Friday, October 30, 2015

Turn your part-time employees into winners

Turn your part-time employees into winners.
Part-time employees play a valuable role in a small business. They help deal with fluctuations in workload and can job-share with full-timers. In addition, because part-timers often look for flexibility in hours, you may find a skilled worker whose schedule fits perfectly with existing staff.
But part-timers can turn into a liability if not managed well. You could end up with poorly motivated workers who are unsure of their duties, unfamiliar with your company, and uncertain who they report to. Here are tips to keep this from happening.
Think before you hire. Decide what you want your new employee to do, what work hours are expected, and who he or she will report to. Does the position have well-defined duties? Or does the work involve filling in wherever needed? Decide on the pay and benefits.
Communicate clearly with your new part-timer. Explain the required duties and the chain of authority. Be very clear on hours and benefits, while remaining flexible enough to accommodate school or other commitments.
Communicate clearly with your full-time staff. Explain why you're hiring a part-time employee. Clarify what the new employee will and will not be expected to do. Designate who will manage and assign work to the part-timer.
Make the part-timer feel like part of the company. Provide introductory training on specific duties and the company's business and policies. Assign a mentor or "buddy" – someone the new person can turn to with everyday questions.
Monitor progress. Don't forget about your new employee after hiring. Provide feedback on performance and recognition for tasks well done.
With a sound plan, hiring a part-time employee can be a win-win situation.

Wednesday, October 28, 2015

Breakeven analysis helps with business choices

Break even analysis helps with business choices

Break even analysis is an important and useful tool in business. Whether you're starting a new business, expanding current operations, contemplating an acquisition, downsizing, or approaching banks and other potential lenders, you'll want to know your break even.
Break even is defined as the point at which costs equal income – no profit, no loss. It's an excellent starting point for finding out where your business is and where it can go. Break even is the first step in planning future growth. It shows how much sales volume you need to cover fixed and variable expenses. Once your company has reached break even, all gross profit beyond that point goes directly to improving the bottom line.
Of course, break even analysis has limitations. For example, it ignores the importance of cash flow and makes the assumption that fixed and variable expenses will stay within the parameters used to calculate the break even point. Despite these shortcomings, break even can help with business planning.
Here's how to calculate your business's break even.
First, review your annual financial statement to learn your fixed and variable expenses. Fixed expenses are those that don't generally vary in relation to sales volume. Rent, for example, usually stays constant no matter the amount of your sales. The same is typically true for depreciation, utilities, and insurance.
Variable expenses are the cost of goods sold and other costs of sales, such as direct labor and sales commissions.
What about costs that are part fixed and part variable? Split these into separate categories based on your knowledge of your business.
Next, compute your gross profit percentage by dividing your net sales less your cost of goods sold by your net sales. Then divide your fixed costs by your gross profit percentage to arrive at break even.
Example. Say your fixed costs are $10,000 and your gross profit percentage is 25%. Your break even point is sales of $40,000 ($10,000 ÷ 25% = $40,000).

Too much math? Call us. We're happy to help you calculate your business's break even point and evaluate your profit structure.

Monday, October 26, 2015

Protect yourself from ID theft with credit report check

Protect yourself from ID theft with credit report check
Even if you're covered by a credit monitoring service, you may want to keep an eye on your credit report – and you can still do that for free at That's the only official website, so don't be fooled by other "free" claims.
At the site, you can get one free report annually from each of the three major agencies. Why bother? Identity theft is a multi-billion dollar industry, and checking your credit rating is one of the best ways to protect yourself. You might also be surprised at the number of mistakes on credit reports. Relatives or even non-relatives with the same (or similar) last name could have their credit information jumbled with yours. Individual companies could have incorrectly reported a negative credit occurrence (in the form of a delinquent payment or nonpayment) to the reporting agencies. Reviewing your credit report is a way to find and fix those issues.
If you find an error, both the credit reporting company and the company that provided the information about you are responsible for making corrections. You'll have to submit a written report and you'll get written results when corrections are made.
Give us a call if you're having problems with your credit reports. We're here to help.

Thursday, October 22, 2015

Decide when to start social security benefits

Decide when to start social security benefits
Whether you should take social security retirement benefits at the earliest possible date or defer benefits until reaching normal retirement age (or even age 70), depends on several factors. For example, you'll want to consider your overall health and life expectancy, your plans to earn income before reaching normal retirement age, anticipated returns on your other investments, and, surprisingly, your guess about the future of the social security program. As you can tell, the decision isn't one-size-fits-all.
For instance, say your savings won't cover ongoing expenses and you need to rely on social security income to make ends meet. In that case, deferring social security benefits may not be an option for you.
But if your financial circumstances offer more financial flexibility, deferring your benefits can be an advantage. For each year you delay (up to age 70), the payouts increase. In addition, if you plan to earn significant income between age 62 and your normal retirement age (65-67, depending on the year you were born), putting off your social security benefits may make sense. That's because any benefits in excess of specified limits ($15,720 in 2015) will be reduced. You'll lose $1 of benefits for every $2 in earnings above the limits. Note that you won't lose any social security benefits (regardless of earnings) once you reach full retirement age.
On the other hand, let's say you've accumulated a healthy balance in your 401(k) and expect that account to generate a good annual return. Under this scenario, you might be better off leaving your retirement savings alone and taking your social security benefits early to cover living expenses.
Or perhaps your family has a history of health problems and you don't realistically expect to live into your 80s. Again, taking social security benefits at age 62 might be a good choice.
For help with this important decision, please give us a call.

