Archive for the ‘Business Advice’ Category

Are Your Employees Skimming From The Top?

Friday, January 29th, 2016

Fraud Triangle- Ohio CPA Firm Dear Drebit: As a new business without a cash register, what is the best way (accounting method-wise or other) to protect cash receipts from sales against employee theft or dishonest activity? Thanks, “Ernest”

Dear Ernest: Great question! Segregation of duties is essential when it comes to protecting your business against fraud. Here are some tips to help you protect your business from employee theft or dishonest activity.

5 Ways To Prevent Fraud In Your Small Business

  • Your bank activity and all copies of your cancelled checks should be reviewed by someone other than the individual who collected the cash. Similarly, the person who collected the cash should not be the same person responsible for taking the deposit to the bank.
  • Inventory records should be reviewed by the business owner, who should then compare them with the company’s sales totals/collections. While your number probably won’t be exact, it will help you identify large variances. Start by reviewing how much inventory was sold and identify the sales price. Then review that total with the business’s sales totals.
  • Never use the cash in the register to pay vendors for business expenses. All payables should be processed in such a way to provide you with a paper trail. A check or card payment is ideal.
  • Lead by example. Your employees are watching your behavior, which means if they see you removing cash from the till, they will have an easier time rationalizing their behavior to do the same. It’s up to you to set a good tone at the top.
  • If the person responsible for collecting payment from your customers throughout the day is also responsible for preparing a “daily reconciliation” of monies, their work should be double-checked by another employee as well. Again, because it’s just that important, someone other than the employee who collected the money in the first place should be the one to take the funds to the bank. After the deposit has been made, the employee should return with the validated deposit slip to compare with the day’s sales activity.

While you can never reduce the risk of fraud from occurring to zero, any control you put in place – even the perception of oversight – will help deter fraud.

I recently spoke about this topic on our podcast, unsuitable on Rea Radio. If you get a chance, check out episode 3: trust is not an internal control for more insight, tips and general fraud prevention advice.

If you would like more information on internal controls, email Rea & Associates. You may also find the information provided in this video to be helpful.

By Annie Yoder, CPA, CFE, CFF (New Philadelphia office)

Learn more about the impact of occupational fraud, check out these articles:

Where There’s Smoke, There’s Fire: 5 Internal Control Tips That Can Save Your Business From Fraud

Fraud Hotlines Deter Occupational Fraud

Cost-Effective Ways To Deter Fraud

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Go Green for the Planet and Pocket the Savings

Monday, January 11th, 2016
Think Green To Save Money | Rea & Associates | Ohio CPA Firm

Bright Idea:
Start saving in 2016. If you haven’t already, replace discontinued incandescent light bulbs with LED and other energy-efficient bulb options and save on your electric bill. Read on for more great tips!

It’s always a good time to talk about ways to realize some significant savings, and sometimes all you have to do is go green to save some green. Even though some green initiatives may seem to have a higher upfront cost, the IRS continues to offer a variety of tax saving incentives to help balance the burden as well as to reward you for making a few pro-planet upgrades to your home and/or business property.

Since it’s the beginning of the year and we are already open to the idea of making a few changes, we have another one for you to consider. Because Jan. 10 was national cut your engine cost day, we wanted to give you some ideas to help you celebrate the occasion while investing in the long-term sustainability of both your planet and finances.

For Individuals:

Planning to install a residential fuel cell and micro turbine system in the near future? Through the end of 2016 you may qualify for a tax credit of 30 percent of the cost of the project, up to $500 per 0.5 kilowatt of power capacity.

Looking to purchase a new car soon? Tax credits are available for all electrical cars. You can visit the DOE’s Fuel Economy website to search what cars are eligible. Based on the vehicle’s battery capacity the credit can be between $2,500 to $7,500.

For Business Owners:

If your business has installed solar panels at company properties, then you may be eligible for up to a 30 percent tax credit for installation and project costs. This credit is available until Dec. 31, 2016.

An energy-efficient commercial building tax deduction allows businesses to deduct certain costs related to making a building energy-efficient rather than capitalize those costs over 39 years. Some improvements that might apply include:

  • interior lighting systems
  • HVAC systems
  • hot water systems
  • insulation and exterior windows and doors

But there’s a catch – you have to get a certified licensed engineer to review the project and verify that it meets the IRS’s requirements for a tax deduction. The maximum deduction that can be taken is calculated at $1.80 times the building square footage for property placed into service in 2016.

