersection of commerce, accounting, and taxes, which forms the backbone of any successful business.

The Importance of Accurate Accounting in Commerce

Accurate accounting is fundamental to the success of any commercial endeavor. It provides a clear picture of a business’s financial health, enabling informed decision-making. Here’s why good accounting practices are indispensable:

1. Financial Clarity : Detailed and accurate accounting records help businesses understand their financial position, ensuring they can plan for the future and make strategic investments.

2. Compliance : Proper accounting ensures that businesses comply with financial regulations and tax laws, avoiding penalties and legal issues.

3. Cash Flow Management : Effective accounting practices help businesses manage their cash flow, ensuring they have the liquidity needed to meet obligations and seize opportunities.

4. Investor Confidence : Transparent and accurate financial statements build investor confidence, which is crucial for securing funding and investment.

Navigating Taxes in Commerce

Taxes are an inevitable part of commerce, and managing them efficiently can make a significant difference in a business’s profitability. Here are some key tax considerations for businesses:

1. Tax Planning : Proactive tax planning can help businesses minimize their tax liabilities. By understanding available deductions, credits, and incentives, businesses can reduce their tax burden.

2. Sales Tax Compliance : For businesses involved in the sale of goods and services, staying compliant with sales tax regulations is crucial. This involves collecting, reporting, and remitting the correct amount of sales tax to the appropriate authorities.

3. Payroll Taxes : Ensuring accurate calculation and timely payment of payroll taxes is essential for businesses with employees. This includes withholding federal, state, and local taxes, as well as Social Security and Medicare contributions.

4. Business Structure : The structure of a business (e.g., sole proprietorship, partnership, corporation) can significantly impact its tax obligations. Choosing the right structure can provide tax advantages and affect the overall tax strategy.

Acumen MB LLC: Your Partner in Commerce

At Acumen MB LLC, we understand the complexities of accounting and taxes in the world of commerce. Our team of experienced professionals is dedicated to helping businesses thrive by providing:

·Comprehensive Accounting Services : From bookkeeping to financial statement preparation, we ensure your financial records are accurate and up-to-date.

·Tax Planning and Preparation : We offer tailored tax planning and preparation services to help you navigate the ever-changing tax landscape and minimize your liabilities.

As we celebrate Commerce Day, let’s remember the importance of robust accounting and tax practices in driving business success. Whether you’re a small startup or a large corporation, Acumen MB LLC is here to support your journey and ensure your business thrives in the dynamic world of commerce.

Celebrate Commerce Day with us by ensuring your business is financially sound and tax-compliant. Contact Acumen MB LLC today to learn how we can help your business succeed!

Back to School Month: Tax Tips and Money-Saving Strategies for Smart Shopping

Thu, 01 Aug 2024 18:34:51 GMT

As we gear up for another exciting Back to School Month, Acumen MB LLC is here to help you navigate the financial aspects of this busy season. Whether you’re a parent preparing your kids for the upcoming school year or a student getting ready for college, managing expenses effectively can make a significant difference. Here are some practical tax tips and money-saving strategies to ensure you start the school year on the right financial foot.

1. Take Advantage of Tax-Free Weekends

Many states offer tax-free weekends during Back to School Month, allowing you to purchase school supplies, clothing, and even electronics without paying sales tax. Be sure to check if your state participates and mark your calendar for these dates. This can result in substantial savings, especially on big-ticket items like laptops and calculators. (Ohio’s is going on right now!)

2. Save Your Receipts for Tax Deductions

Certain educational expenses may be tax-deductible. While the IRS doesn’t allow deductions for general school supplies, you can deduct expenses related to higher education, such as tuition, fees, and required course materials. Keep detailed records and receipts of these purchases to maximize your tax deductions.

3. Utilize Education Tax Credits

The American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) are valuable tools for reducing your tax bill. The AOTC can offer up to $2,500 per eligible student for qualified education expenses during the first four years of higher education. The LLC, on the other hand, provides a credit of up to $2,000 per tax return for tuition and fees required for enrollment in an eligible institution. Make sure to explore these credits to ease your financial burden.

4. Shop Smart with Sales and Discounts

Retailers often run Back to School sales, offering significant discounts on school supplies, clothing, and electronics. Compare prices online and in-store to find the best deals. Many stores also provide student discounts; don’t forget to bring your student ID or verify your student status to take advantage of these offers.

5. Consider Second-Hand Options

Thrift stores, consignment shops, and online marketplaces can be treasure troves for gently used school supplies and clothing. Buying second-hand not only saves money but also supports sustainable shopping practices. Look for quality items that can withstand the school year and beyond.

6. Plan and Budget

Creating a detailed shopping list and setting a budget before you start shopping can help you avoid impulse purchases. Focus on essential items first, and prioritize your spending based on necessity. This disciplined approach ensures you stay within your financial limits and reduces the risk of overspending.

7. Use Rewards and Cashback Programs

Take advantage of credit card rewards and cashback programs when shopping for school supplies. Many credit cards offer points or cash back on purchases at office supply stores, clothing retailers, and electronics shops. Accumulate these rewards to offset future expenses or redeem them for additional savings.

8. Explore State-Sponsored Savings Plans

Consider contributing to a 529 college savings plan. These state-sponsored plans offer tax advantages and can be used to pay for qualified education expenses, including K-12 tuition in some states. Contributions grow tax-free and withdrawals for qualified expenses are also tax-free, providing a valuable way to save for your child’s educational future.

At Acumen MB LLC, we understand the importance of financial planning, especially during Back to School Month. Our team of experts is here to assist you with all your tax-related needs, ensuring you make the most of every opportunity to save. Contact us today for personalized advice and support to help you navigate the school year with confidence and financial peace of mind.

Happy Back to School Month from Acumen MB LLC!

Celebrating National Support Public Education Day: An Interview with Lauren Beder

Mon, 29 Jul 2024 18:52:18 GMT

As National Support Public Education Day approaches, we at Acumen MB LLC are thrilled to shine a spotlight on the dedication and passion of our educators. In honor of this day, we had the pleasure of interviewing Lauren Beder, a remarkable 4 ^th grade math and science teacher at North Olmsted schools. Lauren, who is also the daughter-in-law of our managing partner Jeffrey Beder, has been shaping young minds for over a decade. Her insights and experiences underscore the vital role of public education in our society.

What Inspired Lauren to Become a Teacher?

Lauren’s journey to teaching was not straightforward. She originally aspired to be an astronaut and even took steps towards this dream by arranging a meeting with her senator to get into the Air Force Academy. However, budget cuts to NASA’s manned space program shifted her path. “If I couldn’t be an astronaut myself, perhaps I could inspire the next generation to ‘Reach for the stars’… literally,” she shared. Now, having just completed her tenth year of teaching, Lauren firmly believes that life led her to her true calling.

A Memorable Experience in Public Education

One of Lauren’s most touching stories highlights the deep impact of public education beyond academics. Early in her career, she started “Tribe Time,” a morning meeting to build a classroom community. One day, following the unexpected death of a student’s brother, the grieving student chose to come to school to share with his “family” during Tribe Time. “Public education isn’t just about learning science, math, reading, and writing or social studies. It is about helping students find a place to feel comfortable and learn life skills while being a safe place when they may not have anywhere else to go,” Lauren emphasized.

Challenges Facing Public Education

Lauren identifies equality and technology access as significant challenges. The disparity in resources based on location and family income, coupled with the rapid pace of technological advancements, exacerbated by the COVID-19 pandemic, have highlighted these issues. “Fixing these problems means making sure all schools get enough money and support, and finding new ways to teach that work for everyone,” she noted. Additionally, the growing expectations placed on teachers contribute to high rates of burnout, making it a pressing issue for the education system.

Engaging and Motivating Students

Building strong relationships with students is at the heart of Lauren’s teaching philosophy. “No one is going to listen or work for someone that they don’t feel cares about them,” she said. By learning about her students’ interests and learning styles, she creates engaging lessons and fosters a supportive classroom environment. She also instills the power of “YET” in her students, teaching them that perseverance and hard work will eventually lead to understanding and success.

The Role of Public Education in Society

Lauren believes that public education is crucial for creating opportunities for all individuals to succeed and pursue their dreams. “Without public education, we are creating a society where only some people are provided the opportunity to learn and grow,” she stated.

Supporting Public Education

To improve public education, Lauren highlights the need for proper funding and access to technology. Community members can make a difference by volunteering their time, donating supplies, attending school events, and mentoring students. Businesses can also contribute similarly by providing resources and expertise.

The Evolving Role of Teachers

The role of teachers has expanded significantly over the years. Beyond educating, they now serve as data analysts, psychologists, IT professionals, and more. Despite these increasing demands, resources remain scarce. Lauren anticipates this trend to continue, stressing the importance of adequate support for teachers.

Advice for Aspiring Educators

Teaching is a challenging yet incredibly rewarding career. “You will spend your own money and time away from family and friends to make your classroom a safe place to be and to help your students succeed,” Lauren advised. The joy of seeing students overcome challenges and learn new things make it all worthwhile.

Showing Appreciation and Support

Guardians can show appreciation by trusting teachers and engaging in collaborative conversations. Simple gestures like gift cards are always appreciated. For the general public, supporting and electing officials who prioritize education and listen to educators is crucial.

Policymakers’ Role in Supporting Education

Lauren urges policymakers to seek out and value the opinions of teachers and educators. “Legislative decisions when it comes to education are routinely made by people with no practical experience educating students and those who do not seek out the advice of educators. This needs to change,” she asserted.

On this National Support Public Education Day, let’s celebrate and support the educators like Lauren Beder who dedicate their lives to nurturing the next generation. Their efforts are essential in building a brighter future for all.

Beneficial Ownership Information Report

Wed, 17 Jul 2024 18:39:41 GMT

At Acumen MB LLC, we strive to keep you informed about regulatory changes that may impact your business. In line with our commitment to providing comprehensive financial services, we would like to bring to your attention the recent requirement imposed by the Financial Crimes Enforcement Network (FinCEN).

Beginning January 1 ^st , 2024, FinCEN now mandates that certain businesses file a report annually, disclosing information about their beneficial owners – the individuals who ultimately own or control the company. Your company may be required to report beneficial ownership information if it falls into either of the following categories:

A corporation, a limited liability company (LLC), or was otherwise created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe.
A foreign company that was registered to do business in any U.S. state or Indian tribe by such a filing.

Reporting companies are required to submit beneficial ownership information electronically through FinCEN’s website at www.fincen.gov/boi . The system will provide a confirmation of receipt upon filing.

When to Report:

Companies created or registered prior to January 1 ^st , 2024, have until January 1 ^st , 2025 to report.
Companies created or registered on or after January 1 ^st , 2024, and before January 1 ^st , 2025, must report within 90 calendar days after receiving actual or public notice of the creation or registration.
Companies created or registered on or after January 1 ^st , 2025, must file within 30 calendar days after receiving actual or public notice.

If you find that your company is required to file but would prefer not to handle the reporting process yourself, Acumen MB LLC is here to help. For a fee of $300, we are pleased to offer our services to file the report on your behalf. Please let us know if you would like us to take care of the filing or if you plan to handle it independently.

We understand that regulatory changes can be overwhelming, and we are committed to supporting you through this process. If you have any questions or require further assistance, please feel free to reach out to us.

Thank you for entrusting Acumen MB LLC with your financial needs.

Celebrating National Lottery Day: What You Need to Know About Taxes and Your Winnings

Wed, 17 Jul 2024 18:13:57 GMT

Today marks National Lottery Day, a celebration of the thrill and excitement that comes with buying a lottery ticket and dreaming of hitting the jackpot. At Acumen MB LLC, we understand that while winning the lottery is exhilarating, it also brings a new set of financial responsibilities, particularly when it comes to taxes and accounting. Here’s what you need to know if you find yourself holding that lucky ticket.

The Tax Man Cometh: Federal and State Obligations

Federal Taxes:

The IRS views lottery winnings as taxable income. This means that your winnings are subject to federal income tax. The IRS requires lottery organizations to withhold 24% of winnings over $5,000 for federal taxes. However, this is just a portion of what you may owe, as lottery winnings are added to your annual income and taxed at your applicable income tax rate.

State Taxes:

In addition to federal taxes, many states impose their own taxes on lottery winnings. The rate varies significantly by state, with some states like California and Delaware imposing no state tax on lottery winnings, while others like New York and Maryland have higher rates. It’s crucial to understand your state’s specific tax laws to accurately plan for your tax liabilities.

Lump Sum or Annuity: Deciding How to Receive Your Winnings

Lottery winners are often given a choice between receiving their winnings as a lump sum or as an annuity paid out over several years. Each option has different tax implications:

-Lump Sum : Receiving your winnings in a single, large payment means you’ll pay taxes on the entire amount in the year you receive it. This can push you into a higher tax bracket, resulting in a larger tax bill.

-Annuity : Opting for an annuity spreads your payments – and thus your tax liabilities – over multiple years. This can keep you in a lower tax bracket each year, potentially reducing your overall tax burden.

Planning for the Future: Estate and Gift Taxes

Lottery winnings can significantly increase your estate’s value, potentially making you subject to estate taxes. Additionally, if you plan to share your good fortune with family and friends, be aware of gift tax rules. The IRS allows you to gift up to $16,000 per person per year without incurring gift taxes (as of 2024), but anything above that amount could be taxable.

Financial Planning and Asset Management

Winning the lottery presents a unique opportunity to secure your financial future, but it also requires careful planning and management. Here are a few steps to consider:

1. Hire a Financial Advisor : A financial advisor can help you create a plan to manage your newfound wealth, ensuring you make informed decisions that align with your long-term financial goals.

2. Invest Wisely : Consider diversifying your investments to balance risk and reward. A well-rounded investment portfolio can help grow your wealth while providing financial security.

3. Set Up a Trust : Establishing a trust can protect your assets and provide for your family members according to your wishes. Trusts can also offer tax advantages and help manage your estate.

4. Stay Organized : Keep thorough records of your lottery winnings, expenses, and tax documents. This will make it easier to file accurate tax returns and manage your finances.

How Acumen MB LLC Can Help

At Acumen MB LLC, we specialize in providing comprehensive tax and accounting services to help lottery winners navigate their financial responsibilities. Our experienced team can assist you with tax planning, estate planning, and more, ensuring you maximize your winnings and secure your financial future.

National Lottery Day is a time to celebrate the excitement and possibility that comes with playing the lottery. If you’re lucky enough to win, understanding the tax implications and taking steps to manage your wealth effectively is crucial. At Acumen MB LLC, we’re here to help you every step of the way. Contact us today to learn more about how we can support you in making the most of your lottery winnings.

Understanding the New Department of Labor Rules for Salary Exempt Employees

Tue, 09 Jul 2024 18:11:15 GMT

As of July 1 ^st , significant changes to the Department of Labor (DOL) regulations will impact certain salaried employees regarding overtime rules. At Acumen MB LLC, we aim to help our clients navigate these changes seamlessly and ensure compliance with the latest labor laws.

The EAP Exemption Explained

To understand the changes, it’s essential first to grasp the basics of the EAP exemption. EAP stands for Executive, Administrative, or Professional, which are the categories under which employees can be exempt from overtime pay requirements. For an employee to qualify for this exemption, they must meet three key criteria:

1. Salary Basis Requirement : The employee must be paid a predetermined and fixed salary. This salary should not be subject to reductions due to variations in the quality or quantity of work performed. This ensures that the employee receives a consistent paycheck regardless of the hours worked or the results achieved in a specific pay period.

2. Salary Level Requirement : The employee must earn at least a specified minimum salary per week. This threshold is set by the DOL and can be subject to periodic adjustments. The goal is to ensure that employees in exempt positions are compensated at a level commensurate with their roles and responsibilities.

3. Duties Test : The employee’s primary duties must fall under executive, administrative, or professional categories as defined by the DOL regulations. This means their job responsibilities should involve significant decision-making, management, or specialized knowledge and skills.

What’s Changing on July 1 ^st ?

Starting July 1 ^st , certain salaried employees who previously fell under the EAP exemption may now be entitled to overtime pay if they work more than the standard number of hours in a pay period. This change is crucial for businesses to understand and implement to avoid non-compliance and potential penalties.

Here's what you need to know:

1. Re-evaluation of Salaried Positions : Companies must review their salaried positions to determine if they still qualify for the EAP exemption under the new rules. This involves reassessing job descriptions, salary levels, and actual duties performed by employees.

2. Adjustment of Payroll Practices : For employees who no longer qualify for the exemption, businesses will need to adjust their payroll practices to account for overtime pay. This might involve updating time-tracking systems, revising compensation plans, and ensuring accurate payment for all hours worked beyond the standard workweek.

3. Employee Communication : It is essential to communicate these changes clearly to affected employees. Transparency about how their compensation might be impacted and the rationale behind these adjustments will help in maintaining trust and morale within the organization.

By staying informed and proactive, your business can smoothly transition to the new requirements while ensuring fair and compliant compensation practices. Contact Acumen MB LLC today to learn more about how we can assist you in navigating these important changes.

Celebrating National Financial Freedom Day: The Role of Taxes and Accounting in Achieving Your Goals

Mon, 01 Jul 2024 18:02:23 GMT

At Acumen MB LLC, we believe that financial freedom is not just a distant dream but a realistic goal that can be achieved with proper planning and guidance. As we celebrate National Financial Freedom Day, we want to highlight the pivotal role that taxes and accounting play in helping you attain and sustain financial independence.

Understanding Financial Freedom

Financial freedom means having the financial stability to live the life you desire without constantly worrying about money. It involves having enough savings, investments, and cash on hand to afford the lifestyle you want for yourself and your family. Achieving this freedom requires diligent planning, disciplined spending, and strategic financial management.

The Crucial Role of Accounting

Accounting is often seen as just a necessary task for compliance, but it is so much more than that. Proper accounting provides a clear picture of your financial health, helping you make informed decisions about your money. Here’s how good accounting practices can pave your way to financial freedom:

1. Budgeting and Forecasting : Effective accounting helps you create realistic budgets and financial forecasts. Understanding your income and expenses allow you to identify areas where you can save and invest more wisely.

2. Expense Management : By keeping accurate records, you can track your spending habits and identify unnecessary expenses. This insight is crucial for redirecting funds towards savings and investments.

3. Cash Flow Management : Maintaining a healthy cash flow is essential for financial stability. Accounting helps you manage your cash flow efficiently, ensuring you always have enough liquidity to meet your obligations and capitalize on investment opportunities.

4. Debt Management : Understanding your financial position enables you to manage and reduce debt effectively. Accounting can help you develop a strategy to pay off debts faster, freeing up more money for savings and investments.

Navigating Taxes on the Path to Financial Freedom

Taxes are an integral part of financial planning, and managing them effectively can significantly impact your journey to financial freedom. Here’s how:

1. Tax Planning and Strategy : At Acumen MB LLC, we help you devise tax strategies that minimize your liabilities and maximize your savings. Proper tax planning can reduce the amount you owe, allowing you to allocate more towards your financial goals.

2. Investment Taxation : Understanding how different investments are taxed can help you make smarter choices. We guide you through the complexities of capital gains, dividends, and interest income to optimize your investment portfolio for tax efficiency.

3. Retirement Planning : Utilizing tax-advantaged retirement accounts, such as IRAs and 401(k)s, can significantly enhance your savings. We help you navigate the rules and contributions limits to maximize your retirement savings while minimizing your tax burden.

4. Tax Credits and Deductions : There are numerous credits and deductions available that can lower your taxable income. Our team ensures you take full advantage of all eligible tax breaks, increasing your disposable income and enhancing your financial freedom.

Partnering with Acumen MB LLC for Your Financial Freedom

Achieving financial freedom requires a comprehensive approach to managing your finances, and that’s where we come in. At Acumen MB LLC, we are committed to providing you with expert accounting and tax services tailored to your unique needs. Our goal is to help you build a solid financial foundation, navigate the complexities of tax regulations, and create a strategic plan for long-term financial success.

As we celebrate National Financial Freedom Day, take the first step towards your financial independence by partnering with us. Together, we can turn your financial dreams into reality.

Celebrating Social Media Day with Acumen MB LLC and Our Social Media Director, Amanda Beder

Sun, 30 Jun 2024 16:00:02 GMT

Happy Social Media Day! At Acumen MB LLC, we’re excited to celebrate the power of connection, engagement, and innovation that social media brings to our professional and personal lives. Today, we want to take a moment to spotlight the person who makes our social media presence shine: Amanda Beder, our Social Media Director.

Amanda has been an integral part of the Acumen MB LLC family for over four years. She began her journey with us as an administrative assistant, a role she continues to excel in alongside her social media responsibilities. Amanda’s dedication and diverse skill set have made her an invaluable asset to our team.

A Journey of Passion and Versatility

Amanda’s professional journey is as varied as it is impressive. Before joining Acumen MB LLC, she gained experience in numerous fields. From dog walking and leasing luxury apartments to managing the front desk at a doctor’s office, Amanda has acquired a wealth of skills that she brings to her role every day. Her adaptability and expertise in different programs make her a dynamic force in our office.

A Glimpse into Amanda’s World

Outside of her professional life, Amanda is engaged to the love of her life, Nick, and together they share their home with Eddy, their loyal dog and our unofficial “security guard” at Acumen MB LLC. Amanda’s life is filled with love, laughter, and the joy of new experiences.

Amanda’s hobbies reflect her vibrant personality. She loves to bake, crafting delicious gluten-free and refined sugar-free treats. Her passion for health and creativity extends into her culinary adventures, making her a beloved source of tasty, balanced recipes.

In her leisure time, Amanda enjoys watching police procedural shows and exploring different Peloton workout classes. In the past year, she has begun really diving into the world of gluten free bread baking. Recently, she has taken up candle making, adding another layer to her creative pursuits. Date nights with Nick often involve trying new restaurants, satisfying their mutual love for good food and great company.

Leading with Kindness

Amanda’s approach to her work and life is grounded in kindness. She believes in leading with kindness first, a philosophy that resonates through her interactions and professional conduct. This guiding principle not only enhances our workplace culture but also positively influences our social media interactions with our community.

Celebrating Social Media Day

As we celebrate Social Media Day, we’re reminded of the incredible impact social media has on connecting people and fostering communities. We’re grateful for Amanda’s efforts in making our social media presence engaging, informative, and reflective of who we are as a firm.

Join us in celebrating Social Media Day by following our social media channels, engaging with our content, and experiencing firsthand the creativity and dedication Amanda brings to Acumen MB LLC. Here’s to many more years of connection and growth!

Happy Social Media Day from all of us at Acumen MB LLC!

Acumen MB LLC Celebrates World Music Day: A Harmonious Ode to Our Team’s Favorites!

Mon, 17 Jun 2024 17:39:23 GMT

Hello, music lovers and accounting aficionados alike! At Acumen MB LLC, we believe in balancing the ledger and life’s little pleasures, and what better way to celebrate World Music Day than by sharing the diverse musical tastes of our fabulous team? Dive into the harmonious blend of tunes that keep us motivated, inspired, and sometimes even dancing at our desks!

Fran Hoen: The Diva Devotee

Our dynamic Firm Administrator, Fran Hoen, is all about the powerful voices and unforgettable hits. Fran’s playlist is a star-studded affair featuring the likes of Mariah Carey, Bon Jovi, Celine Dion, Pink, Leann Rimes, and Shania Twain. Fran’s taste is as legendary as her administrative prowess!

Melissa Greer: The Eclectic Senior Accountant

Senior Accountant Melissa Greer’s musical preferences are as diverse as her accounting expertise. From the indie vibes of Tove Lo and the timeless hits of Cher, to the unique sounds of Orville Peck and Rina Sawayama, Melissa’s playlist is an adventure. She also grooves to the classics of Fleetwood Mac, Whitney Houston, Carly Rae Jepson, and the electrifying Lady Gaga. Melissa brings an eclectic energy to everything she does, just like her music collection.

Amanda Beder: The Social Media Songstress

Our Social Media Director, Amanda Beder, brings a touch of nostalgia and a dash of modern flair to our office soundscape. Amanda’s favorites include the soothing melodies of James Taylor and Ben Platt, the heartfelt tunes of Greg Holden and The Paper Kites, and the timeless classics of Barbara Streisand. And let’s not forget her love for 90’s pop – Girl Power anthems that keep our social media strategies as vibrant and dynamic as a Spice Girls concert!

Jeff Beder: The Managing Partner Maestro

Managing Partner Jeff Beder’s musical tastes are as varied and refined as his leadership style. Jeff enjoys the harmonious sounds of The Eagles and Crosby Stills & Nash, the soulful voice of Sarah McLachlan, and the gentle strumming of James Taylor and Carole King. He also has a soft spot for the upbeat rhythms of Steve Winwood, the smooth elegance of jazz instrumentals, and, in a surprising twist, the tranquil chants of Gregorian monks. Jeff’s playlist is the perfect mix for a balanced and inspired workday.

As we celebrate World Music Day, we invite you to find joy in the melodies that move you, just as we do here at Acumen MB LLC. Music has the power to bring us together, inspire creativity, and add a little fun to our daily routines. Here’s to the tunes that make our world go round and the incredible team that brings harmony to our firm!

Happy World Music Day from all of us at Acumen MB LLC – may your day be filled with wonderful music and joyful moments!

Embracing Great Outdoors Month with Acumen MB LLC: Explore the Beauty of Cleveland and Beyond

Mon, 10 Jun 2024 19:36:19 GMT

June is here, and with it comes the celebration of Great Outdoors Month! At Acumen MB LLC, we believe in the importance of balancing hard work with quality leisure time. This month is the perfect opportunity to reconnect with nature, explore the great outdoors, and enjoy the many benefits of spending time outside. Whether you’re in Cleveland or looking to venture out to some of the stunning national parks across the United States, there are plenty of adventures waiting for you.

Discover Cleveland’s Outdoor Gems

Cleveland, Ohio may be known for its bustling urban landscape, but it also boasts a variety of outdoor activities that can satisfy the adventurer in everyone. Here are some local favorites to help you make the most of Great Outdoors Month:

1. Cuyahoga Valley National Park

Located just a short drive from downtown Cleveland, Cuyahoga Valley National Park offers over 125 miles of hiking trails, beautiful waterfalls, and scenic train rides on the Cuyahoga Valley Scenic Railroad. It’s a perfect spot for hiking, biking, and even bird watching. The park’s blend of natural beauty and rich history provides a serene escape from city life.

2. Edgewater Park

For those who love waterfront views, Edgewater Park is a must-visit. With its sandy beaches, picnic areas, and stunning views of Lake Erie, it’s an ideal spot for a family outing. Enjoy a swim, take a leisurely walk along the shore, or simply relax and watch the sunset.

3. Cleveland Metroparks

Often referred to as the “Emerald Necklace,” the Cleveland Metroparks system encircles the city with beautiful green spaces. Whether you’re looking to hike, fish, or picnic, these parks offer numerous options. The Rocky River Reservation and Brecksville Reservation are particularly popular for their trails and wildlife.

Explore America’s National Parks

If you’re feeling more adventurous and ready to travel, the United States is home to some of the most breathtaking national parks in the world. Here are a few iconic parks that are worth visiting during Great Outdoors Month:

1. Yellowstone National Park

As the first national park in the world, Yellowstone is a true natural wonder. Located primarily in Wyoming, it features dramatic canyons, alpine rivers, lush forests, hot springs, and geysers, including the famous Old Faithful. The park is a paradise for hiking, camping, and wildlife spotting.

2. Yosemite National Park

Nestled in California’s Sierra Nevada mountains, Yosemite is renowned for its majestic waterfalls, towering sequoias, and the impressive granite cliffs of El Capital and Half Dome. The park’s diverse landscape offers something for everyone, from easy walks to challenging rock climbs.

3. Great Smoky Mountains National Park

Straddling the border between North Carolina and Tennessee, the Great Smoky Mountains National Park is known for its mist-covered mountains and diverse plant and animal life. It’s a great destination for hiking, with over 800 miles of trails, and it’s also a UNESCO World Heritage Site.

Balancing Work and Play

At Acumen MB LLC, we understand the demands of the professional world, but we also know the importance of taking time to rejuvenate. Nature provides the perfect backdrop for relaxation and reflection, helping to improve mental well-being and overall health. As you plan your outdoor adventures this June, remember that the great outdoors can be a source of inspiration and tranquility.

Whether you choose to explore the local parks of Cleveland or venture out to the vast landscapes of America’s national parks, we encourage you to take advantage of Great Outdoors Month. Embrace the natural beauty around you, create lasting memories, and return to your work with renewed energy and focus.

Happy Great Outdoors Month from all of us at Acumen MB LLC! Let’s make this June a time to appreciate and enjoy the incredible outdoor wonders that surround us.

Promoting Wellness: International Men’s Health Week and National Diabetes Week

Thu, 06 Jun 2024 13:44:58 GMT

At Acumen MB LLC, we understand that a healthy workforce is the foundation of a successful business. As we celebrate National Men’s Health Week and National Diabetes Week, we want to emphasize the importance of these observances and how they intertwine to highlight the significance of health in our lives and work.

The Importance of National Men’s Health Week

National Men’s Health Week, celebrated each June, serves as a reminder for men to take charge of their health. Men often neglect routine check-ups and screenings, which can lead to preventable health issues. This week encourages men to:

1. Schedule Regular Check-Ups : Routine visits to the doctor can help detect potential health problems early, leading to better outcomes.

2. Adopt a Healthy Lifestyle : Incorporating balanced nutrition, regular exercise, and sufficient sleep into daily routines can significantly improve overall health.

3. Mental Health Matters : Men’s mental health is as important as physical health. Seeking support and managing stress are crucial for a well-rounded, healthy life.

National Diabetes Week: A Crucial Connection

National Diabetes Week, which often coincides with Men’s Health Week, brings attention to diabetes – a condition that significantly affects men’s health. Diabetes management and prevention are critical, especially considering that men with diabetes are at higher risk for severe complications. During this week, we emphasize:

1. Understanding Diabetes : Whether Type 1 or Type 2, diabetes requires proper management. Knowing the symptoms and risk factors can lead to earlier diagnosis and better management.

2. Preventive Measures : A healthy diet, regular physical activity, and maintaining a healthy weight can prevent or delay Type 2 Diabetes.

3. Monitoring Health : Regular blood sugar testing and health check-ups are essential for managing diabetes and preventing complications.

Taking Action: Small Steps to Better Health

We encourage everyone to take proactive steps towards better health. Here are a few tips to get started:

1. Get Active : Aim for a least 30 minutes of moderate exercise most days of the week.

2. Eat Balanced Meals : Focus on a diet rich in fruits, vegetables, lean proteins, and whole grains.

3. Stay Informed : Educate yourself about health risks and the benefits of regular health screenings.

As we observe National Men’s Health Week and National Diabetes Week, let’s take this opportunity to prioritize our health and well-being. At Acumen MB LLC, we are committed to supporting our employees and clients in their journey towards better health. Together, we can make a difference and build a healthier future.

Stay healthy, stay proactive, and remember that small changes today can lead to significant improvements tomorrow.

Succession Planning: Securing the Future of Your Business

Mon, 03 Jun 2024 17:55:11 GMT

At Acumen MB LLC, we understand the dedication and hard work that goes into building a successful business. However, it’s equally important to ensure that your business can continue to thrive in the event of unexpected circumstances. Succession planning is not just about preparing for retirement; it’s about protecting your business from unforeseen events such as the incapacity or death of an owner.

What Would Happen to Your Business If You Were No Longer Able to Lead?

Have you ever considered what would happen to your business if you were to pass away or become incapacitated? Without a solid succession plan, your business could face significant challenges. Here are some critical considerations to keep in mind:

1. Written Instructions and Decision Makers

One of the first steps in succession planning is to have clear, written instructions detailing the operation of your business in your absence. This includes:

·Operational Guidelines : Documenting the day-to-day operations and strategic goals of the business ensures continuity. This guide can serve as a manual for your successors to maintain the same standards and values you established.

·Decision-Making Authority : Identify individuals who can make important decisions on your behalf. This includes designating someone to oversee the company’s direction and make executive decisions.

2. Financial Management and Legal Authority

Another crucial aspect of succession planning is ensuring that there are individuals authorized to handle financial and legal matters:

·Check Signatories : Designate trusted individuals who can sign checks and manage banking transactions. This prevents any disruptions in the business’s cash flow and financial obligations.

·Legal Documentation : Ensure that there are authorized persons who can sign legal documents and contracts. This is essential to keep the business running smoothly and avoid any legal complications.

Creating a Robust Succession Plan

At Acumen MB LLC, we can help you develop a comprehensive succession plan tailored to your business needs. Here’s how we can assist:

·Assessment and Planning : We will work with you to assess your current situation and identify potential successors. This includes evaluating the skills and readiness of your team members to take on leadership roles.

·Training and Development : Preparing your successors is key to a smooth transition. We can help design training programs to develop their skills and knowledge, ensuring they are ready to step up when needed.

·Financial Structuring : Our experts will assist in structuring the necessary financial frameworks to support your succession plan. This includes updating financial authorizations and ensuring your financial operations continue seamlessly.

·Legal Referrals : While we don’t handle legal structuring directly, we can refer you to trusted lawyers who specialize in business succession planning. They can assist with updating your will, creating power of attorney documents, and establishing trusts if needed.

·Regular Review and Updates : Succession planning is not a one-time task. We recommend regular reviews and updates to your plan to ensure it remains relevant and effective as your business evolves.

Succession planning is a critical component of your business strategy. It provides peace of mind knowing that your business can endure beyond your leadership. At Acumen MB LLC, we are committed to helping you create a robust succession plan that secures the future of your business and protects your legacy.

Promoting Mental Well-being: A Message from Acumen MB LLC

Tue, 28 May 2024 21:38:14 GMT

As we step out of May, we at Acumen MB LLC are reminded of the significance of this month in shedding light on two crucial matters: Mental Health Awareness and Anxiety Awareness. In our fast-paced world, where deadlines loom and expectations soar, it’s imperative to pause and reflect on the well-being of not just our clients and business associates, but also our own team members.

The accounting profession, renowned for its demanding nature, often places individuals under immense pressure. Long hours, tight schedules, and the weight of responsibility can take a toll on mental health. At Acumen MB LLC, we recognize the importance of addressing these challenges head-on and fostering an environment where mental well-being is prioritized.

Mental Health Awareness Month serves as a poignant reminder of the prevalence of mental health issues and the importance of breaking the stigma surrounding them. By openly discussing mental health in the workplace, we can create a supportive culture where individuals feel comfortable seeking help when needed.

Anxiety, in particular, is a common experience among professionals in high-stress environments. The persistent worry and fear associated with anxiety can impact productivity and overall quality of life. Through Anxiety Awareness Month, we aim to increase understanding and empathy towards those grappling with anxiety disorders.

At Acumen MB LLC, we are committed to supporting our team members in managing stress and anxiety. We offer resources such as flexible work arrangements to promote mental well-being. Additionally, we encourage open communication and provide a safe space for individuals to express their concerns without fear of judgment.

As advocates for mental health awareness, we understand that small actions can make a significant difference. Whether it’s checking in on a colleague, offering words of encouragement, or simply listening with empathy, we can all play a role in supporting one another’s mental well-being.

As May ends, let us come together as a community to promote mental health awareness and foster a culture of compassion and support. Together, we can break down barriers, challenge stigma, and create a workplace where everyone feels valued and supported.

Thank you for joining us in this important conversation.

Navigating Life’s Milestones: How They Impact Your Taxes

Tue, 14 May 2024 18:47:37 GMT

Life is full of milestones – from welcoming a new bundle of joy into your family to embarking on exciting entrepreneurial ventures. While these moments bring joy and excitement, they also bring changes to your financial landscape, including their impact on your taxes. At Acumen MB LLC, we understand that each of these life events carries unique tax implications, and we’re here to guide you through them.

