6 Benefits of a Mastermind Group

 

Benefits of Participating in a Mastermind Group         

  1. Be part of an exclusive community.  Participation in most Mastermind Groups are by invite or application only.   The other members need you just as much as you need them, so quality of experience and knowledge is crucial to all involved.
  2. Advisement and Accountability are top priorities of the group.  Being involved in a Mastermind group nixes that feeling of “being alone” in running your business. The other members of the group turn into your business advisory board and hold you accountable for your progress.
  3. Collaboration is king. Everyone has strengths and weaknesses.  Chances are that someone in your group will have certain strenghts that can help you balance out your weaknesses and vice versa. The group works together collaboratively, to achieve more together.
  4. You get to extend your network and make new connections on a deeper level. Joining a Mastermind can expand your network exponentially. As a professional, you know how important your network is. By joining a group of other professionals who are equally focused on success, you instantly add quality connections to your network.
  5. New learning opportunities are key to Mastermind participants. Everyone in the Mastermind is unique in skill, experience and connections. By interacting and sharing your challenges, it’s almost certain that someone in your mastermind will have a solution for you and you may also be able to offer a solution, connection or tactic to help another in the group.
  6.  Think bigger to grow faster. Being in a Mastermind eventually gives you a Master Mind! You can’t help but think bigger and stretch beyond your boundaries when surrounded by amazing professionals striving to accomplish their own amazing goals.

 About our Online Mastermind Groups

  • Your group meets exclusively online one day a week for 1 hour 30 minutes.  
  • Your initial committment is a once a week meeting for three months with the option to continue in six month increments.
  • You choose either an early morning, lunch time or evening group.
  • Your group members must apply by submitting the form below.
  • Your group members are required to sign a confidentiality agreement.
  • Your group members must commit to attending every meeting or risk being expelled from the group

  Masterminds are incredible and can do wonders for your business as well as for you, personally. Growing in a group is not only more effective, it’s quite a bit more fun!  Give it a try – what do you have to lose?

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Do You Need to Worry About Estate Taxes?

If you are like most people, you don’t really know right off the cuff what your estate is actually worth.  Let’s start off by defining what your estate actually is.  Your estate consists of all of the property you own or control.   Your estate property may be in your sole name, held in a partnership, in a joint ownership arrangement, or through a trust.  Your estate property also includes all other monies that would be generated upon your death, such as through life insurance.

Here’s a link to a cool 11-step wiki to help you figure out the value of your estate.  http://www.wikihow.com/Calculate-the-Value-of-an-Estate

The good news is you can transfer an amount that equals up to your available exemption at death without having to be subject to federal estate taxes.  If your taxable estate is equal to or less than the estate tax exemption (for 2016, $5.45 million) reduced by any gift tax exemption you used during your life, no federal estate tax will be due when you die.  But if your taxable estate exceeds this amount, it will be subject to estate tax. Many states, however, now impose estate tax at a lower threshold than the federal government does, so you’ll also need to consider the rules in your state.  Here in Virginia, legislation enacted by the 2006 General Assembly, House Bill 5018, repealed the Virginia estate tax for the estates of decedents whose date of death occurs on or after July 1, 2007.   The repeal of the Virginia estate tax does not affect the filing requirements for fiduciary income tax, regardless of when the date of death occurs.

Even if you don’t have a $5 million estate now, it doesn’t mean that you won’t one day.  The estate tax exemption amount changes every year so it’s a good idea to keep tabs on your net worth and any changes from year to year in your personal financial position.   Check with us for advice and guidance.

 

 

Should You Take Bonus Depreciation?

Extender from PATH Act means you can take bonus depreciation on your 2015 returns – but should you?

Once again, bonus depreciation has been extended allowing taxpayers to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) extended 50% bonus depreciation through 2017.  Many taxpayers may benefit from claiming this break on their 2015 returns however some might save more tax in the long run if they elect out of bonus depreciation.