Finally, if you plan to install a geothermal system, your business may qualify for a 10 percent tax credit.

With rising electric costs, implementing some of these green initiatives can garner you tax savings now and energy cost savings in the future.

Looking to more ways to go green and cut expenses? Email Rea & Associates and ask for more tips.

By Brian Kempf, CPA (Millersburg)

Looking for more ways to improve your business in the new year? Check out these posts:

16 Resolutions For Business Growth In 2016

Easy Year-End Tax Tips For Business Owners

It’s OK To ‘Think Small’

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Anything Can Happen In Cleveland

Friday, January 8th, 2016

“There’s always next year …”

Value of Big Data - Ohio CPA Firm

Paul DePodesta has just been announced as the Cleveland Browns Chief Strategy Officer to assist in rebuilding the team. Can big data help the Browns like it helped the Oakland A’s?

Since 1999 that phrase has been uttered so many times in reference to the Cleveland Browns it should have been declared Ohio’s state motto. Well, it’s now 2016 and it looks as though next year might finally be THE year. Why am I so optimistic? Because the day after the Browns cleaned house, the franchise announced who would step in as the new Chief Strategy Officer to help rebuild the team – Paul DePodesta!

Some of you may have no idea who this guy is. But stay with me here while I explain why the news of the Browns hiring DePodesta may have changed the way I look at a team that has done nothing but bring me heartache and disappointment for more than literally half my life.

Six months back I wrote the post “The Billy Beane Approach To Business Success,” which was inspired by another lackluster sports team. One night, rather than watch the Cleveland Indians withstand another defeat, I chose to watch a baseball story with a much happier ending.

If you’ve seen Moneyball then you know that Billy Beane, the general manager of the Oakland A’s, is famous for abandoning “business as usual” and embracing a data driven approach to team building. In doing so, Beane transformed his team and began delivering results simply by recruiting players based on a single data point – their ability to get on base.

So, what does Beane’s story have to do with the Cleveland Browns and Paul DePodesta? Everything. DePodesta, also known as Beane’s right-hand-man, is the guy who first identified the data that went on to drive the Oakland A’s success!

It looks like the Dawg Pound is scheduled for a renovation after all and that “next year” may finally be here!

Now the question is: what data driver will be the key to turning the Browns into a winning team?

What Drives Your Business’s Success?

Take a play from the Browns’ new strategy, your priority should always be defined by what is driving your business’s success and you can’t afford to let yourself become bogged down by business as usual. If you are finding that you are becoming more and more distracted, it may be time to take a fresh look at your organization and refocus on what’s important. Let go of everything else.

This is something the management team at Rea can speak a lot about. The firm recently rolled out its new strategic plan, which calls for all 200+ employees throughout 11 offices across the state of Ohio to focus on a singular driver. Today, all employees are able to clearly identify how their position impacts the firm’s ability to be successful and, together, we can work to deliver real, measurable results.

Listen to Rea’s CEO talk about the firm’s new strategic plan in episode 4 of unsuitable on Rea Radio: “How To Run With The Big Dogs.”

Are you ready to make a change and develop a winning strategy? We can help. Email Rea & Associates to speak to someone who can help you identify and assess your company’s drivers.

In the meantime, I don’t know about you, but I will be eagerly awaiting the announcement of the Browns’ new GM (general manager.) Maybe it will be Kevin Costner –  he did a great job for the Browns in Draft Day. The Browns do have the number two draft pick of 2016. Anything can happen.

By Katie Snyder (Wooster office)

 

Want more tips to help you improve your business? These posts will help:

How Can A Focus On Inventory Management Help My Business?

Cash Flow Is King: Where Do You Need To Focus?

Getting Back To Business: How Outsourcing May Provide Relief To Your Business

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Pay more attention to your company’s cash flow for a prosperous 2016

Tuesday, January 5th, 2016

A 13-week rolling cash flow budget lets you harness the past, present and future of your company to arrive at a comprehensive analysis of its overall financial well-being – making you a more effective leader and decision-maker.

An effective cash flow is rooted in your company’s historical trends and considers current initiatives and any internal and external factors that may impact the financial security of your business – including past, present and future billing and payment patterns. In order to dig a little further to gain a little more insight into your company, I recommend:

  • Analyzing your accounts receivable to determine ways to quickly turn them in to cash.
  • Reviewing your current inventory levels to determine what is old or obsolete and what can be used to generate more revenue.
  • Going over your accounts payable to optimize your own financial obligations.
  • Looking at your non-core assets to determine how much money is being spent and whether or not a more lucrative avenue is available.