1. The Birth of a Child : Welcoming a new member to your family is a life-changing event, both emotionally and financially. Did you know that having a child can lead to tax benefits such as the Child Tax Credit, Child and Dependent Care Credit, and the Earned Income Tax Credit? Additionally, you may want to explore tax-advantaged savings options like a 529 plan for your child’s education expenses. Our team can help you navigate these opportunities and ensure you’re maximizing your tax savings.

2. Buying or Selling Real Estate : Whether you’re purchasing your dream home or selling an investment property, real estate transactions can have significant tax implications. From capital gains taxes to mortgage interest deductions, it’s essential to understand how these transactions impact your tax liability. Consulting with our experts can help you strategize to minimize taxes and maximize returns in your real estate endeavors.

3. Buying or Selling a Business : Entrepreneurship comes with its own set of tax considerations, especially when buying or selling a business. Structuring the transaction in the most tax-efficient manner can save you substantial amounts of money. Whether you’re evaluating the tax consequences of an acquisition or planning an exit strategy, our team can provide invaluable advice tailored to your unique situation.

4. Investment Income During Volatile Periods : Volatile markets can lead to fluctuations in investment income, which in turn can affect your tax liability. Understanding the tax treatment of various types of investment income, such as capital gains, dividends, and interest, is crucial for optimizing your tax situation. We can help you develop tax-efficient investment strategies that align with your financial goals.

5. Moving : Relocating to a new state or country can have significant tax implications, State and local income tax rates vary widely, and moving across state lines can impact your tax filing requirements and deductions. Additionally, international moves may trigger complex tax issues such as foreign income reporting and tax treaties. Our team can assist you in navigating the tax consequences of your move and ensure compliance with applicable laws.

These are just a few examples of life events that can impact your taxes, but there are many others. Whether you’re getting married, divorcing, starting a business, or planning for retirement, consulting with our experienced tax professionals can provide peace of mind and potentially save you money.

At Acumen MB LLC, we’re committed to helping you make informed financial decisions at every stage of your life. Contact us today to schedule a consultation and take control of your tax situation. Remember, proactive tax planning is the key to financial success!

Making a Difference: Acumen MB LLC Celebrates National Volunteering Week in Cleveland and Nationwide

Mon, 13 May 2024 14:49:27 GMT

As National Volunteering Week approaches, we at Acumen MB LLC are thrilled to celebrate the spirit of giving back and making a positive impact in our community. Volunteering is not just about donating time; it’s about contributing to the greater good, fostering connections, and creating lasting change. This year, we are excited to shine a light on some incredible volunteering opportunities right here in northeast Ohio or in your area.

Feeding the Hungry:

One of the most pressing issues facing communities across the nation is food insecurity. Numerous organizations are working tirelessly to ensure that no one goes hungry. From food banks to soup kitchens, there are ample opportunities to volunteer your time and support those in need. Consider lending a hand at a food bank or pantry or serving meals at a local shelter. Your efforts can make a significant difference in the lives of individuals and families struggling to put food on the table.

Mentoring Youth:

Empowering the next generation is essential for building a bright future for our community. Organizations like Big Brothers Big Sisters and Boys & Girls Clubs provide invaluable mentorship programs that help young people reach their full potential. By volunteering as a mentor, you can make a profound impact on a child’s life, offering guidance, support, and encouragement.

Environmental Conservation:

Protecting our environment is a collective responsibility, and there are plenty of opportunities to get involved in conservation efforts. Whether it’s participating in a local clean-up event, volunteering at a community garden, or joining a conservation organization, you can play a vital role in preserving the beauty of our natural surroundings for future generations to enjoy.

Supporting Seniors:

Many seniors in our community face challenges such as loneliness, limited mobility, and financial hardship. Volunteering with local organizations or senior centers can provide much-needed companionship and assistance to older adults in need. Whether it’s visiting with seniors, helping with household tasks, or organizing recreational activities, your time and compassion can make a world of difference.

Caring for Animals:

Let’s not forget about our furry friends who also need our support and care. Cleveland is home to several animal shelters and rescue organizations dedicated to finding loving homes for pets in need (including our very own Head of Security, Eddy!) Volunteering at a shelter can involve everything from walking dogs and socializing with cats to assisting with adoption events and fundraising efforts. By volunteering your time and skills, you can help improve the lives of animals and contribute to their well-being.

At Acumen MB LLC, we believe in the power of volunteering to strengthen communities and drive positive change. That’s why we encourage our team members to get involved in causes they are passionate about and support their efforts to make a difference. This National Volunteering Week, we invite you to join us in giving back and making a lasting impact in the lives of others.

Together, we can create a brighter, more compassionate future for all.

Celebrating Public Service: A Tribute from Acumen MB LLC

Tue, 07 May 2024 19:07:19 GMT

As we step into Public Service Recognition Week, Acumen MB LLC extends our heartfelt gratitude to all those who dedicate their lives to public service. This week is not just a mere acknowledgment; it’s a celebration of the unwavering commitment and selfless dedication of individuals who work tirelessly to serve our communities, nation, and beyond.

At Acumen MB LLC, we understand the invaluable contributions made by public servants. From firefighters who bravely rush into burning buildings to educators shaping the minds of our future leaders, from healthcare workers providing compassionate care to civil servants ensuring the smooth functioning of our government institutions – each role plays an integral part in the fabric of society.

Public service is more than just a job; it’s a calling, a commitment to something greater than oneself. It requires sacrifice, resilience, and an unwavering sense of duty. It’s about putting the needs of others before our own and striving to make a positive difference in the lives of those we serve.

As an accounting firm, we have had the privilege of working with various public sector organizations and witnessing firsthand the dedication and passion that public servants bring to their roles. Whether it’s managing budgets, ensuring compliance, or providing financial insights, these individuals work tirelessly behind the scenes to ensure that resources are allocated efficiently and effectively to meet the needs of the community.

Public Service Recognition Week is not only an opportunity to express our gratitude but also a time to reflect on the importance of supporting and empowering our public servants. It’s about recognizing their contributions, advocating for their well-being, and investing in resources and infrastructure that enable them to thrive in their roles.

As we celebrate Public Service Recognition Week, let us take a moment to thank all those who serve our communities with integrity, compassion, and dedication. Your commitment to public service inspires us all, and we are honored to stand alongside you in making a positive impact on the world.

Safeguarding Your Finances: World Password Day Reminds Us of the Importance of Cybersecurity in Tax Season

Wed, 01 May 2024 18:42:40 GMT

As a leading accounting firm dedicated to ensuring the financial health and security of our clients, we are always vigilant about safeguarding sensitive information. With World Password Day upon us, it’s an opportune moment to reflect on the critical role cybersecurity plays, especially during tax season.

In today’s digital age, passwords serve as the frontline defense against unauthorized access to confidential data. Whether it’s personal tax information or sensitive financial records, protecting this data is paramount. At Acumen MB LLC, we understand the significance of robust cybersecurity measures in preserving the integrity of our client’s financial information.

Tax season, in particular, underscores the importance of maintaining secure passwords and implementing stringent cybersecurity practices. With cyber threats becoming increasingly sophisticated, individuals and businesses alike are vulnerable to data breaches, identity theft, and financial fraud. As trusted financial advisors, we recognize the immense responsibility entrusted to us by our clients to ensure the confidentiality and security of their financial data.

Here are some essential tips to enhance your cybersecurity posture, not only during tax season but throughout the year:

1. Create Strong, Unique Passwords : Avoid using easily guessable passwords such as “123456” or “password.” Instead, opt for complex combinations of letters, numbers, and special characters. Consider using a reputable password manager to generate and store secure passwords for various accounts.

2. Enable Multi-Factor Authentication (MFA) : MFA adds an extra layer of security by requiring additional verification steps beyond a password, such as a unique code sent to your mobile device. By enabling MFA, you significantly reduce the risk of unauthorized access to your accounts.

3. Stay Vigilant Against Phishing Attempts : Be cautious of unsolicited emails, messages, or phone calls requesting sensitive information or prompting you to click on suspicious links. Cybercriminals often use phishing tactics to trick individuals into divulging personal or financial data. Verify the legitimacy of communications before taking any action.

4. Regularly Update Software and Security Patches : Keep your operating system, antivirus software, and other applications up to date with the latest security patches. Vulnerabilities in outdated software can be exploited by cyber attackers to gain unauthorized access to your devices and networks.

5. Educate Yourself and Your Team : Invest in cybersecurity awareness training for yourself and your employees. Educate them about common cyber threats, safe browsing practices, and the importance of maintaining strong passwords. A well-informed team is your first line of defense against cyber attacks.

At Acumen MB LLC, we go above and beyond to uphold the highest standards of cybersecurity to protect our clients’ financial interests. From implementing robust encryption protocols to conducting regular security audits, we employ a multi-layered approach to safeguarding sensitive data.

As we observe World Password Day, let us reaffirm our commitment to cybersecurity best practices and empower ourselves with the knowledge and tools necessary to defend against evolving cyber threats. Together, we can ensure a secure and prosperous financial future.

Remember, your password is the key to your financial fortress. Handle it with care and fortify your defenses against cyber adversaries. Stay secure, stay informed, and let us at Acumen MB be your trusted partner in navigating the complex landscape of taxation and finance.

Wishing you a happy World Password Day and a cyber-secure future ahead!

National Small Business Month: Tax Tips and Accounting Insights

Wed, 01 May 2024 18:22:47 GMT

As we celebrate National Small Business Month, it’s a perfect opportunity to reflect on the resilience, creativity, and dedication of small business owners across the nation. At Acumen MB LLC, we understand the pivotal role small businesses play in driving economic growth and fostering innovation. As advocates for small business success, we’re here to provide valuable insights and guidance, particularly in the realm of taxes and accounting.

Taxes: The Backbone of Business Operations

Taxes are an inevitable aspect of running a business, but they need not be daunting. Here are some key considerations to ensure your tax strategy aligns with your business goals:

1. Stay Organized: Maintaining meticulous records of income, expenses, and receipts throughout the year streamlines the tax preparation process. Utilize accounting software or engage with professional services to keep your financial records in order.

2. Understand Deductions: Familiarize yourself with available deductions and credits that can minimize your tax liability. Deductible expenses may include office supplies, equipment purchases, travel expenses, and even a portion of your home office if applicable.

3. Plan Ahead: Proactive tax planning is essential for optimizing financial outcomes. Assess your tax obligations quarterly to avoid surprises at year-end. Consider scheduling a consultation with our experts at Acumen MB LLC to develop a comprehensive tax strategy tailored to your business needs.

Accounting: Building a Strong Financial Foundation

Effective accounting practices form the bedrock of a successful small business. Here are some fundamental principles to enhance your financial management:

1. Accurate Bookkeeping: Maintain accurate and up-to-date financial records to gain insights into your business’s financial health. Regularly reconcile bank statements, track expenses, and categorize transactions to monitor cash flow effectively.

2. Budgeting and Forecasting: Develop a realistic budget and financial forecast to guide decision-making and resource allocation. By setting clear financial goals and monitoring performance against benchmarks, you can identify areas for improvement and capitalize on growth opportunities.

3. Strategic Advisory Services: Leverage the expertise of accounting professionals to receive strategic guidance and actionable insights. Whether you’re seeking assistance with financial analysis, business valuation, or strategic planning, our team at Acumen MB LLC is committed to supporting your business objectives.

As we honor National Small Business Month, let us recognize the remarkable contributions of entrepreneurs and small business owners nationwide. At Acumen MB LLC, we are dedicated to empowering small businesses with the knowledge, tools, and support they need to thrive. By implementing proactive tax strategies and adopting sound accounting practices, you can position your business for sustained success in an ever-evolving marketplace. Reach out to us today to discover how we can partner with you on your journey towards financial prosperity.

Celebrating National Mom and Pop Business Owners Day: Nurturing Small Businesses Through Financial Acumen

Fri, 29 Mar 2024 13:55:23 GMT

As we celebrate National Mom and Pop Business Owners Day, we at Acumen MB LLC extend our heartfelt gratitude to all the passionate entrepreneurs who drive the spirit of small businesses across the nation. Today, we reflect on the invaluable contributions you make to our communities and economy, and we reaffirm our commitment to supporting your journey toward financial success.

At Acumen MB LLC, we understand the dedication, hard work, and sacrifices that go into running a small business. As fellow entrepreneurs ourselves, we empathize with the challenges you face, especially in navigating the complex landscape of accounting and taxes. However, we firmly believe that with the right guidance and expertise, every small business has the potential to thrive.

Accounting and tax management are often perceived as daunting tasks, overshadowing the joy and passion that drive you to pursue your dreams. But fret not, for we are here to alleviate your burdens and empower you with the financial acumen necessary to flourish. Our team of seasoned professionals is committed to providing personalized solutions tailored to your unique needs, ensuring compliance, maximizing efficiency, and optimizing profitability.

In the spirit of National Mom and Pop Business Owners Day, we invite you to reflect on the journey you’ve embarked upon. Remember the initial spark of inspiration that ignited your entrepreneurial spirit, the countless late nights spent strategizing, and the moments of triumph that reaffirmed your resilience. Today, celebrate your accomplishments and embrace the unwavering determination that sets you apart.

As advocates for small businesses, we recognize the pivotal role you play in shaping our communities and driving innovation. Your dedication not only sustains livelihoods but also fosters a sense of belonging and camaraderie that transcends mere transactions. Together, we form the backbone of a vibrant entrepreneurial ecosystem that thrives on collaboration and mutual support.

In commemorating National Mom and Pop Business Owners Day, let us reaffirm our commitment to nurturing the entrepreneurial spirit that defines us. As your trusted partners in prosperity, we stand ready to assist you in overcoming obstacles, seizing opportunities, and charting a course toward sustained success. Together, let us embrace the journey ahead with optimism, resilience, and unwavering determination.

Happy National Mom and Pop Business Owners Day!

Celebrating National Nutrition Month: The Power of Food as Medicine

Fri, 15 Mar 2024 13:42:00 GMT

As a team at Acumen MB LLC, we are thrilled to celebrate National Nutrition Month. This month is a time to reflect on the importance of proper nutrition and its impact on our health. At Acumen MB LLC, we strongly believe in the power of food as medicine and its ability to prevent illnesses from occurring in the first place.

It’s crucial to recognize that what may be healthy for one person may not be the best solution for another. Each individual has unique nutritional needs based on factors such as age, gender, activity level, and health status. Therefore, personalized nutrition guidance is essential to help individuals make informed choices that support their overall well-being. For instance, our team member Amanda follows a gluten free lifestyle for her health. (If you’re considering a gluten-free lifestyle or have any questions about it, Amanda is a great resource!)

We also encourage you to explore the benefits of incorporating functional foods into your diet. Functional foods are those that provide health benefits beyond basic nutrition. Examples include foods rich in antioxidants, probiotics, and omega-3 fatty acids. By incorporating these foods into your diet, you can support your body’s natural defense mechanisms and promote overall health and wellness.

As we celebrate National Nutrition Month, we invite you to join us in prioritizing your health and well-being. Whether you are looking to improve your diet, manage a chronic condition, or simply enhance your overall health, we are here to support you. Together, we can harness the power of food as medicine and create a healthier, happier future for ourselves and our loved ones.

Celebrating International Women’s Week: Empowering Women in the Workforce and Beyond

Fri, 08 Mar 2024 14:01:33 GMT

As we celebrate International Women’s Week and International (Working) Women’s Day, we at Acumen MB LLC would like to take a moment to reflect on the invaluable contributions of women in the workforce and beyond. As an accounting firm, we are proud to say that our team is comprised of 75% women, and we recognize the immense value they bring to our organization and the broader professional landscape.

In recent years, there has been a significant push for gender equality in the workplace, and we are committed to fostering an environment where all individuals, regardless of gender, feel empowered to thrive and succeed. We firmly believe that diversity and inclusion are essential components of a successful business, and we are dedicated to promoting these values within our firm and the wider community.

As we continue to work towards gender equality, we must also recognize and address the unique challenges that women face in the workforce, such as the gender pay gap and lack of representation in leadership positions. By fostering a culture of inclusivity and support, we can create a more equitable and prosperous future for all.

It’s important to acknowledge that women’s contributions extend far beyond the workplace. Many women (and men) choose to dedicate their time to caring for their families and homes, and their efforts are equally as important and deserving of recognition. The roles of caregiver and homemaker are often undervalued, but we understand the vital role they play in our society and economy.

Additionally, we must not forget the invaluable contributions of parents, who often have the toughest job of all. The work of parenting is demanding, relentless, and often goes unnoticed. Yet, it is the foundation of our society and shapes the future generations. Parents, regardless of gender, deserve our utmost respect and appreciation for the work they do.

This International Women’s Week, let us celebrate the achievements of women in all aspects of life and work towards a more inclusive and equitable future for all.

Student Loan Repayment Programs: A Win-Win for Employers and Employees

Wed, 21 Feb 2024 19:50:33 GMT

In today’s competitive job market, employers are constantly seeking new ways to attract and retain top talent. With voluntary turnover rates reaching record highs, companies are looking for any edge they can get. One increasingly popular benefit that has been gaining traction is student loan repayment programs. These programs offer a win-win solution for both employers and employees, and recent changes in tax laws have made them even more affordable.

Thanks to the Consolidated Appropriations Act, signed into law in 2020, employers can now offer up to $5,250 in student loan repayment benefits without paying any tax. This change has made student loan repayment programs more accessible to a wider range of employers, and as a result, more and more companies are offering some form of loan repayment support. In fact, by October 2023, 34% of employers were offering student loan benefits, up from just 17% in 2021.

The need for student loan repayment programs is clear when you consider the scale of the student loan epidemic in the United States. Nearly 44 million Americans owe more than $1.6 trillion in student loans, making it the fourth highest U.S. debt category. The average federal student loan debt balance is nearly $38,000, and when you factor in private loan debt, the total average balance may be more than $54,000. Given these staggering numbers, it’s no wonder that student loan repayment benefits could be a major draw for job candidates.

For employers, offering student loan debt relief can help attract and retain talent more easily. Studies have shown that 86% of workers would commit to an employer for five years if the employer offered student loan support. This can lead to increased employee loyalty and engagement, as well as improved productivity and job satisfaction.

Setting up a student loan repayment program is relatively straightforward, especially with the help of a financial organization that offers program management. However, if you prefer to handle it yourself, here are a few tips to keep in mind:

1. Determine the monthly payments you want to contribute, keeping in mind that even small amounts can save employees thousands of dollars in interest.

2. Set a cap on the maximum amount you’ll contribute.

3. Decide who will be eligible to receive the benefit, keeping in mind that nondiscrimination rules do not apply to student loan repayment programs.

4. Consider requiring a specific work commitment from the employee in exchange for loan repayment assistance.

It’s also worth noting that there have been recent updates to 401(k) plans that allow employers to help employees pay off their student loan debt without sacrificing an employer retirement match. This can be a particularly attractive benefit for employees who are struggling to save for retirement while also paying off their student loans.

In conclusion, student loan repayment programs can be a valuable tool for employers looking to attract and retain top talent. By offering this benefit, employers can help their employees pay off their student loans faster, improve their financial health, and increase their loyalty and engagement. And with recent changes in tax laws, these programs are more affordable than ever.

WISP Badge

abeder123@gmail.com (Amanda Beder) — Mon, 19 Feb 2024 20:34:42 GMT

Acumen MB LLC is thrilled to announce that our written information security plan (WISP) has successfully passed a rigorous review conducted by a PTIN Security Certified IT Firm, Tech 4 Accountants!

Our WISP has met all the stringent data security requirements outlined in IRS Publication 4557, IRS Publication 1075, IRS Publication 5293, IRS Publication 5708, and IRS W-12 Paid Preparer Tax Identification Number (PTIN) Application and Renewal. This means that we are fully equipped to safeguard your sensitive information and maintain the highest standards of confidentiality and integrity.

The approved WISP period is valid until 12/20/2024. After this date, we will be required to resubmit a new written information security plan that complies with the latest regulations. Rest assured, we are committed to staying ahead of the curve and ensuring that your data remains protected.

Why is WISP important? A WISP is a comprehensive set of policies and procedures designed to protect sensitive information from unauthorized access, use, disclosure, modification, or destruction. It is crucial for any organization that handles sensitive data, as it helps mitigate risks and ensures compliance with legal and regulatory requirements.

Thank you for your trust in Acumen MB LLC. We are dedicated to maintaining the highest standards of security and confidentiality, and we look forward to continuing to serve you with excellence.

The Art of Record Retention: A Guide for Individual Taxpayers

Fri, 16 Feb 2024 14:10:31 GMT

Welcome to Acumen MB LLC’s guide to record retention for individuals aiming to navigate the labyrinth of tax documentation. At Acumen MB LLC, we understand the importance of maintaining organized financial records to ensure smooth sailing during tax season. Let’s delve into the specifics of what documents you need to retain and for how long.

Income Documents - Keep your W-2 forms, 1099’s and any other income statements for a minimum of seven years. These documents are crucial for reporting your earnings accurately to the IRS.

Tax Returns and Supporting Documents - Hang onto your filed tax returns and any supporting documents, such as receipts, invoices, and canceled checks, for a recommended period of seven years. This timeframe aligns with the IRS statute of limitations for auditing tax returns.

Investment Records - For investments, hold onto purchase and sale records, dividend reinvestment statements, and year-end brokerage statements for at least seven years after you’ve sold the investment. These records are vital for calculating capital gains or losses accurately.

Property Records - Keep records related to the purchase, sale, or improvement of real estate properties for at least seven years after selling the property. This includes closing statements, purchase contracts, and receipts for home improvements.

Retirement Account Statements - Retain records of contributions, withdrawals, and any rollover documentation for retirement accounts such as IRA’s and 401(k)s for the duration that the account is active. Additionally, keep any annual statements until the account is closed.

Medical Expenses and Health Insurance Documents - Hold onto medical bills, insurance explanation of benefits (EOB) statements, and receipts for medical expenses for at least seven years. These records may be necessary for claiming medical expense deductions or substantiating health insurance reimbursements.

Education Expenses - Keep records of tuition payments, student loan interest statements, and receipts for educational expenses for at least seven years. These documents can support education-related tax credits or deductions.

By adhering to these guidelines for records retention, you can streamline the tax preparation process and ensure compliance with IRS regulations. At Acumen MB LLC, we prioritize your financial well-being and offer personalized assistance to help you navigate the complexities of tax management. Remember, meticulous record-keeping is the cornerstone of financial accountability.

Leveraging National Entrepreneurship Week and International Networking Week: A Guide for Small Businesses on Tax and Accounting Strategies

Mon, 12 Feb 2024 19:40:09 GMT

As we celebrated National Entrepreneurship Week and International Networking Week last week, it’s an opportune moment for small business owners to reflect on their entrepreneurial journey, network with peers, and strategize for financial success. At Acumen MB LLC, we understand the pivotal role that accounting and tax planning play in the growth and sustainability of businesses. In this blog post, we’ll explore how entrepreneurs can leverage these events to enhance their financial management practices and maximize their potential for success.

1. Building a Strong Financial Foundation:

Entrepreneurs often wear multiple hats, juggling various responsibilities to keep their businesses afloat. Amidst the hustle, it’s crucial not to overlook the importance of establishing a robust financial foundation. National Entrepreneurship Week serves as a reminder to evaluate your business’s financial health. At Acumen MB LLC, we recommend conducting a thorough review of your financial statements, assessing cash flow, and identifying areas for improvement. By understanding your business’s financial position, you can make informed decisions and navigate challenges more effectively.

2. Harnessing the Power of Networking:

International Networking Week presents a valuable opportunity for entrepreneurs to expand their professional network and forge meaningful connections. Networking isn’t just about exchanging business cards; it’s about cultivating relationships that can lead to mutual growth and collaboration. As accounting professionals, we encourage our clients to actively participate in networking events, both online and offline. By connecting with fellow entrepreneurs, industry experts, and potential clients, you can gain valuable insights, explore new opportunities, and even find strategic partners for your business.

3. Strategic Tax Planning:

Effective tax planning is essential for maximizing profits and minimizing liabilities. During National Entrepreneurship Week, take the time to review your tax strategy and identify potential savings opportunities. At Acumen MB LLC, we help our clients leverage various tax incentives, deductions, and credits available to small businesses. Whether it’s optimizing business structures, managing payroll taxes, or exploring tax-deferred investment options, proactive tax planning can significantly impact your bottom line.

4. Embracing Technology and Innovation:

In today’s digital age, technology plays a crucial role in streamlining accounting processes and enhancing productivity. As you celebrate National Entrepreneurship Week, consider embracing innovative accounting solutions that can simplify your workflow and provide real-time insights into your business finances. From cloud-based accounting software to automated expense tracking tools, investing in the right technology can save you time, reduce errors, and improve financial transparency.

National Entrepreneurship Week and International Networking Week offer invaluable opportunities for small business owners to reflect on their journey, connect with peers, and enhance their financial management practices. By prioritizing financial literacy, strategic networking, and proactive tax planning, entrepreneurs can position themselves for long-term success. At Acumen MB LLC, we’re committed to empowering our clients with the knowledge and resources they need to thrive in today’s competitive landscape. Let’s seize the momentum of these events to take your business to new heights.

Embracing the Spirit of Giving: A Charitable Journey with Acumen MB LLC

Tue, 19 Dec 2023 19:46:02 GMT

As the holiday season approaches and the air becomes filled with warmth and goodwill, Acumen MB LLC is delighted to join the chorus of joy and giving. The month of December is not just about festivities and decorations; it’s also a time to reflect on the incredible power of charitable giving.

At Acumen MB LLC, we understand that our role extends beyond just numbers and ledgers. It’s about making a positive impact on the community we serve. This month, we invite you to embark on a charitable journey with us – a journey that goes beyond financial statements and tax returns.

Charitable giving is a powerful way to make a difference in the lives of those less fortunate. Whether it’s supporting local charities, contributing to community projects, or volunteering time and expertise, there are countless ways to give back. And the best part? The benefits of giving are not limited to the recipients; they extend to the giver as well.

One practical aspect to keep in mind as you engage in charitable giving is the potential tax benefits. By saving receipts of your donations, you may be eligible for deductions when tax season rolls around. Acumen MB LLC encourages you to stay organized and maintain a record of your contributions, ensuring that you maximize the benefits of your generosity while navigating the complexities of tax regulations.

While tax incentives are often associated with charitable donations, we believe that the true essence of giving lies in the act itself. It’s about fostering a sense of community, compassion, and shared responsibility. As you explore ways to give this season, consider the impact you can make on a personal level – connecting with the causes that resonate with you on a deeper level.

This December, let’s make giving a heartfelt and meaningful experience. Join Acumen MB LLC in embracing the spirit of generosity and creating a ripple effect of kindness that extends far beyond the holiday season. Together, we can make a difference – one act of kindness at a time.

Maximizing Your Health and Wealth: Celebrating National Health Savings Account Day with Acumen MB LLC

Fri, 08 Dec 2023 14:46:01 GMT

Greetings, valued clients and readers! At Acumen MB LLC, we believe in holistic financial well-being, and what better occasion to emphasize the synergy between health and wealth than National Health Savings Account (HSA) Day! Today, we celebrate the importance of these tax-advantaged accounts that not only contribute to your physical well-being but also play a crucial role in your financial strategy.

The Foundation of Financial Health

A Health Savings Account is more than just a savings tool for medical expenses – it’s a cornerstone for building a robust financial future. At Acumen MB LLC, we understand the pivotal role that HSAs play in achieving financial stability, and we’re here to guide you through the process.

The Tax Advantage Tango

One of the key features that make HSAs an attractive option is their triple tax advantage. Contributions are tax-deductible, earnings within the account grow tax-free, and qualified withdrawals for medical expenses are also tax-free. This tax trifecta provides a unique opportunity to not only save for healthcare costs but to also bolster your overall financial portfolio.

Strategic Planning with Acumen MB LLC

As your trusted accounting partner, we at Acumen MB LLC are dedicated to helping you leverage the full potential of your HSA. Our team of experts can assist you in devising a strategic plan that aligns with your financial goals. From optimizing contributions to navigating the complex world of tax regulations, we’ve got you covered.

A Healthier Bottom Line

Health and wealth go hand in hand, and a well-managed HSA can contribute significantly to both. By taking advantage of the tax benefits and strategically utilizing your HSA funds, you not only protect yourself against unforeseen medical expenses but also enhance your financial resilience.

Celebrate National HSA Day with Acumen MB LLC

This National Health Savings Account Day, join us in recognizing the importance of proactive financial planning and the role that HSAs play in securing a healthier and wealthier future. Contact Acumen MB LLC today to explore personalized strategies that align with your unique financial circumstances and goals.

Remember, it’s not just about managing your finances; it’s about thriving in every aspect of your life. Here’s to your health, wealth, and prosperity!

Mastering Year-End: Your Comprehensive Tax Preparation Guide from Acumen MB LLC

Wed, 29 Nov 2023 15:42:52 GMT

Hello valued clients and fellow financial enthusiasts,

As the year draws to a close, it’s time to gear up for one of the most important financial tasks – tax preparation. At Acumen MB LLC, we understand that the year-end hustle can be overwhelming, so we’ve crafted this comprehensive guide to help both individuals and businesses navigate the intricacies of tax preparation.

Individual Tax Preparation:

1. Gather Personal Information :

a. Social Security Numbers for yourself and dependents

b. Employment and income information (W-2’s, 1099s)

c. Any additional income sources (rental, investments, etc.)

2. Review Deductions and Credits :

a. Charitable contributions

b. Education expenses

c. Medical expenses

d. Homeownership-related deductions

3. Organize Receipts and Records

a. Keep track of any business expenses if you’re self-employed

i. If you use your vehicle for business, charitable, or medical purposes, it’s essential to update your mileage logs. Keep track of the miles driven, purpose of the trip, and related expenses.

ii. If you work from home, you may be eligible for the home office deduction. Keep records of your home-related expenses, such as mortgage interest, property taxes, utilities, and maintenance/repair costs. Additionally, maintain a clear record of the square footage of your dedicated home office space relative to the total living space.

b. Document medical expenses, job-related expenses, and education expenses

4. Consider Retirement Contributions

a. Maximize contributions to your IRA or 401(k) for potential tax savings

5. Plan for Health Coverage:

a. Ensure compliance with health insurance requirements

6. Review Changes in Personal Circumstances:

a. Marriage, divorce, new dependents – these can impact your tax situation

Business/Corporate/Partnership/LLC Tax Preparation:

1. Collect Financial Statements:

a. Balance sheets, income statements, and cash flow statements

2. Review Business Expenses:

a. Gather receipts for all deductible expenses

b. Mileage and home office deduction, if applicable

c. Ensure proper categorization for tax purposes

3. Evaluate Depreciation:

a. Assess the depreciation of assets for potential deductions

4. Employee Information:

a. W-2s for employees

b. 1099s for contractors

5. Consider Tax Credits:

a. Research and leverage available tax credits for your business type

6. Review Changes in Business Structure:

a. Any changes in structure may impact tax obligations

Checklist of Documents for Individuals:

Social Security Numbers for taxpayer, spouse, and dependents
W-2s and 1099s
Charitable contribution receipts
Education expense documents
Medical expense records
Homeownership-related documents
Retirement contribution statements
Health coverage documentation

Checklist of Documents for Businesses:

Financial statements (balance sheets, income statements, cash flow statements)
Receipts for all deductible expenses
Asset depreciation records
Employee W-2’s and contractor 1099’s
Documentation for tax credits
Records of any changes in business structure

At Acumen MB LLC, we’re committed to making your year-end tax preparation as smooth as possible. If you have any questions or need personalize assistance, don’t hesitate to reach out to our dedicated team at 216-859-7001.

Wishing you a stress-free and financially successful year-end!

Celebrating Small Business Saturday with Acumen MB LLC and Our Valued Clients

Wed, 22 Nov 2023 14:05:56 GMT

Hello, valued readers and supporters of Acumen MB LLC! As we approach the holiday season, we can’t help but feel a surge of excitement for Small Business Saturday – a day dedicated to celebrating and supporting local businesses that form the backbone of our communities. At Acumen MB LLC, we take pride in serving small businesses, and today, we want to shine a spotlight on some of our incredible clients who contribute to the vibrancy of our local economy.

1. The ARRA Group: Nurturing Healthcare Talent Nationwide

Our first featured client is The ARRA Group, a boutique healthcare recruitment consultancy firm. They specialize in providing nationwide permanent placement solutions to health systems. Their commitment to excellence in healthcare staffing aligns perfectly with Acumen MB LLC’s dedication precision in financial services. https://www.thearragroup.com/

2. D’MAZ Lifestyle Salon: Where Beauty Meets Wellness

Next up is D’MAZ Lifestyle Salon, a private studio hair and wellness salon located on park East Drive off I-271 and Chagrin Blvd. in Beachwood. The salon opened in 2001 and is the brainchild of the talented and experienced Denise Zingale. As a seasoned professional, Denise has honed her skills with training and education received in various parts of the world. Her commitment to client satisfaction is evident in her personalized approach, dedicated to understanding and addressing individual needs. The salon boasts a tranquil and private studio environment where clients can receive the latest in “wearable” trends, treatments, and technology. Denise’s philosophy revolves around enhancing your natural beauty, emphasizing that the evolution in hairdressing is not solely about drastic changes but, more importantly, about helping you look and feel your best. Denise is also a Certified Reiki Master and Certified Personal Trainer, infusing holistic wellness into the salon experience. D’MAZ Lifestyle Salon also proudly holds the certification of being a “Green Circle Salon,” reflecting a commitment to sustainable practices. https://dmazsalon.com/

3. Fish Furniture: Furnishing Homes with Elegance

Fish Furniture is a household name known for furnishing homes with timeless elegance. As a pillar of our community, they embody the spirit of Small Business Saturday, offering quality furniture and exceptional service to residents in our area. https://www.fishfurniture.com/

4. IMG Jewelers: Sparkling Moments, Unforgettable Memories

If you’re looking for a touch of sparkle and a dash of luxury, IMG Jewelers is the place to be. With a generous sale of 20-70% off, and the chance for purchases to be absolutely free if it snows 5 inches or more in Chardon on New Year’s Day, they’re adding an extra layer of excitement to your holiday shopping for your loved ones. https://www.imgjewelers.com/

5. Herman Textile Window Fashions: Transforming Spaces with Style

Herman Textile Window Fashions is your local go-to resource for interior design needs. Offering Hunter Douglas window coverings and custom treatments, they bring a touch of elegance to every home. Their commitment to quality and style resonates with Acumen MB LLC’s dedication to precision. https://www.hermantextilewindowfashions.com/

6. Jamison Art Conservation: Preserving Art, Preserving Culture

Jamison Art Conservation is a professional art conservation studio specializing in works on paper. The studio provides clients with museum quality conservation services for prints, drawings, watercolors, manuscripts, archival materials and select bound materials. Jamye Jamison (she/her) is a peer reviewed Fellow of the American Institute for Conservation (AIC). All treatments are done in accordance with the Code of Ethics and Guidelines for Practice set forth by the AIC.

https://jamisonartconservation.com/

7. Karnis Safe & Lock: Keeping Our Community Secure

Karnis Safe & Lock is a trusted name in security, providing peace of mind to our community. Their dedication to keeping us safe aligns with Acumen MB LLC’s commitment to safeguarding our client’s financial interests.