Tuesday, October 20, 2015

Items on your 2014 return can affect 2015 planning

Items on your 2014 return can affect 2015 planning

As year-end approaches, remember to check your 2014 federal income tax return for items that can affect your 2015 planning. Here are three to look for.
Capital loss carryover. If your capital losses exceeded your capital gains in 2014, you may be able to carry any unused loss to future years. You can apply the loss against 2015 capital gains as well as up to $3,000 of other income – a benefit to remember when you're rebalancing your portfolio over the next few months.
Tip: Keep track of your capital loss carryforward for alternative minimum tax planning and projections. In some cases, this amount can be different from the carryforward calculated for your regular income tax.
Charitable contribution carryover. Was your charitable donation deduction limited for 2014 or prior years? You may have a carryover that you can use if you're going to itemize on your 2015 tax return.
Tip: Take this carryover into consideration when planning your 2015 donations so you don't lose the benefit of older unused amounts. Charitable contribution carryforwards have a five-year life.
Net operating loss carryover. If your business had a loss in 2014, you had to make an election to carry the entire loss forward to 2015. Otherwise, the general rule of carrying the net operating loss back two years applies, with the remainder carried forward 20 years.

Give us a call to schedule a tax planning appointment. We're ready to help you get the most benefit from these and other carryovers, such as investment interest, tax credits, and passive activity losses.

Friday, October 16, 2015

Get ready for the "Cadillac" tax

Get ready for the "Cadillac" tax
 The 2010 Affordable Care Act added a 40% excise tax on high-cost employer-sponsored health insurance (sometimes called "Cadillac" plans). "High-cost" means plans with an annual cost of more than $10,200 for an individual and $27,500 for a family. Beginning in 2018, the tax applies to the amount above that limit. The tax is assessed annually, and is permanent, nondeductible, and applicable to many types of health coverage.
Because of its potentially broad impact, you'll want to start reviewing the health insurance coverage you offer to employees to learn how your business will be affected.
The IRS is just beginning to issue guidance. We'll keep you informed as information is released.

Wednesday, October 14, 2015

Estate executors have another responsibility

Estate executors have another responsibility

A law effective as of July 31, 2015, included provisions that require certain executors to file a statement with estate beneficiaries and the IRS, notifying both of the value of property as reported on the estate return. Unless an exception applies, the beneficiaries can claim no more than that value when the property is later sold or disposed of.
Under the new rule, the statement is due within 30 days after the estate return is filed or 30 days after the due date of the estate return, whichever is earlier. However, if you're required to file this new statement before February 29, 2016, the due date for filing and furnishing the statement is delayed until February 29, 2016.

We'll keep you updated as guidance becomes available.

Monday, October 12, 2015

Law revises due dates for 2016 returns

Law revises due dates for 2016 returns
The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 changed due dates for some 2016 federal business returns (the ones you'll file in 2017).
Here's a sample of the changes:
Partnerships (Form 1065) – 2½ months after the close of the tax year. For calendar-year partnerships, that means a due date of March 15.
C corporations (Form 1120) – 3½ months after the close of the tax year. For calendar-year C corporations the due date will be April 15. Note there is a special rule for C corporations with a June 30 year-end. These corporations will not have to comply with the new due dates until after 2025.
S corporations (Form 1120S) – No change. The due date remains 2½ months after the close of the tax year (March 15 for calendar-year corporations).
Call us for more information.

Thursday, October 8, 2015

Avoid underpayment penalties

Avoid underpayment penalties

Check the total taxes you've already paid in for the year through withholding from your wages and/or quarterly estimated payments. Are you underpaid? Consider adjusting your withholding for the final months of 2015 or increasing your remaining quarterly estimate. If you employ household workers, include the payroll taxes you'll owe for them in your calculations. Call us for assistance.

Tuesday, October 6, 2015

Take time for tax planning

Take time for tax planning

Take time to review your 2015 tax situation while there are still a few months to make adjustments. Can you benefit from bunching your itemized deductions? Will increasing your retirement plan contributions cut your tax bill? An investment in a tax review could make a significant difference in your final tax bill for the year.

Thursday, October 1, 2015

October 15 is a final tax deadline

October 15 is a final tax deadline

Time's almost up if you requested a six-month extension to file your 2014 federal income tax return. October 15 is the final date for filing your 2014 return; the IRS generally does not give filing extensions beyond that date.
October 15 is also the deadline for undoing a 2014 conversion of a traditional IRA to a Roth IRA. If you converted your traditional IRA to a Roth last year, you can switch it back to a regular IRA without penalty if you do so by October 15.

Want to know more? Contact our office.