Finally, don’t forget to update your cash flow regularly. Setting up a cash flow dashboard will take a little extra effort at first, but maintaining it is simple. Then, if done correctly, you will have the ability to accurately estimate your business’s variable costs and expected sales at a moment’s notice – and that is a very powerful tool to have.

To learn more, visit www.reacpa.com/cashflow and listen to my podcast about why $1 million doesn’t matter or, if you have questions, send me an email.

This article was published in the January 2016 issue of Columbus Business First – Ask The Expert.

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16 Resolutions For Business Growth In 2016

Monday, January 4th, 2016
Be Accountable In 2016 | Rea & Associates | Ohio CPA Firm

Might we suggest 16 resolutions to help your company prosper in 2016?

New Year’s resolutions aren’t just great ways to set personal goals; they can help keep us on track professionally as well. This year, instead of worrying about which goal you are going to pick from the New Year’s Resolution menu, why not consider committing your energy and resources into ways that will improve the overall health of your business?

Might we suggest 16 resolutions to help your company prosper in 2016?

1. Celebrate your amazing team.

If you’ve been in business for a while, chances are you wouldn’t be where you are today without your team. Just remember that if you don’t work to retain your top performers, you run the risk of losing them. Start celebrating your human capital.

2. Make a gift, but make sure it’s effective.

When we give a monetary gift to a not-for-profit organization, we want to know that it’s going to be used in the best, most effective way possible. Make sure your money is well spent.

3. Design a better retirement plan.

The way your company’s retirement plan is designed can be a huge motivator for your employees. If your plan has a good plan design, participants will be more willing to invest in it. Work with a retirement plan expert to find a retirement plan design that works for you.

4. Review your will, estate plan and buy-sell agreement.

Legal changes over the last few years may have made updating these documents necessary, not to mention any personal changes that may have taken place. It’s just good practice to make sure this important paperwork gets updated regularly. It could get messy if you forget.

5. Develop a line item in your budget for continuing education.

Investing in yourself and your employees is a good way to engage your workforce. One way is to add dollars to the budget for training and continuing education. Find out what else you can do to promote employee retention.

6. Improve your company’s cash flow.

Easier said than done, right? Just remember that you can’t spend the bottom line profit, but you can use the cash flow to reinvest in your business and community. A sustainable cash flow model will ultimately increase the value of your business.

7. Know what your business is really worth.

Your business is easily your most valuable asset. So, how can you nurture its growth if you don’t know how much it’s worth? Discover why it’s so important to know the value of your business.

8. Develop a wellness program.

Healthcare costs are high and one way companies are taking control is by introducing a wellness program. As with any new plan, several factors will greatly increase your company’s success.  Start planning your wellness program implementation and soon you will be saving money.

9. Upgrades for the business.

It seems like there are always better ways to get things done. Perhaps 2016 is a good time to make a few upgrades. In the process, your purchase could be good for a deduction at tax time.

10. Schedule a family vacation.

A successful business has the understanding and support of your family. Long hours … late suppers … numerous emails and a 24/7 mentality have become just another part of the routine. Reward yourself and your family with a family vacation. A vacation isn’t just good for your peace of mind, it’s good for your business.

11. Save more for retirement.

It’s always a good idea to keep your retirement goals top-of-mind, which is why you should evaluate your current retirement plan situation and determine if you need to make any changes to get further ahead in 2016. Ask your advisor if you are setting aside as much as you could (and should) be.

12. Defend your cyber space.

Hackers and fraudsters are stopping at nothing to get to your data. Whether they have plans to steal your system’s information to sell to other criminals or are trying to make a quick buck by holding your data for ransom, if you don’t have a disaster recovery plan you and your business could be in serious trouble. Make 2016 the year you get your data security plan in place.

13. Meet with all your advisors at least once a year.

You work with a lot of people over the course of your career and it’s important to maintain those relationships – regardless of whether you will need their services or not. Set aside some time to meet with your accounting, legal, estate planning, investment, banking, retirement and other advisors, even if it’s just to chat. An impromptu meeting could reveal opportunities you didn’t know were there.