8. Kiss Swim: Nurturing a Love for Safe Swimming

Kiss Swim, a swim school dedicated to teaching all ages a love for safe swimming, embodies the importance of skill and safety. Their dedication to the well-being of our community members resonates with Acumen MB LLC’s commitment to financial well-being. https://kissaquatics.com/

9. Rent-A-Daughter Senior Care, Inc.: Ensuring Quality of Life

Last but certainly not least is Rent-A-Daughter Senior Care, Inc. Their dependable and affordable home care services ensure a great quality of life for our senior clients and their families. Recognized in Case Western Reserve’s Weatherhead 100 as one of the fastest-growing companies in Northeast Ohio, their commitment to excellence mirrors Acumen MB LLC’s dedication to financial growth. https://rentadaughter.org/home-health-care-service-areas/

This Small Business Saturday, we invite you to join us in supporting these exceptional local businesses. As we celebrate the unique contributions they make to our community, let’s come together to ensure a prosperous and vibrant future for all.

Honoring Financial Discipline and Dedication: A Tribute on International Accounting Day and Veterans Day

Fri, 10 Nov 2023 22:58:33 GMT

Dear valued clients, partners, and community members,

As we celebrate International Accounting Day and Veterans Day, Acumen MB LLC is delighted to reflect on the shared values that bind these two significant occasions – discipline, dedication, and a commitment to excellence.

International Accounting Day: Recognizing the Language of Business

Every year on November 10 ^th , the global community comes together to celebrate International Accounting Day. It is a day to acknowledge sometimes overlooked professionals in the business world – accountants. At Acumen MB LLC, we take pride in the crucial role we play as financial stewards, translating the intricate language of numbers into meaningful insights for our clients.

Accounting is often referred to as the “language of business,” and much like any language, it requires fluency and precision. Our team at Acumen MB LLC embraces the challenge of navigating the complexities of financial data, ensuring that our clients receive accurate and actionable information to drive their success.

Veterans Day: Honoring Sacrifice and Service

Just as International Accounting Day is a day of recognition, Veterans Day, observed on November 11 ^th , is a time to honor the brave men and women who have served in the armed forces. Veterans Day serves as a reminder of the sacrifices made to protect the freedoms we hold dear in our country.

At Acumen MB LLC, we extend our deepest gratitude to all veterans. We recognize the discipline, leadership, and commitment to duty that characterize the military experience. These qualities resonate with our approach to accounting, where attention to detail, integrity, and dedication are paramount.

A Unified Commitment to Excellence

On this joint celebration of International Accounting Day and Veterans Day, Acumen MB LLC reaffirms its commitment to excellence. We are grateful for the opportunity to serve our clients with the same dedication and discipline that characterize both the accounting profession and the military.

In conclusion, we express our heartfelt appreciation to accountants around the world on International Accounting Day and extend our deepest gratitude to veterans on Veterans Day. Together, we celebrate the values that unite us – discipline, dedication, and a shared commitment to making a positive impact on the world.

Navigating the Buckeye State: Celebrating National Ohio Day with Acumen MB LLC

Thu, 02 Nov 2023 14:58:16 GMT

Greetings fellow Buckeyes and accounting enthusiasts! As we celebrate National Ohio Day, the team at Acumen MB LLC is delighted to share our love for the great state of Ohio. While we may be number crunchers by day, we’re also passionate about exploring and enjoying all that Ohio has to offer. Join us on a journey through the heartland as we uncover some fascinating facts and recommend a few must-visit places, including some off-the-beaten path attractions that make this state truly exceptional.

Fun Facts About Ohio: The Buckeye State

1. Birthplace of Aviation : Ohio proudly claims the Wright brothers, Orville and Wilbur, as its native sons. The Wright brothers’ bicycle shop in Dayton served as the birthplace of modern aviation.

2. The Rock and Roll Capital : Cleveland is synonymous with rock and roll, and our city is home to the iconic Rock and Roll Hall of Fame. Pay homage to musical legends and immerse yourself in the rich history of this influential genre.

3. Buckeye Pride : Ohio is known as the “Buckeye State” due to the prevalence of the Ohio Buckeye tree. O-H!

More Intriguing Facts About Ohio

1. The Serpent Mound : Tucked away in Adams County, Ohio, lies the mysterious Serpent Mound – a prehistoric effigy mound shaped liked a serpent. Its origin and purpose remain a subject of debate among archaeologists and historians, adding an air of intrigue to this ancient site.

2. Birthplace of the Hot Dog : Cincinnati holds the title of the birthplace of the hot dog. German immigrants brought their love for sausages to the city, where the first recorded mention of a “frankfurter” on a bun was in 1901 during a baseball game.

3. Hopewell Culture National Historical Park : Discover the enigmatic history of the Hopewell people at this national park, which preserves earthworks created by Native American cultures nearly 2,000 years ago. The geometric shapes and mounds provide a fascinating glimpse into Ohio’s ancient past.

Exploring Ohio: A Cleveland Adventure

1. Rock and Roll Hall of Fame : Start your Cleveland adventure at none other than the Rock and Roll Hall of Fame, an architectural masterpiece overlooking Lake Erie. Dive into the world of music and discover the stories behind your favorite rock legends.

2. Cleveland Metroparks : Nature lovers, rejoice! The Cleveland Metroparks offers a breath of fresh air with over 23,000 acres of greenery, hiking trails, and scenic beauty. Take a break from the hustle and bustle to enjoy the serenity of these urban oases.

3. West Side Market : For a culinary experience like no other, visit the historic West Side Market. This foodie haven has been serving up fresh produce, meats, and international delights since 1912. It’s a feast for the senses and a must-visit for any gastronome.

4. Cuyahoga Valley National Park: Escape to nature just outside the city in Cuyahoga Valley National Park. Hike, bike, or take a scenic train ride though the lush landscapes and picturesque views.

Off-the-Beaten Path Attractions in Ohio

1. The Mohicans Treehouses : Elevate your Ohio experience by staying in one of The Mohicans’ luxury treehouses. Nestled in the heart of the Mohican Valley, these unique accommodations offer a perfect blend of nature and comfort, providing an unforgettable escape.

2. The Great Serpent Mound of Peebles : While the Serpent Mound is well-known, its lesser-known counterpart in Peebles is equally captivating. This effigy mound, often overshadowed by its more famous relative, boasts its own distinct charm and historical significance.

3. The Ohio and Erie Canal Towpath Trail : Lace up your hiking boots or hop on a bike to explore the scenic Ohio and Erie Canal Towpath Trail. Stretching from Cleveland to New Philadelphia, this historic trail follows the route of the canal and offers a peaceful journey through Ohio’s landscapes.

4. Moonville Tunnel : Venture into the eerie allure of the Moonville Tunnel, located in the Zaleski State Forest. Steeped in local legends, this abandoned tunnel is rumored to be haunted and provides a spine-tingling adventure for those seeking a touch of the supernatural.

As accountants, we understand the importance of balance – balancing numbers and balancing life. So, on this National Ohio Day, we encourage you to explore the diverse offerings of our beloved state. Whether you’re a client, a fellow Buckeye, or just passing through, Ohio has something for everyone.

On this National Ohio Day, let curiosity be your guide, and may your Ohio adventure be as full of surprises as a well-audited financial statement. Happy exploring from Acumen MB LLC!

Pawsitively Productive: Embracing National Adopt a Shelter Dog Month at Acumen MB LLC

Wed, 25 Oct 2023 14:52:33 GMT

October is more than just a month of falling leaves and pumpkin spice lattes – it’s also National Adopt a Shelter Dog Month! At Acumen MB LLC, we’re not just crunching numbers; we’re wagging tails and celebrating the pawsitive impact our furry friend, Eddy, has brought to the office.

Unleashing Productivity

Who says accountants can’t have fun at work? With Eddy, a chihuahua and Boston terrier mix, the office atmosphere has taken on a whole new level of energy. His love for affection is a reminder that sometimes, a brief pause to pet a dog can be the perfect remedy for a hectic day.

Stress Reduction Tailored to Perfection

Tax season can be “ruff,” but having Eddy around has been a game-changer. Numerous studies have shown that the presence of dogs in the workplace can significantly reduce stress and increase overall job satisfaction. Eddy is our four-legged stress buster, providing impromptu therapy sessions with every tail wag and biiiiiiig stretch!

Increased Productivity, Decreased Absenteeism

Believe it or not, having a dog in the office can lead to increased productivity. The responsibility of caring for a pet encourages a more structured work routine, and employees are more likely to take shorter breaks to spend quality time with their furry companions. This, in turn, reduces absenteeism and fosters a sense of responsibility among the team.

Eddy’s Impact Beyond the Office Walls

National Adopt a Shelter Dog Month is not just about celebrating the joy of having a dog in the office; it’s also about spreading awareness and encouraging adoption. Eddy, a proud rescue, is a testament to the countless pets waiting for loving homes in shelters and rescues. We hope that by sharing his story, we inspire others to consider adopting their own office sidekick.

How You Can Join the Paw-ty

Want to make a difference this October? Consider adopting a shelter dog or supporting your local animal shelter. Even if having an office dog isn’t in the cards, you can still contribute to the cause by volunteering or making a donation. Every small effort adds up to make a big impact in the lives of these deserving animals.

At Acumen MB LLC, National Adopt a Shelter Dog Month is more than a hashtag; it’s a commitment to creating a pawsitive work environment. Eddy has not only stolen our hearts but has also taught us valuable lessons about the importance of compassion, responsibility, and the undeniable joy that a furry friend can bring to the daily grind.

So here’s to Eddy, to National Adopt a Shelter Dog Month, and to the countless tails that have found their forever homes. Let’s continue to make our workplaces a little more pawsome, one adoption at a time!

Navigating Success: A Glimpse into the Leadership Philosophy of Acumen MB LLC on National Boss’s Day

Mon, 16 Oct 2023 14:28:18 GMT

On this National Boss’s Day, I had the privilege of sitting down with the visionary leader behind Acumen MB LLC, Jeffrey Beder. We explored the personal and professional aspects that shape the company’s unique culture. Let’s delve into the insightful responses from the driving force behind Acumen MB LLC.

Question : How do you manage to maintain a healthy work-life balance, and do you have any tips for achieving it? (Especially during tax season!)

Answer : Maintaining a healthy work-life balance is crucial, especially in our fast-paced industry. For me, it all boils down to relationships. I surround myself with people I care about – be it family or colleagues. Fostering these meaningful connections is key. After hours, I don’t answer business calls to create a clear boundary. Regular exercise and a commitment to a healthy lifestyle further contribute to this delicate equilibrium.

Question : What are some of the values or principles from your personal life that you’ve carried into your leadership style?

Answer : Respect and kindness are the cornerstones of my leadership style. At Acumen MB LLC, no job or chore is beneath anyone. This egalitarian approach creates an environment where every team member feels valued. Treating each other with decency is not just a principle but the core foundation of how I lead.

Question : Can you tell us about a memorable vacation or travel experience that has influenced your perspective?

Answer : One of my favorite getaways is Niagara-on-the-Lake. Each year, my wife and I visit to unwind and connect with the people behind the winemaking. This experience is transformative, marking a transition into vacation mode like no other place.

Question : What’s one of the most important life lessons you’ve learned outside of your professional journey?

Answer : I’ve learned to explore my creativity outside of work. Each of us has an outlet that can enrich our lives in so many ways.

Question : What inspired you to pursue a career in the accounting industry?

Answer : I found that I was good with numbers, and I wanted a career where I could interact with the public. Accounting seemed like the perfect blend of these interests.

Question : Can you share a significant milestone or achievement in your career that has had a lasting impact on you?

Answer : Two achievements stand out – the triumph of passing the CPA exam and the bold move of opening my own practice. The latter, influenced by my self-made entrepreneur father, showcased the transformative power of determination and vision.

Question : What leadership qualities or principles do you consider most important in your day-to-day work?

Answer : As a leader, recognizing the support of my staff is crucial. They’re the ones that make me look good. Being respectful and kind to all goes a long way. Involving the team in decision-making processes is pivotal. Leaders don’t exist in a vacuum. It’s critical that my staff buy into the vision we’re trying to accomplish.

Question : How do you see the future of Acumen MB LLC, and what role do you envision for your team in achieving those goals?

Answer : My vision for Acumen MB LLC is to provide client advisory services to our business clients. I want the staff to feel that they can build on this vision and participate in it, both from a professional as well as financial perspective.

Conclusion

As we celebrate National Boss’s Day, Acumen MB LLC stands out as a beacon of leadership driven by values, respect, and a shared vision. The insights shared by Jeffrey Beder provide a glimpse into the principles that shape Acumen MB LLC’s success and paint a vivid picture of the path ahead.

Smart Saving Strategies: A National Savings Day Special

Thu, 12 Oct 2023 14:11:22 GMT

Happy National Savings Day from all of us at Acumen MB LLC! Today, as we celebrate the art of smart money management, we thought it would be the perfect opportunity to share some insights and tips on saving for a secure financial future.

At Acumen MB, we understand that achieving your financial goals is not just about making money – it’s about keeping it safe too. That’s why, on this National Savings Day, we want to shed light on the crucial aspect of fraud prevention in the realm of personal and business finance.

Why Saving Matters

Before we delve into the world of fraud prevention, let’s take a moment to appreciate the importance of saving. Saving isn’t just a financial task; it’s a mindset. It’s about preparing for the unexpected, reaching your goals, and creating a safety net for you and your loved ones.

The Role of Acumen MB in Your Financial Journey

As your trusted accounting partner, Acumen MB is committed to helping you navigate the complex landscape of financial management. We believe in a holistic approach that not only optimizes your tax strategy, but also safeguards your hard-earned money.

Fraud Prevention: A Crucial Component of Financial Wellness

National Savings Day is not just about accumulating wealth – it’s about preserving it. Unfortunately, the rise of digital transactions and online financial activities has also brought about an increased risk of fraud. At Acumen MB, we want to empower you with the knowledge and tools to protect your financial assets.

Here are some tips for effective fraud prevention:

1. Monitor Your Accounts Regularly : Keep a close eye on your bank and credit card statements. Report any suspicious activity immediately.

2. Use Strong Passwords : Strengthen your online security by using unique and complex passwords for your financial accounts.

3. Educate Your Team : If you’re a business owner, ensure that your team is educated on cybersecurity best practices to prevent fraud in the workplace.

4. Implement Multi-Factor Authentication : Add an extra layer of security to your accounts by enabling multi-factor authentication wherever possible.

5. Stay Informed : Keep yourself updated on the latest scams and fraud tactics. Awareness is your best defense.

Acumen MB’s Commitment to Your Financial Security

As your financial partners, we go beyond the numbers. Acumen MB is dedicated to providing not only top-notch accounting services, but also valuable guidance on safeguarding your financial well-being. Our team is here to help you navigate the ever-evolving landscape of finance and ensure that your savings remain in safe hands.

This National Savings Day, let’s celebrate not just the act of saving, but also the wisdom in protecting what we’ve worked so hard to accumulate. Here’s to a future filled with financial security and smart saving strategies!

Protecting Your Business: The Key to Fraud Prevention on National Improve Your Office Day

Wed, 04 Oct 2023 13:37:54 GMT

Greetings, fellow office enthusiasts! At Acumen MB, we’re excited to celebrate National Improve Your Office Day with you. While organizing your workspace and optimizing your workflow are essential aspects of office improvement, we’d like to shed light on a crucial aspect often overlooked – fraud prevention.

As a trusted accounting firm, we understand the significance of maintaining the financial integrity of your business. Fraud can have devastating consequences for both small and large organizations. Therefore, we’re here to provide insights and strategies to help you safeguard your business against fraudulent activities.

1. Educate your team: First and foremost, knowledge is power. Empower your employees with training programs on fraud prevention. Teach them to recognize warning signs and to report any suspicious activities promptly. A well-informed team is your first line of defense against fraud.

2. Implement internal controls: Establish robust internal controls within your organization. These include segregation of duties, dual authorization processes, and regular financial audits. By creating a system of checks and balances, you minimize the opportunity for fraudulent activities to occur.

3. Embrace technology: In today’s digital age, technology plays a vital role in fraud prevention. Implement fraud detection software and monitoring tools to track financial transactions. These tools can help identify irregularities and potential fraud patters early on.

4. Conduct due diligence: Before entering into partnerships or agreements, perform thorough due diligence on your potential partners, vendors, and suppliers. Verify their financial stability and reputation. This diligence can help you avoid fraudulent schemes that could harm your business.

5. Stay informed: Keep yourself updated on the latest fraud trends and schemes. Criminals are continually evolving their tactics, so staying informed is crucial to staying one step ahead.

6. Change passwords regularly: Regularly changing passwords for your business accounts is a simple, yet effective way to enhance security. Encourage employees to use strong, unique passwords and consider implementing multi-factor authentication.

7. Annual IT system security check: Perform an annual security check to evaluate your IT systems for weak areas. Identify vulnerabilities and take proactive measures to strengthen your cybersecurity defenses. Consider hiring a cybersecurity expert for a comprehensive assessment.

For more information on fraud prevention and additional resources, we recommend visiting the IRS website, where you can find valuable articles and guidance about protecting your business.

On this National Improve Your Office Day, let’s not forget that an office free from fraud is a workplace that thrives. By implementing these fraud prevention strategies, you not only protect your business but also contribute to a healthier, more ethical work environment.

At Acumen MB, we are dedicated to helping you safeguard your financial interests. If you have any questions or require assistance in fraud prevention or any accounting-related matters, feel free to reach out to us at 216-859-7001. Together, we can make your office a safe and more productive place.

Here’s to a fraud-free and productive future for your business!

Empowering Women in Business: Celebrating National American Business Women’s Day

Fri, 22 Sep 2023 13:56:08 GMT

National American Business Women’s Day is a momentous occasion dedicated to celebrating the remarkable achievements and contributions of women in the business world. Today, we explore the perspectives of a female leader who has successfully navigated the complexities of business, family, and personal growth. Abby Cravotta, CEO of The ARRA Group LLC, shares her unique insights on the challenges women face, advice for aspiring young women, and the female entrepreneurs and leaders who inspire her.

Challenges Faced by Women in Business

Abby approaches the challenges women face in business from a multifaceted perspective – she’s not just a leader, but also a mother and a wife. According to Abby, society and social media often portray an unrealistic image of women being able to effortlessly juggle it all. She emphasizes that this is not attainable. Abby highlights the importance of recognizing that “it takes a village.” Learning to ask for and accept help is vital in achieving a balance between professional and personal responsibilities. She underscores the significance of finding a partner who not only supports your business goals, but also shares the responsibilities of maintaining a household. Abby speaks from experience, acknowledging that she can’t do everything or be everywhere. She leans on her family and friends for support when she can’t be present and has learned to grant herself grace and patience to persevere.

Advice for Aspiring Women in Business

Mentorship and creating a circle of influence and inspiration are two essential pieces of advice that Abby passionately advocates for young women embarking on their careers. She believes in setting a “north star” and creating guides to stay on course. Surrounding oneself with people, places, and things that align with your aspirations is crucial. Abby attributes much of her own success to working with a mentor who shaped her business perspective and finding inspiration in books and blogs. She encourages young women to seek out individuals who possess knowledge and experience and from whom they can learn. Abby emphasizes that if you have a goal, you can achieve it by following your “north star” and creating a motivating circle around yourself.

Female Entrepreneurs and Leaders Who Inspire Abby

Abby draws inspiration from a diverse group of female entrepreneurs and leaders who have left a profound impact on her professional journey. Sheryl Sandberg’s groundbreaking book, “Lean In,” served as a game changer, influencing her perspective on women’s roles in the business world. Abby is an avid reader and follower of female entrepreneurs and leaders, including Brene Brown, Glennon Doyle, Tina Fey, and Reese Witherspoon. She admires Reese Witherspoon’s work in promoting female writers and stories though her book club and production company. These women serve as beacons of inspiration for Abby, highlighting the importance of female voices and narratives in today’s world.

Conclusion

On National American Business Women’s Day, we celebrate the resilience, determination, and accomplishments of women in business. Abby Cravotta’s insights, gained through her unique perspective as a leader, mother, and wife, offer valuable guidance for women navigating their own professional and personal journeys. Her emphasis on seeking support, creating a circle of influence, and drawing inspiration from accomplished female leaders resonates deeply.

As we reflect on the remarkable contributions of women in the business world, we take pride in highlighting that our accounting firm stands as a shining example of women’s empowerment. With an impressive 80% female composition, our firm embodies the spirit of inclusivity and gender diversity, fostering an environment where women can thrive, lead, and shape the future of the industry.

Together, we celebrate the achievements of women in business, recognize the challenges they overcome, and acknowledge the crucial role they play in driving innovation and progress. Let’s continue to support and uplift women in their pursuit of success, recognizing that together, we can achieve remarkable feats and create a brighter, more inclusive future for all.

National Care for Kids Day

Wed, 20 Sep 2023 13:20:03 GMT

Today is National Care for Kids Day and to gain a deeper understanding of the significance of this day and how organizations are contributing to the cause, we had the privilege of interviewing Sarah Rintamaki, Executive Director for Connecting For Kids, an organization dedicated to supporting families who have concerns about their child.

Q1: Can you tell us about your organization and the services it provides for children and families?

Sarah Rintamaki: Connecting For Kids provides resources, support, and community to families in Northeast Ohio who have concerns about their child. We support families who have children with mental health concerns, developmental delays and disabilities, as well as those facing major life changes. We offer library programs, Resources Fairs, and a Family Resource Specialist (FRS) Program. Library programs include support groups for adults, presentations by professionals, as well as hands-on programs that caregivers attend with their child. The FRS program offers a CFK staff member who meets with families and assists them in navigating resources. All programs are offered free to families.

Q2: What inspired you to start a business focused on caring for kids, and how has it evolved over the years?

Sarah Rintamaki: I started Connecting For Kids in 2011 when I wanted to provide other families with the same connection I found through an informal support group. Both of my sons struggled with speech and developmental delays, and between the doctor, specialist, and therapy appointments, I was feeling overwhelmed and lonely. By finding other families in similar situations, I felt connected and less alone. Not only did these families share new therapies and program information, but they also had a safe place to express feelings of grief, frustration, pride, and joy. Out of these beginnings, Connecting For Kids was born and has helped more than 15,000 local families in the last 12 years. Connecting For Kids started in the western part of Cuyahoga County and then moved into Lorain County. In 2023, we offered our first Eastern Cuyahoga County Resource Fair, in addition to the already established Western Cuyahoga County and Lorain County Resource Fairs.

Q3: Can you share any success stories or memorable moments that highlight the positive impact your organization has had on children and families?

Sarah Rintamaki: Through the Connecting For Kids Ask Us! Program, local mom, Janay, has been able to talk one-on-one with CFK Family Resource Specialists to get information on camps, adapted programs, and sources of funding. Here is what she recently said about our organization: “Their response time is amazing. With CFK, you feel important. You are not shuffled or forgotten. I feel like someone is focusing on me and my needs. It is a warm organization that feels like family, everyone is willing to go above and beyond to help my family.”

Here are some statistics about Connecting For Kids:

1. Staff connected more than 2,000 families with resources, information, and support during the 2022-23 program year.

2. In spring of 2023, more than 1,000 participants attended three Northeast Ohio resource fairs.

3. More than 2,500 participants connected in one of our programs during the 2022-23 program year.

Q4: Is there a particular message or theme you would like to convey to your community and the public on this important day?

Sarah Rintamaki: The lack of access to affordable childcare for families with children with disabilities, medical, and/or behavioral needs is a real crisis in our community. There isn’t any government funding to encourage centers to provide care for children with additional needs and many families have to leave work because they cannot find childcare.

Celebrating National Care for Kids Day as an Accounting Firm:

At Acumen MB LLC, we are committed to more than just numbers. We understand that supporting our community and fostering a bright future for our children is an integral part of our responsibility. National Care for Kids Day provides us with an excellent opportunity to demonstrate this commitment.

For more information on Connecting For Kids and the resources they provide, please visit their website at https://www.connectingforkids.org/ . And a big thank you to Sarah Rintamaki for taking the time to educate us on her amazing organization and what they provide for the Northeast Ohio Community!

Strengthening Your Business’s Financial Resilience: A Guide for National Preparedness Month

Tue, 12 Sep 2023 17:40:29 GMT

As we celebrate National Preparedness Month, at Acumen MB LLC, we want to underscore the importance of financial preparedness for your business or corporation. While disaster preparedness often focuses on physical safety, it’s equally crucial to ensure the financial health and continuity of your organization. In times of crisis, being financially resilient can make all the difference in the world.

1. Understand Your Financial Landscape

To safeguard your business during unforeseen events, start by comprehending your financial landscape inside and out. This includes:

a. Budgeting: Maintain a well-structured budget that encompasses both daily operations and contingencies for emergencies. Continually monitor and adjust it as necessary.

b. Cash Flow Management: Maintain a healthy cash reserve to cover at least three to six months’ worth of operating expenses. This will provide a buffer during unexpected disruptions.

c. Debt Management: Be cautious with your debt load. Minimize high-interest loans and explore options for debt consolidation or refinancing.

d. Insurance: Review your insurance policies regularly to ensure they adequately cover potential risks, such as natural disasters or cyberattacks.

2. Create a Disaster Recovery Plan

A well-thought-out disaster recovery plan is paramount for business resilience. Your plan should include:

a. Data Backup: Regularly back up your financial records and important documents in secure, off-site locations or cloud-based storage.

b. Emergency Contacts: Maintain an up-to-date list of key contacts, including employees, suppliers, and clients, so you can quickly communicate during a crisis.

c. Financial Redundancies: Identify alternative sources of income or financial support in case your primary revenue streams are disrupted.

3. Diversify Income Streams

Over-reliance on a single revenue source can be risky. Diversify your income streams by exploring new markets, products, or services. This can provide a financial cushion during challenging times.

4. Employee Financial Well-Being

Your employees are the backbone of your business. Consider implementing financial wellness programs to help them manage personal finances, reducing their financial stress during disasters.

5. Succession Planning

Ensure the continuity of your business by developing a succession plan. Identify key individuals within your organization who can step into leadership roles if needed. Document processes and responsibilities to ensure a smooth transition in case of unexpected events.

6. Seek Professional Guidance

Engaging a CPA or financial advisor can be invaluable in preparing for unexpected financial challenges. Professionals like us can offer expert insights, conduct financial stress tests, and provide guidance on optimizing your financial strategies.

7. Continual Monitoring and Adaptation

Financial preparedness is an ongoing process. Regularly assess and update your financial strategies, making necessary adjustments as your business evolves and new risks emerge.

8. Collaborate and Network

Join local business associations and networks that can provide support during times of crisis. Sharing experiences and resources can be instrumental in navigating financial challenges.

In conclusion, National Preparedness Month serves as a timely reminder that safeguarding your business’s financial health is an essential part of overall preparedness. By following these steps and proactively managing your financial well-being, you can ensure your business remains resilient in the face of adversity. At Acumen MB LLC, we stand ready to assist you in your journey towards financial preparedness.

Don’t wait for the storm to hit; start building your financial resilience today. Together, we can weather any financial challenge that comes your way.

Ensuring a Secure Future: Estate Planning and National Preparedness Month

Tue, 05 Sep 2023 14:43:06 GMT

As National Preparedness Month begins, Acumen MB LLC recognizes the importance of proactive measures; not only in terms of disaster readiness, but also in securing your financial future. One aspect often overlooked in preparedness discussions is estate planning. While it might not be as immediate as a natural disaster, having a well-structured estate plan is a critical step in ensuring your assets are protected and your loved ones are provided for. In this blog post, we will delve into the significance of estate planning during National Preparedness Month and how it contributes to your overall financial security.

Understanding Estate Planning:

Estate planning is the process of arranging for the management and disposal of your assets after you pass away. It involves making important decisions regarding how your assets will be distributed, who will manage your affairs, and how taxes and other financial considerations will be handled. While it’s not a topic most people relish thinking about, having a comprehensive estate plan in place can alleviate a significant amount of stress for your loved ones during an already difficult time.

Key Components of Estate Planning:

1. Will: A will is a legal document that outlines how you want your assets to be distributed after your death. It allows you to specify beneficiaries for your various properties, investments, and possessions.

2. Trusts: Trusts are versatile tools that can help manage and distribute your assets according to your wishes, while minimizing tax implications. They can be set up during your lifetime (living trusts) or after your passing (testamentary trusts).

3. Power of Attorney: A power of attorney designates someone to make financial decisions on your behalf in case you become incapacitated and are unable to manage your affairs.

4. Healthcare Directives: Healthcare directives, including living wills and healthcare proxies, outline your medical preferences and designate someone to make medical decisions for you if you’re unable to communicate.

5. Beneficiary Designations: Assets such as life insurance policies, retirement accounts, and certain bank accounts allow you to name beneficiaries directly. These designations override your will, so it’s important to keep them updated accordingly.

6. Guardianship Designations: If you have minor children, an estate plan can specify who will care for them in the event of your passing.

While estate planning might not seem directly linked to disaster preparedness, the two concepts share an underlying theme: proactive readiness. Just as you prepare for potential emergencies by having a disaster kit and a family communication plan, estate planning is about preparing for the unexpected. By creating a comprehensive estate plan, you’re not only safeguarding your family’s financial well-being but also ensuring that your wishes are respected when you’re no longer around to communicate them.

Take Action Today:

1. Evaluate Your Assets: Take stock of your assets, both financial and tangible. In other words, prepare an inventory list of those assets. This will help you determine what you need to include in your estate plan.

2. Consult Professionals: Estate planning involves complex legal and financial considerations. Consulting an experienced attorney, financial advisor, and accountant can ensure that your plan is legally sound and tailored to your unique situation.

3. Regular Updates: Life is fluid, and so should be your estate plan. Major life events such as marriage, divorce, births, and deaths should prompt a review and update of your plan.

4. Open Family Discussions: While discussing estate planning can be uncomfortable, involving your family in the process can help prevent confusion and conflicts later.

As we commemorate National Preparedness Month, remember that estate planning is an essential aspect of comprehensive preparedness. Just as you take steps to protect your family from potential disasters, take the time to create an estate plan that ensures their financial security and honors your wishes. Acumen MB LLC is here to assist you in this important endeavor, guiding you through the complexities of estate planning and empowering you to face the future with confidence.

Navigating the Financial Landscape of Selling Your Business: Insights from an Accounting Firm

Tue, 29 Aug 2023 13:57:40 GMT

Selling a business is a monumental decision that requires careful planning, meticulous preparation, and a deep understanding of the financial implications involved. As an accounting firm with years of experience guiding business owners through this complex process, we are here to share valuable insights into the world of selling a business from a financial perspective. In this blog post, we will explore key considerations, strategic steps, and potential pitfalls that business owners should be aware of when embarking on the journey of selling their cherished enterprise.

1. Preparing Your Financial Records

One of the fundamental aspects of selling a business is having accurate and organized financial records. We cannot stress enough the importance of presenting clear and transparent financial information to potential buyers. This includes up-to-date balance sheets, income statements, cash flow statements, and tax returns. Well-maintained records not only instill confidence in prospective buyers but also expedite the due diligence process, ultimately leading to a smoother transaction.

2. Valuation: Determining the True Worth of Your Business

Determining the fair market value of your business is a critical step in the selling process. At our firm, we collaborate closely with firms that specialize in business valuations to assess both tangible and intangible assets, historical financial performance, growth potential, industry trends, and market comparables. Accurate valuation sets the foundation for negotiations and assures that you receive a fair price for the value you’ve built over the years.

3. Tax Implications and Structuring the Deal

Navigating the tax implications of selling a business requires careful planning and strategic structuring of the deal. There are different ways to structure a sale, such as an asset sale or a stock sale, each carrying distinct tax consequences. We work with business owners and legal professionals to optimize the deal structure, minimize tax liabilities, and maximize after-tax proceeds.

4. Due Diligence: Unveiling the Financial Truth

Due diligence is a comprehensive examination of your business by potential buyers. It involves scrutinizing financial statements, contracts, customer relationships, intellectual property, and other critical aspects of your business. Ensuring that your financial records are prepared to withstand rigorous scrutiny is key, increasing the likelihood of a successful transaction.

5. Exit Strategy and Financial Planning

Selling your business is a significant financial event that often marks the transition into a new phase of life. It’s essential to have a well-thought-out-exit strategy that aligns with your long-term financial goals. At Acumen MB, we collaborate with business owners to develop comprehensive financial plans that address post-sale wealth management, retirement goals, and potential tax implications of the newfound wealth.

6. Professional Guidance: Assembling Your Team

Selling a business is a multifaceted endeavor that requires the expertise of various professionals, including attorneys, financial advisors, and, of course, accountants. We are an integral part of the advisory team, collaborating with other experts to ensure a seamless and successful sale.

In conclusion, selling a business is a transformative journey that necessitates meticulous financial planning and strategic decision-making. As accountants and advisors, our role is to guide you through the intricate financial landscape of the sale, from preparing your financial records to structuring the deal and planning for the future. By working closely together, we can navigate the challenges and opportunities that come with selling your business, ultimately ensuring a smooth transition and a prosperous financial future.

Embarking on a New Venture: The Accountant’s Guide to Buying a Business

Tue, 22 Aug 2023 13:58:25 GMT

The decision to buy a business is an exciting venture that comes with a unique set of challenges and opportunities. As an accounting firm deeply invested in your financial success, we understand the complexities involved in acquiring a business. In this blog post, we’ll guide you through the key steps and considerations when buying a business, highlighting how our expertise can steer you toward a successful acquisition.

1. Due Diligence

Before diving into the acquisition process, it’s crucial to thoroughly assess the business’s value. Meticulously examining financial records, operational performance, and potential risks is key when buying a business. With our expertise, you’ll gain a comprehensive understanding of the business’s financial health, enabling you to make informed decisions.

2. Financial Analysis and Performance Assessment

Understanding the financial performance of the target business is paramount. Analyzing historical financial data, identifying trends, strengths, and areas for improvement, are all important aspects of buying a business. This in-depth analysis helps you evaluate whether the business aligns with your goals and if it holds the potential for growth and profitability.

3. Deal Structure and Negotiation

The structure of the acquisition deal can significantly impact the terms, tax implications, and overall success of the transaction. Our firm collaborates with you to design a deal structure that aligns with your financial objectives while considering tax optimization strategies. We provide insights into asset purchases versus stock acquisitions, earn-outs, and other elements that influence negotiations.

4. Tax Planning and Minimization

Navigating the tax implications of an acquisition is essential to maximize your return on investment. Our tax experts develop tailored strategies to minimize tax liabilities, exploring options such as purchase price allocations, tax credits, and deferral strategies. By strategically planning the tax aspects of the acquisition, we help you retain more of your investment.

5. Financial Integration and Reporting

After the acquisition, integrating the new business’s financial operations seamlessly is crucial. Our accounting team assists in harmonizing accounting systems, financial reporting, and internal controls. We ensure a smooth transition, allowing you to manage the acquired business with confidence and accuracy.

6. Risk Mitigation and Compliance

Acquiring a business involves inherent risks, from legal compliance to financial uncertainties. Our accounting firm collaborates closely with legal experts to ensure all regulations are met, contracts are sound, and potential risks are identified and mitigated. This comprehensive approach safeguards your investment and sets the stage for a successful integration.

7. Post-Acquisition Financial Planning

A successful acquisition is just the beginning of your journey. Personalized financial planning guidance will help you manage the acquired business’s finances, optimize cash flow, and plan for future growth. We ensure you’re equipped to navigate the challenges and capitalize on the opportunities that lie ahead.

Buying a business is a monumental endeavor that demands a strategic approach and a comprehensive understanding of financial intricacies. As your dedicated partners, we’re here to guide you every step of the way, providing the expertise, insights, and support you need for a successful acquisition. Let us be your compass on this transformative journey, leading you towards a brighter, more prosperous future.