What type of assets qualify for bonus depreciation?

For 2015, new tangible property with an IRS stipulated depreciable life of 20 years or less (such as computers, office furniture or equipment) qualifies for bonus depreciation.  Off-the-shelf computer software, water utility property and qualified leasehold-improvement property also qualifies.  The new assets must also have been put in to use in 2015 in order to qualify for any depreciation deduction.

To bonus or not to bonus, that is the question…

Typically, taxpayers always want to maximize their tax deductions in the current year.  But wise tax planning calls for considering the effects of this year’s choices on future year’s tax burdens.  If a taxpayer has assets that are eligible for bonus depreciation and they expect to be in the same or a lower tax bracket in future years, taking Section 179 deduction first, then bonus depreciation is most likely a good tax strategy.  Doing so will defer tax, which generally is beneficial and usually the goal of tax planning.

However, if a business is growing and expects to be in a higher tax bracket in the near future, it may be better off forgoing bonus depreciation altogether. Why?  Because it makes sense to decrease deductions in years when a taxpayer is in a lower tax bracket, when they expect to have a higher taxable income in future years.  They will need the depreciation deductions more in the years they have higher taxable income, so electing out of bonus depreciation and not taking Section 179 deductions can be a smart tax move.  Deductions are worth more when your tax bracket is higher.

Have questions about depreciation?  We can help

If you’re unsure whether you should take bonus depreciation on your 2015 return — or you have questions about other depreciation-related breaks, such as Sec. 179 expensing — contact us – we can help.

Can You Take the Home Office Deduction?

Are You Eligible to Deduct Home Office Expenses?

Just because you have a home office space doesn’t mean you can deduct expenses associated with it.

Home Office Requirements

The eligibility requirements for deducting home office expenses differ depending upon if you are an employee or if you are self-employed.  For example, as an employee, having a home office must be for your employer’s convenience and not just your own. The IRS even has a “Convenience of Employer Test” in which an employee’s home office is deemed to be for an employer’s convenience only if it is:

  1. a condition of employment
  2. necessary for the employer’s business to properly function, or
  3. needed to allow the employee to properly perform his or her duties.

Most likely, you won’t pass the employer convenience test if you have another office provided by your employer but like to take work home with you.  However, you would pass the test if your employer doesn’t provide you with an office, or if there is some valid business reason why you must work at home.

If you’re self-employed, generally your home office must be your principal place of business, but there are a few exceptions.

Whether you’re an employee or self-employed, the space must be used regularly (not just occasionally) and exclusively for business purposes. If, for example, your home office is also a family room, guest room or where your kids do their homework, the space is NOT a home office in the eyes of the IRS.

How Does the Home Office Deduction Affect Taxes?

The home office deduction can be a nice tax break – especially for self-employed people because you save not only on regular income tax but that pesky 15.3% self-employment tax as well!  How the deduction works – the first step is figuring out the square footage of your home office, then you divide that number by the total square footage of your home.  The result is a percentage.  You may be able to deduct that percentage of your mortgage interest, property taxes, home owner’s insurance, utilities and certain other expenses, as well as the depreciation allocable to the office space.

In the last couple of years, the IRS has created a simpler “safe harbor” deduction in lieu of calculating, allocating and substantiating actual expenses. The safe harbor deduction is capped at $1,500 per year, based on $5 per square foot up to a maximum of 300 square feet.

For employees and S-corporation shareholders, home office expenses are a less beneficial miscellaneous 2% itemized deduction. This means you’ll get a tax break only if these expenses plus your other miscellaneous itemized expenses exceed 2% of your adjusted gross income (AGI).

Finally, be aware that we’ve covered only a few of the rules and limits here. If you think you may be eligible for the home office deduction, contact us for more information.  