14. Establish a fraud hotline.

The Association of Certified Fraud Examiners has found fraud hotlines to be the most effective way for detecting and preventing fraud. Don’t let occupational fraud destroy your businesses.

15. Stay organized … for real, this time.

Every year it happens. You promised yourself that this year would be different. Now, once again, you are rushing to your gather receipts, remember how much money you spent at last year’s company retreat, and backtrack through balance sheets. Wouldn’t it be nice not to have this year-end stress anymore? By implementing a few simple procedures, you can avoid another crunch-time crisis.

16. Trim the fat.

If you are really looking for a way to make a significant reduction this year, take a look at your inventory. If you are carrying around some extra weight, chances are your business is feeling the pinch. This simple 3-step program will get you back on track.


Be Accountable In 2016

Have you identified a few resolutions to begin implementing over the course of 2016? Great! Need help holding yourself accountable? Send your list of 2016 New Year’s Resolutions to Rea & Associates and one of our business consultants will work with you to make this your best year in business yet!

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IRS Gives Business Owners The Gift Of More Time

Monday, January 4th, 2016
Form 1095 Deadline Extended - Ohio CPA Firm

Failure to comply with provisions set forth in the ACA can lead to catastrophic penalties, which is why we have actively sought to inform business owners of their responsibility to file Form 1095-C. Unfortunately, we knew that while we could successfully inform many businesses in advance of the original deadline – some were going to be left behind. Time, it seemed, just wasn’t on our side. But the IRS saw this threat and, as 2015 came to a close, took action to delay the 1095-C reporting deadline - (hopefully) keeping many small businesses intact.

While some taxpayers may be rejoicing after learning that the IRS has delayed 1095-C reporting deadline, it’s important to remember that this late Christmas gift may not be as great as it seems - especially when it comes to meeting the deadline to file your individual tax return.

Read Also: Make BIG Changes Or Face BIG Fines

1095-C Reporting Deadline Postponed

As you may already know, failure to comply with provisions set forth in the Affordable Care Act can lead to catastrophic penalties, which is why we have actively sought to inform business owners of their responsibility to file Form 1095-C. Unfortunately, we knew that while we could successfully inform many businesses in advance of the original Jan. 31 deadline – some were going to be left behind. Time, it seemed, just wasn’t on our side. But the IRS saw this threat and, as 2015 came to a close, took action to delay the 1095-C reporting deadline - (hopefully) keeping many small businesses in tact.

Employers now have until March 31 to provide employees with Form 1095-C and the deadline to file the form electronically with the IRS was moved to June 30. The IRS also extended the deadlines for 1095-Bs to these new dates as well.

Remember, all 2014 large employers are required to file these forms, based on 2015 data. Per employee penalties will accrue for those who file late or fail to file. Some businesses may be considered large employers under the ACA, and not even know it; but there are ways to determine your employer status before it’s too late.

That Sounds Great, Except …

Now for the bad news – there will be some individual tax payers who may not get these forms to us until the first week of April. For most taxpayers, this will simply require some additional due diligence with no delay to filing their tax return. However, there will be some individuals who will likely have to file an extension if they do not get their forms in time. Don’t be afraid of tax extensions. As long as you work proactively with your tax advisor, there is absolutely nothing to worry about. In fact, filing a tax extension could be very helpful. Click here to get “The Truth About Tax Extensions”

You Do Not Have Permission To Do Nothing

You’ve been given extra time. Now let’s make the most of it. Rea & Associates is still accepting new clients for 1095-C Form preparation projects, And, as we have previously stated, the top payroll companies are already booked to capacity with wait lists growing by the day. If you haven’t started on this project yet and know that you should, take advantage of this delay and email me for help. My team here at Rea can also help you determine if your business is considered a large employer – which can keep you from being blindsided when the IRS determines that you do, indeed meet the large employer qualifications.

By Joe Popp, JD, LLM (Dublin office)

Want to learn more about your responsibilities under the ACA? These articles will provide you with more insight:

The Cost Of Reimbursing Employees For Health Care

Obamacare: Discrimination Is Not An Option

Secure Form 1095-C Help Now And Avoid Penalties

 

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Business Leaders Were Reading What?!