Contact us today at 216-859-7001 to embark on the path to buying a business with confidence and financial excellence. Your success is our priority, and we’re excited to help you achieve it.

Self-Employment: Quick and Dirty Guide to Tax Issues and Savings

Tue, 26 Jul 2022 14:46:38 GMT

Are you considering joining the Great Resignation and becoming self-employed to be in charge of yourself?

Yes?

Okay, but before leaping, consider the tax implications. This self-employment thing may not be as rosy as it appears.

Here’s the big picture.

Don’t Believe the Hype

Despite what some may believe, becoming self-employed won’t allow you to

write off all your meals as a business expense,
deduct the cost of taking your friends to sporting events,
deduct all your transportation expenses, and
write off the entire cost of owning or renting a residence that contains your home office.

Sorry about that.

While there are some tax advantages to being self-employed, they are underwhelming and should not be the main reason for deciding to go out on your own.

The big non-tax disadvantage is you’ll have to pay for things that were formerly provided by your employer, such as

health insurance,
retirement plan contributions,
a company car (if you were lucky),
company-paid business trips that included elements of pleasure,
meals when you worked late at the office, and
so forth.

And there is one big tax disadvantage: the dreaded self-employment tax.

Now, some details on the tax issues most likely to affect you as a self-employed taxpayer.

The Dreaded Self-Employment Tax Can Be Really Expensive

The self-employment tax is how our beloved U.S. Treasury collects Social Security and Medicare taxes on non-wage income from business-related activities. For 2022, the self-employment tax rate is 15.3 percent on the first $147,000 of net self-employment income (e.g., net income from Schedule C multiplied by 92.35 percent).

That 15.3 percent rate is composed of:

12.4 percent for the Social Security tax component of the self-employment tax plus
2.9 percent for the Medicare tax component.

Above the $147,000 threshold, the Social Security tax component goes away, but the 2.9 percent Medicare tax continues before rising to 3.8 percent at higher self-employment income levels (above $200,000 if you’re unmarried or $250,000 if you’re a married joint-filer). The 3.8 percent rate consists of the “regular” 2.9 percent Medicare tax plus the 0.9 percent additional Medicare tax on higher earners.

Side note . The additional Medicare tax applies to an employee’s W-2 income in the same manner that it applies to self-employment income. It kicks in at the $200,000/$250,000 levels.

Once you’re in the 3.8 percent bracket, it continues to hit your net self-employment income up “to infinity and beyond,” as Buzz Lightyear would say.

Key point. When you were an employee, your employer paid half of the 12.4 percent Social Security tax and half of the 2.9 percent Medicare tax. You paid the other half. Your employer took what you paid from your salary. But now that you’re self-employed, you cover both halves out of your own pocket.

Bottom line: If you make good money, the self-employment tax can be a big number. You’ll need to include what you owe for self-employment tax with your quarterly estimated federal income tax payments to avoid an IRS underpayment penalty.

If, after reading the above, you are ready for self-employment, call us at the office at 216-859-7001, and let’s talk about getting you set up with some tax deductions to offset your tax bite.

Cut Employment Taxes with the S Corporation

Thu, 14 Jul 2022 15:01:32 GMT

I know you report your business on Schedule C of your Form 1040.

Have you noticed that the self-employment tax significantly drains your cash? The S corporation may plug a good chunk of that leak because only the W-2 wages that the S corporation pays to you would suffer federal employment taxes.

Here’s the big picture: The S corporation

deducts the W-2 wages;
passes the remaining taxable income to you—the shareholder who reports the income on his Form 1040; and
makes cash distributions to you—the shareholder.

The passed-through S corporation taxable income increases the tax basis of your stock; therefore, distributions of corporate cash flow are usually federal-income-tax-free.

This tax regime places S corporations in a potentially more favorable position than equivalent businesses conducted as sole proprietorships, single-member LLCs that are treated as sole proprietorships for federal tax purposes, partnerships, and multi-member LLCs that are treated as partnerships for federal tax purposes.

That’s because S corporations can follow the tax-smart strategy of paying modest salaries to shareholder-employees while distributing most or all of the remaining corporate cash flow to them in the form of federal-employment-tax-free distributions.

If you would like to examine the potential tax savings available to you with a switch to the S corporation, please call us at the office at 216-859-7001.

How Will You Deal with the New 62.5 Cents Mileage Rate?

Tue, 05 Jul 2022 18:30:01 GMT

The IRS noticed that average gas prices across the United States exceeded $5.00 a gallon and took action.

Small businesses that qualify to use and do use the standard mileage rate can deduct 62.5 cents per business mile from July 1 through December 31, 2022. That’s up 4 cents a mile.

This brings up a practical question: what do you do if you track business mileage using the three-month sample method?

Three-Month Sample Basics

As a reminder, here are the basics of how the IRS describes the three-month test:

The taxpayer uses her vehicle for business use.
She and other members of her family use the vehicle for personal use.
The taxpayer keeps a mileage log for the first three months of the taxable year, showing that she uses the vehicle 75 percent of the time for business.
Invoices and paid bills show that her vehicle use is about the same throughout the year.

According to this IRS regulation, her three-month sample is adequate for this taxpayer to prove her 75 percent business use.

Sample-Method Solution to New July 1 Mileage Rate

To use the sample rate, you need to prove that your vehicle use is about the same throughout the year. Your invoices and paid bills prove the mileage part, and your appointment book can add creditability to consistent business and personal use.

Keep in mind that the sample is just that—a sample—it’s pretty exact for the three months but not that exact for the year, although it must adequately reflect the business mileage for the year.

If you have a good three-month sample, you take your business mileage for the year and apply the 58.5 cents to half the mileage and the 62.5 cents to the remaining half to find your deductions.

For example, say you drove 20,000 business miles for the year. Your deduction would be $12,100 (10,000 x 58.5 cents + 10,000 x 62.5 cents).

Mileage Record for the Full Year

If you have a mileage record for the entire year, no problem. Your record gives you the mileage for the first six months and the last six months.

If you have questions about your vehicle deductions, please call us at the office at 216-859-7001.

Are Self-Directed IRA's for Real Estate a Good Idea? Maybe Not (Part 1)

Tue, 28 Jun 2022 16:04:59 GMT

The stock market is tanking while real estate continues to skyrocket.

If your retirement savings have taken a hit, you may be wondering if this is the time to invest in real estate through your IRA, Roth IRA, or SEP-IRA.

You can’t invest in real estate with a traditional IRA or Roth IRA (or SEP-IRA) you establish with a bank, brokerage, or trust company. These types of IRA custodians typically limit you to a narrow range of investments, such as publicly traded stocks, bonds, mutual funds, ETFs, and CDs.

But you can invest in real estate if you establish a self-directed IRA with a custodian that allows self-directed investments. There are dozens of such IRA custodians.

Real estate is the single most popular investment in self-directed IRAs. The self-directed IRA can be used for all types of real estate investments: multi-family rental properties, single-family homes, commercial rentals, raw land, farmland, international real estate, tax lien certificates, trust deeds and mortgage notes, and private placements.

Investing in real estate through a self-directed IRA is one way to diversify your retirement holdings. There are also some tax advantages.

And there are several disadvantages and complications you should carefully consider.

First, you need to understand that owning real estate in a self-directed IRA is not like owning it any other way, because you and your self-directed IRA must be totally separate—self-dealing is not allowed.

You, the self-directed IRA owner, should not benefit from your self-directed IRA other than through distributions from the self-directed IRA. And your self-directed IRA itself should not benefit from you other than through contributions you make to the account.

In practical terms, this means you, your relatives, and certain other “disqualified persons” cannot do business with your self-directed IRA. For example, you can’t

· sell property you personally own to your self-directed IRA,

· purchase or lease property from your self-directed IRA,

· personally guarantee loans taken out by your self-directed IRA to purchase property,

· receive rental income from a rental property held in a self-directed IRA, or

· repair or improve any self-directed IRA property.

If you do any of these things, your self-directed IRA could lose its tax-deferred status and you could have to pay tax on the value of all the property it owns.

When your self-directed IRA owns real estate, you also don’t benefit from real estate tax deductions such as depreciation and the 20 percent qualified business income (QBI) deduction.

It may not be pleasant to think about, but upon your death, there is no step-up in basis for real estate held in the self-directed IRA. Instead, your beneficiaries pay tax at ordinary rates on any money or property distributed from a traditional self-directed IRA. This eliminates one of the most valuable tax benefits for real estate owners.

Don’t get the idea that self-directed IRAs are all bad. None of the income from property held in a self-directed IRA is taxable to you personally. Likewise, if you sell property in a self-directed IRA, you need pay no personal tax on any profit. You pay tax only when you withdraw money from a traditional IRA.

With a Roth IRA, you pay no tax at all on withdrawals after age 59 1/2, provided your IRA held the property for at least five years.

But you need to balance these benefits with all the potential drawbacks.

If you have questions about the self-directed IRA, please call me us at the office at 216-859-7001.

Increase Your Tax Deductions Using the Business-Mileage Rule

abeder123@gmail.com (Amanda Beder) — Thu, 09 Jun 2022 14:10:36 GMT

We absolutely, positively don’t like commuting mileage. You should dislike it, too. It’s personal. It’s not deductible.

But with knowledge, it’s avoidable.

Let’s eliminate commuting and make those trips from your home to your office deductible.

The law gives you two ways to eliminate commuting from your home to your outside-the-home office:

Make a temporary business stop on the way to the office.
Establish a home office that qualifies as a principal office.

Temporary Business Stop

The temporary business stop strategy is designed for the home that contains no home office. In this case, the stop turns a commute from your home to the office into a deductible business trip.

Example 1 . Sam, a property and casualty insurance agent, does not claim a home-office deduction. He has to photograph a property before the insurance company will issue the policy. Sam’s trip from his home to the property and from the property to his downtown office produces business miles.

Example 2 . Sam, the guy from Example 1, drives from his home to his downtown office. That’s a non-deductible commute.

Caution . If your only office is in your home and that office does not qualify as a principal office, then the IRS labels your trip from your home to a business stop the “first stop,” and that trip is a non-deductible commute.

Example 3 . You have an office inside your home that does not qualify as a principal office, and you have no office outside the home. You drive 17 miles to a business stop and then return home. Because your only office is inside the home and it does not qualify as a principal office, your 34-mile round trip is a personal non-deductible commute under the IRS’s first and last stop rule.

Home-Office Solution

If you have both a downtown office and a principal office inside your home, you have no commuting mileage from your home to your downtown office. You don’t need to work in your home before you leave for the office. You simply need an office in the home that qualifies under the law as a principal office.

Example 4 . You have an administrative office in your home that qualifies as a principal office. You drive 11 miles from your home to your downtown office, work all day in your downtown office, and then drive the 11 miles from your downtown office back home. This 22-mile round trip to and from your downtown office is deductible as business mileage.

If you would like to discuss business mileage, please don’t hesitate to call us at the office at 216-859-7001.

The IRS Wants to Know About Your Crypto

Thu, 02 Jun 2022 13:54:03 GMT

Cryptocurrency such as bitcoin is all the rage these days. Crypto is not legal money. It is property, similar to gold. Like gold, its use can result in taxable income.

The IRS is concerned that you and millions of Americans are using crypto without paying tax on the earnings. To clarify that it expects you and other taxpayers to report crypto earnings, the IRS added the following question about cryptocurrency to the top of Form 1040:

At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?

You must answer this question under penalty of perjury, even if you have never heard of bitcoin and don’t know what cryptocurrency is. You can’t leave the field blank.

Unfortunately, this is something of a trick question. It is so broadly worded, you’d think any transaction involving digital currency requires a “yes” answer. But that is not the case.

IRS guidance makes clear that it is interested only in virtual currency transactions that result in taxable income (or loss) that must be reported on a taxpayer’s return.

Thus, for example, if you simply purchased bitcoin during the year and held on to it, you should answer “no” to the crypto question. The same goes if you received crypto as a gift, or transferred crypto from one wallet to another.

You should answer “yes” to the crypto question if you purchased or sold goods or services with crypto, received new crypto through mining or staking activities, exchanged crypto for dollars or other crypto, or got new crypto from a hard fork. All these activities result in taxable income (or loss).

What should you do if you answered the crypto question wrong?

If you answered the crypto question “yes” when you should have answered “no,” you don’t have to do anything. There is no need to amend your tax return.

On the other hand, if you answered “no” when it should have been “yes” and you did not report your taxable virtual currency transactions, you need to file an amended or superseding return. If you fail to do so, you may get a letter from the IRS advising you to file an amended return and pay any taxes due. The IRS began sending out such letters in 2019.

If you have any virtual currency questions, please call me us at the office at 216-859-7001.

Minimize cyber footprints, Protect personal information online

Thu, 26 May 2022 13:28:35 GMT

The Internal Revenue Service urged people to stay resolute against ongoing scams and schemes by properly securing computers, tablets and phones. Solid cybersecurity protection and scam recognition is vital to reduce the threat of identity theft inside and outside the tax system.

The IRS works closely with the Security Summit , a partnership with state tax agencies and the private-sector tax industry, to help protect taxpayer information and defend against identity theft. Taxpayers and tax professionals can take steps to help in this effort by doing things like minimizing cybersecurity footprints and recognizing common scams and schemes.

Below are 10 tips to help minimize exposure to fraud and identity theft:

Safeguard personal data. Provide a Social Security number, for example, only when necessary . Only offer personal information or conduct financial transactions on sites that have been verified as reputable, encrypted websites.
Protect personal information. Treat personal information like cash – don't hand it out to just anyone. Social Security numbers, credit card numbers, bank and even utility account numbers can be used to help steal a person's money or open new accounts.
Use strong passwords. Use a password phrase or series of words that will be easy for you to remember. Use at least 10 characters; 12 is ideal for most home users. Mix letters, numbers and special characters. Try to be unpredictable – don't use names, birthdates or common words. Don't use the same password for many accounts and avoid sharing them. Keep passwords in a secure place or use password management tools.
Set password and encryption protections for wireless networks. If a home or business Wi-Fi is unsecured, it allows any computer within range to access the wireless network and potentially steal information from connected devices. Whenever it is an option for a password-protected account, users should also opt for a multi-factor authentication process. Multi-factor authentication is critical to protecting your password.
Avoid phishing scams. The easiest way for criminals to steal sensitive data is simply to ask for it. IRS urges people to learn to recognize phishing emails , calls or texts that pose as familiar organizations such as banks, credit card companies or even the IRS. Keep sensitive data safe and:
Be aware that an unsolicited email with a request to download an attachment or click on a URL could appear to come from someone that you know like a friend, work colleague or tax professional if their email has been spoofed or compromised.
Don't assume internet advertisements, pop-up ads or emails are from reputable companies. If an ad or offer looks too good to be true, take a moment to check out the company behind it.
Never download "security" software from a pop-up ad. A pervasive ploy is a pop-up ad that indicates it has detected a virus on the computer. The download most likely will install some type of malware. Reputable security software companies do not advertise in this manner.
Use security software. An anti-virus program should provide protection from viruses, Trojans, spyware and adware. The IRS urges everyone to use an anti-virus program and always keep it up to date. Set security software to update automatically so it can be updated as threats emerge.
Educate those less experienced about online safety. Children and those with less online experience may not be fully aware of the perils of opening suspicious web pages, emails or documents. Teens and younger users can put themselves at risk by leaving a trail of personal information for con artists to follow.
Back up files. No system is completely secure. Copy important files, including federal and state tax returns, onto removable discs or back-up drives and cloud storage. Store discs, drives and any paper copies in secure, locked locations.
Know the risk of public Wi-Fi. Connection to public Wi-Fi is convenient and often free, but it may not be safe. Hackers and cybercriminals can easily steal personal information from these networks. Always use a virtual private network when connecting to public Wi-Fi.
Review ID Theft Central. Designed to improve online access to information on identity theft , it serves taxpayers, tax professionals and businesses.

The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Generally, the IRS first mails a paper bill to a person who owes taxes. In some special situations, the IRS will call or come to a home or business.

People should be alert to scammers posing as the IRS to steal personal information. There are ways to know if it's really the IRS calling or knocking on someone's door.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it's needed at home, at work or on the go.

Avoid This Payroll Tax Nightmare

Tue, 24 May 2022 15:43:46 GMT

Don’t let this happen to you.

Here’s what happened to Mr. Kazmi. First, a little background.

Urgent Care Center Inc., an Illinois corporation, employed Mr. Kazmi as a part-time hourly bookkeeper.

· He had no ownership interest in Urgent Care.

· He was not an officer of Urgent Care.

· His name was not on any of Urgent Care’s bank accounts.

· He did not have check-signing authority for Urgent Care or any power to make payments on behalf of Urgent Care.

At all times, Mr. Kazmi worked under the authority and direction of Dr. Senno, the sole owner of Urgent Care, an S corporation.

Problem

Urgent Care did not pay its payroll taxes. The IRS claimed that Mr. Kazmi was a responsible person—meaning that he was now on the hook for the unpaid taxes and the 100 percent trust fund penalty. Mr. Kazmi’s amount at risk: $10,375.

He took his case to court, where we pick up his story.

IRS Interview

In this case, the record before the court included IRS Form 4180, “Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes.”

During that interview with the IRS revenue officer, Mr. Kazmi described his job title as “bookkeeper” and his duties as “to take care of payroll.” On the form, he indicated the following:

He did not determine financial policy for Urgent Care.
He did not authorize payments of bills or to creditors.
He did not authorize payroll.

During the interview, he indicated that he was authorized to transmit payroll tax returns and make federal tax deposits. He was also aware that Urgent Care did not remit the employees’ withheld taxes.

So here we have the part-time, hourly paid bookkeeper who could not sign a check or authorize payments with $10,375 of payroll tax trouble—attributable entirely to Dr. Senno.

Missed Opportunity

The IRS sent by certified mail IRS Letter 1153 to Mr. Kazmi. He signed the postal service form signifying he had received the letter.

Letter 1153 set forth that the IRS considered Mr. Kazmi a person responsible for the unpaid payroll tax and subject to the 100 percent trust fund penalty—the $10,375. Mr. Kazmi had 60 days to challenge by submitting a written appeal. He did not.

Result

The court ruled that Mr. Kazmi had to pay $10,375 (Mohammad A. Kazmi v Commr., T.C. Memo. 2022-13).

But you can see in this opinion that the court does not rule that Mr. Kazmi was a responsible person. Instead, the court ruled that the IRS did its job correctly and that Mr. Kazmi owes the money because he failed to respond to Letter 1153.

Key point . Had Mr. Kazmi responded to Letter 1153, the IRS likely would not have considered him a responsible person based on his facts and circumstances.

Takeaways

Do not work for or deal with taxpayers who do not remit the payroll taxes to the government. What happened to Mr. Kazmi could happen to you.

By all accounts, you know that Mr. Kazmi is a victim of Dr. Senno’s failure to pay the payroll taxes. He’s pretty much an innocent bystander—but despite his innocence, he is now out of pocket $10,375.

Think about this: How many part-time bookkeeping hours will it take for Mr. Kazmi to pay $10,375 to the IRS? And keep in mind that the $10,375 is not tax-deductible.

One final thought: Don’t ignore IRS notices.

If you have a payroll tax issue and would like to discuss it, please call us at the office at 216-859-7001.

Is Now the Time to Transfer Your Home to Your Adult Child?

Tue, 17 May 2022 15:25:00 GMT

With today’s home prices and the crazy real estate market, it’s likely difficult for your children to buy a home. And it’s conceivable that you are ready to move on from your existing home.

If this is true, consider the three options below.

Option 1 : Make an Outright Gift

Say you’re feeling so generous that you might just simply give your home to your adult child. What a deal for the kid!

Tax-wise, if you make the gift this year, it will reduce your $12.06 million unified federal gift and estate tax exemption. To calculate the impact, reduce the fair market value of the home you would be giving away by the annual federal gift tax exclusion, which is $16,000 for 2022. The remainder is the amount that would reduce your unified federal exemption.

If you’re married, your spouse has a separate $12.06 million unified federal exemption. If you and your spouse make a joint gift of the home, each of your unified federal exemptions will be reduced. To calculate the impact, take half of the fair market value of the home minus the $16,000 annual exclusion. The remainder is the amount by which you would reduce your unified federal exemption. Ditto for your spouse’s separate exemption.

If your child is married and you give the home to your child and his or her spouse, you can claim a separate $16,000 annual exclusion for your child’s spouse.

If you expect the home to continue to appreciate (seemingly a pretty good bet), getting it out of your estate by giving it away is a good estate-tax-avoidance strategy.

Option 2 : Arrange a Bargain Sale

Say you’re feeling generous, but not so generous that you want to simply give away your home. Fair enough.

Consider selling the home to your child for less than fair market value. For federal gift tax purposes, this is treated as a gift of the difference between the home’s fair market value and the bargain sale price. Tax-wise, this can work out okay.

Warning . Do not make a bargain sale or an outright gift of the home if you intend to continue living there until you depart this planet. In these scenarios, expect the IRS to argue that the home’s full date-of-death fair market value must be included in your estate for federal estate tax purposes, even if you were paying fair market rent to your child.

Option 3 : Arrange Full-Price Sale with Seller Financing from You

The idea of giving your home-starved child a big free lunch might be unappealing. Very well.

Consider selling the home to your child for its current fair market value with you taking back a note for a big part of the purchase price.

Assume you’re feeling charitable. If so, you can charge the lowest interest rate the IRS allows without any weird tax consequences. That’s called the “applicable federal rate” (AFR).

AFRs change monthly in response to bond market conditions and are generally well below commercial rates. In April 2022, the long-term AFR, for loans of more than nine years, is only 2.25 percent (assuming annual compounding). The mid-term AFR, for loans of more than three years but not more than nine years, is only 1.87 percent (assuming annual compounding).

As this was written, the going rate nationally for a 30-year fixed-rate commercial mortgage was around 6.1 percent, while the rate for a 15-year loan was around 5.6 percent.

So, for a loan made in April 2022, you could take back a 30-year note that charges the long-term AFR of only 2.25 percent. Alternatively, you could take back a nine-year note that charges the mid-term AFR of only 1.87 percent. Either arrangement would be a money-saving deal for your child.

If you would like to discuss transferring your home to your adult child, please call us at 216-859-7001.

Selling Your Highly Appreciated Vacation Home? What About Taxes?

Tue, 10 May 2022 14:56:07 GMT

The tax-code-defined vacation home rules come into play when you have both rental and personal use of a home. Thus, you can have tax-code-defined vacation homes in the city, in the suburbs, and in recreation areas.

If you have no combined rental and personal use of the home, the rules are easy. The property is one of the following:

Principal residence
Second home
Rental property

But when you have both rental and personal use of the home, your tax life gets more complicated because you have entered the tax code’s vacation home section. In this situation, the property in a more complicated way is one of the following:

Principal residence
Second home
Rental property

If it’s a principal residence , then the $250,000/$500,000 home sale exclusion is available when you sell.

If it’s simply a second home , you can’t use the exclusion and you pay taxes at capital gains rates—and you may suffer the NIIT as well.

If it’s a rental , you face the capital gains rules, NIIT, unrecaptured Section 1250 gain taxes, and release of some (if grouped) or all (if not grouped) passive activity suspended losses.

When you have rental use after 2008 and then convert the rental to your principal residence, you must use a rental/residence fraction to determine how you will be taxed.

As you can see, the rules in this area can get complicated. If you would like to discuss the rules, please don’t hesitate to call us at 216-859-7001.

Donor-Advised Funds: A Tax Planning Tool for Church and Charity Donations

Thu, 05 May 2022 17:24:11 GMT

Do you give money to your church?

Do you get a tax benefit from those donations?

How about your donations to other charities?

Recent changes in the tax code have done much to destroy your benefits from church and other tax-deductible 501(c)(3) donations. But there’s a way to donate the way you want, get revenge on the tax code, and realize the tax benefits you deserve.

This get-even tool is the donor-advised fund, an increasingly popular way to donate to your church and other 501(c)(3) organizations. Indeed, donor-advised funds have exploded over the past few years, with over one million donor-advised fund accounts in existence as of 2020.

Example . You donate $100,000 to the fund today. You get the $100,000 deduction now. From the fund, you donate $10,000 a year to your church (probably more as your money in the fund grows tax-free).

National investment firms such as Fidelity, Schwab, and Vanguard have all created donor-advised funds. These “commercial” donor-advised funds hire an affiliated for-profit investment firm to manage the assets in the accounts for a fee that varies based on the account balance.

You can also establish a donor-advised fund account with a community foundation that has a local orientation; a single-issue non-profit, such as a university or an environmental charity like the Sierra Club; or an independent, non-commercial organization such as the American Endowment Foundation, National Philanthropic Trust, or United Charitable.

You can always donate cash, including money in IRAs and 401(k)s, to your donor-advised fund account. But many donor-advised funds also accept non-cash donations, including

stocks, bonds, and mutual fund shares,
real estate,
privately owned company stock,
LLC and limited partnership interests,
Bitcoin and other cryptocurrency, and
life insurance.

Donating stock or mutual fund shares that have appreciated is a great tax strategy. Here’s why:

If you owned the stock for more than one year, you get a deduction equal to its fair market value at the time of the donation.
And you don’t pay any capital gains tax on the appreciated value of the stock.

Example . Darius owns $1,000 shares of Evergreen stock that’s publicly traded on NASDAQ. He paid $10,000 for the stock back in 2010, and the shares are worth $100,000 today.

He establishes a donor-advised fund in 2022 and donates the stock.

He gets a $100,000 charitable deduction for 2022.
He pays no federal tax on his $90,000 gain.

As you can see, there are many benefits to donor-advised funds for the charitably inclined, and few drawbacks. If you would like to discuss donor-advised funds, please don’t hesitate to us at the office at 216-859-7001.

Deducting Mortgage Interest When Your Name is Not on the Deed

Thu, 28 Apr 2022 16:02:29 GMT

Tax law has an amazing break for unconventional homeowners.

You can deduct your mortgage interest payments even when the deed to the house and the mortgage are in someone else’s name.

Here’s what happened to Sue Davis.

Sue could not personally qualify for a home loan. Her parents stepped in to help. They bought the house and signed the mortgage.

But Sue lives in the home and pays all the expenses of the property, including the property taxes and the mortgage.

Using a little-known tax rule, Sue deducts the mortgage interest payments she makes on her Form 1040.

What’s even more interesting is that Sue found out about this little-known rule after she had been making payments for a few years. Once she learned the rule, Sue amended three years of tax returns, claiming about $18,000 per year in deductions, and got a sizable tax refund.

If you are in a similar situation, you can get these tax breaks too. You simply need to prove that you are the “equitable owner” of the property.

If you make payments on a mortgage that is not in your name, you can deduct the interest as long as you are the legal or equitable owner of the property that secures the mortgage.

“Legal” title and “equitable” title are two different things. You just need one or the other to qualify for the interest deduction.

Legal title . This simply means legal ownership according to the real estate laws of your state. In general, legal title requires a deed of ownership that is properly recorded according to the laws of your state.

Equitable title. Under this doctrine, you prove that even though you do not have legal title, you bear the benefits and burdens of the property and are thus the true owner under the law for certain purposes.

When a court considers an equitable ownership claim, the judge looks at all the facts and circumstances of the situation. The factors the courts consider are

right to possess the property and enjoy its use, rents, or profits;
duty to maintain the property;
responsibility for insuring the property;
risk of loss on the property;
obligation to pay the property’s taxes, assessments, or charges;
right to improve the property without the legal owner’s consent; and
right to get legal title at any time by paying the balance of the purchase price.

You don’t have to prove every single element in the list, but you want to show as many as possible. The more elements you have on your side, the stronger your case will be.

If you would like to discuss legal or equitable title, please call us at the office at 216-859-7001.

Tax Pros and Cons: Partnership with Multiple Partners

Tue, 26 Apr 2022 15:47:49 GMT

The generally favorable partnership federal income tax rules are a common reason for choosing to operate as a partnership with multiple partners instead of as a corporation with multiple shareholders. The most important partnership tax rules can be summarized as follows:

You get pass-through taxation.
You can deduct partnership losses (within limits).
You may be eligible for the Section 199A tax deduction.
You get basis from partnership debts.
You get basis step-up for purchased interests.
You can make tax-free asset transfers with the partnership.
You can make special tax allocations.

Partnership taxation is not all good stuff. There are a few important disadvantages and complications to consider:

Exposure to self-employment tax
Complicated Section 704(c) tax allocation rules
Tricky disguised sale rules
Unfavorable fringe benefit tax rules

Limited partnerships are obviously treated as partnerships for federal income tax purposes, with the generally favorable partnership taxation rules mentioned above.

Limited partners generally are not exposed to liabilities related to the partnership or its operations. So, you generally cannot lose more than what you’ve invested in a limited partnership—unless you guarantee partnership debt.

So far, so good. But you must also consider the following disadvantages for limited partners:

Limited partners usually get no basis from partnership liabilities.
Limited partners can lose their liability protection.
You need a general partner.

On the plus side, limited partners have a self-employment tax advantage.

Since your partnership will have multiple partners, multiple issues can come into play. You’ll need a carefully drafted partnership agreement to handle potential issues even if you don’t expect them to arise. For instance, you may want to include

a partnership interest buy-sell agreement to cover partner exits;
a non-compete agreement (for obvious reasons);
an explanation of how tax allocations will be calculated in compliance with IRS regulations;
an explanation of how distributions will be calculated and when they will be paid (for instance, you may want to call for cash distributions to be made annually in early April to cover partners’ tax liabilities from their shares of partnership income for the previous year);
guidelines for how the divorce, bankruptcy, or death of a partner will be handled;
and so on.

Key point. No type of entity (including a limited partnership in which you are a limited partner) will protect your personal assets from exposure to liabilities related to your own professional malpractice or your own tortious acts.

If you would like to discuss partnerships, please call us at the office at 216-859-7001.

Don't Rob Yourself of the Home Internet Deduction

Wed, 02 Feb 2022 16:35:48 GMT

If you do some work at home, you’re probably using your home internet connection. Are your monthly internet expenses deductible? Maybe.

The deduction rules depend on your choice of business entity (proprietorship, corporation, or partnership).

Deduction on Schedule C

If you operate your business as a sole proprietorship or as a single-member LLC, you file a Schedule C to report your business income and expenses. As a Schedule C taxpayer, you may deduct ordinary and necessary expenses, which include business-related internet subscription fees.

You can deduct your use of your home internet whether or not you claim the home-office deduction, as follows:

If you claim the home-office deduction on your Form 1040, the internet expense goes on line 21 (utilities) of IRS Form 8829 as either a direct or an indirect expense.
If you do not claim the home-office deduction, enter the business portion of your internet expenses as utilities expenses on line 25 of your Schedule C.

Deduction When You Operate as a Corporation

When you operate your business as a corporation, you are an employee of that corporation. Because of the Tax Cuts and Jobs Act (TCJA), the only way for you to reap the benefits of the home internet deduction is to have your corporation reimburse you for the expense. In the case of a reimbursed employee expense,

the corporation deducts the expense as a utility expense, and
you receive the reimbursement as a tax-free reimbursed employee business expense.

Why is the reimbursement method the only way for the corporate owner to get the deduction? The TCJA eliminated the 2018-2025 deduction for miscellaneous itemized expenses. These include unreimbursed employee expenses, such as internet connection fees.

Deduction When You Operate as a Partnership

If you have deductible home internet expenses and operate as a partner in a partnership, you have two ways to get a tax benefit from the home office:

Deduct the cost as an unreimbursed partner expense (UPE).
Or get reimbursed from your partnership via an accountable plan (think “expense report”).

Substantiating Your Home Internet Expense Deduction

Where business owners can run into trouble with the IRS is in substantiating their internet expense deduction.

You should have no problem showing the total cost for your home internet connection—just total your monthly bills. The problem is in establishing what percentage of the total cost was for business, because only that percentage is deductible.

Ideally, you should keep track of how much time you use your home internet connection for business and how much time for personal use. A simple log or notation on your business calendar or appointment book—indicating approximately how many hours you were online for business each day while working at home—should be sufficient.

Google it, and you can find software and apps that will track your internet use.

Instead of tracking your home internet use every day throughout the year, you could use a sampling method such as that permitted for tracking business use of vehicles and other listed property. There is no logical reason the IRS shouldn’t accept such a sampling for internet use.

If you would like to discuss how your work at home creates tax deductions, please call us at the office at 216-859-7001.

Get Ready to File Your Federal Income Tax Return with These Preparation Tips

abeder123@gmail.com (Amanda Beder) — Thu, 16 Dec 2021 15:54:29 GMT

Rely on IRS.GOV for verified information

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Securely access your individual tax account information online

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Update your records

Notify the IRS if your address changed to ensure you receive IRS correspondence at your new address. File Form 8822, Change of Address (For Individual, Gift, Estate, or Generation-Skipping Transfer Tax Returns) to update your address with the IRS. Otherwise, IRS will automatically update your records with the address on your tax return when you file your taxes. If you’ve had a legal name change, notify the Social Security Administration to avoid a delay in processing your tax return.

Review your eligibility for credits and deductions

Life events—purchasing a home, going to college or losing a job—may make you eligible for certain tax benefits. Finding out your eligibility now can help make filing easier next year. Other circumstances, such as getting married or divorced, welcoming a child or experiencing the death of a spouse or a dependent you claim, could also affect your tax benefit eligibility and filing status. To learn more, go to managing your taxes after a life event. Tax credits and deductions can mean more money in your pocket; and thinking about your eligibility now can help make filing easier next year. Tax law changes for the 2021 tax year made more people eligible for tax credits, including the Earned Income Credit and the Child Tax Credit. Use the Interactive Tax Assistant on IRS.gov to find out if you qualify for credits such as the Earned Income Tax Credit, Child and Dependent Care Credit and the Credit for Other Dependents. Families with students may qualify for education credits. You may also qualify for a Recovery Rebate Credit if you did not get the full third Economic Impact Payment. Remember to keep records that show your eligibility for credits you claim. This includes agency letters about advance credit payments you received for the Child Tax Credit, Economic Impact Payments and the Premium Tax Credit.

Check your ITIN

If you use an ITIN (Individual Tax Identification Number) to file, make sure it hasn’t expired. Go to IRS.gov/ITIN for more information.

Prepare to file electronically

E-file is the most accurate way to prepare and file your tax return. Errors delay refunds and the easiest way to avoid them is to file electronically. Tax preparation software guides you through the process and does all the math. Seventy percent of all taxpayers can use free brand name tax software to prepare and file their federal income tax return electronically using IRS Free File. All taxpayers, regardless of income level, can also use IRS Free File Fillable Forms. Senior citizens, members of the military, and many other taxpayers—depending on their income—may also qualify for free tax return preparation and electronic filing by IRS-trained volunteers through the Volunteer Income Tax Assistance Program (VITA) or Tax Counseling for the Elderly (TCE) programs.

Get ready to direct deposit your refund

Combining direct deposit with electronic filing is the safest and fastest way for you to get your refund. With direct deposit, your tax refund goes directly into your bank account. There’s no reason to worry about a lost, stolen or undeliverable refund check. If you don’t have a bank account, go to the FDIC website or the National Credit Union Administration’s Credit Union Locator Tool for information on where to find a bank or credit union that can open an account online and how to choose the right account for you.

Manage refund expectations

Different factors can affect your refund. Be careful not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. See IRS.gov/refunds for more information. While the IRS issues most e-file refunds in less than 21 days, it’s possible your tax return may require additional review. Some returns take longer to process than others for many reasons, including when a return is incomplete, affected by identity theft or fraud, or includes math errors. And, if you claim the Earned Income Tax Credit or Additional Child Tax Credit, by law, the IRS cannot issue your refund before mid- February. This timeframe applies to the entire refund, not just the portion associated with these credits.

