Archive for the ‘Business Advice’ Category

Last Chance To Claim Valuable Retroactive Tax Credit

Thursday, April 23rd, 2015
Last Chance To Claim Valuable Retroactive Tax Credit

All businesses that hired members of targeted groups, such as qualifying veterans, must submit Form 8850, a pre-screening notice and certification request for each employee hired between Jan. 1, 2014 and Dec. 31, 2014 to the Ohio Department of Job and Family Services no later than April 30, 2015 to qualify for the WOTC.

It was a cold evening last December when Congress finally voted in favor of extending more than 50 tax provisions considered critical by several businesses and individuals. The Tax Increase Prevention Act of 2014 provided assurance that certain incentives would remain intact and that certain provisions would be put in place to allow for the retroactive extension of some key deadlines. Among them was the deadline to claim the 2014 Work Opportunity Tax Credit (WOTC). Now, as we teeter at the end of April, that deadline is set to expire.

Read: How Do You Qualify For Tax Credits And Incentives?

What You Need To Know

All businesses that hired members of targeted groups, such as qualifying veterans, must submit Form 8850, a pre-screening notice and certification request for each employee hired between Jan. 1, 2014 and Dec. 31, 2014 to the Ohio Department of Job and Family Services no later than April 30, 2015 to qualify for the WOTC.

According to the Internal Revenue Service, under normal circumstances, eligible employers are required to file the appropriate information with their respective workforce agencies within 28 days of the employees start date. Section 51 of the Internal Revenue Code concerning the WOTC states that eligible employers may claim a tax credit for a percentage of the qualified employee’s first-year wages (and second-year wages for some eligible hires).

Email Rea & Associates to learn more about tax incentives that can impact your business’s bottom line.

By Lisa Beamer, CPA (New Philadelphia)

 

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Research & Development Credit Benefits Businesses Of All Sizes

Tuesday, April 14th, 2015
Plan For The Future - Rea & Associates - Ohio CPA Firm

While the 2014 tax season is now over, it’s never too early to start strategizing to secure future tax savings. For example, have you thought about improving your current processes to become more efficient? Believe it or not, taking steps to make your company “lean” may be just what you need to qualify for future tax savings.

If you own a small-to-midsize company, you probably haven’t given much thought to how the Research & Development (R&D) tax credit could help you. You might even think that the R&D credit is reserved for big businesses with tons of money to spare on technological investments. If so, then you may want to change your thought process and your business strategy.

Planning ahead is a great way to save your company’s tax dollars and there are many successful strategies from which to choose.
Click here to find out if you should be making a big purchase for your company that will help cut your tax bill.

The R&D tax credit applies to more than just businesses that have research facilities. In fact, many businesses across a range of industries may qualify for this valuable credit, but instead of asking their financial advisor for guidance, they give in to the misconception that they are not “big enough” or that they have not “big enough investments in technology.”

I recommend you avoid this mindset at all costs.

Plan For The Future

While the 2014 tax season is now over, it’s never too early to start strategizing to secure future tax savings. For example, have you thought about improving your current processes to become more efficient? Believe it or not, taking steps to make your company “lean” may be just what you need to qualify for future tax savings.

Are you familiar with Lean Six Sigma and how it can help you improve efficiency and effectiveness?
Read: Can You Explain The Concept Of Waste In Lean Six Sigma? to learn more.

According to consulting firm Smart Devine, in order to qualify for the R&D credit, your company must engage in an activity or initiative that:

  • Is technological in nature – Meaning it must rely on at least one of the following: physical sciences, biological sciences, computer science and engineering.
  • Is being conducted for a permitted purpose – Meaning that it must be intended to improve functionality, performance, reliability and quality.
  • Involves the elimination of uncertainty – Meaning the activity must be intended to identify information required to eliminate technical uncertainty.
  • Involves an experimentation process – Meaning that there must be some elements of experimentation, such as trial and error testing, prototyping, development and analysis of hypothesis.

The expenses that will be used to calculate the credit include your wages for research, supplies and contract research expenses.

Still Not Sure?

OK, so maybe you haven’t committed to an extensive lean-oriented strategy yet. That’s alright. There are many ways to qualify for this credit. Start by asking yourself the following four questions:

  1. Are you constantly developing new products or altering old products for new uses?
  2. Have you had a lean event to try and increase the productivity of a manufacturing facility, a single manufacturing line, or even a specific machine?
  3. Have you developed internal software because you couldn’t find one that met your needs on the market?
  4. Do you constantly develop prototypes to make sure your machines can produce a product that meets customer specifications?