Monday, December 28th, 2015

2015′s Most Popular Blog Posts

Best Business Blog Posts 2015- Ohio CPA FirmIf you take a moment to scroll through the list of categories, authors and archives on the right-hand side of this page, it’s pretty clear to see just how active Rea’s team of experts are when it comes to providing leaders in the business community with accurate, timely and easy to digest content. We are fortunate to have so much experience and expertise on our staff, and their eagerness to serve you better has allowed us to maintain a bi-weekly electronic newsletter, a quarterly print newsletter, three blogs and a handful of electronic segment specific newsletters. That’s a lot of content – but we are not even thinking about slowing down! I hope you hang around my lily pad for awhile. I’m pretty sure you’ll find a lot of great little tidbits to read about in 2016 too. Until then, I want to invite you to take a look at some of our most popular blog posts and articles. And, if you haven’t already, take a moment to look through the newsletters we offer and sign up to have news, tips and valuable information delivered to your inbox all year long!

Top 5 Dear Drebit Posts In 2015

Dear Drebit is updated every few days with timely information and advice. In addition to covering current trends and issues, readers are also invited to ask financial and business questions on the page, which will be answered by one of Rea’s industry experts. Here are last year’s top posts:

  1. How Far Back Can The IRS Go For Auditing?
  2. Theft Safeguards To Cause Tax Return Delays In Ohio
  3. Six Things 401K Plan Sponsors Need To Do Now
  4. New Adjustments Will Affect Your 2015 Tax Return
  5. File Faster With This Tax Prep Checklist

5 Most Popular Posts On Brushing Up Blog

Brushing Up: The Dental Accounting Blog features a variety of finance and business advice specifically tailored to dental professionals. From purchasing a practice, knowing what to expect from a career in dentistry and hiring the best staff for your practice to general accounting advice, tips for cashing out at retirement and tax tips, this blog is a valuable tool for dental professionals who are looking for ways to secure long-term success in their career. The year’s most-read blog posts are:

  1. How Sales & Use Taxes Apply To Ohio Dental Practices
  2. 6 QuickBooks Tips Every Dentist Should Know
  3. Could A Crown Be A Tax Deduction?
  4. 10 Year-End Tax Planning Strategies For Dentists
  5. Buying An Established Dental Practice? Master The Changeover 

Cultivating Your Business Readers Choose Top 5 2015 Posts

The Cultivating Your Business blog is a resource provided to clients and visitors on the firm’s Know & Grow website. Updated a few times per month, business owners have access to advice, tips and general insight into how to grow their businesses and realize an optimal return on their investment upon retirement. Here are the top blog posts from last year:

  1. Bad Buy-Sell Agreement Claims Another Family Dinner
  2. Will Your Summer Reading List Make You A Better Business Owner?
  3. WARNING: Free Business Valuation Offer Is Unbelievable
  4. Uncover The Secrets To Cashing In On Your Business
  5. How To Communicate To Your Employees That You’re Selling Your Business

Top 10 Articles In Rea’s Library In 2015

In addition to our blogs, the Rea team publishes a lot of other valuable content in print and electronic newsletters. We make sure that all these articles are easily accessible in our article library. This is where you will find many of our niche pieces as well as a lot of general accounting tips and insights. Take a look at some of our most popular posts over the last year.

  1. What Is The Mid-Quarter Convention?
  2. Dangers Of Paying Under The Table
  3. Revenue Recognition Changes Are Coming
  4. Football Ticket Deductions
  5. 401K Loans And Keeping Your Plan In Compliance
  6. Take Control Of Your Vendor Master In Nine Steps
  7. Why Your Traditional Employee Management Method Is Failing
  8. The Birth Of The Taxpayer’s Estate
  9. Parting Is Such Sweet Sorrow: But What About Your 401K?
  10. Purchasing Cards Compromise Business Security
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National ID Theft Awareness Month: Get in the Know

Saturday, December 26th, 2015

Stop Criminals From Hijacking Your Identity With These Top 5 ID Theft Prevention Posts

ID Theft Awareness | Rea & Associates | Ohio CPA Firm

Identity theft is a scary thing and you don’t want to become a victim. Take some steps now to protect yourself in the future.

December is National ID Theft Awareness Month and the fraud prevention team at Rea is a wealth of information when it comes to sharing great tips to help taxpayers protect their identities from fraudsters. Instead of scrolling past posts in our expansive article library or award-winning blog, we’ve compiled this Top 5 list to make your search for information easier. Read on to discover how you can prevent cyber criminals from hijacking your identity all year long.