Unemployment compensation

In 2021, many people received unemployment compensation. Unemployment compensation is taxable and must be reported on your income tax return. Unemployment benefit recipients should receive Form 1099-G, Government Payments, from their state unemployment insurance agency in January 2022 either by mail or electronically. Check your state’s unemployment compensation website for more information. Form 1099-G reports the amount of unemployment compensation received in Box 1 and any federal income tax withheld in Box 4. Be sure to include these amounts on your 2021 federal tax return. Find more information on unemployment benefits in Publication 525.

Find out if you need to adjust your withholding

Did you receive a smaller refund than expected or have an unanticipated tax bill? Use the IRS Tax Withholding Estimator to help decide if you need to adjust your tax withholding or make estimated or additional tax payments. Submit a new Form W-4, Employee’s Withholding Allowance Certificate, to your employer if you need to make an adjustment. You can also make estimated or additional tax payments if the withholding from your salary, pension or other income doesn’t cover the income tax that you’ll owe for the year.

If you have any questions, please give us a call at the office at 216-859-7001.

2021 Last-Minute Year-End Retirement Deductions

Thu, 18 Nov 2021 15:17:10 GMT

The clock continues to tick. Your retirement is one year closer.

You have time before December 31 to take steps that will help you fund the retirement you desire. Here are four things to consider.

1. Establish Your 2021 Retirement Plan

First, a question: As you read this, do you have your (or your corporation’s) retirement plan in place?

If not, and if you have some cash you can put into a retirement plan, get busy and put that retirement plan in place so you can obtain a tax deduction for 2021.

For most defined contribution plans, such as 401(k) plans, you (the owner-employee) are both an employee and the employer, whether you operate as a corporation or as a proprietorship. And that’s good because you can make both the employer and the employee contributions, allowing you to put a good chunk of money away.

2. Claim the New, Improved Retirement Plan Start-Up Tax Credit of Up to $15,000

By establishing a new qualified retirement plan (such as a profit-sharing plan, 401(k) plan, or defined benefit pension plan), a SIMPLE IRA plan, or a SEP, you can qualify for a non-refundable tax credit that’s the greater of

$500 or
the lesser of (a) $250 multiplied by the number of your non-highly compensated employees who are eligible to participate in the plan, or (b) $5,000.

The credit is based on your “qualified start-up costs,” which means any ordinary and necessary expenses of an eligible employer that are paid or incurred in connection with

the establishment or administration of an eligible employer plan, or
the retirement-related education of employees with respect to such plan.

3. Claim the New Automatic Enrollment $500 Tax Credit for Each of Three Years ($1,500 Total)

The SECURE Act added a non-refundable credit of $500 per year for up to three years, beginning with the first taxable year (2020 or later) in which you, as an eligible small employer, include an automatic contribution arrangement in a 401(k) or SIMPLE plan.

The new $500 auto-contribution tax credit is in addition to the start-up credit and can apply to both newly created and existing retirement plans. Further, you don’t have to spend any money to trigger the credit. You simply need to add the auto-enrollment feature (which does contain a provision that allows employees to opt out).

4. Convert to a Roth IRA

Consider converting your 401(k) or traditional IRA to a Roth IRA.

If you make good money on your IRA investments and you won’t need your IRA money during the next five years, the Roth IRA over its lifetime can produce financial results far superior to the traditional retirement plan.

You first need to answer this question: How much tax will you have to pay to convert your existing plan to a Roth IRA? With this answer, you now know how much cash you need on hand to pay the extra taxes caused by the conversion to a Roth IRA.

Here are four reasons you should consider converting your retirement plan to a Roth IRA:

You can withdraw the monies you put into your Roth IRA (the contributions) at any time, both tax-free and penalty-free, because you invested previously taxed money into the Roth account.
You can withdraw the money you converted from the traditional plan to the Roth IRA at any time, tax-free. (But if you make that conversion withdrawal within five years of the conversion, you pay a 10 percent penalty. Each conversion has its own five-year period.)
When you have your money in a Roth IRA, you pay no tax on qualified withdrawals (earnings), which are distributions taken after age 59 1/2, provided you’ve had your Roth IRA open for at least five years.
Unlike with the traditional IRA, you don’t have to receive required minimum distributions from a Roth IRA when you reach age 72—or to put this another way, you can keep your Roth IRA intact and earning money until you die. (After your death, the Roth IRA can continue to earn money, but someone else will be making the investment decisions and enjoying your cash.)

If you would like my help with any of the above, please give us a call at 216-859-7001.

2021 Last-Minute Year-End General Business Income Tax Deductions

Fri, 05 Nov 2021 14:28:55 GMT

The purpose of this blog is to get the IRS to owe you money.

Of course, the IRS is not likely to cut you a check for this money (although in the right circumstances, that will happen), but you’ll realize the cash when you pay less in taxes.

Here are six powerful business tax deduction strategies that you can easily understand and implement before the end of 2021.

1. Prepay Expenses Using the IRS Safe Harbor

You just have to thank the IRS for its tax-deduction safe harbors.

IRS regulations contain a safe-harbor rule that allows cash-basis taxpayers to prepay and deduct qualifying expenses up to 12 months in advance without challenge, adjustment, or change by the IRS.

Under this safe harbor, your 2021 prepayments cannot go into 2023. This makes sense, because you can prepay only 12 months of qualifying expenses under the safe-harbor rule.

For a cash-basis taxpayer, qualifying expenses include lease payments on business vehicles, rent payments on offices and machinery, and business and malpractice insurance premiums.

Example . You pay $3,000 a month in rent and would like a $36,000 deduction this year. So on Friday, December 31, 2021, you mail a rent check for $36,000 to cover all of your 2022 rent. Your landlord does not receive the payment in the mail until Tuesday, January 4, 2022. Here are the results:

You deduct $36,000 in 2021 (the year you paid the money).
The landlord reports taxable income of $36,000 in 2022 (the year he received the money).

You get what you want—the deduction this year.

The landlord gets what he wants—next year’s entire rent in advance, eliminating any collection problems while keeping the rent taxable in the year he expects it to be taxable.

2. Stop Billing Customers, Clients, and Patients

Here is one rock-solid, easy strategy to reduce your taxable income for this year: stop billing your customers, clients, and patients until after December 31, 2021. (We assume here that you or your corporation is on a cash basis and operates on the calendar year.)

Customers, clients, patients, and insurance companies generally don’t pay until billed. Not billing customers and patients is a time-tested tax-planning strategy that business owners have used successfully for years.

Example . Jim, a dentist, usually bills his patients and the insurance companies at the end of each week. This year, however, he sends no bills in December. Instead, he gathers up those bills and mails them the first week of January. Presto! He just postponed paying taxes on his December 2021 income by moving that income to 2022.

3. Buy Office Equipment

With bonus depreciation now at 100 percent along with increased limits for Section 179 expensing, buy your equipment or machinery and place it in service before December 31, and get a deduction for 100 percent of the cost in 2021.

Qualifying bonus depreciation and Section 179 purchases include new and used personal property such as machinery, equipment, computers, desks, chairs, and other furniture (and certain qualifying vehicles).

4. Use Your Credit Cards

If you are a single-member LLC or sole proprietor filing Schedule C for your business, the day you charge a purchase to your business or personal credit card is the day you deduct the expense. Therefore, as a Schedule C taxpayer, you should consider using your credit card for last-minute purchases of office supplies and other business necessities.

If you operate your business as a corporation, and if the corporation has a credit card in the corporate name, the same rule applies: the date of charge is the date of deduction for the corporation.

But if you operate your business as a corporation and you are the personal owner of the credit card, the corporation must reimburse you if you want the corporation to realize the tax deduction, and that happens on the date of reimbursement. Thus, submit your expense report and have your corporation make its reimbursements to you before midnight on December 31.

5. Don’t Assume You Are Taking Too Many Deductions

If your business deductions exceed your business income, you have a tax loss for the year. With a few modifications to the loss, tax law calls this a “net operating loss,” or NOL.

If you are just starting your business, you could very possibly have an NOL. You could have a loss year even with an ongoing, successful business.

You used to be able to carry back your NOL two years and get immediate tax refunds from prior years, but the Tax Cuts and Jobs Act (TCJA) eliminated this provision. Now, you can only carry your NOL forward, and it can only offset up to 80 percent of your taxable income in any one future year.

What does this all mean? You should never stop documenting your deductions, and you should always claim all your rightful deductions. We have spoken with far too many business owners, especially new owners, who don’t claim all their deductions when those deductions would produce a tax loss.

6. Deal with Your Qualified Improvement Property (QIP)

In the CARES Act, Congress finally fixed the qualified improvement property (QIP) error that it made when enacting the TCJA.

QIP is any improvement made by you to the interior portion of a building you own that is non-residential real property (think office buildings, retail stores, and shopping centers) if you place the improvement in service after the date you place the building in service.

The big deal with QIP is that it’s not considered real property that you depreciate over 39 years. QIP is 15-year property, eligible for immediate deduction using either 100 percent bonus depreciation or Section 179 expensing. To get the QIP deduction in 2021, you need to place the QIP in service on or before December 31, 2021.

Planning note. If you have QIP property on an already filed 2018 or 2019 return, it’s on that return as 39-year property. You need to fix that—and likely add some cash to your bank account because of the fix.

I trust that you found the six ideas above worthwhile. If you would like to discuss any of them, please call us at the office at 216-859-7001.

Be Sure to Know the Tax-Home Rule

Thu, 28 Oct 2021 14:26:33 GMT

When you travel out of town overnight, you need to know the tax-home rule. The IRS defines your tax home, and it’s not necessarily in the same town where you have your personal residence.

If you have more than one business location, one of the locations will be your tax home. It’s generally your main place of business.

In determining your main place of business, the IRS takes into account three factors:

the length of time you spend at each location for business purposes;
the degree of business activity in each area; and
the relative financial return from each area.

Here’s a recent court case that illustrates this rule.

Akeem Soboyede, an immigration attorney, was licensed to practice law in both Minnesota and Washington, D.C., and he maintained solo law practices in both Minneapolis and Washington, D.C.

Although Mr. Soboyede’s primary personal residence was in Minneapolis, he divided his time between his office in Minneapolis and his office in Washington, D.C.

Get ready for a chuckle: in court, Mr. Soboyede admitted in his testimony that he did not keep the necessary documentation because he “did not know . . . [he] was going to get audited.”

Due to the lack of records, the IRS disallowed most of the deductions. The remaining issue for the court was the travel expenses for lodging for which Mr. Soboyede had the records.

The court noted that Mr. Soboyede’s lodging expenses were only deductible if he was “away from home” as required by Section 162(a)(2).

In deciding whether Mr. Soboyede’s tax home was in Minneapolis or Washington, D.C., the court used the following two factors:

Where did he spend more of his time?
Where did he derive a greater proportion of his income?

Answer: Washington, D.C. Think about this: He had his home in Minneapolis, but the court ruled that his “tax home” was in Washington, D.C. As a result, he lost his travel deductions.

If you are in a similar situation, please call me us at the office to see how we might create a better result than the one described above.

Ready, Set, Depreciate

Thu, 21 Oct 2021 14:34:06 GMT

Are you thinking about buying personal property (such as a car, a computer, or other equipment) or real property (such as a building)?

If you use the property for personal purposes, it’s not deductible.

But if you use it in a business, you can deduct the full cost using regular depreciation, bonus depreciation, or IRC Section 179 expensing.

Regular depreciation takes three to 39 years depending on the property involved, while bonus deprecation allows you to deduct 100 percent of the cost of personal property in one year through 2022. Up to $1,050,000 of personal property may also be deducted in one year under IRC Section 179.

But depreciation won’t begin if you purchase property with the intent of beginning a new business. You must actually be in business to claim depreciation. This doesn’t require that you make sales or earn profits—only that your business is a going concern.

Also, depreciation doesn’t begin the moment you purchase property for your business. It begins only when you place property in service in your business. You don’t have to use the property to place it in service, but the property must be available for use in your active business. This could occur after you purchase the property.

Finally, if you use regular depreciation, you must apply rules called conventions to determine the month in which your depreciation deduction begins. The earlier in the year, the larger your deduction for the first year.

The default rule is that regular depreciation for personal property begins July 1 the first year (mid-year convention). But if you purchase 40 percent or more of your total personal property for the year during the fourth quarter, your depreciation begins at the midpoint of the quarter in which it is placed in service (mid-quarter convention).

First-year depreciation for real property begins at the middle of the month during which the property is placed in service (mid-month convention).

If you have any questions or need our assistance, please call us at the office at 216-859-7001.

How Are Roth IRA Withdrawals Taxed?

Thu, 07 Oct 2021 15:23:48 GMT

Dear Client:

Some withdrawals are taxable.

Even worse, some can be socked with a 10 percent early withdrawal penalty tax, and this can happen even when there’s no income tax hit.

Any withdrawals from any of your Roth accounts are federal-income-tax-free qualified withdrawals if you, as a Roth IRA owner,

are age 59 1/2 or older, and
have had at least one Roth IRA open for over five years.

Such withdrawals are usually state-income-tax-free too. Good!

You must pass both the age and the five-year tests to have a qualified withdrawal.

The five-year period for determining whether your withdrawals are qualified starts on January 1 of the first tax year for which you make a Roth contribution. It can be a regular annual contribution or a conversion contribution.

A non-qualified withdrawal is potentially subject to both federal income tax and the 10 percent early withdrawal penalty tax. The only exceptions are

when the special first-time home purchase provision applies, or
when the account owner (that would be you) is disabled or dead.

If you have a Roth and want to take a non-qualified withdrawal, make sure you know the tax consequences. If you have questions, please call us at the office at 216-859-7001.

Expanded Tax Benefits Help Individuals and Businesses Give to Charity During 2021

abeder123@gmail.com (Amanda Beder) — Thu, 30 Sep 2021 13:38:55 GMT

Deductions up to $600 available for cash donations by non-itemizers

The Internal Revenue Service today explained how expanded tax benefits can help both individuals and businesses give to charity before the end of this year.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted last December, provides several provisions to help individuals and businesses who give to charity. The new law generally extends through the end of 2021 four temporary tax changes originally enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Here is a rundown of these changes.

Deduction for individuals who don't itemize; cash donations up to $600 qualify

Ordinarily, individuals who elect to take the standard deduction cannot claim a deduction for their charitable contributions. The law now permits these individuals to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to certain qualifying charitable organizations. Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify to claim a limited deduction for cash contributions.

These individuals, including married individuals filing separate returns, can claim a deduction of up to $300 for cash contributions made to qualifying charities during 2021. The maximum deduction is increased to $600 for married individuals filing joint returns.

Cash contributions to most charitable organizations qualify. However, cash contributions made either to supporting organizations or to establish or maintain a donor advised fund do not qualify. Cash contributions carried forward from prior years do not qualify, nor do cash contributions to most private foundations and most cash contributions to charitable remainder trusts. In general, a donor-advised fund is a fund or account maintained by a charity in which a donor can, because of being a donor, advise the fund on how to distribute or invest amounts contributed by the donor and held in the fund. A supporting organization is a charity that carries out its exempt purposes by supporting other exempt organizations, usually other public charities. See Publication 526, Charitable Contributions for more information on the types of organizations that qualify.

Cash contributions include those made by check, credit card or debit card as well as amounts incurred by an individual for unreimbursed out-of-pocket expenses in connection with the individual's volunteer services to a qualifying charitable organization. Cash contributions don't include the value of volunteer services, securities, household items or other property.

100% limit on eligible cash contributions made by itemizers in 2021

Subject to certain limits, individuals who itemize may generally claim a deduction for charitable contributions made to qualifying charitable organizations. These limits typically range from 20% to 60% of adjusted gross income (AGI) and vary by the type of contribution and type of charitable organization. For example, a cash contribution made by an individual to a qualifying public charity is generally limited to 60% of the individual's AGI. Excess contributions may be carried forward for up to five tax years.

The law now permits electing individuals to apply an increased limit ("Increased Individual Limit"), up to 100% of their AGI, for qualified contributions made during calendar-year 2021. Qualified contributions are contributions made in cash to qualifying charitable organizations.

As with the new limited deduction for nonitemizers, cash contributions to most charitable organizations qualify, but, cash contributions made either to supporting organizations or to establish or maintain a donor advised fund, do not. Nor do cash contributions to private foundations and most cash contributions to charitable remainder trusts

Unless an individual makes the election for any given qualified cash contribution, the usual percentage limit applies. Keep in mind that an individual's other allowed charitable contribution deductions reduce the maximum amount allowed under this election. Eligible individuals must make their elections with their 2021 Form 1040 or Form 1040-SR.

Corporate limit increased to 25% of taxable income

The law now permits C corporations to apply an increased limit (Increased Corporate Limit) of 25% of taxable income for charitable contributions of cash they make to eligible charities during calendar-year 2021. Normally, the maximum allowable deduction is limited to 10% of a corporation's taxable income.

Again, the Increased Corporate Limit does not automatically apply. C corporations must elect the Increased Corporate Limit on a contribution-by-contribution basis.

Increased limits on amounts deductible by businesses for certain donated food inventory

Businesses donating food inventory that are eligible for the existing enhanced deduction (for contributions for the care of the ill, needy and infants) may qualify for increased deduction limits. For contributions made in 2021, the limit for these contribution deductions is increased from 15% to 25%. For C corporations, the 25% limit is based on their taxable income. For other businesses, including sole proprietorships, partnerships, and S corporations, the limit is based on their aggregate net income for the year from all trades or businesses from which the contributions are made. A special method for computing the enhanced deduction continues to apply, as do food quality standards and other requirements.

Keep good records

The IRS reminds individuals and businesses that special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining an acknowledgment letter from the charity before filing a return and retaining a cancelled check or credit card receipt for contributions of cash. For donations of property, additional recordkeeping rules apply, and may include filing a Form 8283 and obtaining a qualified appraisal in some instances.

For details on how to apply the percentage limits and a description of the recordkeeping rules for substantiating gifts to charity, see Publication 526 , available on IRS.gov.

The IRS also encourages employers to help get the word out about the advance payments of the Child Tax Credit because they have direct access to many employees and individuals who receive this credit.

For more information about other Coronavirus-related tax relief, visit IRS.gov/coronavirus .

As always, please feel free to call us at the office with any questions!

NUA Choice: A Tax Strategy to Consider If You Own Company Stock

Tue, 14 Sep 2021 15:20:06 GMT

Do you own any of your employer’s company stock inside your employer’s 401(k), ESOP, profit sharing plan, or other retirement plan?

Has it gone up in value since you got it? If so, you should start thinking about what to do with the stock when you retire or leave your employer. Your decision can have big tax consequences.

Most people roll company stock into an IRA when they retire or leave. When you do this, no tax is due.

But there’s a downside: when you later sell the stock, you’ll have to pay tax on the proceeds at ordinary income tax rates, which can be as high as 37 percent (and could be going higher).

You have another alternative: electing net unrealized appreciation (NUA) treatment for your company stock. This way, whenever you sell the stock, you pay tax on your NUA at long-term capital gains rates, which are 15 percent for most people.

The tradeoff: you have to pay tax on your tax basis in the stock at ordinary income rates for the year you transfer it. You may also have to pay the 10 percent early withdrawal penalty on your shares’ cost basis if you take your lump-sum distribution before reaching age 59 1/2.

Any additional appreciation in the stock at the time of sale also receives capital gains treatment—it will be taxed at the long-term capital gains rate if you hold the stock for more than one year from the distribution date.

To qualify for NUA treatment, you must transfer all your vested employer retirement plan assets as part of a lump-sum distribution made after you reach age 59 1/2, leave your employer, or die.

Because the stock is not in a retirement plan, it is not subject to the required minimum distribution rules. You can keep it in your account until you die. Your heirs then get a stepped-up basis above the NUA amount for the appreciation in the stock during the time you held it in your taxable account.

Net unrealized appreciation treatment isn’t for everyone. It works best for older employees who have substantial appreciation in their company stock and want the money soon while paying the lowest taxes.

If you have any questions or need our assistance with this or any matter, please call us at the office at 216-859-7001.

Why IRS Audit Technique Guides Are Helpful Business Resources

Thu, 09 Sep 2021 15:52:47 GMT

As a business owner, you are in partnership with the IRS, like it or not.

You share your net profits with the IRS according to your partnership agreement (known to you as the Internal Revenue Code).

To make sure you are sharing fairly, the IRS can audit your tax return. You have to hate the idea of an IRS audit.

But your big audit worry is not about the potential bills for unpaid taxes, interest, and penalties. No, your big worry is the additional time the audit will take.

Tax audits can go on for months or even years. Time and resources spent preparing for and participating in an IRS audit are time and resources that are not available for you to run your business.

So, you should consider two things here:

1. How can you spend less time in an IRS audit?

2. How can you pay the IRS nothing extra, or at least as little as possible, in an audit?

You need to get ready for the audit every day, because you are in business. The major chunk of records you need for the audit are the records that help you run your business.

Keeping the minor additional records you need to prove certain tax deductions for your vehicles, entertainment, and travel takes only minutes a day.

Planning point

Keep good records every day.

Okay, so you’ve got that. But now you’re looking at the letter from the IRS about the audit. What is the IRS going to be looking for?

Check Out the IRS Playbook

The IRS provides extensive documentation on what it wants its examiners to look for. And it makes a big chunk of that available to you in the Internal Revenue Manual and Audit Technique Guides (ATGs).

Currently, the IRS publishes ATGs for about 50 industries, ranging from the aerospace industry to the wine industry. The ATGs on the IRS website are available as PDF documents, web pages, or both. The ATGs explain:

Industry-specific examination techniques
Common and unique industry issues, business practices, and terminology
How to examine income and deductions, interview the taxpayer, and evaluate evidence

For example, say you are in the retail industry operating a liquor store or a gas station. The IRS recently updated the ATG for the retail industry, and your liquor store or gas station is addressed in this audit guide.

You as the business owner can not only learn what the IRS is going to do and why, but also find good information on practical procedures and techniques that are common to today’s liquor stores and gas stations, such as:

1. Business operations

2. Inventory valuation

3. Control procedures

4. Cash on hand

5. Personal expenditures

How Does the IRS Use the Retail ATG?

When the IRS conducts an in-person audit of a retailer’s business returns, it is looking to verify the accuracy of the business’s tax return and the sources of gross income.

In addition to giving the IRS examiner general interview questions common to all retail industries, the retail ATG has particular questions relating to specific segments of the retail industry, such as your liquor store or gas station. Here’s a list of the retailers in this IRS guide:

Grocery stores
Electronic business and online retail
Retail liquor sales
Mobile food vendors
Gasoline service stations
Motor vehicle dealerships
Auto body/repair
Direct sellers

Common to all examinations, the IRS examines the retailer’s ledgers, bank statements, invoices, and receipts to see whether it reported all its income, and whether the expenses claimed are legitimate.

Thus, you can expect the IRS examiner to conduct minimum income probes during every examination. If the minimum income probes and examination of gross receipts show all taxable income from known sources is reported, the IRS may limit its examination.

For you, this means that you want clean income records – which, as a businessperson, you want anyway.

On the other hand, the IRS will undertake a more in-depth examination of income if:

The results indicate the potential for unreported income due to inaccurate reporting of taxable income from known sources
The books cannot be reconciled to the return
A material imbalance in the financial status analysis cannot be reconciled

If direct records are not available, the IRS will use one or more of the following indirect methods to analyze the sources of income:

Source and application of funds method
Bank deposits and cash expenditures method
Markup method
Unit and volume method
Net worth method

Why Should I Care about IRS ATGs?

Preparing tax returns is complicated, but not because the math is difficult or the accounting procedures are complicated. There are complexities in knowing what legitimate deductions are and how they are claimed on the various tax forms.

Generally, the answers to the deductions are not found in tax statutes, or even in the case law. The ATGs help by giving you insights into various deductions and options that can apply.

For example, the inventory discussions in the retail ATG give you the variety of options that are available, and likely some you had not previously considered.

Takeaways

The IRS ATGs can help you develop financial best practices and become a better businessperson.

And of course, they also provide valuable insight as to how the IRS conducts audits.

The IRS uses ATGs to help its examiners understand the particular and peculiar aspects of an industry, a line of business, or even select tax deductions.

The retail ATG mentioned in this article contains a wealth of information on how the IRS conducts audits for:

Grocery stores
Electronic business and online retail
Retail liquor sales
Mobile food vendors
Gasoline service stations
Motor vehicle dealerships
Auto body/repair
Direct sellers

If you operate a business in one of the retail sectors mentioned above, you should spend some time examining the retail ATG even if you are not yet under audit, because you will find useful information such as tax deductions and financial best practices.

As always, please feel free to reach out to us at the office at 216-859-7001 with any questions you may have.

Vaccinated? Claim Tax Credits for Your Employees and Yourself

Thu, 02 Sep 2021 16:35:13 GMT

As the nation suffers from the ravages of the super-contagious COVID-19 Delta variant, the federal government desperately wants all American workers and their families to get vaccinated.

More and more employers are implementing vaccine mandates—a trend that will likely grow after the FDA gives final approval to the COVID vaccines.

COVID vaccine mandates are highly controversial.

One thing that’s not controversial is giving your employees paid time off to get vaccinated and to deal with the possible side effects of vaccination (usually, short-lived flu-like symptoms). The federal government does not require that employers provide such paid time off, but it strongly encourages them to do so. And it’s putting its money where its mouth is, by providing fairly generous tax credits to repay employers for the lost employee work time.

You can also collect these credits if your employees take time off to help family and household members get the vaccination and/or recover from its side effects. There’s only one thing better than having an employee vaccinated: having an employee’s entire family vaccinated.

How big are the credits?

Employers who give employees paid time off to get vaccinated against COVID-19 and/or recover from the vaccination can collect a sick leave credit of up to $511 per day for 10 days, plus a family leave credit of up to $200 per day for 60 additional days.
Employers who give employees paid time off to help household members get vaccinated and/or recover from the vaccination can get a sick leave credit for 10 days and family leave credit for 60 days, both capped at $200 per day.

What if you are self-employed and have no employees? You haven’t been left out. Similar tax credits are available to self-employed individuals who take time off from work to get vaccinated or who help family or household members do so.

But you must act soon. These sick leave and family leave credits are available only through September 30, 2021.

One more thing: these are refundable tax credits. This means you collect the full amount even if it exceeds your tax liability. Employers can reduce their third-quarter 2021 payroll tax deposits in the amount of their credits. If the credit exceeds these deposits, they can get paid the difference in advance by filing IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19.

The documentation requirements for these credits are modest, and you’ll have to file a couple of new forms with your 2021 tax return.

If you have any questions or need my assistance with this process, please call us at the office at 216-859-7001.

IRS Urges Taxpayers to Prepare for Natural Disasters

abeder123@gmail.com (Amanda Beder) — Tue, 31 Aug 2021 15:22:06 GMT

September is National Preparedness Month

With the height of hurricane season fast approaching and the ongoing threat of wildfires in some parts of the country, the Internal Revenue Service reminds everyone to develop an emergency preparedness plan.

All taxpayers, from individuals to organizations and businesses, should take time now to create or update their emergency plans.

Taxpayers can begin getting ready for a disaster with a preparedness plan that includes securing and duplicating essential tax and financial documents, creating lists of property and knowing where to find information once a disaster has occurred. Securing this information can help in the aftermath of a disaster, and it can help people more quickly take advantage of disaster relief available from the IRS.

Start secure

Taxpayers should keep critical original documents inside waterproof containers in a secure space. Documents such as tax returns, birth certificates, deeds, titles and insurance policies should also be duplicated and kept with a trusted person outside the area a natural disaster may affect.

Make copies

If original documents are available only on paper, taxpayers can use a scanner and save them on a USB flash drive, CD or in the cloud, which provide security and easy portability.

Document valuables

After a disaster hits, photographs and videos of a home or business's contents can help support claims for insurance or tax benefits. All property, especially expensive and high- value items, should be recorded. The IRS disaster-loss workbooks can help individuals and businesses compile lists of belongings or business equipment.

Employer fiduciary bonds

Employers using payroll service providers should check if their provider has a fiduciary bond in place to protect the employer in the event of a default by provider. Employers are encouraged to create an Electronic Federal Tax Payment System account at EFTPS.gov to monitor their payroll tax deposits and receive email alerts.

Know where to go

Reconstructing records after a disaster may be required for tax purposes, getting federal assistance or insurance reimbursement. Find out if financial institutions provide statements and documents electronically. Taxpayers who have lost some or all of their records during a disaster should visit IRS' Reconstructing Records webpage.

IRS is ready to help

Taxpayers living in a federally declared disaster can visit the IRS Tax Relief in Disaster Situations webpage or Around the Nation on IRS.gov and check for the available disaster tax relief. The IRS automatically identifies taxpayers located in the covered disaster area and applies filing and payment relief. Affected taxpayers can call 866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

A taxpayer impacted by a disaster outside of a federally-declared disaster area may qualify for disaster relief. This includes taxpayers who are not physically located in a disaster area, but whose records necessary to meet a filing or payment deadline postponed during the relief period are located in a covered disaster area.

For more information about National Preparedness Month, visit Ready.gov/september . If you have any questions about how to prepare, please feel free to call us at 216-859-7001.

Find the Winning Tax Law for Your IRS Audit

abeder123@gmail.com (Amanda Beder) — Tue, 24 Aug 2021 15:11:24 GMT

If you are suffering or about to suffer an IRS audit, you should know how your tax positions stack up against the IRS examiners’ positions.

In most cases, you are discussing the facts, not the law, and you prove your facts with receipts, canceled checks, and logbooks.

Once you get into the law, the rules of engagement work pretty much as I describe below.

Here are three general rules on the persuasiveness of tax documents:

· Statutes and regulations are highly persuasive with both the courts and the IRS.

· The next-best authority with the courts is prior case law.

· The next-best authorities with the IRS are IRS documents. But as you’ll see, IRS documents range from very strong to very weak.

Your tax dispute always begins with the IRS.

At the earliest stages of the audit, you work with auditors and agents whose knowledge of the law comes primarily (or solely) from IRS documents, not statutes or court cases. As you advance your case within the IRS, you deal with supervisors and officers who are more knowledgeable and pay more attention to the code, regulations, and (to a lesser extent) court cases.

Throughout the audit, one thing remains constant: IRS documents remain hugely important at all levels within the IRS.

After the tax code and regulations, the first type of official IRS publication is a revenue ruling. The revenue ruling reads like a condensed court case and describes how the IRS applies the law to a particular set of facts.

The second type of official publication is the revenue procedure. The IRS uses the revenue procedure to administer the law by updating dollar amounts for inflation and by explaining procedures for making elections or filing forms.

The third type of official publication is the acquiescence or non-acquiescence. At its discretion, the IRS can issue a statement indicating its agreement (acquiescence) or disagreement (non-acquiescence) with a Tax Court ruling.

Last, you’ll find notices and announcements that describe the IRS’s official position on recent issues. You’ll also find private letter rulings and technical advice memoranda that carry weight with the IRS.

The IRS also publishes IRS forms, instructions, publications, and FAQs (guides). The guides are less technical than official pronouncements, and they don’t include citations. The IRS writes the guides in clear terms so that non-professionals can easily understand them.

Most tax disputes begin and end with the IRS. So where do court cases fit into your legal research?

Court cases matter at the IRS level for two reasons:

· At the highest level of IRS review (appeals), IRS officers consider court cases.

· Court cases usually describe all the statutes, regulations, and other important IRS documents you need in order to support your case. Plagiarizing court cases is not only within the rules for engagement with the IRS but also a great strategy!

Once your tax dispute leaves the IRS and enters court, your best sources of tax authority are statutes, regulations, and prior court cases.

If you have any questions on any of the above, please call us at the office at 216-859-7001.

Don't Miss Out on the Employee Retention Credit

Thu, 12 Aug 2021 18:47:48 GMT

It’s hard to imagine that a small business does not qualify for some or all of the employee retention credit (ERC).

And remember, this is a tax credit—one of the very best things that tax law has to offer. True, it’s not as valuable as some other tax credits, because you have to reduce your payroll income tax deductions for the credits, but the ERC certainly puts your money ahead.

And you can be looking at big bucks. The possible ERC is $5,000 per employee for 2020 and $28,000 per employee for 2021. That’s $33,000 per employee.

For 2020, you have two ways to qualify:

You had a gross receipts drop during a calendar quarter of more than 50 percent when compared to the same calendar quarter of 2019. The 50 percent test is the trigger for the ERC and you automatically qualify in the following 2020 quarter.
You suffered from a federal, state, or local government order that fully or partially suspended your operations.

For 2021, you have three ways to qualify:

You suffered a federal, state, or local government order that fully or partially suspended your operations (under this rule, you qualify for the ERC on the days you suffered the full or partial suspension, even if you did not lose any money).
Your gross receipts for a 2021 calendar quarter are less than 80 percent of gross receipts from the same quarter in calendar year 2019.
As an alternative to number 2 above, using the preceding quarter to your 2021 calendar quarter, your gross receipts are less than the comparable quarter in 2019.

You can see by the rules that the government wants to help your small business. Take advantage.

One final note. You may not double dip. Wages you use for the ERC may not be used for the PPP, family leave credit, or similar COVID-19 programs.

If you would like to discuss the ERC, please call us at the office at 216-859-7001.

Here’s what taxpayers need to know about higher education tax credits

abeder123@gmail.com (Amanda Beder) — Tue, 10 Aug 2021 15:35:02 GMT

As a new school year approaches, students are considering what classes they need to take and how much the classes will cost. Whether it's community college, a trade school, a four-year university or an advanced degree, higher education is expensive. The good news is tax credits can help offset these costs.

These credits reduce the amount of tax someone owes. If the credit reduces tax to less than zero, the taxpayer could even receive a refund.

Taxpayers who pay for higher education in 2021 can see these tax savings when they file their tax return next year. If taxpayers, their spouses or their dependents take post-high school coursework, they may be eligible for a tax benefit.

There are two credits available to help taxpayers save money on higher education, the American opportunity tax credit and the lifetime learning credit . Taxpayers use Form 8863, Education Credits , to claim the credits.

Here are some important things taxpayers should know about these credits:

The American opportunity tax credit is:

Worth a maximum benefit of up to $2,500 per eligible student.
Only for the first four years at an eligible college or vocational school.
For students pursuing a degree or other recognized education credential.
Partially refundable. People could get up to $1,000 back.

The lifetime learning credit is:

Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify.
Available for all years of postsecondary education and for courses to acquire or improve job skills.
Available for an unlimited number of tax years.

To be eligible to claim either of these credits, a taxpayer or a dependent must have received a Form 1098-T from an eligible educational institution. There are exceptions for some students.

Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to find out if they're eligible for these credits.

As always, if you have any questions, please feel free to reach out to our office for guidance.

Big Mistake: Filing Your Tax Return Late

Tue, 03 Aug 2021 15:25:52 GMT

Three bad things happen when you file your tax return late.

What’s Late?

You can extend your tax return and file during the period of extension; that’s not a late-filed return.

The late-filed return is filed after the last extension expired. That’s what causes the three bad things to happen.

Bad Thing 1

The IRS notices that you filed late or not at all.

Of course, the “I didn’t file at all” people receive the IRS’s “come on down and bring your tax records” letter. In general, the meeting with the IRS about non-filed tax returns does not go well.

For the late filers, the big problem is exposure to an IRS audit. Say you’re in the group that the IRS audits about 3 percent of the time, but you file your tax return late. Your chances of an IRS audit increase significantly, perhaps to 50 percent or higher.