Per Diem vs Accountable Plan

Using the “per diem” approach when reimbursing employees for lodging, meals and incidental expenses requires the use of either IRS tables or a simplified high-low method to reimburse workers up to specified limits.  Organizations seem to really like the per diem approach because of its simplicity.  It doesn’t require too much record keeping and keeping up with receipts. However, the per diem method may put your organization at risk if you exceed the per diem limits.  Exceeding the per diem limits exposes your organization to IRS penalties and your employees to higher tax liabilities.  This is typically why organizations will often switch to an “accountable plan” for handling employee expense reimbursements.

Tax Advantages of An Accountable Plan

An accountable plan is a formal arrangement to advance, reimburse or provide allowances for business expenses. The biggest advantage is that your organization can deduct expenses (subject to a 50% limit for meals and entertainment), and employees and subcontractors can usually exclude 100% of advances or reimbursements from their incomes. Workers whose jobs involve frequent travel may realize significant tax savings.

How to Qualify As An Accountable Plan

Under IRS rules, your accountable plan must meet the following three criteria:

  • The plan must only reimburse “ordinary & necessary” business-related expenses that would otherwise be deductible by the employee or subcontractor.
  • Employees must substantiate these expenses — including amounts, times and places — ideally at least monthly by turning in receipts.
  • Employees must return any advances or allowances they can’t substantiate within a reasonable time, typically 120 days.

Failure to meet these conditions, will cause the IRS to treat your plan as “non-accountable”, which then transforms all reimbursements into wages taxable to the employee and subject to income and employment taxes.

Need Some Help?

Accountable plans take time to establish and require meticulous record keeping. Let us help. We’d be happy to assist you in setting up your accountable plan and regularly reviewing its compliance with IRS rules.

5 Benefits of Outsourcing Your Accounting Function

Making the choice to turn over something as important as your accounting can be a tough decision.  We hope to explain some of the compelling reasons you might want to hire an outsourced accounting department.  These points can help you determine what’s best for you and your business.

  1. The most important benefit of having an outsourced accounting team has to do with cost savings.  Outsourcing your accounting department saves you the costs of a full-time employee’s salary, employee benefits, accounting software costs, upgrading computers, educating your in-house staff and more!  When you add it up all, you’ll quickly see that an outsourced accounting functon is a very affordable and convenient option.
  2. The second benefit of outsourcing your accounting is the elimination of the hassle of IT maintenance and upkeep.  If you have an internet connection and a fax machine or a scanner – that is all you need to submit your accounting work to us for processing.  You can forget about annual software updates, learning new technologies, and paying to train staff on your accounting system.
  3. A third benefit of an outsourced accounting department is NO sick days!  You eliminate all the hassles of having in-house accounting staff.  No employee benefits to worry about, no calling in sick, no need to worry about employees being inefficient or worse ineffective!
  4. Another benefit you might find surprising is increased security and safeguarding of your financial data.  The systems we use are built and maintained in the cloud and offer the most secure platform available.  Hosting your accounting in the cloud is actually a lot safer than housing it on an on-premise server.  A survey from the Ponemon Institute revealed that 55% of small business owners have experienced a breach of private data. While many small business owners are aware that data breaches hurt business, most don’t appear to be taking action.  You don’t need to worry about that because every software solution we employ uses state of the art security and privacy features that most private servers can’t even begin to match.
  5. A final benefit of using an outsourced accounting service provider is just having peace of mind about your financials.  When you use a team of experienced US based CPAs you are able to rest easy that your accounting is up to date and compliant with all of the latest standards in your industry.  Using an outsourced team of CPAs provides you with a much greater breadth and depth of knowledge at your disposal than if you were to spend the same or more on an uncredentialed in-house employee.

We hope you found this article to be useful in learning more about how outsourced accounting services can help free you up to do what you do best, and can give you peace of mind about your books.  You get to keep your eye on the big picture while highly trained and experienced professionals handle all the details.  If you’re interested in continuing the conversation with us and getting started on your custom action plan simply respond to this email or give us a call toll-free today at (757) 926-4109.

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