Read Also: Let’s Talk About The F-Word

  1. WARNING: Tis The Season To Practice Safe Online Shopping Habits: While it may be the most wonderful time of the year, cyber criminals are looking for ways to stuff their own stockings – at your expense. The holiday season is also a busy time of the year for scammers because, in general, more money is being spent and more people are clicking through cyberspace for the best deals and tracking their purchases. Find out what you can do to keep your identity safe this Holiday season.
  2. Cyber Crime: It Can Happen To You: Fraudsters don’t take holidays. In fact, they tend to be more active this time of year because they believe we are more likely to let our guards down. I don’t intend on falling for any of their traps, and I encourage you to do the same.
  3. Malware Threat Spreads To Smart Phones: Researchers and IT security experts from ESET, a global IT security company, recently announced that they had discovered a malware application that is designed to encrypt files and change PINs on Android devices in the United States. In return, victims are demanded to pay up to the tune of $500. Only then will hackers provide users with the recover key. Keep reading to learn how you can protect yourself.
  4. Should I Still Be Concerned About Identity Theft And Tax Fraud?: Identity theft and tax fraud are problems that show no signs of stopping. In 2015, in an attempt to provide an added layer of protection, taxpayers in Ohio had the opportunity to get up close and personal with the Ohio Department of Taxation’s (ODT) newest fraud safety measure – the Identification Confirmation Quiz. Read on to see how this quiz has helped reduce fraud in Ohio.
  5. How To Recover From Identity Theft & Refund Fraud: Suspecting, and then confirming, that you’ve had your identity stolen is a nightmarish scenario. It combines one of your worst fears, losing your wallet or purse, with all of the work of replacing the things that were lost. It can be so overwhelming you might be wondering: “Where do I even start?” We can help you answer that question.

Identity theft is a scary thing and you don’t want to become a victim. Take some steps now to protect yourself in the future.

Want to learn more about keeping your identity safe? Email the team at Rea & Associates, our fraud prevention specialists can be an important of keeping your information protected.

By Joe Welker, CISA (New Philadelphia office)

Looking for tips to secure your business from fraudsters? Check out these posts:

Fraudulent Credit Card Transactions Will Become Merchant’s Problem On Oct. 1

Who Is That Email Really From?

Businesses Beware: Sloppy Data Security Could Cost You

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Congress Gives Taxpayers An Early Christmas Present

Monday, December 21st, 2015

PATH Act Makes Several Key Tax Provisions Permanent

PATH Act Makes Several Key Tax Provisions Permanent | Rea & Associates | Ohio CPA Firm

Congress finally made good on its promise to make take a more definitive stance on the future of many popular tax provisions last week when members voted in favor of making many of them permanent. Other tax provisions received a temporary extension. Read on to learn more.

There is nothing like waiting until the last minute to complete a task. We’ve all been there and we all promise we’ll never do it again. Unfortunately (especially when it comes to determining the future of several valuable tax provisions) our government has fallen victim to the same bad habit.

Year after year, Congress promises to address the future of many expired tax provisions, and year after year they fail to make a definitive decision – opting only to pass legislation that extends the provisions for another year. In the meantime, taxpayers are expected to take on the impossible task of navigating the terrain amidst legislative uncertainty. Happily, things are about to change.

Listen To Our Podcast Taxes Are Like Fishing To Learn More About Tax Strategy

Congress finally made good on its promise to make take a more definitive stance on the future of many popular tax provisions last week when members voted in favor of making many of them permanent. Other tax provisions received a temporary extension. The legislation, Protecting Americans From Tax Hikes Act of 2015 (PATH Act), is retroactive to Jan. 1, 2015, and provides taxpayers a level of certainty that they have been without for quite some time.

This legislation offers a lot of relief to individuals and businesses, alike. Here’s an overview of what you can expect moving forward.

Key Tax Provisions Made Permanent By The PATH Act:

  • 15-year recovery period for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements
  • Extension and modification of the research & development credit, including allowing certain small businesses to claim the credit against AMT liability and employer’s payroll (ie: FICA) liability
  • 179 expensing limitations and phase out increased to $500,000 and $2 million respectively
  • Exclusion of 100 percent of gain on certain small business stock
  • Extension of tax-free distributions from IRAs for charitable purposes
  • Earned income tax credit
  • Child tax credit

Key Provisions Extended Through 2019

  • Extension of the new markets tax credit in which Congress authorized $3.5 billion allocation of credits each year from 2015 until 2019
  • Extension and expansion of the work opportunity tax credit
  • Bonus depreciation is extended at 50 percent for 2015 through 2017, 40 percent for 2018, and 30 percent for 2019

Key Provisions Extended Through 2016

  • Extension and expansion of empowerment zone tax incentives
  • Two-year moratorium on the 2.3 percent medical excise tax imposed on the sale of medical devices
  • Extension of energy efficient commercial buildings deduction

In addition to the extension of key tax provisions, the PATH act also puts more scrutiny on the operations of the IRS. IRS agents will be held accountable for knowing and acting in accordance with the taxpayer bill of rights and prohibits the use of IRS business for political gain.