Simply stated, bad thing 1 is this: file late and increase your odds of saying: “Hello, IRS examiner.”

Bad Thing 2

When you file late, you trigger the big 5 percent a month, not to exceed 25 percent of the tax-due penalty.

Here, the bad news is 5 percent a month. The good news (if you want to call it that) is this penalty maxes out at 25 percent.

Bad Thing 3

Of course, if you owe the “failure to file” penalty, you likely also owe the penalty for “failure to pay.” The failure-to-pay penalty equals 0.5 percent a month, not to exceed 25 percent of the tax due.

The penalty for failure to pay offsets the penalty for failure to file such that the 5 percent is the maximum penalty during the first five months when both penalties apply.

But once those five months are over, the penalty for failure to pay continues to apply. Thus, you can owe 47.5 percent of the tax due by not filing and not paying (25 percent plus 0.5 percent for the additional 45 months it takes to get to the maximum failure-to-pay penalty of 25 percent).

Don’t let the three bad things happen to you. If you want to discuss any of the bad things, please call us at the office at 216-859-7001.

Mid-Year Tax Checkup

Thu, 22 Jul 2021 14:54:36 GMT

It’s the perfect time for a midyear tax checkup, financial experts say. Filers may prepare for next year’s tax season by reviewing withholdings, retirement contributions, child tax credits, unemployment income and more

As Covid-19 restrictions lift and summer kicks off, it may be tempting to get distracted by vacations, concerts, barbecues and camping. But financial experts say it’s also the perfect opportunity for a midyear tax progress report. A tax checkup shows if you’re on track and may uncover ways to save over the next six months, said Sabina Smailhodzic Lewis, certified financial planner and co-owner at Avant-Garde Wealth in Bowling Green, Kentucky. With recent law changes, there are new things to monitor as the year progresses. Here’s what to include in a midyear tax audit.

Double-check withholdings

It’s essential to review paycheck withholdings throughout the year, said Eric Bronnenkant, a CFP and certified public accountant at Betterment, a digital investment advisor. As time passes, life changes may affect how much someone needs to withhold every pay period. “Obviously, there’s a lot of things that happen during the year,” he said. For example, getting married, having a child, and income and career changes may impact health insurance premiums, health savings accounts, retirement accounts and more, Smailhodzic Lewis said.

The IRS tax withholding estimator allows filers to double-check the levies taken from their paychecks, cutting the risk of underpaying or overpaying taxes throughout the year, she added. Moreover, those eligible for the 2021 increased dependent care flexible spending account limit of $10,500 may review how much they want to defer and spend through the rest of the year.

Retirement contributions

The middle of the year is an excellent time to review retirement plan contributions, such as 401(k) and individual retirement accounts, said Bronnenkant. Big savers may even consider depositing more with after-tax 401(k) contribution s if their plan allows it. While filers have until the tax deadline next year for IRA or health savings account contributions, they won’t have the same opportunity for their 401(k) after the year ends. “You can’t go backward on your 401(k),” he said.

Child tax credit

In a few weeks, millions of families will start receiving monthly payments for the enhanced child tax credi t. The 2021 change boosts the credit to $3,000 from $2,000 per child under 17, with an extra $600 for children under age 6. However, those expecting a tax bill may prefer to opt-out of the payment s and receive a lump sum next April, assuming they still qualify. There’s also the risk of losing eligibility if someone earns more through the rest of the year, Bronnenkant said. “For some people, it may be a good time to think about their situation,” he said. Although the deadline to decline the first payment already passed, there’s still a chance to unenroll from the others through the Child Tax Credit Update Portal .

Taxes on unemployment income

Those receiving unemployment income may also benefit from a midyear audit. While the default federal tax withholding is 10%, recipients may set aside more with quarterly estimated payments or deductions from a future job, Bronnenkant said.

Get organized

While next year’s tax season is several months away, it’s not too soon to start getting organized, Bronnenkant said. Filing receipts and paperwork now will only make it easier to file later.

IRS Readies Nearly 4 Million Refunds for Unemployment Compensation Overpayments

abeder123@gmail.com (Amanda Beder) — Thu, 15 Jul 2021 15:08:26 GMT

The Internal Revenue Service announced this week that it will issue another round of refunds to nearly 4 million taxpayers who overpaid their taxes on unemployment compensation received last year.

The American Rescue Plan Act of 2021, which became law in March, excluded up to $10,200 in 2020 unemployment compensation from taxable income calculations. The exclusion applied to individuals and married couples whose modified adjusted gross income was less than $150,000.

Refunds by direct deposit will begin July 14 and refunds by paper check will begin July 16. The IRS previously issued refunds related to unemployment compensation exclusion in May and June, and it will continue to issue refunds throughout the summer.

To ease the burden on taxpayers, the IRS has been reviewing the Forms 1040 and 1040SR that were filed prior to the law's enactment to identify those people who are due an adjustment. For taxpayers who overpaid, the IRS will either refund the overpayment, apply it to other outstanding taxes or other federal or state debts owed.

For this round, the IRS identified approximately 4.6 million taxpayers who may be due an adjustment. Of that number, approximately 4 million taxpayers are expected to receive a refund. The refund average is $1,265, which means some will receive more and some will receive less.

Most taxpayers need not take any action and there is no need to call the IRS. However, if, as a result of the excluded unemployment compensation, taxpayers are now eligible for deductions or credits not claimed on the original return, they should file a Form 1040-X, Amended U.S. Individual Income Tax Return.

Taxpayers should file an amended return if they:

did not submit a Schedule 8812 with the original return to claim the Additional Child Tax Credit and are now eligible for the credit after the unemployment compensation exclusion;
did not submit a Schedule EIC with the original return to claim the Earned Income Tax Credit (with qualifying dependents) and are now eligible for the credit after the unemployment compensation exclusion;
are now eligible for any other credits and/or deductions not mentioned below. Make sure to include any required forms or schedules.

Taxpayers do not need to file an amended return if they:

already filed a tax return and did not claim the unemployment exclusion; the IRS will determine the correct taxable amount of unemployment compensation and tax;
have an adjustment, because of the exclusion, that will result in an increase in any non-refundable or refundable credits reported on the original return;
did not claim the following credits on their tax return but are now eligible when the unemployment exclusion is applied: Recovery Rebate Credit, Earned Income Credit with no qualifying dependents or the Advance Premium Tax Credit. The IRS will calculate the credit and include it in any overpayment;
filed a married filing joint return, live in a community property state, and entered a smaller exclusion amount than entitled on Schedule 1, line 8.

Taxpayers will generally receive letters from the IRS within 30 days of the adjustment, informing them of what kind of adjustment was made (such as refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment.

If you have any questions, please feel free to call the office at 216-859-7001.

How the Law Decides If Your Travel Day is Personal or Business

Tue, 13 Jul 2021 15:07:14 GMT

Dear Client:

When you travel to a business location where you spend the night, you are in travel status. But will the tax rules make this a business or personal night?

The rules also affect your costs during the day. When you have an overnight business travel day, you generally deduct your costs of sustaining life for the day, such as breakfast, lunch, dinner, snacks, drinks, lodging, and taxis.

Business days also are important in determining how much of your travel cost you may deduct. For example, on a seven-day trip to London, one business day makes the airfare deductible.

Yep, you heard that right. Six personal days and one business day in London—you deduct 100 percent of the airfare.

Transportation days are the trickiest days.

Days spent traveling to or returning from a destination outside the United States are treated as business days—provided you use a “reasonably direct route” and you don’t engage in “substantial diversions for non-business reasons” that prolong your travel time.

If you don’t use a reasonably direct route, you count as business days the amount of time that a reasonably direct route would have taken.

Similarly, if you engage in substantial non-business diversions, you count as business days the amount of time it would have taken without such diversions.

These rules apply to whatever mode of transportation you use. So if you travel by airplane and don’t take a reasonably direct route, you count as business travel days the number of days an airplane would take to reach your destination by a reasonably direct route. The same is true for travel by car or cruise ship.

Once you are at your business travel destination, if a Saturday, a Sunday, a legal holiday, or another reasonably necessary standby day intervenes while you endeavor to conduct your business with reasonable dispatch, you treat such a day as a business day.

If you have questions about your business travel, please don’t hesitate to call the office at 216-859-7001.

Two Ways to Fix Tax Return Mistakes Before the IRS Discovers Them

Thu, 08 Jul 2021 13:26:13 GMT

Dear Client:

If you made an error on your tax return, don’t worry—there are two easy ways to fix it:

A superseding return
A qualified amended return

A superseding return is an amended or corrected return filed on or before the original or extended due date. The IRS considers the changes on a superseding return to be part of your original return.

A qualified amended return is an amended return that you file after the due date of the return (including extensions) and before the earliest of several events, but most likely when the IRS contacts you with respect to an examination of the return. If you file a qualified amended return, you avoid the 20 percent accuracy-related penalty on that mistake.

When it comes to the IRS, an ounce of prevention is worth a pound of cure. If you made a mistake, fix it as soon as you know about it, which will save you penalties, increased interest accruals, and the headache of an IRS review of your return.

If you have an error in your return, please call us at the office at 216-859-7001 so that we can get busy making the correction.

You Took Coronavirus-Related IRA Money Last Year: What Now?

Tue, 06 Jul 2021 19:47:51 GMT

Dear Client:

Did you take a coronavirus distribution (CVD) of up to a combined limit of $100,000 from one or more of your traditional IRAs in 2020?

You can recontribute the CVD amount(s) back into one or more traditional IRAs within three years of the withdrawal date(s). You treat each withdrawal and later re-contribution within the three-year window as a federal-income-tax-free IRA rollover transaction. That’s the tax advantage.

The non-tax advantage is that there are no restrictions on how you can use CVD funds. You can use the money to pay bills and recontribute later—within the three-year window—when your financial situation permits. You can help out your adult kids now and recontribute later. Whatever.

Key point. The favorable tax treatment applies equally to CVDs taken from garden-variety traditional IRAs, SEP-IRAs, SIMPLE-IRAs, and employer retirement plans that allowed CVDs.

Unfortunately, you must put up with some potentially awkward interim tax consequences before you arrive at the tax-free-rollover-equivalent outcome. The interim tax consequences can diminish the cash-management advantages of the CVD deal, and they require filing amended returns to gain federal-income-tax-free treatment.

You always have the option of simply keeping all or part of your CVD money. You’ll have taxable income from the CVD amount that you don’t recontribute.

Good news. Regardless of what you choose to do with your CVD, you won’t owe the dreaded 10 percent early withdrawal penalty tax that generally applies to traditional IRA withdrawals taken before age 59 1/2. CVDs are completely exempt from the penalty tax.

The same is true for the SIMPLE-IRA. IRS Notice 2020-50 clarifies that CVDs taken from a SIMPLE-IRA are exempt from the 25 percent early distribution penalty tax that generally applies to SIMPLE-IRA withdrawals taken before age 59 1/2.

More good news. When you recontribute a CVD amount within the three-year window, it’s deemed to be a direct trustee-to-trustee transfer that’s exempt from the one-IRA-rollover-per-year limitation.

Bad news. According to IRS Notice 2020-50, beneficiaries of inherited IRAs can receive CVDs as long as

they are eligible individuals,
they can follow the three-year ratable inclusion rule to report taxable income from CVDs, and
their CVDs are exempt from the 10 percent early distribution penalty tax.

But only an IRA CVD that is otherwise eligible for tax-free rollover treatment can be recontributed. Therefore, CVDs received by beneficiaries of inherited IRAs (other than the surviving spouse of the IRA owner) cannot be recontributed. So, no tax-free-rollover-equivalent deal for those folks. Sorry.

If you have questions about your CVDs, please don’t hesitate to call us at the office at 216-859-7001.

Cryptocurrency: Are You Ready?

Thu, 01 Jul 2021 14:01:27 GMT

Dear Client:

Cryptocurrencies have gone mainstream.

For example, you can use bitcoin to buy far more than you would think. To see, try googling “What can I buy with bitcoin?” You will get more than 350,000 hits.

But using cryptocurrencies has federal income tax implications that may surprise you.

With the price of bitcoin having gone through the roof (before its recent decline), and with increasing acceptance of bitcoin and other cryptocurrencies as forms of payment, the tax implications of using cryptocurrencies are a hot-button issue for the IRS.

The 2020 version of IRS Form 1040 (the form you recently filed or will file soon) asks whether you received, sold, sent, exchanged, or otherwise acquired—at any time during the year—any financial interest in any virtual currency. If you did, you are supposed to check the “Yes” box.

The fact that this question appears on page 1 of Form 1040, right below the lines for supplying taxpayer information such as your name and address, indicates that the IRS is getting serious about enforcing compliance with the applicable tax rules. Fair warning!

The 2020 Form 1040 instructions clarify that virtual currency transactions for which you should check the “Yes” box include but are not limited to:

1. the receipt or transfer of virtual currency for free (i.e., without having to pay),

2. the exchange of virtual currency for goods or services,

3. the sale of virtual currency,

4. the exchange of virtual currency for other property, and

5. the disposition of a financial interest in virtual currency.

To arrive at the federal income tax results of a cryptocurrency transaction, the first step is to calculate the fair market value (FMV), measured in U.S. dollars, of the cryptocurrency on the date you receive it and on the date you use it to pay something.

When you exchange cryptocurrency for other property, including U.S. dollars, a different cryptocurrency, services, or whatever, you must recognize taxable gain or loss just as you do when you make a stock sale in your taxable brokerage account.

· You will have a taxable gain if the FMV of what you receive exceeds your basis in the cryptocurrency that you exchanged.

· You will have a taxable loss if the FMV of what you receive is less than your basis in the cryptocurrency.

It is hard to imagine that a cryptocurrency holding will be classified for federal income tax purposes as anything other than a capital asset—even if you use it to conduct business or personal transactions, as opposed to holding it for investment. Therefore, the taxable gain or loss from exchanging a cryptocurrency will be a short-term capital gain or loss or a long-term capital gain or loss, depending on how long you held the cryptocurrency before using it in a transaction.

Example. You use one bitcoin to buy tax-deductible supplies for your booming sole proprietorship business. On the date of the purchase, bitcoins are worth $55,000 each. So, you have a business deduction of $55,000.

But there is another piece to this transaction: the tax gain or loss from holding the bitcoin and then spending it.

Say you bought the bitcoin in January of this year for only $31,000. You have a $24,000 taxable gain from appreciation in the value of the bitcoin ($55,000 - $31,000). The $24,000 gain is a short-term capital gain because you did not hold the bitcoin for more than one year.

Detailed records are essential for compliance. Your records should include:

· the date when you received the cryptocurrency,

· its FMV on the date of receipt,

· the FMV on the date you exchanged it (for U.S. dollars or whatever),

· the cryptocurrency trading exchange that you used to determine FMV, and

· your purpose for holding the currency (business, investment, or personal use).

If you have questions about cryptocurrency, do not hesitate to call us at the office at 216-859-7001.

"Dirty Dozen" Tax Schemes for 2021

abeder123@gmail.com (Amanda Beder) — Tue, 29 Jun 2021 15:58:16 GMT

The Internal Revenue Service today began its "Dirty Dozen" list for 2021 with a warning for taxpayers, tax professionals and financial institutions to be on the lookout for these 12 nefarious schemes and scams.

This year's "Dirty Dozen" will be separated into four separate categories:

pandemic-related scams like Economic Impact Payment theft;
personal information cons including phishing, ransomware and phone "vishing;"
ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud; and
schemes that persuade taxpayers into unscrupulous actions such as Offer In Compromise mills and syndicated conservation easements.

The agency compiled the list into these categories based on who perpetuates the schemes and who they impact. In addition to today's scams the IRS will highlight the other schemes over the next three days.

The IRS urges all taxpayers to be on guard, especially during the pandemic, not only for themselves, but also for other people in their lives. "We continue to see scam artists use the pandemic to steal money and information from honest taxpayers in a time of crisis," said IRS Commissioner Chuck Rettig. "We provide this list to alert taxpayers about common scams that fraudsters use against their victims. At the IRS, we are dedicated to stopping these criminals, but it's up to all of us to remain vigilant to protect ourselves and our families."

Taxpayers are encouraged to review the "Dirty Dozen: list in a special section on IRS.gov and should be alert to these scams during tax filing season and throughout the year.

Economic Impact Payment theft

A continuing threat to individuals is from identity thieves who try to steal Economic Impact Payments (EIPs), also known as stimulus payments. Most eligible people will get their payments automatically from the IRS. Taxpayers should watch out for these tell-tale signs of a scam:

Any text messages, random incoming phone calls or emails inquiring about bank account information or requesting recipients to click a link or verify data should be considered suspicious and deleted without opening.
Be alert to mailbox theft. Frequently check mail and report suspected mail losses to Postal Inspectors .
Don't fall for stimulus check scams. The IRS won't initiate contact by phone, email, text or social media asking for Social Security numbers or other personal or financial information related to Economic Impact Payments.

Taxpayers should remember that the IRS website, IRS.gov, is the agency's official website for information on payments, refunds and other tax information.

Unemployment fraud leading to inaccurate taxpayer 1099-Gs

Because of the COVID-19 pandemic, many taxpayers lost their jobs and received unemployment compensation from their state. However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made on these fraudulent claims went to the identity thieves.

The IRS reminds taxpayers to be on the lookout for receiving a Form 1099-G reporting unemployment compensation that they didn't receive. For people in this situation, the IRS urges them to contact their appropriate state agency for a corrected form. If a corrected form cannot be obtained so that a taxpayer can file a timely tax return, taxpayers should complete their return claiming only the unemployment compensation and other income they actually received. See Identity Theft and Unemployment Benefits for tax details and DOL.gov/fraud for state-by-state reporting information.

Additional protection to help protect taxpayers

IRS makes IP PINs available to all taxpayers – adding another layer of security

To help taxpayers avoid identity theft, the IRS this year made its Identity Protection PIN (IP PIN) program available to all taxpayers. Previously it was available only to victims of ID theft or taxpayers in certain states. The IP PIN is a six-digit code known only to the taxpayer and to the IRS. It helps prevent identity thieves from filing fraudulent tax returns using a taxpayer's personally identifiable information.

Using an IP PIN is, in essence, a way to lock a tax account. The IP PIN serves as the key to opening that account. Electronic returns that do not contain the correct IP PIN will be rejected and paper returns will go through additional scrutiny for fraud.

Reducing fraud

The IRS and its Security Summit partners in the states and the private-sector tax community have made changes to help reduce identity theft-related refund fraud that are noticeable to the average person filing a return:

Tax software providers agreed to strengthen password protocols. This is the first line of defense for these companies to make sure their products are secure.
State tax agencies began asking for taxpayers' driver's license numbers as another way for people to prove their identities.
The IRS limited the number of tax refunds going to financial accounts or addresses.
The IRS masked personal information from tax transcripts.

Multi-factor authentication can help

It is important for taxpayers filing in 2021 to know that online tax software products available to both taxpayers and tax professionals will contain options for multi-factor authentication. Multi-factor authentication allows users to better protect online accounts. One way this is accomplished is by requiring a security code sent to a mobile phone in addition to the username and password used to access the account.

The IRS and its Security Summit partners have formed an information sharing center that allows them to quickly identify emerging scams and react to protect taxpayers. The Identity Theft Tax Refund Fraud Information Sharing and Analysis Center PDF is now operational.

Also, check out our recent A Closer Look column for more on how to be vigilant about tax scams. Visit Identity Theft Central and Tax Fraud Alerts for more information on how to protect against or report identity theft or fraud.

Post courtesy of www.irs.gov

Where's My Refund?

abeder123@gmail.com (Amanda Beder) — Tue, 30 Mar 2021 19:45:53 GMT

Tracking the status of a tax refund is easy with the Where's My Refund? tool. It's conveniently accessible at IRS.gov or through the IRS2Go App .

Taxpayers can start checking their refund status within 24 hours after an e-filed return is received.

Refund timing

Where's My Refund provides a personalized date after the return is processed and a refund is approved. While most tax refunds are issued within 21 days, some may take longer if the return requires additional review.

Here are some reasons a tax refund may take longer:

The return may include errors or be incomplete.
The return could be affected by identity theft or fraud.
Many banks do not process payments on weekends or holidays.

Claiming the Recovery Rebate Credit on a 2020 tax return will not delay processing of a tax return. However, it is important that taxpayers claim the correct amount. If a correction is needed, there may be a slight delay in processing the return. If corrections are made, the IRS will send the taxpayer notice explaining any changes. The recovery rebate credit will be included in the tax refund.

The IRS will contact taxpayers by mail if more information is needed to process their tax return.

Fast and easy refund updates

Taxpayers can start checking on the status of their return within 24 hours after the IRS acknowledges receipt of an electronically filed return or four weeks after the taxpayer mails a paper return. The tool's tracker displays progress in three phases:

Return received
Refund approved
Refund sent

To use Where's My Refund? , taxpayers must enter their Social Security number or Individual Taxpayer Identification Number, their filing status and the exact whole dollar amount of their refund. The IRS updates the tool once a day, usually overnight, so there's no need to check more often.

Calling the IRS won't speed up a tax refund. The information available on Where's My Refund? is the same information available to IRS phone assistors.

IRS Deadline

abeder123@gmail.com (Amanda Beder) — Thu, 18 Mar 2021 19:57:05 GMT

Dear Client,

The IRS has officially announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15 ^th , 2021, to May 17 ^th , 2021.

Some things to keep in mind:

This relief does not apply to estimated tax payments for the 2021 calendar year . Those are still due on April 15 ^th , 2021.
The tax filing deadline postponement only applies to the filing of the Federal return. As of today (03/18/21), the deadline for state and local tax returns is still 04/15. We are aware that many state legislatures are currently assessing the need to move their filing deadlines to be in conformity with the new Federal guideline.

We will keep you apprised as to any changes regarding the above. As always, if you have any questions, please feel free to call us at 216-859-7001 or visit https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline for more information.

Thank you,

Acumen MB LLC

Who Qualifies for First Draw PPP Money Today?

Fri, 05 Feb 2021 19:23:32 GMT

Dear Client:

Two things to know about the Paycheck Protection Program (PPP) first draw enacted on December 27, 2020:

The first draw is for those who missed getting in on the original PPP, which expired on August 8, 2020.
Don’t think of a PPP draw as a loan. It’s not a loan. It’s a cash infusion. You have to repay a loan. You don’t have to repay the PPP funds.

Who qualifies for first-draw PPP money today? You, most likely—if you file a business tax return and have not yet received any PPP monies.

But don’t wait. The money is going to run out fast, and once it’s gone, so is the PPP. And the new PPP ends March 31, even if the money is not gone by then.

You qualify for the PPP if any of the following are true:

You file your taxes on Schedule C of your tax return. Businesses that file on Schedule C include independent contractors (often called 1099 folks), single-member LLCs, proprietorships, and statutory employees such as life insurance salespeople.
You file your taxes on Schedule F (ranchers and farmers).
You are a general partner in a partnership, but the partnership asks for and receives the money based on your and the other partners’ combined self-employment incomes, as adjusted.
You operate as an S corporation.
You operate as a C corporation.
You are the only worker in the business—and if you have employees in the business, you qualify on both your ownership worker status and your employees’ W-2 status.

If you would like to discuss the PPP, please call me on at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

PPP Alert: New Shot for Your Tax-Free Cash

Thu, 28 Jan 2021 17:14:25 GMT

Dear Client:

Did you miss out on the first two opportunities to receive your tax-free Paycheck Protection Program (PPP) cash?

Many did miss out. Why?

One reason: the word “loan.”

Who wants a loan? No one. Well, almost no one.

But who wants a cash gift, tax-free?

If you do, read on for the details. But first, you should know that the big picture works like this:

You obtain your PPP tax-free monies from a lender (it’s called a “loan,” but watch that word disappear as you read this letter).
You spend all the PPP money on yourself if you are self-employed or operate as a partnership; on payroll (including pay to you, if that applies); and on other covered expenses such as rent, interest, utilities, operations, property damage, suppliers, and worker protection.
You apply for loan forgiveness and achieve 100 percent loan forgiveness, which is easy-peasy when you spend 60 percent or more of the money on payroll (and yourself if you are self-employed or a partner in a partnership).
You deduct the expenses that you paid with the PPP loan monies that were forgiven.

New Money on the Table

The new COVID-19 stimulus act sets aside $35 billion for first-time PPP applicants, with $15 billion of that made in loans for first-time applicants with 10 employees or fewer or made in amounts less than $250,000 to businesses in low-income areas.

New Deadline

The new deadline of March 31, 2021, replaces the expired deadline of August 8, 2020.

The monies available in this new round of PPP funding are on a first-come, first-served basis. Don’t procrastinate. Get your application for your first-time PPP monies in place now.

If you would like to discuss the PPP, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

New PPP Forgiveness Rules for Past, Current, and New PPP Money

Mon, 11 Jan 2021 16:49:25 GMT

Dear Client:

Good news.

The new Paycheck Protection Program (PPP) law enacted with the stimulus package adds dollars to your pockets if you have or had PPP money.

Before we go further, please note the PPP money comes to you in what appears to be a loan. We say “appears” because you typically pay back a loan.

Done right, however, the PPP loan is 100 percent forgiven. The word “loan” makes some businesses leery of this arrangement. Don’t be. The PPP monetary arrangement is a true “have your cake and eat it too” deal.

And this remarkable deal applies to your past PPP loan, the PPP loan you have outstanding, and the PPP loan you are about to get if you have not had one before. Here are the details.

Loan Proceeds Are Not Taxable

The COVID-related Tax Relief Act of 2020 reiterates that your PPP loan forgiveness amount is not taxable income to you.

Expenses Paid with Forgiven Loan Money Are Tax-Deductible

As you may remember, the IRS took the position that expenses paid with PPP loan forgiveness monies were not deductible.

Lawmakers disagreed but were unable to get the IRS to change its position. The IRS essentially told lawmakers, “If you want the expenses paid with a PPP loan to be deductible, change the law.”

And that’s precisely what lawmakers did. The COVID-related Tax Relief Act of 2020 states that “no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.”

In plain English, the expenses paid with monies from a forgiven PPP loan are now tax-deductible, and this change goes back to March 27, 2020, the date the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted.

There is more to this, of course. If you would like my help with your PPP loan or simply would like to talk about it, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

How to Prepare for Tax Season in 2021

Mon, 04 Jan 2021 17:44:11 GMT

2020 is probably a year that many will gladly put behind them and wish for a better 2021. However, rather than just wishing for a better 2021, there are some steps that you can take that might help you make that wish a reality. One of those important areas is your taxes. Unlike many other countries, the U.S. tax system is technically a voluntary compliance system; it is up to each taxpayer to figure out and pay the proper amount of taxes.

COVID-related legislation drove a lot of tax changes for 2020 and President-elect Joe Biden has proposed many tax changes for 2021. With tax laws already very complicated it can be easy to make mistakes or miss things. Here are some resolutions to get ahead of taxes in 2021:

· Organize your tax documents . It is very helpful to collect and organize important tax documents throughout the year so that nothing is overlooked. And keep those organized documents in a safe place as part of your disaster preparedness plan. This year there are also some new documents that may be required related to COVID and those economic stimulus payments.

· Maximize your tax-favored retirement plan contributions . Maximizing your contributions helps grow your retirement fund, it can entitle you to employer matching, and it may help reduce your taxes.

· Start or update an estate or incapacity plan . Even if you are under the federal estate tax exemption limit, that limit could drop in the future, there may be state estate taxes to try to avoid, and you can direct your money where you want it to go.

· Update your W-4 Form. The IRS revised the W-4 form in 2019 to make it easier to calculate the correct withholding, but many employees have not yet completed the revised form.

· Pay close attention to foreign accounts and cryptocurrency transactions . The IRS asks questions about these on the tax return and increasingly has access to third party information to determine if you are disclosing your income properly.

· Look at amending prior years’ tax returns . Recent retroactive tax legislation has provided a lot of potential tax benefit to amending prior years’ tax returns, including the Kiddie Tax, disaster losses, mortgage debt forgiveness, mortgage insurance premiums, energy-efficient home repairs, and, for businesses, net operating loss carrybacks.

· Be a better steward of your financial assets. Always look for income-increasing or tax-saving opportunities such as refinancing a mortgage at a lower interest rate, reallocating investments for higher returns with taxes in mind, or considering Roth IRA contributions or conversions.

· Consider hiring a professional tax expert to help with your taxes . Taxes are very complicated, and experts can help you identify ways to reduce taxes that you may have overlooked.

We know that doing your taxes can be a difficult process, especially with the conditions of this past year. As always, we are happy to help with any questions you may have. I wish you and your family a safe, healthy and prosperous New Year!

Sincerely,

Jeff Beder

Tax Considerations When a Loved One Passes Away

Tue, 15 Dec 2020 15:24:20 GMT

Dear Client:

If a loved one passes away and you serve as the executor or inherit assets, you need to consider your duties and so some tax planning.

Filing the Final Form 1040 for Unmarried Decedent

If the decedent was unmarried, an initial step is to file his or her final Form 1040.

That return covers the period from January 1 through the date of death. The return is due on the standard date: for example, April 15, 2021, for someone who dies in 2020, or October 15, 2021, if you extend the return to that date.

Surviving Spouse May Be Able to Use Joint Return Rates for Two Years Following Deceased Spouse’s Year of Death

The benefits of the married-filing-joint status are extended to a qualified widow or widower for the two tax years following the year of the deceased spouse’s death.

In general, to be a qualified widow/widower for the year, the surviving spouse must be unmarried as of the end of the year.

If Decedent Had a Revocable Trust

To avoid probate, many individuals and married couples of means set up revocable trusts to hold valuable assets, including real property and bank and investment accounts.

These revocable trusts are often called “living trusts” or “family trusts.” For federal income tax purposes, they are properly described as “grantor trusts.”

As long as the trust remains in revocable status, it is a grantor trust, and its existence is disregarded for federal income tax purposes. Therefore, the grantor or grantors are treated as still personally owning the trust’s assets for federal income tax purposes, and tax returns of the grantor(s) are prepared accordingly.

Basis Step-Ups for Inherited Assets

If the decedent left appreciated capital gain assets—such as real property and securities held in taxable accounts, the heir(s) can increase the federal income tax basis of those assets to reflect fair market value as of

the decedent’s date of death, or
the alternate valuation date of six months after the date of death, if the executor of the decedent’s estate chooses to use the alternate valuation date.

When the inherited asset is sold, the federal capital gains tax applies only to the appreciation (if any) that occurs after the applicable magic date described above. The step-up to fair market value can dramatically lower the tax bill. Good!

Co-ownership . If the decedent was married and co-owned one or more homes and/or other capital gain assets with the surviving spouse, the tax basis of the ownership interest(s) that belonged to the decedent (usually half) is stepped up.

Community property . If the decedent was married and co-owned one or more homes and/or other capital gain assets with the surviving spouse as community property in one of the nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), the tax basis of the entire asset—not just the half that belonged to the decedent—is stepped up to fair market value.

This strange-but-true rule means the surviving spouse can sell capital gain assets that were co-owned as community property and only owe federal capital gains tax on the appreciation (if any) that occurs after the applicable magic date. That means little or no tax may be owed. Good!

If you have questions about any of the above, please do not hesitate to call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

Refresher on Tax-Smart College Savings Strategies for Parents

Fri, 11 Dec 2020 14:23:19 GMT

Dear Client:

College is expensive. Data for the 2019–2020 academic year indicates that the average cost of tuition, fees, room, and board was $30,500. Tax law has provisions to help you cover the costs, including Coverdell, Section 529 savings, and Section 529 tuition plans.

Contribute to a Coverdell Education Savings Account

You can contribute up to $2,000 per year to the child’s CESA. If you have several children, you can set up a CESA for each of them.

Contributions are non-deductible, but earnings are allowed to accumulate free of any federal income tax. You can then take tax-free withdrawals to pay for the account beneficiary’s post-secondary tuition, fees, books, supplies, and room and board.

Maybe not for you . Your right to contribute is phased out between modified adjusted gross income (MAGI) of $95,000 and $110,000 if you are unmarried, or between $190,000 and $220,000 if you are a married joint-filer.

Contribute to a Section 529 College Savings Plan

Section 529 college savings plans are state-sponsored arrangements named after the section of our beloved Internal Revenue Code that authorizes very favorable treatment under the federal income and gift tax rules.

You as the parent of a college-bound child begin by making contributions into a trust fund set up by the state plan that you choose. The money goes into an account designated for the beneficiary whom you specify (your college-bound child).

You can then make contributions via a lump-sum pay-in or via installment pay-ins stretching over several years. The plan then invests the money using the investment direction option that you select.

When your child reaches college age, you can take federal-income-tax-free withdrawals to pay eligible college expenses, including room and board under most plans. Plans will generally cover expenses at any accredited college or university in the country (not just schools within the state sponsoring the plan). Community colleges qualify as well.

In essence, a Section 529 college savings plan account is a tax-advantaged way to build up a college fund for your child.

Don’t Confuse Savings Plans with Prepaid Plans

Don’t mix up Section 529 college savings plans with Section 529 prepaid college tuition plans—which we will give only a brief mention here. Both types of plans are properly called “Section 529 plans” because both are authorized by that section of the Internal Revenue Code. Both receive the same favorable federal tax treatment. But that’s where the resemblance ends.

The big distinction is that prepaid tuition plans lock in the cost to attend certain colleges. In other words, the rate of return on a prepaid tuition plan account is promised to match the inflation rate for costs to attend the designated school or schools—nothing more, nothing less. That’s okay if that’s what you really want.

No Kiddie Tax on Section 529 Plan

You don’t have to worry about the kiddie tax if you set up a custodial 529 plan in the child’s name. The 529 plan is an investment plan where the monies remain in the plan. You make contributions with after-tax dollars.

When the child takes the money out of the plan for college, he or she does so tax-free when the funds are used to pay for qualified higher education expenses.

If you want to discuss your college-planning strategies, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

Good News If Your PPP Loan Is for $50,000 or Less

Fri, 04 Dec 2020 16:20:33 GMT

Dear Client:

As you likely know by now, the Paycheck Protection Program (PPP) loan and its forgiveness process have been an ever-changing (and often confusing) ride so far.

With the new rules for PPP loans of $50,000 or less, you escape from the most difficult part of the loan forgiveness if you had to consider employees.

And you may even obtain more loan forgiveness than you would have otherwise.

Before

Before the $50,000-or-less rule, you had to either suffer a reduction in loan forgiveness or meet one of the many exceptions that allowed you to

cut annual salaries or hourly wages by more than 25 percent, and/or
reduce the average number of employees or average hours paid.

After

Now, with a PPP loan of $50,000 or less, you don’t have to consider the myriad rules about employees. Regardless of what you did with your employees, you qualify for full forgiveness if

· your PPP loan is for $50,000 or less,

· you spent the PPP money on costs that are eligible for forgiveness, and

· at least 60 percent of the forgiveness is for qualified payroll costs (including defined payroll for owners).

Example . Henry obtained a PPP loan of $34,000 based on his 2019 Schedule C income and pay to his part-time employee. When COVID-19 hit, Henry laid off his part-time worker and has not rehired him. Using SBA Form 3508S and the 24-week covered period, Henry qualifies for 100 percent forgiveness of his $34,000 loan because he spent $20,833 (61 percent) on the deemed payroll to himself and the remainder on five months’ rent and utilities.

Planning note . Henry is not an employee of his Schedule C business. He receives no W-2 income. But the PPP rules deem Henry’s 2019 Schedule C profits as his payroll for PPP loan purposes. The rules cap the Schedule C taxpayer’s loan amount and forgiveness at a maximum of $20,833 when Schedule C income is $100,000 or more.