The passage of the PATH act is a huge victory for American taxpayers, and will allow them to partner more efficiently and effectively with their tax advisors on key issues in years to come without the uncertainty that has plagued them for many years.

Be sure to set up an appointment to speak with your tax advisor or financial planner to talk about how the PATH act will impact your ability to take advantage of tax planning strategies. Do you have questions about specific aspects of the PATH act? Fill out the form on the top, right side of this page to submit your question to Dear Drebit.

By Ashley Matthews (Dublin office)

Are you looking for more ways to save on your tax bill? These articles can help:

Year-End Tax Tips For Business Owners

Dos & Don’ts of Gifting Donations

Should I Make A Big Purchase To Cut Taxes?

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Mileage Rates Will Be Reduced In 2016

Friday, December 18th, 2015
2016 Mileage Rates | Rea & Associates | Ohio CPA Firm

Based on a study of the fixed and variable costs associated with operating an automobile, the standard mileage rates take into consideration vehicle depreciation, insurance, repairs, maintenance, gas, etc. However, if you don’t intend on tracking your mileage, you also have the option of claiming deductions based on the actual costs of using your own vehicle rather than the standard mileage rates. Read on to find out the 2016 mileage rates.

Drivers were able to get a little more money back for every mile driven in 2015, but next year’s road map tells a different story.

The IRS announced that most of the 2016 optimal standard mileage rates would either remain the same or would be lowered going in to 2016. Among the rates seeing a decrease, were the standard mileage rates for business use of a vehicle, which were reduced to 54 cents per mile – a decrease of 3.5 cents over 2015’s rate of 57.5 cents per mile.

Read Also: 5 Tax Deductions To Ease Your Business’s Tax Burden

How Are Optimal Standard Mileage Rates Determined?

Based on a study of the fixed and variable costs associated with operating an automobile, the standard mileage rates take into consideration vehicle depreciation, insurance, repairs, maintenance, gas, etc. However, if you don’t intend on tracking your mileage, you also have the option of claiming deductions based on the actual costs of using your own vehicle rather than the standard mileage rates. Just be aware that you will not be allowed to claim both.

For example, if you have plans of claiming an accelerated depreciation on your vehicle, then you will not be able to claim the business standard mileage rate as well. If you are a business owner, you should also note that the standard rate is not available to fleet owners, or those who use more than four vehicles simultaneously. Additional details and rules can be found in Revenue Procedure 2010-51.

Different Rules For Different Road Trips

Here are some of the other common rates drivers should be aware of:

  • The miles you drive for medical or moving purposes will be calculated at 19 cents per mile driven.
  • Those driving their vehicles as a service to charitable organizations may calculate their deductions at 14 cents per mile driven.
  • The portion of your business standard mileage rate that will receive depreciation treatment in 2016 will continue to be 24 cents.

Also in its announcement, the IRS noted an adjustment to the standard automobile cost allowable under the fixed and variable rate (FAVR) plan, which considers the costs taxpayers incur by driving their own vehicles for work-related purposes. In 2015, standard automobile costs may not exceed $28,000 (not including trucks and vans), which is a decrease of $200 from 2015. The maximum standard automobile cost for trucks and vans, however, is $31,000 – an increase of $200 over the 2015 rates).

Travel For Tax Savings

If you use your vehicle for business don’t forget to track your mileage. Every mile you travel is an opportunity to realize real tax savings. A financial advisor can help you find these opportunities as well as many others.

By Lesley Mast, CPA (Wooster office)

Are you looking for ways to help you plan for the upcoming tax season? Check out these articles for some great tips:

Easy Year-End Tax Tips For Business Owners

How Long Should You Keep Financial Documents?

What Could Ohio’s Small Business Investor Income Tax Deduction Do For Me?

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