If you would like my help with your PPP loan forgiveness application, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

2020 Last-Minute Year-End Tax Strategies for Marriage, Kids, and Family

Mon, 30 Nov 2020 15:36:51 GMT

Dear Client:

If you are thinking of getting married or divorced, you need to consider December 31, 2020, in your tax planning.

Here’s another planning question: Do you give money to family or friends (other than your children, who are subject to the kiddie tax)? If so, you need to consider the zero-taxes planning strategy.

And now, consider your children who are under age 18. Have you paid them for work they’ve done for your business? Have you paid them the right way?

Here are five strategies to consider as we come to the end of 2020.

1. Put Your Children on Your Payroll

If you have a child under the age of 18 and you operate your business as a Schedule C sole proprietor or as a spousal partnership, you absolutely need to consider having that child on your payroll. Why?

First, neither you nor your child would pay payroll taxes on the child’s income.
Second, with a traditional IRA, the child can avoid all federal income taxes on up to $18,400 in income.

If you operate your business as a corporation, you can still benefit by employing the child even though both your corporation and your child suffer payroll taxes.

2. Get Divorced after December 31

The marriage rule works like this: you are considered married for the entire year if you are married on December 31.

Although lawmakers have made many changes to eliminate the differences between married and single taxpayers, in most cases the joint return will work to your advantage.

Warning on alimony! The Tax Cuts and Jobs Act (TCJA) changed the tax treatment of alimony payments under divorce and separate maintenance agreements executed after December 31, 2018:

Under the old rules, the payor deducts alimony payments and the recipient includes the payments in income.
Under the new rules, which apply to all agreements executed after December 31, 2018, the payor gets no tax deduction and the recipient does not recognize income.

3. Stay Single to Increase Mortgage Deductions

Two single people can deduct more mortgage interest than a married couple.

If you own a home with someone other than a spouse, and you bought it on or before December 15, 2017, you individually can deduct mortgage interest on up to $1 million of a qualifying mortgage.

For example, if you and your unmarried partner live together and own the home together, the mortgage ceiling on deductions for the two of you is $2 million. If you get married, the ceiling drops to $1 million.

If you bought your house after December 15, 2017, then the reduced $750,000 mortgage limit from the TCJA applies. In that case, for two single people, the maximum deduction for mortgage interest is based on a ceiling of $1.5 million.

4. Get Married on or before December 31

Remember, if you are married on December 31, you are married for the entire year.

If you are thinking of getting married in 2020, you might want to rethink that plan for the same reasons that apply in a divorce (as described above). The IRS could make big savings available to you if you get married on or before December 31, 2020.

You have to run the numbers in your tax return both ways to know the tax benefits and detriments for your particular case. But a quick trip to the courthouse may save you thousands.

5. Make Use of the 0 Percent Tax Bracket

In the old days, you used this strategy with your college student. Today, this strategy does not work with the college student, because the kiddie tax now applies to students up to age 24.

But this strategy is a good one, so ask yourself this question: Do I give money to my parents or other loved ones to make their lives more comfortable?

If the answer is yes, is your loved one in the 0 percent capital gains tax bracket? The 0 percent capital gains tax bracket applies to a single person with less than $40,000 in taxable income and to a married couple with less than $80,000 in taxable income.

If the parent or other loved one is in the 0 percent capital gains tax bracket, you can get extra bang for your buck by giving this person appreciated stock rather than cash.

Example . You give Aunt Millie shares of stock with a fair market value of $20,000, for which you paid $2,000. Aunt Millie sells the stock and pays zero capital gains taxes. She now has $20,000 in after-tax cash to spend, which should take care of things for a while.

Had you sold the stock, you would have paid taxes of $4,284 in your tax bracket (23.8 percent times the $18,000 gain).

Of course, $5,000 of the $20,000 you gifted goes against your $11.4 million estate tax exemption if you are single. But if you’re married and you made the gift together, you each have a $15,000 gift-tax exclusion, for a total of $30,000, and you have no gift-tax concerns other than the requirement to file a gift-tax return that shows you split the gift.

I know that taxes can cause confusion. Remember, that’s why you have me and I’m always here to be of service. If you want to discuss any of the strategies above, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

2020 Last-Minute Year-End Tax Strategies for Your Stock Portfolio

Wed, 25 Nov 2020 15:45:47 GMT

Dear Client:

When you take advantage of the tax code’s offset game, your stock market portfolio can represent a little gold mine of opportunities to reduce your 2020 income taxes.

The tax code contains the basic rules for this game, and once you know the rules, you can apply the correct strategies.

Here’s the basic strategy :

Avoid the high taxes (up to 40.8 percent) on short-term capital gains and ordinary income.
Lower the taxes to zero—or if you can’t do that, then lower them to 23.8 percent or less by making the profits subject to long-term capital gains.

Think of this: you are paying taxes at a 71.4 percent higher rate when you pay at 40.8 percent rather than the tax-favored 23.8 percent.

To avoid the higher rates, here are seven possible tax planning strategies.

Strategy 1

Examine your portfolio for stocks that you want to unload, and make sales where you offset short-term gains subject to a high tax rate such as 40.8 percent with long-term losses (up to 23.8 percent).

In other words, make the high taxes disappear by offsetting them with low-taxed losses, and pocket the difference.

Strategy 2

Use long-term losses to create the $3,000 deduction allowed against ordinary income.

Again, you are trying to use the 23.8 percent loss to kill a 40.8 percent rate of tax (or a 0 percent loss to kill a 12 percent tax, if you are in the 12 percent or lower tax bracket).

Strategy 3

As an individual investor, avoid the wash-sale loss rule.

Under the wash-sale loss rule, if you sell a stock or other security and purchase substantially identical stock or securities within 30 days before or after the date of sale, you don’t recognize your loss on that sale. Instead, the code makes you add the loss amount to the basis of your new stock.

If you want to use the loss in 2020, then you’ll have to sell the stock and sit on your hands for more than 30 days before repurchasing that stock.

Strategy 4

If you have lots of capital losses or capital loss carryovers and the $3,000 allowance is looking extra tiny, sell additional stocks, rental properties, and other assets to create offsetting capital gains.

If you sell stocks to purge the capital losses, you can immediately repurchase the stock after you sell it—there’s no wash-sale “gain” rule.

Strategy 5

Do you give money to your parents to assist them with their retirement or living expenses? How about children (specifically, children not subject to the kiddie tax)?

If so, consider giving appreciated stock to your parents and your non-kiddie-tax children. Why? If the parents or children are in lower tax brackets than you are, you get a bigger bang for your buck by

gifting them stock,
having them sell the stock, and then
having them pay taxes on the stock sale at their lower tax rates.

Strategy 6

If you are going to make a donation to a charity, consider appreciated stock rather than cash, because a donation of appreciated stock gives you more tax benefit.

It works like this:

· Benefit 1 . You deduct the fair market value of the stock as a charitable donation.

· Benefit 2 . You don’t pay any of the taxes you would have had to pay if you sold the stock.

Example . You bought a publicly traded stock for $1,000, and it’s now worth $11,000. You give it to a 501(c)(3) charity, and the following happens:

· You get a tax deduction for $11,000.

· You pay no taxes on the $10,000 profit.

Two rules to know:

Your deductions for donating appreciated stocks to 501(c)(3) organizations may not exceed 30 percent of your adjusted gross income.
If your publicly traded stock donation exceeds the 30 percent, no problem. Tax law allows you to carry forward the excess until used, for up to five years.

Strategy 7

If you could sell a publicly traded stock at a loss, do not give that loss-deduction stock to a 501(c)(3) charity. Why? If you sell the stock, you have a tax loss that you can deduct. If you give the stock to a charity, you get no deduction for the loss—in other words, you can just kiss that tax-reducing loss goodbye.

The stock strategies have a long history in tax planning. If you need my help with any of these strategies, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

2020 Last-Minute Year-End Medical Plan Strategies

Tue, 17 Nov 2020 18:54:04 GMT

Dear Client:

All small-business owners with one to 49 employees should have a medical plan in their business.

Sure, the tax law does not require you to have a plan, but you should.

Most of the tax rules that apply to medical plans are straightforward when you have fewer than 50 employees.

Here are the six opportunities for you to consider :

If you did not obtain a PPP loan, then you should make sure to claim the federal tax credit equal to 100 percent of required emergency sick leave and emergency family leave payments made pursuant to the FFCRA. And as long as you are doing that, make sure to obtain the employee retention tax credit too.
If you have a Section 105 plan in place and you have not been reimbursing expenses monthly, do a reimbursement now to get your 2020 deductions, and then put yourself on a monthly reimbursement schedule in 2021.
If you want to but have not implemented your QSEHRA, make sure to get that done properly now. You are late, so you could suffer that $50-per-employee penalty should you be found out.
But if you are thinking of the QSEHRA and want to help your employees with more money and flexibility, be sure to consider the ICHRA. It’s got more advantages.
If you operate your business as an S corporation and you want an above-the-line tax deduction for the cost of your health insurance, you need the S corporation to (a) pay for or reimburse you for the health insurance, and (b) put it on your W-2. Make sure that the reimbursement happens before December 31 and that you have the reimbursement set up to show on the W-2.
Claim the tax credit for the group health insurance you give your employees. If you provide your employees with group health insurance, see whether your pay structure and number of employees put you in a position to claim a 50 percent tax credit for some or all of the monies you paid for health insurance in 2020 and possibly in prior years.

If you need more insights into the above opportunities, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

2020 Last-Minute Year-End Retirement Deductions

Thu, 12 Nov 2020 19:16:42 GMT

Dear Client:

The clock continues to tick. Your retirement is one year closer.

You have time before December 31 to take steps that will help you fund the retirement you desire. Here are four things to consider:

1. Establish Your 2020 Retirement Plan

First, a question: As you read this, do you have your (or your corporation’s) retirement plan in place?

If not, and if you have some cash you can put into a retirement plan, get busy and put that retirement plan in place so you can obtain a tax deduction for 2020.

2. Claim the New, Improved Retirement Plan Start-Up Tax Credit of Up to $15,000

$500 or
the lesser of (a) $250 multiplied by the number of your non-highly compensated employees who are eligible to participate in the plan, or (b) $5,000.

The credit is based on your “qualified start-up costs,” which means any ordinary and necessary expenses of an eligible employer that are paid or incurred in connection with

the establishment or administration of an eligible employer plan, or
the retirement-related education of employees with respect to such plan.

3. Claim the New Automatic Enrollment $500 Tax Credit for Each of Three Years ($1,500 Total)

The SECURE Act added a nonrefundable credit of $500 per year for up to three years beginning with the first taxable year beginning in 2020 or later in which you, as an eligible small employer, include an automatic contribution arrangement in a 401(k) or SIMPLE plan.

The new $500 auto contribution tax credit is in addition to the start-up credit and can apply to both newly created and existing retirement plans. Further, you don’t have to spend any money to trigger the credit. You simply need to add the auto-enrollment feature.

4. Convert to a Roth IRA

Consider converting your 401(k) or traditional IRA to a Roth IRA.

You first need to answer this question: How much tax will I have to pay now to convert my existing plan to a Roth IRA? With the answer to this, you know how much cash you need on hand to pay the extra taxes caused by the conversion to a Roth IRA.

Here are four reasons you should consider converting your retirement plan to a Roth IRA:

You can withdraw the monies you put into your Roth IRA (the contributions) at any time, both tax-free and penalty-free, because you invested previously taxed money into the Roth account.
You can withdraw the money you converted from the traditional plan to the Roth IRA at any time, tax-free. (If you make that conversion withdrawal within five years, however, you pay a 10 percent penalty. Each conversion has its own five-year period.)
When you have your money in a Roth IRA, you pay no tax on qualified withdrawals (earnings), which are distributions taken after age 59 1/2, provided you’ve had your Roth IRA open for at least five years.
Unlike with the traditional IRA, you don’t have to receive required minimum distributions from a Roth IRA when you reach age 72—or to put this another way, you can keep your Roth IRA intact and earning money until you die. (After your death, the Roth IRA can continue to earn money, but someone else will be making the investment decisions and enjoying your cash.)

If you would like my help with any of the above, please give me a call at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

2020 Last-Minute Year-End General Business Income Tax Deductions

Tue, 10 Nov 2020 16:11:05 GMT

Dear Client:

The purpose of this letter is to get the IRS to owe you money.

Of course, the IRS is not likely to cut you a check for this money (although in the right circumstances, that will happen), but you’ll realize the cash when you pay less in taxes.

Here are seven powerful business tax deduction strategies that you can easily understand and implement before the end of 2020.

1. Prepay Expenses Using the IRS Safe Harbor

You just have to thank the IRS for its tax-deduction safe harbors.

IRS regulations contain a safe-harbor rule that allows cash-basis taxpayers to prepay and deduct qualifying expenses up to 12 months in advance without challenge, adjustment, or change by the IRS.

Under this safe harbor, your 2020 prepayments cannot go into 2022. This makes sense, because you can prepay only 12 months of qualifying expenses under the safe-harbor rule.

For a cash-basis taxpayer, qualifying expenses include lease payments on business vehicles, rent payments on offices and machinery, and business and malpractice insurance premiums.

Example . You pay $3,000 a month in rent and would like a $36,000 deduction this year. So on Thursday, December 31, 2020, you mail a rent check for $36,000 to cover all of your 2021 rent. Your landlord does not receive the payment in the mail until Tuesday, January 5, 2021. Here are the results:

You deduct $36,000 in 2020 (the year you paid the money).
The landlord reports taxable income of $36,000 in 2021 (the year he received the money).

You get what you want—the deduction this year.

The landlord gets what he wants—next year’s entire rent in advance, eliminating any collection problems while keeping the rent taxable in the year he expects it to be taxable.

Don’t surprise your landlord: if he had received the $36,000 of rent paid in advance in 2020, he would have had to pay taxes on the rent money in tax year 2020.

2. Stop Billing Customers, Clients, and Patients

Here is one rock-solid, time-tested, easy strategy to reduce your taxable income for this year: stop billing your customers, clients, and patients until after December 31, 2020. (We assume here that you or your corporation is on a cash basis and operates on the calendar year.)

Example . Jim Schafback, a dentist, usually bills his patients and the insurance companies at the end of each week; however, in December, he sends no bills. Instead, he gathers up those bills and mails them the first week of January. Presto! He just postponed paying taxes on his December 2020 income by moving that income to 2021.

3. Buy Office Equipment

4. Use Your Credit Cards

If you operate your business as a corporation, and if the corporation has a credit card in the corporate name, the same rule applies: the date of charge is the date of deduction for the corporation.

5. Don’t Assume You Are Taking Too Many Deductions

If your business deductions exceed your business income, you have a tax loss for the year. With a few modifications to the loss, tax law calls this a “net operating loss,” or NOL.

If you are just starting your business, you could very possibly have an NOL. You could have a loss year even with an ongoing, successful business.

You used to be able to carry back your NOL two years and get immediate tax refunds from prior years; however, the Tax Cuts and Jobs Act (TCJA) eliminated this provision. Now, you can only carry your NOL forward, and it can only offset up to 80 percent of your taxable income in any one future year.

6. Thank COVID-19

Let’s be real: there’s little to be grateful for with COVID-19, with one of the several exceptions being the potential opportunities to turn NOLs into cash for your business.

Two NOL opportunities come from the Coronavirus Aid, Relief, and Economic Security (CARES) Act:

The CARES Act allows NOLs arising in tax years beginning in 2018, 2019, and 2020 to be carried back five years for refunds against prior taxes.
The CARES Act allows application of 100 percent of the NOL to the carryback years.

Before the CARES Act, you could not carry back your 2018, 2019, or 2020 losses, and your NOL could offset only up to 80 percent of taxable income before your Section 199A deduction.

7. Deal with Your Qualified Improvement Property (QIP)

In the CARES Act, Congress finally fixed the qualified improvement property (QIP) error that it made in the TCJA.

QIP is any improvement made by the taxpayer to the interior portion of a building that is non-residential real property (think office buildings, retail stores, and shopping centers) if you place the improvement in service after the date you place the building in service.

If you have such property on an already filed 2018 or 2019 return, it’s on that return as 39-year property. You now have to change it to 15-year property, eligible for both bonus depreciation and Section 179 expensing.

I trust that you found the seven ideas above worthwhile. If you would like to discuss any of them, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

If the SBA Made Six Loan Payments on Your Behalf, Are You Taxed?

Wed, 04 Nov 2020 18:57:00 GMT

Dear Client:

Are you one of the millions of businesses that have an outstanding non-disaster Small Business Administration (SBA) loan? These include:

· 7(a) loans: general small business loans of up to $5 million,

· 504 loans: loans of up to $5.5 million to provide financing for major fixed assets such as equipment or real estate, and

· microloans: short-term loans of up to $50,000 for small businesses.

If so, you have already benefited, or soon will benefit, from a little-known provision included in the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Congress appropriated $17 billion so that the SBA could provide a temporary loan payment subsidy to businesses with these non-disaster SBA loans. Under this provision, the SBA automatically makes six monthly loan payments on behalf of borrowers. There is no need to file an application.

Are the SBA loan subsidies taxable income to you?

Unfortunately, the CARES Act is silent on this subject and the IRS has yet to issue any guidance on this particular loan subsidy program. In the past, the IRS advised that similar loan payments were includible in income by the taxpayer-borrower.

It’s unclear whether the IRS will follow this prior guidance.

The IRS could instead conclude that these loan subsidies are not taxable under the general welfare exclusion. The general welfare exclusion has often been used to exempt from tax SBA disaster payments made to individual taxpayers. The exclusion ordinarily does not apply to payments to business. But the IRS could make an exception due to the extraordinary nature of the COVID-19 pandemic.

It’s also possible that Congress will act to make the SBA loan payments tax-free. This could be done in a future stimulus bill.

Right now, the prudent course is to assume that the SBA loan subsidies are taxable income and plan accordingly.

If you have any further questions or need my assistance, please call us at the office at 216-859-7001.

Sincerely,

Jeff Beder

Small Business Relief

abeder123@gmail.com (Amanda Beder) — Mon, 02 Nov 2020 15:47:30 GMT

Dear Client,

On Friday, October 23, 2020, Governor DeWine and the Ohio Development Services Agency announced two new COVID Relief grant programs for Ohio Companies. They are the Small Business Relief Grant and The Bar and Restaurant Assistance Fund. Please click the link below for more information on these programs and to see if your business may qualify. Applications for these grants open today!

Please feel free to call us at the office for any assistance - 216-859-7001.

https://businesshelp.ohio.gov/

Where Do the Presidential Candidates Stand on Tax Issues?

Mon, 26 Oct 2020 15:20:55 GMT

A lot has happened to all of us over this past year. For myself, this has been a period of positive change professionally. I have reconstituted my CPA practice with the help and support of my family and those individuals who have joined me in my practice and I could not be more enthusiastic of the people who have joined me on this journey. My staff has been entrusted with providing client support, handling the administrative functions, and tasked with social media outreach, allowing me to spend most of my time on issues that affect my clients. I appreciate the comments many of you have given to me and will continue to listen and implement changes based on your feedback.

It comes as no surprise that we have an election on November 3 ^rd . As with any election, one of the major talking points is the area of taxation and the positions of the presidential candidates regarding current and proposed legislation. Both sides have made their positions known to the public on these topics. This article is intended to explain each candidate’s position and in no way reflects the opinion of Acumen MB LLC and its employees.

INDIVIDUAL TAXATION

Income Tax Rates

Under current law, there are seven tax brackets: 10,12, 22, 24,32, 35, and 37 percent. These are in effect through 2025.

TRUMP : He has floated the idea of a new 10 percent middle income tax cut but for the most part wants to extend these rates beyond 2025.

BIDEN : He has proposed increasing the top rate back to 39.6 percent which was in effect prior to 2018.

Capital Gains/Dividends

Under current law, a capital gains rate of 0 percent, 15 percent, or 20 percent applies to capital gains and qualified dividends received by individuals, depending upon the amount of the individual’s taxable income. For 2020, the 20 percent rate applies to joint filers with taxable incomes over $496,600 ($469,050 for heads of households, 441, 450 for single filers, and $248,300 for married taxpayers filing separately).

TRUMP : He has stated that he would propose cutting the maximum capital gains rate to 15 percent if reelected. His 2021 fiscal year budget proposal would extend the applicable tax provisions as currently on the books beyond 2025. In addition, Trump has indicated he would be open to indexing capital gains to inflation.

BIDEN : His proposal would increase the top marginal income tax rate on long-term capital gains to 39.6 percent for taxpayers earning more than $1 million annually and eliminate the step-up basis tax expenditure that allows decedents to pass capital gains to heirs without tax.

Child Tax Incentives

Under current law, the maximum Child Tax Credit is $2,000 through 2025. Additionally, an earned income tax credit (EITC) up to $6,557 may be available in 2020, depending on income and family size, as well as a dependent care credit up to $2,100.

TRUMP : Trump has no currently proposed expansions to child tax incentives. His 2021 fiscal year budget proposal would extend current provisions beyond 2025.

BIDEN : Biden has proposed expanding the EITC and dependent care credit. Further, Biden has proposed a refundable $8,000 child care tax credit for a qualifying child or up to $16,000 for two or more children. Additionally, Biden proposes a new $5,000 tax credit for caregivers of individuals with certain physical and cognitive needs.

BUSINESS TAXATION

Corporate Tax Rates

Under current law, the corporate tax rate for C corporations is 21 percent.

TRUMP : Trump has no currently proposed changes.

BIDEN : Biden proposes increasing the corporate tax rate to 28 percent. Additionally, Biden proposes a minimum tax on corporations with book profits of $100 million or more.

Qualified Business Income Deduction

Under current law, the Section 199A deduction allows eligible taxpayers such as partnerships/LLC’s and S corporations to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. The deduction is scheduled to expire after 2025.

TRUMP : Trump supports extending the applicable tax law provision beyond 2025.

BIDEN : Biden has proposed phasing out the qualified business income deduction for incomes above $400,000.

Energy Tax Incentives

Various credits are available under current law for oil production, electric vehicles, as well as for the production of solar, wind, and other “green” energy.

TRUMP : Trump has no currently proposed energy tax incentives.

BIDEN : Biden proposes ending subsidies for fossil fuels, restoring the full electric vehicle tax credit and various credits and deductions to incentivize both residential and commercial energy efficiency.

Please take every opportunity to learn more about each candidate’s positions to make an informed decision.

** With acknowledgement to CCH Incorporated

TCJA: Don't Lose Out When Corp. Vehicle Is in Your Personal Name

Fri, 23 Oct 2020 17:22:23 GMT

Dear Client:

Do you operate your business as an S or a C corporation?

Do you drive a vehicle titled in your personal name for corporate business?

Beware . The Tax Cuts and Jobs Act (TCJA) changed the rules for tax years 2018-2025.

Before the TCJA, you had to pay attention to the use of your personal vehicle for corporate business in order to avoid losing deductions to the 2 percent miscellaneous itemized deduction rule and the alternative minimum tax.

But now, because of the TCJA, you face a narrow road during tax years 2018-2025 if you want tax benefits for the corporate business use of your personal vehicle.

Big Picture

The personal vehicle used for corporate business is a business vehicle to the extent of corporate use.
If you don’t want to lose your rightful tax benefits from your business use, your corporation must reimburse you for your business use.
Your corporation may reimburse you using the IRS standard mileage rate or actual expenses.
When you trade in or sell the vehicle you used for corporate business, you will report a taxable gain or claim a deductible loss on IRS Form 4797.
To obtain your reimbursements from your corporation, you submit expense reports under the accountable plan rules.

Make Sure to Do This

You need a mileage log. The mileage log defines the dollar amount of the corporate reimbursement—regardless of whether you seek reimbursement using (a) actual expenses or (b) the IRS mileage method. The mileage log saves you in an IRS audit.

Accountable Plan

Because your corporation is reimbursing you for your personal vehicle, using either IRS mileage rates or actual expenses, it needs an accountable plan.

Reimbursements from the Corporation

A corporation can reimburse an employee for all expenses allowable under sections 161 to 199 of the tax code—which includes Section 179 expensing and Section 168 bonus and other depreciation.

Here’s what happens when your corporation properly reimburses you for the expenses:

You, as the employee, receive the cash reimbursement from the corporation but do not have taxable income from the reimbursement.
The corporation gets the full deduction for the reimbursed expenses.
If the corporation is an S corporation, then those expenses reduce the corporate income and the corporation passes that reduced income to you—say, as the sole shareholder of your S corporation.

If you are using a personal vehicle for corporate business, please call me at the office at 216-859-7001, because we should discuss what’s required.

Sincerely,

Jeffrey Beder

Avoid Trouble: Don't Let the IRS Set Your S Corporation Salary

Mon, 19 Oct 2020 15:54:36 GMT

Dear Client:

You likely formed an S corporation to save on self-employment taxes.

If so, is your S corporation salary

nonexistent?
too low?
too high?
just right?

Getting the S corporation salary right is important. First, if it’s too low and you get caught by the IRS, you will pay not only income taxes and self-employment taxes on the too-low amount, but also both payroll and income tax penalties that can cost plenty.

Second, in most cases, the IRS is going to expand the audit to cover three years and then add the income and penalties for those three years.

Third, after being found out, you likely are now stuck with this higher salary, defeating your original purpose of saving on self-employment taxes.

Getting to the Number

The IRS did you a big favor when it released its “Reasonable Compensation Job Aid for IRS Valuation Professionals.”

The IRS states that the job aid is not an official IRS position and that it does not represent official authority. That said, the document is a huge help because it gives you some clearly defined valuation rules of the road to follow and takes away some of the gray areas.

Market Approach

The market approach to reasonable compensation compares the S corporation’s business with others and then looks at the compensation being paid by those businesses to employees who look like you, the shareholder-employee who is likely the CEO.

The question to be answered is, how much compensation would be paid for this same position, held by a nonowner in an arm’s-length employment relationship, at a similar company?

In its job aid, the IRS states that the courts favor the market approach, but because of challenges in matching employees at comparable companies, the IRS developed other approaches.

Cost Approach

The cost approach breaks your employee activities into their components, such as management, accounting, finance, marketing, advertising, engineering, purchasing, janitorial, bookkeeping, clerking, etc.

Here’s an example of how the cost approach works to support a $71,019 salary as reasonable compensation for this S corporation owner whose corporation had $3.5 million in revenue and 19 employees:

New ParaHealth Insurance

The S corporation’s payment or reimbursement of health insurance for the shareholder-employee and his or her family goes on the shareholder-employee’s W-2 and counts as compensation, but it’s not subject to payroll taxes, so it fits nicely into the payroll tax savings strategy for the S corporation owner.

Pension

The S corporation’s employer contributions on behalf of the owner-employee to a defined benefit plan, simplified employee pension (SEP) plan, or 401(k) count as compensation but don’t trigger payroll taxes. Such contributions further enable the savings on payroll taxes while adding to the dollar amount that’s considered reasonable compensation.

Planning note. Your S corporation compensation determines the amount that your S corporation can contribute to your SEP or 401(k) retirement plan. The defined benefit plan likely allows the corporation to make a larger contribution on your behalf.

Section 199A Deduction

The S corporation’s net income that is passed through to you, the shareholder, can qualify for the 20 percent Section 199A tax deduction on your Form 1040.

If you would like my help with your S corporation salary, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

How Many Whole or Partial Rooms Can You Use for Your Home Office?

Thu, 15 Oct 2020 15:55:46 GMT

Dear Client:

With the COVID-19 pandemic still going on, you may be spending more time working from your home office.

You may have taken some extra rooms for your business use. Is that okay?

Section 280A(c) states that you may claim a home office based on the portion of the dwelling that you use exclusively and regularly for business. Thus, the law dictates no specific number of rooms or particulars regarding the size of the office.

The courts make this rule clear, as you can see in the Mills (less than one room) and Hefti (lots of rooms) cases described below.

The Mills Case

Albert Victor Mills maintained an office in his apartment from which he conducted his rental property management business. The apartment was small, totaling only 422 square feet. In the office area of the apartment where Mr. Mills had his desk, he also kept tools, equipment, paint supplies, and a filing cabinet.

The court agreed with Mr. Mills’s allocations and awarded the home-office deduction based on his claimed 23 percent business use of the 422-square-foot apartment.

Planning note . Mr. Mills did not have a single room dedicated to a home office. He had only an area of the apartment where he grouped his office furnishings, equipment, and supplies. If you have a similar situation, make sure your business assets are located in a group.

The Hefti Case

Charles R. Hefti lived in a big house, totaling 9,142 square feet. He claimed that more than 90 percent of his home was used regularly and exclusively for business.

Based on its review of the rooms, the court concluded that 13 rooms, totaling 19 percent of the home, were used exclusively and regularly for business.

Insights

The deductible portion of your home for an office includes the area used exclusively and regularly for business.

Let’s say you have an office in one room and your files in a second room, and you never use these rooms for personal purposes. Further, let’s say you use the office area on a daily basis and the file area in connection with that daily work.

Both rooms would meet the exclusive and regular use requirements, just as Mr. Mills’s and Mr. Hefti’s offices met these rules.

But Not This

“Exclusive use” means that you must use a specific portion of the home only for business purposes. You must make no other use of the space.

Exception . One exception to the exclusive use rule is storage of inventory or product samples if the home is the sole fixed location of a trade or business selling products at retail or wholesale.

Example 1 . Your home is the only fixed location of your business, which involves selling mechanics’ tools at retail. You regularly use half of your basement for storage of inventory and product samples. You sometimes use the area for personal purposes. The expenses for the storage space are deductible even though you do not use this part of your basement exclusively for business.

Example 2 . In Pearson, Dr. Pearson practiced orthodontics in a downtown medical building but retained the dental records of more than 3,000 patients in 36 file drawers (each measuring 26 inches by 14 inches by 12 inches) and had 1,461 boxes containing orthodontic models (each box measuring 10 inches by 6 inches by 2 1/2 inches).

He stored the records in the attic and basement of his home. The areas used for such storage were not separate rooms, and the remaining portions of the attic and basement were used by Dr. Pearson and his family for personal purposes.

The court ruled that Dr. Pearson may not treat the storage areas as home-office expenses because the records were not inventory or samples and Dr. Pearson did not operate a wholesale or retail trade or business from his home.

If you would like to discuss your home-office deduction, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

The Latest Payroll Tax Deferral: An Offer You Should Refuse?

Tue, 06 Oct 2020 16:24:55 GMT

Dear Client:

If you have employees, you must withhold their 6.2 percent share of the Social Security tax from their wages up to an annual wage ceiling ($137,700 for 2020). You must pay the money to the IRS along with your matching 6.2 percent employer share of the tax.

But under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as you likely know, employers are allowed to defer paying their 6.2 percent share of the Social Security tax on wages paid to employees through the end of 2020. Fifty percent of these deferred taxes will have to be paid during 2021 and the remainder in 2022.

Both the Trump administration and the IRS have issued orders permitting employers to defer withholding and paying the employee portion of the Social Security tax for a limited time. But the executive order on employee deferral is much more limited in scope than the CARES Act employer deferral, and it’s beset with practical problems for employers.

Which Taxes Can Be Deferred?

The deferral applies only to the employee portion of the Social Security tax due on wages paid from September 1, 2020, through December 31, 2020. No other payroll taxes can be deferred.

Which Employees Qualify for the Deferral?

Only employees who earn less than $4,000 biweekly qualify for the deferral. Employees who are not paid on a biweekly basis qualify if their pay is equivalent to less than $4,000 biweekly. This would include employees who are paid less than

· $2,000 weekly,

· $4,333 semimonthly, or

· $8,666.67 monthly.

Each pay period is tested separately. An employee who earns too much during one pay period can still qualify for the deferral if he or she earns less than the ceiling amount in a later pay period.

Is the Deferral Mandatory?

IRS officials have stated that the deferral is not mandatory. Employers are not obligated to offer the deferral to their employees. This is so even if an employee requests it.

What Happens When the Deferral Period Ends?

The employee Social Security tax deferral ends on December 31, 2020. IRS guidance provides that the deferred taxes must then be paid “ratably” from wages paid from January 1, 2021, through April 30, 2021. Employers must withhold and pay the deferred taxes from employee wages paid during this period.

Thus, from January 1, 2021, through April 30, 2021, most employees will have to pay a 12.4 percent Social Security tax instead of the normal 6.2 percent. This amounts to a 6.2 percent pay cut for affected employees for four months.

What If Employees Quit or Get Fired?

If an employee quits or is fired during the four-month repayment period, there may not be enough wages paid to cover the deferred Social Security taxes. The IRS says that in this event employers can “make arrangements to otherwise collect” the deferred taxes. What form such “arrangements” could take is unclear.

Interest, penalties, and additions to taxes will begin to accrue on any unpaid deferred Social Security taxes starting May 1, 2021. Thus, if you (the employer) fail to remit the deferred monies because employees were not employed during the collection period, you are on the hook.

Due to the uncertainty involved, many employers have reportedly elected not to participate in the employee Social Security tax deferral.

If you have any further questions or need my assistance, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

Eviction Moratoriums in 2020

Fri, 02 Oct 2020 17:12:08 GMT

Dear Client:

During this COVID-19 pandemic, landlords have two big possible problems:

Tenants who can’t pay the rent.
Tax losses they can’t deduct.

We’ll start with the tenants and then move on to the rental property tax-loss issues.

For the first time in U.S. history, residential landlords are subject to a sweeping nationwide federal moratorium on evictions for nonpayment of rent through the end of 2020.

There is no moratorium on landlords’ responsibility to pay their bills. Thus, landlords need to prepare for some of the rockiest times in decades.

The Federal Moratorium on Residential Evictions

The Centers for Disease Control and Prevention (CDC) and the Department of Health & Human Services issued the latest federal moratorium on evictions. It is an emergency health measure intended to help prevent the spread of COVID-19.

The CDC order is effective September 4, 2020, through December 31, 2020. The order replaces an eviction moratorium put in place on March 27, 2020, by the Coronavirus Aid, Relief, and Economic Security (CARES) Act that expired July 24, 2020.

The CDC order generally bars residential landlords from evicting tenants for nonpayment of rent if a tenant’s estimated 2020 income is no more than $99,000 (single) or $198,000 (married, filing jointly).

Unlike the CARES Act moratorium, which applied only to multifamily rental properties with rental subsidies or federally backed mortgages, the CDC order applies to all types of residential rentals: houses, duplexes, apartment buildings, mobile homes, and mobile home spaces. There is no requirement that the rental be federally financed or rent subsidized.

The CDC order does not apply to commercial properties, including motels and hotels. Nor does it apply to guesthouses rented to temporary guests or seasonal tenants—this presumably excludes most Airbnb and similar short-term rentals.

To prevent an eviction, a tenant need only give the landlord a declaration signed under penalty of perjury providing that the tenant

· has used his or her best efforts to obtain all available government assistance for rent or housing;

· falls within the income restrictions ($99,000 or $198,000 in income for 2020);

· is unable to pay the full rent due to substantial loss of household income, loss of work or wages, or extraordinary out-of-pocket medical expenses;

· is using his or her best efforts to make partial payments that are as close to the full rental payments as the tenant’s circumstances permit; and

· would likely become homeless or forced to move into and live in close quarters or a shared living space.

Tenants need not provide their landlord with any proof that the statements in the declaration are true. The CDC has created a form declaration for tenants to use.

There is no time limit on when tenants must provide this declaration to their landlord—they can do so anytime before or after receiving a termination notice.

Individual landlords who violate the CDC order are subject to a fine of up to $100,000 and up to one year in jail, if the violation does not result in a death.

The fine goes up to $250,000 if the violation results in a death (it’s unclear how the government could prove an eviction caused a tenant’s death).

The fines are doubled for organizations such as LLCs, corporations, and REITs.

Help Tenants Get Help

The CDC order requires tenants to seek government aid to help pay their rent. But they need not seek help from nongovernment sources such as churches or private charities.

It is to your advantage to help your tenants obtain such aid. After all, you would like the rent to get paid. And you likely would want to keep the tenant—assuming this is a good tenant. Links to government programs providing financial assistance for renters are available at https://legalfaq.org .

Work Out a Payment Plan

Try to work out payment plans with struggling tenants. This is in their best interests as well as your own. Be sure to get the terms in writing.

For example, if a tenant’s income has declined by 20 percent, you could agree to accept a 20 percent rent reduction through the end of the year and require the tenant to pay the balance due over 2021. Make it clear that this is a partial rent payment and does not satisfy the tenant’s full rental obligation.

You are under no obligation to offer a tenant a permanent rent reduction or any form of rent forgiveness.

And keep in mind that your government is not going to reward your generosity. You get no tax deduction or other tax benefit for reducing or forgiving rent. This doesn’t mean you shouldn’t do it. Just don’t expect the tax code to reward your generosity.

Unpaid Rent Is Not Tax-Deductible

Bad news . Unpaid rent is not a tax-deductible rental expense. Rather, it is a debt owed to you by your tenant. You get no tax deduction for the unpaid rent even if tenants never pay the rent they owe.

Good news . On the plus side, unpaid rent is not taxable as income, is not reported on your tax return, and increases the chances that you will have a rental property tax loss (deductible, we hope). This assumes you are a cash-basis taxpayer, as virtually all residential landlords are.

Deducting Rental Property Tax Losses

You have a rental loss if the total annual expenses you incur for your rentals (mortgage interest, taxes, utilities, insurance, maintenance, depreciation, and other expenses) exceed your total rental income (which does not include unpaid rent).

It’s likely that many landlords who ordinarily have profitable rentals will suffer rental losses for 2020 because their tenants failed to pay all or part of their rent.

The dreaded passive activity loss rules prevent many landlords from deducting all or part of their rental losses from their non-rental income.

Rental losses are always classified as passive losses. Subject to two important exceptions, the general rules are as follows:

Passive losses are deductible only from passive income—income from rental activities and from businesses in which you do not materially participate.
Passive losses are not deductible either (a) from ordinary income such as salary and self-employment earnings, or (b) from investment income such as dividends or interest.

Exception 1. $25,000 Allowance for Rental Real Estate

The tax law takes pity on landlords with a relatively modest income and permits them to deduct a limited amount of rental losses from non-rental income.

If your modified adjusted gross income for the year is under $100,000, you may deduct up to $25,000 in total annual rental losses from your nonpassive income, provided that you actively participate in the management of your rentals (an easy standard to meet).

Exception 2. Real Estate Professional Exemption from Passive Loss Rules

There’s another way you may be able to deduct your rental losses from non-rental income no matter how high your income: the real estate professional exemption from the passive loss rules.

If you qualify as a tax law–defined real estate professional and materially participate in your rental activity, you may treat rental losses as nonpassive and deduct them from all other nonpassive income without limit for 2020.

Either you or your spouse will qualify as a real estate professional for the year if one of you spends

more than half your personal service work time in real property trades or businesses in which you materially participate, and
more than 750 hours of your personal service work and investment analysis time in real property trades or businesses in which you and/or your spouse materially participate.

In addition to the standard described above, you and/or your spouse must materially participate in a rental activity to enable the tax loss deduction against your other income. There are various methods for establishing material participation. The two most common are working more than 500 hours in a tax law–grouped multi-rental activity and working more than 100 hours more than anyone else on individual non-grouped properties.

People with a full-time job outside the tax law–defined real estate industry can rarely qualify as real estate professionals.

Non-deductible Rental Losses Become Suspended Passive Losses

You don’t lose rental losses you can’t deduct because of the passive loss rules. Instead, the losses become suspended passive losses. They are carried forward indefinitely and deducted from passive income each year until they are used up.

You may also deduct your suspended passive losses if you sell or otherwise dispose of substantially all your interest in your rental property in a taxable transaction.

If you would like my help with your rental properties, please call me at the office at 216-859-7001.

Sincerely,

Jeffrey Beder

Education tax benefits may helps with college costs

Fri, 25 Sep 2020 13:20:10 GMT

If you're paying higher education costs for yourself, a spouse or a dependent, you may be eligible to save some money with education tax credits or the Tuition and Fees Deduction.

Here are some facts about tax credits for higher education.

The American Opportunity Tax Credit (AOTC) is:

Worth a maximum benefit up to $2,500 per eligible student.
Only for the first four years at an eligible educational or vocational institution.
For students pursuing a degree or other recognized education credential.
Partially refundable. People can potentially get up to $1,000 back.

The Lifetime Learning Credit (LLC) is:

Worth up to $2,000 per tax return, per year, no matter how many students qualify.
Available for all years of postsecondary education and for courses to acquire or improve job skills.
Available for an unlimited number of tax years.

If you don't qualify for the AOTC or LLC, you may still benefit from the Tuition and Fees Deduction .

For a complete explanation of all education benefits, read IRS Publication 970, Tax Benefits for Education .

Case Study: Trade-In on a New SUV - Reimbursement by Corporation

Fri, 25 Sep 2020 13:17:01 GMT

Dear Client:

When it comes to vehicles, there’s much to think about.

For example, the rules on vehicle trade-ins have totally changed.

To illustrate, let me tell you about a trade-in Joyce completed last month. She traded in her three-year-old vehicle on a new SUV with a gross vehicle weight rating (GVWR) of 6,075 pounds.

The dealer granted her a trade-in value of $13,000 and paid off the $16,000 remaining note on the old vehicle.

Under the tax law, after the Tax Cuts and Jobs Act, this is a sale of the old vehicle traded in and a purchase of the new SUV. So, we have two different transactions. In this story, I’m going to deal with only the trade-in.

Joyce used the vehicle that she traded in 70 percent for business, drove it 41,000 total miles, and used IRS mileage rates to calculate her business vehicle deductions. She paid $50,000 for the vehicle in 2018. Here’s how we calculated her tax-deductible loss:

Net purchase price (basis)

$50,000

Depreciation

2018: 18,000 x 25 cents

4,500

2019: 16,000 x 26 cents

4,680

2020: 7,000 x 27 cents

1,890

Total depreciation

11,070

Adjusted basis

38,930

Trade-in (sale)

Trade value

13,000

Pay off the loan

16,000

Total trade amount

29,000

Net loss on sale

9,930

Business percent

70%

Deductible loss

$ 6,951

Calculation. Because we believe it is easier, we use 100 percent for the calculations and then use the 70 percent business percentage to find the final amount—the deductible loss, in this case.

Depreciation. Within the IRS standard mileage rate is a component for depreciation. For example, the 2020 standard mileage rate is 57.5 cents a mile, with 27 cents for depreciation incorporated in that rate.

Trade-in. The dealer allowed $13,000 as the fair market value of the trade. This operates as cash when Joyce makes her purchase of the new SUV. In addition, the dealer paid off the existing note, so the total value of the trade for gain and loss purposes is $29,000 ($13,000 + $16,000).

Deductible loss. The $6,951 loss is an ordinary loss that Joyce reports on IRS Form 4797.

The important part of Joyce’s story is that her trade-in, like all trade-ins of vehicles and other personal property, is a sale. And that means there’s a taxable gain or loss.

If you are thinking of trading in your vehicle or other personal property, make sure to consider the taxable gain or loss. If you would like my help, please call me on my direct line at 216-859-7001.

Sincerely,

Jeffrey Beder

Economic Impact Payment

Tue, 22 Sep 2020 18:19:49 GMT

Even if you don't normally file taxes, you may still qualify for an Economic Impact Payment

Updated on September 17, 2020

If you're a U.S. citizen, permanent resident or qualifying resident alien, not a dependent of another taxpayer and have a work eligible Social Security number, you'll likely receive an Economic Impact Payment.

You don't have to have income to claim a payment. If you're experiencing homelessness, you may still be eligible. The payment is not income and you will not owe tax on it. It won't affect your eligibility for federal government assistance or benefit programs.

If you don't normally file taxes, you need to sign up by October 15, 2020 at IRS.gov/nonfilereip to receive a $1,200 payment. You may also get an additional $500 for each qualifying child.

You're not required to file a tax return for 2019 if your income is below $12,200, or $24,400 for married couples.

Don't use the non-filer tool if you:

Can be claimed as a dependent on someone else's tax return
Filed or will file a 2018 or 2019 return

To sign up you'll need:

Name, a mailing address and an email address
Date of birth and valid Social Security number
Bank account information, if you have one
Identity Protection PIN, if you've received one from the IRS
License or state ID, if you have one
Name, SSN and relationship for each qualifying child

If you receive any of the following benefits, you should have automatically received your payment where you normally receive your benefits. However, to get an Economic Impact Payment for a qualifying child, you may need to use the Non-Filers tool by September 30, 2020 to provide additional information to the IRS.

Social Security retirement, disability or survivor benefits
Supplemental Security Income
Veterans Affairs Compensation and Pension benefits
Railroad Retirement benefits

Visit IRS.gov/coronavirus for more information.

Don't Let Section 179 Recapture Hurt You

Mon, 21 Sep 2020 13:50:40 GMT

Dear Client:

Okay, so you took the big Section 179 expensing deduction on your vehicle.

How do you keep it?

You might wonder: What do we mean by “keep it”?

In tax law, there’s no free lunch. The Section 179 deduction comes with “recapture strings” attached.

When you claim your Section 179 deduction, you make a deal with the government to keep your business use above 50 percent during the “designated” depreciation periods (five years for vehicles).

One Sad Story

In 2018, Jerry Jackson claimed a $53,000 Section 179 deduction on a qualifying pickup truck. In 2020, Jerry’s wife drives the truck and Jerry’s business use drops to zero.

Jerry violated his 50 percent business-use agreement with the government. Now he has phantom income to report (called “recapture”), and he’s going to pay the price for breaking his tax promise on the Section 179 deal.

The pickup truck is listed property. This means that Jerry must re-compute his allowable deductions using the ADS straight-line depreciation tables, which will result in the following:

$5,300 deduction (10 percent of $53,000) in 2018
$10,600 deduction (20 percent of $53,000) in 2019

In 2018, Jerry deducted his 90 percent business cost ($53,000) using Section 179. But now, with recapture, his ADS straight-line depreciation for 2018 and 2019 totals only $15,900 ($5,300 + $10,600).

So in 2020, the year of violation, tax law recaptures $37,100 ($53,000 - $15,900). Jerry must report the 2020 recapture income on the same form or line on which he (or his corporation) claimed the original $53,000 deduction in 2018.

For example, say Jerry operates as a proprietor who claimed his 2018 Section 179 deduction on Schedule C. In 2020, he reports the recapture income as other income on Schedule C.

Holy smokes! On Schedule C, that means the Section 179 recapture is going to create self-employment taxes. Correct! The original Section 179 deduction reduced self-employment taxes.

On his recapture income, Jerry gets the double whammy: increased income and self-employment taxes.

Traps to Consider

Retirement. Are you going to retire? Will retirement bring your business use to zero?

Children. Do your children drive your business vehicle(s)? Will their driving bring your business use to 50 percent or less?

Spouse. Does your spouse drive your business vehicle for personal purposes? Will your spouse’s mileage drop your business use to 50 percent or less?

Personal use. Are you converting Section 179 assets, such as a vehicle, to personal use? Does the conversion to personal use occur during the recapture period?

You need to consider recapture when doing your tax planning. If you would like my help with this, please don’t hesitate to call me on my direct line at 216-859-7001.

Sincerely,

Jeffrey Beder

Thinking of Moving to a Lower-Tax State? Tax Angles to Consider

Mon, 21 Sep 2020 13:37:57 GMT

Dear Client:

If you’re considering moving to a different state, taxes in the new state may be the deciding factor—especially if you expect them to be lower.

Consider All Applicable State and Local Taxes

If your objective is to move to a lower-tax state, it may seem like a no-brainer to move to one that has no personal income tax. But that’s not a no-brainer!

You must consider all the taxes that can potentially apply to local residents—including property taxes and death taxes.

One Case Study

Texas is “famous” for having no personal state income tax, while Colorado has a flat 4.63 percent personal state income tax rate. So, you might reasonably think it would be much cheaper tax wise to live in Texas than Colorado if you have a healthy income. Not necessarily! Here’s why.

The property tax rate on a home in some Colorado Springs locales is about 0.49 percent of the property’s actual value, as determined by the county assessor. Say you move to one of these areas and buy a $500,000 home. Your annual property tax bill would be about $2,450.

Say your taxable income is $200,000. Your Colorado state income tax bill would be $9,260. Your combined property tax bill and state income tax bill would be about $11,710 ($2,450 + $9,260).

According to the Dallas Central Appraisal District’s online property tax estimator, the annual property tax bill on a $500,000 home in some Dallas locales would be about $21,200, or about $17,800 if you’re over 65 or a surviving spouse. You would have no state income tax bill.

In most areas within both Colorado Springs and Dallas, the combined state and local sales tax rate is 8.25 percent, so no difference there.

So the relevant comparison for property and income taxes is $11,710 in Colorado Springs and about $21,200 (or $17,800 if you’re over 65 or a surviving spouse) in Dallas.

But if your income is really high, it could be the other way around—assuming you don’t buy a really expensive home in Dallas.

Finally, it’s important to know that the restaurants are better in Dallas. True!

Defang the State Tax Domicile Issue

If you decide to make a permanent move to a lower-tax state, it’s important to establish legal domicile there in order to decouple yourself from taxes in the state you came from.

The exact definition of “legal domicile” varies from state to state.

In general, your domicile is your fixed and permanent home location and the place where you plan to return, even after periods of residing elsewhere.

Because each state has its own rules regarding your domicile, you could wind up in the worst-case scenario—with two states claiming that you owe state taxes because you established domicile in the new state but did not successfully terminate domicile in the old state.

Finally, if you die without clearly establishing domicile in just one state, both the old and new states may claim that state death taxes are owed. Not good!

If you are thinking of moving to another state, please don’t hesitate to ask me for help. My direct line is 216-859-7001.

Sincerely,

Jeffrey Beder

Seven Things to Know Before You Take Out an EIDL

Tue, 08 Sep 2020 18:52:35 GMT

Dear Client:

Small Business Administration (SBA) Economic Injury Disaster Loans (EIDLs) can be a great source of low-interest funding for businesses struggling with the economic impact of the COVID-19 pandemic.

Unlike Payroll Protection Program (PPP) loans, EIDLs are not forgivable—borrowers have to pay them back. But they have a low 3.75 percent interest rate and a long 30-year repayment period. Borrowers can repay them at any time without penalty.

To obtain an EIDL, borrowers must sign a loan authorization and agreement, a note, and a security agreement filled with fine print. Many of these provisions could have a significant impact on the borrower’s business for the life of the loan—up to 30 years.

It is vital to understand the terms and conditions before taking out any loan, including an EIDL. Here are seven key provisions borrowers should be aware of.

1. No Changes to the Business

Without SBA approval, EIDL borrowers may not sell the business or change its ownership structure. This includes removing or adding a business partner.

2. No Distributions Outside the Usual Course of Business

The owners may not make distributions outside the usual course of business without SBA approval. This includes loans, advances, bonuses, or asset transfers to owners, employees, or other companies.

Distributions within the usual course of business are permitted. SBA officials have said this includes distributions of net income to owners of a pass-through business, such as an S corporation or a limited liability company.

3. Strict Record-Keeping Requirements

The SBA imposes strict record-keeping requirements on EIDL borrowers. They must keep itemized receipts showing how they spend the loan funds. Also required is a full set of financial and operating statements, which must be furnished to the SBA each year. The SBA also has the option of requiring an expensive review of the borrower’s records by an independent CPA.

4. Using Other COVID-19 Payments to Pay the SBA

EIDLs are intended to cover disaster losses not compensated by other sources. If an EIDL borrower obtains grants, loans, insurance proceeds, or lawsuit recoveries to help defray COVID-19-related losses, the borrower is required to notify the SBA. The SBA may require that such money be used to repay the EIDL.

But a business may obtain both a PPP loan and an EIDL so long as it doesn’t use them for the same expenses.

5. Strict Collateral Requirements

Businesses that borrow more than $25,000 are required to pledge all their business’s personal property as collateral. Such collateral includes present and future inventory, equipment, deposit accounts, promissory notes, negotiable instruments, and receivables.

The SBA obtains a security interest in all such collateral the borrower has at the time of the loan, or collateral it acquires or creates in the future. The borrower must

· obtain hazard insurance for its collateral, and

· ask the SBA for permission before selling or otherwise disposing of its collateral, other than selling inventory in the ordinary course of business.

6. Buy American

EIDL borrowers must promise to buy American-made equipment and products with the loan proceeds, to the extent feasible.

7. Penalties for Violations

Penalties for violations of the EIDL terms can be severe. The SBA can demand immediate repayment of the entire loan if the borrower breaches any of its terms. The SBA also reports defaults to credit reporting agencies.

Borrowers who misapply EIDL funds—for example, using them to pay personal expenses—are liable to the SBA for an amount equal to one-and-a-half times the original loan.

If you need my assistance or would simply like to discuss EIDLs, please call me on my direct line at 216-859-7001.

Sincerely,

Jeffrey Beder

PPP Update: Two New Rules for Owners of S and C Corporations

Tue, 08 Sep 2020 18:49:35 GMT

Dear Client:

The Payroll Protection Program (PPP) rules—they keep a-changin’.

During the past month, the Small Business Administration (SBA) issued a new set of frequently asked questions (FAQs) and a new interim final rule, which in combination create the following good news for the Payroll Protection Program (PPP):

More forgiveness. The $20,833 cap on corporate owner-employee compensation applies to cash compensation only. It’s not an overall compensation limit as the SBA had stated in its prior interim guidance. Under this new rule, the owner-employee can add retirement benefits on top of the cash compensation, creating a new higher cap.
Escape owner status. You are not an owner-employee if you have less than a 5 percent ownership stake in a C or an S corporation. Therefore, the cap on forgiveness for this newly defined non-owner-employee is not $20,833 but rather $46,154.

The new rules override prior guidance and have significance for PPP loan forgiveness today—and perhaps for obtaining additional loan monies retroactively (if Congress reinstates the PPP along with a new second round for businesses that suffered a big drop in revenue).

Here’s one example of how the new rules benefit John, an S corporation owner.

Example. John, the sole owner and worker, operates his business as an S corporation. His 2019 W-2 shows $140,000 in Box 1, of which $20,000 is for health insurance. In addition, the S corporation pays state unemployment taxes of $500 on John’s income and contributes $20,000 to his pension plan.

Based on the facts in the example, the corporation is eligible for up to $25,000 of PPP loan forgiveness, as follows:

$20,833 on John’s salary (the cap), which the corporation pays to John at his regular rate in less than 10 weeks during the covered period;
$4,167 on John’s retirement ($20,000 x 20.83%); and
zero on the unemployment taxes because they were paid out in January, before the covered period began.

Advantage. Prior guidance limited forgiveness to $20,833. John’s S corporation gains $4,167 in additional forgiveness thanks to the new FAQs, assuming that the S corporation’s loan amount is $25,000 or more (which is possible).

The good news in the new guidance is that the corporate retirement contributions on behalf of owner-employees now count for additional forgiveness when the owner-employee has cash compensation greater than $100,000. And with the C corporation, the new guidance allows health insurance for the owner-employee.

Remember, I am always here for you. If you would like to discuss your PPP with me, don’t hesitate to call me on my direct line at 216-859-7001.

Sincerely,

Jeffrey Beder

No PPP Loans Today, but You can Still Get $150,000 from the SBA

Tue, 08 Sep 2020 18:09:29 GMT

Dear Client:

Can your business use an infusion of cash to deal with losses caused by the COVID-19 epidemic?

The hugely popular federal Payroll Protection Program (PPP) loan program that paid forgivable loans to millions of businesses ended on August 8 (although it could come back in revised form). But you can still obtain a low-interest Emergency Income Disaster Loan (EIDL) of up to $150,000 from the Small Business Administration (SBA).

Do You Qualify for an EIDL?

You can qualify for an EIDL if your business has fewer than 500 employees and has suffered “substantial economic injury” due to the COVID-19 pandemic. You have suffered economic injury if you’re unable to pay your normal business operating expenses and other bills, or to sell or produce your goods or services because of the pandemic.

You can obtain an EIDL even if you already received a PPP loan. However, you may not use the EIDL to pay the same payroll costs or other expenses you pay with a PPP loan.

How Much Can You Borrow?

The SBA is currently capping EIDLs at $150,000. The amount you receive is intended to cover six months of your business operational expenses. For most small businesses, the loan amount is based on gross revenues minus cost of goods sold during the period from February 1, 2019, through January 31, 2020, divided by two.

What Are the Loan Terms?

These are 30-year loans at a 3.75 percent interest rate. You don’t have to make any payments until one year after you receive the loan (interest continues to accrue during the one-year delay). There is no prepayment penalty.

How Do You Apply?

You apply for an EIDL with the SBA, and the loan is funded directly from the U.S. Treasury. Unlike with PPP loans, banks are not involved. You can apply online, and the SBA has created a streamlined application.

Do You Need to Have Collateral or Make Guarantees?

The SBA does not require a personal guarantee for an EIDL of less than $200,000.

Collateral is required only if the loan is over $25,000.

For loans over $25,000, the SBA obtains a security interest in all tangible and intangible property your business owns or acquires, including inventory, equipment, and receivables. The SBA files a UCC-1 lien against your business.

How You Can Use the Money

The money is supposed to be used to help you carry on your business until life gets back to normal. You can use the money to pay normal operating expenses, such as employee salaries and benefits, rent, utilities, and fixed debt payments. You can continue to take your owner’s draw for work you actually perform for the business.

But EIDLs are not supposed to be used to replace lost sales, fund business expansion, start a new business, or refinance long-term debt. Nor can you use them to pay yourself dividends or bonuses.

As you can see, EIDLs can be a useful source of low-interest financing during these troubled times. If you need my assistance or would simply like to discuss EIDLs, please call me on my direct line at 216-859-7001.

Sincerely,

Jeffrey Beder

Spending the PPP Money on You and Your Employees

Wed, 19 Aug 2020 18:48:40 GMT

If you report your business income and expenses on Schedule C of your Form 1040, your Payroll Protection Program (PPP) loan forgiveness is straightforward, as you see in the four answers below.

1. Paying Myself

Question. I know that I can achieve full forgiveness based solely on my 2019 Schedule C income in 10.8 weeks under the 24-week program. Do I have to pay myself every week for 10.8 weeks?

Answer. No. Let’s say your PPP loan is for $20,000. You could, for example, take $20,000 out of your business account in one lump sum and put that in your personal savings anytime during the 10.8-week period and then apply for forgiveness in week 11.

Because both your loan and forgiveness are based on your 2019 Schedule C net profit (yes, last year), you simply need to use the loan money for personal purposes. This is how you pay yourself and obtain loan forgiveness the easy way.

Sure, you need to use only 60 percent of the proceeds for yourself and could use 40 percent for interest, rent, and utilities. But think about it:

• Pay yourself only: simple paperwork.

• Pay interest, rent, and utilities: more rules and paperwork.

Keep it simple. Don’t make yourself suffer.

2. Waiting to Spend

Question. Can I wait a number of weeks before I spend my loan proceeds?

Let’s say I receive the PPP proceeds on August 1, 2020. Can I use the 24-week period and start on August 17, for 11 weeks? Would that be okay? And would it be eligible for forgiveness?

Answer. Yes, no problem. But let’s be clear:

• For PPP loans made on June 5 or later, the 24-week covered period is the rule (there’s no “can” here—no eight-week possibility).

• There’s no requirement that a Schedule C taxpayer spread out the payments.

• There’s no payroll or other impediment here.

3. Spending in Chunks

I am a Schedule C taxpayer with no employees. My PPP loan amount was deposited into my business checking account on May 19, 2020. I am not electing the eight-week covered period. Instead, I am choosing the 24-week covered period, which ends on November 2, 2020.

I have two questions.

Question 1. Can I write one check for every four weeks of payroll and deposit it in my personal checking account?

Answer 1. Yes—but this is not a payroll check. As a Schedule C taxpayer with no employees, you have no payroll. Your PPP loan was based on your 2019 net profit. And your forgiveness will be based on the same amount. You don’t need to spread out your payments.

Question 2. Does this check have to be cashed within that four-week period, or if it is written within that period, is that sufficient to apply for forgiveness?

Answer 2. In general, your check is a payment on the date it is written. Because you are dealing with yourself, you should ensure that the check is cashed soon after it is written.

Also, we don’t see any wisdom (in fact, just the opposite) in writing the check within the 24 weeks and then cashing it outside the 24 weeks.

4. Got the PPP Money but Had a Loss in 2019

Question. I am a Schedule C filer, ran at a loss in 2019, but withdrew $120,000 from the business as the business increased its debt position.

I used my draw amount to obtain a $120,000 PPP loan before the guidance was issued on how sole proprietors should calculate their pay. If the business now has two employees, can both of those employees be used for the forgiveness application?

Answer. Yes, you can use the two employees on the forgiveness application, and you can use 24 weeks of pay. In addition to payroll, 40 percent of the forgiveness can come from interest, rent, and utilities.

Example. Say the two-employee payroll for the 24 weeks totals $60,000 and the interest, rent, and utilities total $30,000. You would achieve $90,000 of forgiveness.

Q&A: PPP Forgiveness Answers for S Corporation Owner-Employees

Tax law definitions do not apply to much of the PPP, making it new ground for owners of S corporations. Here are answers to four questions of concern to many S corporation owners.

1. Spouse Owns S Corporation

Question. My wife owns 100 percent of the S corporation. She has a full-time job and does no work for the S corporation. I am the sole worker in the S corporation. Am I treated as:

• a “non-owner employee” of the S corporation; or

• an “owner-employee” subject to the limits?

Answer. The PPP guidance does not address the situation you describe. From what we know, you are a non-owner employee, which means you are not stuck with the owner-employee limits.

In tax law, you would have to consider “attribution rules” that would make you own what your wife owns because of your marital relationship. (Yes, in tax law you both would own 100 percent.) But the PPP guidance to date contains no such rules.

According to the latest from the Small Business Administration (SBA), you may rely on the laws, rules, and guidance available at the time of your PPP loan application. As we write, the latest guidance is from over a month ago, on June 25, 2020.

2. S Corporation Owner-Employee with No W-2

Question. I submitted my PPP loan application before the guidance disallowing independent contractor payments was published. And at the time of submission, I had not yet started paying myself a salary.

Now I have the PPP money from the bank but cannot get it forgiven through contractor payments. If I pay myself on a W-2, I lack the look-back period of 2019 payroll. Am I out of luck? Should I go on payroll and hope for the best?

Answer. Under the rules, you are out of luck. Your loan forgiveness is based on the lower of your 2019 W-2 (zero) or your 2020 W-2.

3. S Corporation Loan Based

on K-1

Question. I operate my business as an S corporation with two W-2 employees other than me (I don’t receive a W-2). I applied for the PPP loan and obtained it based on my K-1.

A few weeks later the lender told me that the money I received was not available to be forgiven. This doesn’t seem fair. My profit is my income. Is there any workaround for this?

Answer. No—no workaround. But in your case, likely no PPP loan forgiveness problem either.

But first, let’s think about taxes. You operate as an S corporation, and you take no salary. (That’s incorrect and likely a tax problem if the IRS audits your tax return.)

Now, let’s get to the PPP. Your lender granted you the PPP loan based on the K-1 and ignored your employees. That shows how confusing the PPP has been. But let’s ignore the right and wrong of that and get to the heart of the issue. Can you obtain forgiveness?

Yes, your S corporation’s forgiveness begins with what you pay your W-2 employees during the 24-week covered period, including what you pay in health insurance and retirement on their behalf. In addition, you may include some or all of your payments for business interest, rent, and utilities during the 24 weeks beginning with receipt of the loan.

Example. Let’s say you received a $100,000 loan. If your payroll during the 24 weeks is $63,000 and the rent and utilities total $37,000, you would qualify for 100 percent forgiveness. If you achieve this in 20 weeks, you could apply for forgiveness then.

Observation. The fact that the lender based your loan on your profits is simply a mistake by the lender. It does not affect forgiveness, which is based on your using the money for the intended PPP purposes such as payroll.

4. S Corporation with Home Office

Question. You recommend that the S corporation owner use an expense report to submit home-office expenses to the business for reimbursement and then classify the reimbursement in the tax return as an office expense.

How would we classify this as mortgage interest and utilities under the PPP loan forgiveness guidelines? We have the same question for partnerships where an item is claimed as an unreimbursed partner expense.

Answer. The reimbursed expense won’t work for the PPP, but here’s the solution: choose the 24-week program, and you will achieve full forgiveness with only the payroll in as little as 10.8 weeks.

Insights into the PPP Loan and Its Forgiveness

We receive many questions about the PPP. Here are two of them with our answers.

1. Good Faith at the Time

Question. What are your thoughts on the repercussions for business owners who acted in good faith based on the information available at the time and are now left to do things that may be more questionable to earn PPP loan forgiveness?

Answer. First, with good faith, there’s no fraud issue as there is no fraud intent. Second, lenders and individuals had to scramble for a good two months or more before guidance was clarified, so many of the PPP loan application forms were murky (and some still are).

Obtaining the loan based on the guidance that existed at the time of your loan application and approval is a non-issue. Further, lenders used their own formulas during the early process (and in some cases, still use them) to determine the loan amounts.

As to taking “questionable” actions to earn forgiveness, if you follow the forgiveness applications, you are doing nothing questionable. And that’s what you should do: follow the instructions in the loan forgiveness applications.

2. EIDL, EIDL Advance, and PPP

Question. I’ve heard of the Economic Injury Disaster Loan (EIDL), EIDL advance, and the PPP. What are the differences?

Answer. We’ll deal with the big picture here. It will prove helpful.

PPP. The PPP is the cash infusion program of choice. The cash infusion part comes from a bank or other SBA lender and is based on your prior payroll (2019 in most cases). It comes into your business as a forgivable loan if you spend the money on defined payroll, interest, rent, and utilities during a period of up to 24 weeks.

Example. You receive a $50,000 PPP loan and spend it within the 24 weeks on defined payroll with no reduction in your employee head count. You qualify for 100 percent forgiveness.

EIDL. Unlike the PPP loan, which comes from a bank or other approved SBA lender, the EIDL is a loan directly from the SBA; it carries a 3.75 percent interest rate, may require collateral, and must be repaid.

EIDL advance. The EIDL advance, when available, comes into play with the EIDL application. It’s an advance on the EIDL of up to $10,000. If you reject or don’t receive an EIDL and don’t have a PPP loan, the EIDL becomes a non-taxable grant and does not have to be repaid.

If you have a forgivable PPP loan, you reduce the amount of forgiveness by the amount of your EIDL advance.

Example. You have a forgivable PPP loan of $30,000 and an EIDL advance of $7,000. The lender will forgive $23,000 of your $30,000. Let’s say you pay off the remaining $7,000. In this case, you have received a net of $30,000 ($7,000 + $30,000 - $7,000).

All About Limited Liability Companies

Limited liability companies (LLCs) are a popular choice of entity for small businesses and investment activities. LLC owners are called members.

Single-member LLCs have one owner, although spouses who jointly own an LLC in a community property state can elect treatment as a single-member LLC for federal income tax purposes. We will call LLCs with two or more members multimember LLCs.

Key point. LLCs are not corporations. But LLCs can offer similar legal protection to their members (owners).

Here are the most important things to know about LLCs.

LLCs Offer Legal Protection

Using an LLC to conduct a business or investment activity generally protects your personal assets from LLC-related liabilities—similar to the legal protection offered by a corporation.

As you know, liabilities can arise from simple things—like a delivery guy slipping on something you left on your front steps—or in seemingly endless and complicated ways if you have employees.

Key point. As a general rule, no type of entity (including an LLC) will protect your personal assets from exposure to liabilities related to your own professional malpractice or your own tortious acts.

Tortious acts are wrongful deeds other than by breach of contract—such as negligent operation of a motor vehicle resulting in property damage or injuries. The issue of liability protection offered by an LLC is a matter of state law. Seek advice from a competent business attorney for details.

Single-Member LLC Tax Basics

Single-member LLC businesses owned by individuals are treated as sole proprietorships for federal income tax purposes unless the member elects to treat the single-member LLC as a corporation.

In other words, the default federal income tax treatment for a single-member LLC business is sole proprietorship status. Under the default treatment, you simply report all the single-member LLC’s income and expenses on Schedule C of your Form 1040.

If the single-member LLC business activity generates net self-employment income, you will report that on Schedule SE of your Form 1040.

Rental. If the single-member LLC activity is a rental activity, you report the rental income and expenses on Schedule E of your Form 1040.

Farm or ranch. You report the numbers for a farming or ranching activity on Schedule F.

Simple. You don’t need to file a separate federal income tax return for the single-member LLC. And other things being equal, simple is good.

Three key points

1. The big federal income tax advantage of operating as a single-member LLC is simplicity.

2. The big non-tax advantage is liability protection, under applicable state law.

3. As mentioned, you can elect to treat a single-member LLC as a corporation for federal income tax purposes, but we don’t recommend that, for reasons we explain later.

Multimember LLC Tax Basics

Multimember LLCs are treated as partnerships for federal income tax purposes unless you elect to treat the LLC as a corporation.

In other words, the default federal income tax treatment for a multimember LLC is partnership status. Under the default treatment, you must file an annual partnership federal income tax return on Form 1065.

From the Form 1065 partnership return, the LLC issues an annual Schedule K-1 to each member to report that member’s share of the LLC’s income and expenses. The member then takes those taxable and deductible amounts into account on the member’s own return (Form 1040 for a member who is an individual).

The LLC itself does not pay federal income tax. This arrangement is called pass-through taxation, because the income and expenses from the LLC’s operations are passed through to the members, who then take them into account on their own returns. (The same pass-through taxation concept applies to entities set up as “regular” partnerships under applicable state law.)

Electing to Treat the LLC as a Corporation for Tax Purposes

You have the option of electing to treat a single-member LLC or multimember LLC as a corporation for federal income tax purposes. You do that by filing IRS Form 8832, Entity Classification Election, to change the default classification of the single-member LLC or multimember LLC to the new classification as a corporation.

If your desire is to have your LLC treated as an S corporation, it can elect S corporation status directly using IRS Form 2553, or it can elect C corporation treatment on Form 8832 and then S corporation treatment on IRS Form 2553. While there may be valid non-tax reasons for electing to treat an LLC as a corporation, we think tax reasons generally dictate against taking that step.

If you conclude that there are tax advantages to electing corporate status, why not just actually incorporate your operation in the first place? That’s simpler. Keeping your tax matters simple is generally good policy.

Electing corporate status from the LLC could have unintended tax consequences. For example, you can potentially collect federal-income-tax-free gains from selling stock in a qualified small business corporation (QSBC). But you must own shares and hold them for over five years to cash in on this super-favorable deal. Can an LLC membership (ownership) interest count as QSBC stock for this purpose? Apparently not. It’s not stock.

If you are looking for the QSBC stock break, just set up as a corporation in the first place.

Here’s another example: a special federal income tax break allows you to annually deduct up to $50,000 of losses from selling eligible small business stock, or $100,000 if you’re a married joint filer, and treat the loss as a tax-favored ordinary loss instead of a tax-disfavored capital loss.

Can an LLC membership interest count as eligible stock for this purpose? Apparently not. It’s not stock. Avoid the problem—set up as a corporation in the first place.