If you answered yes to any one of these scenarios, chances are good that you will qualify for the credit.

Next Steps

If you do indeed qualify to receive the R&D credit, make an extra effort to maintain adequate records to substantiate the credit. This may seem daunting, but you are probably gathering the necessary information already. You probably just need to filter or tweak what you are already doing.

Email Rea & Associates to learn more about the Research & Development Credit and how to identify expenses that could qualify while promoting your company’s overall growth and sustainability. You may also be eligible to claim the R&D credit retroactively, contact us to learn more.

By Ben Froese, CPA (Wooster office)

 

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The Truth About Tax Extensions

Friday, April 10th, 2015

We find ourselves, once again, at the end of another income tax season. A time of year that many American taxpayers (and accountants) hold dear. We, however, know that while tax season may be “officially” over, there is still plenty of tax work to be done.

The first four months of the year is a busy time for accountants and, because we work closely with so many small businesses all year long, we are acutely aware of how much stress you are under to meet your first quarter obligations. This is why, instead of rushing just to get your taxes filed and out the door ahead of the April 15 deadline, we frequently recommend that our clients file for a tax extension.

Unfortunately, there are some pretty nasty rumors going around about tax extensions. Hopefully, I will be able to debunk some common tax extension myths while helping those who opted to extend their deadline sleep a little better tonight. Check out the slideshow and get the facts about tax extensions!


The Truth About Tax Extensions – Created with Haiku Deck, presentation software that inspires

Myth 1:

Filing a tax extension increases your chance of an audit.

Truth:

First and foremost, your chance of being audited by the IRS does not increase simply because you chose to file a tax extension. In fact, in the event that you are chosen to undergo an audit, you will be able to go into the process with more confidence. Tax extensions can be great for businesses that were simply overwhelmed by other critical responsibilities during the first quarter of the year. When you give yourself the luxury of filing an extension, you give yourself more time to compile all the files and information necessary to make tax return prep as seamless and thorough as possible.

Myth 2:

Tax extensions burden accountants.

Truth:

On the contrary, fling an extension not only gives your accountant extra time to check and double check the work, it gives them the added time needed to provide better service. For example, we pride ourselves on our work ethic, attention to detail and client service – especially during busy season. However, as trusted financial advisors, we are able to better serve our clients better when we have a chance to help them understand the opportunities they qualify for and how they can use certain tax strategies to help plan for the future. Believe me when I tell you that we do not look at extensions as burdens.

Myth 3:

There is nothing to gain by filing a tax extension; it’s just a way to prolong the inevitable.

Truth:

Filing a tax extension not only gives you more time to file your return with the IRS and the state, it effectively stalls some of your other looming deadlines as well. For example, a tax extension can award you more time pay your profit sharing plan, defined benefit, or your SEP IRA as part of your retirement plan contribution, which is an excellent short- and long-term benefit! Once your extension has been filed, you will have more time to file your retirement plan contribution, all while claiming the deduction in your prior year’s return.

Email Rea & Associates to learn more about the benefits of filing income tax extension with the IRS and the state.

By Tiffany Crawford, JD (Lima office)

 

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

Monday, March 30th, 2015
Prevent Fraud With Internal Controls - Rea & Associates - Ohio CPA Firm

When you implement internal control components into your management strategy, you not only deter fraudulent behavior, you help improve the overall quality of your financial statements, which could result in improved transparency, fewer external audit findings and even additional growth and sustainability. Start establishing internal controls today by incorporating these five components into your daily business or organizational activities.

Will the lack of internal control procedures result in the untimely demise of your business or organization? Studies show that if you don’t take action against fraudulent behavior today, tomorrow could be too late. The term “fraud” covers a lot of ground and includes actions that ultimately affect the accuracy of your financial statements. In fact according to the Association of Certified Fraud Examiners (ACFE), entities without internal control procedures are more likely to make errors on their financial statements and more likely to be victims of fraud, which is why it is so important for you to protect your business or organization with procedures that ensure accuracy and reliability of these records.

“The presence of anti-fraud controls is associated with reduced fraud losses and shorter fraud duration. Fraud schemes that occurred at victim organizations that had implemented any of several common anti-fraud controls were significantly less costly and were detected much more quickly than frauds at organizations lacking these controls” (ACFE, 2014).

Read: Fraud Hotlines Deter Occupational Fraud

Improve Accuracy, Eliminate Fraud

When you implement internal control components into your management strategy, you not only deter fraudulent behavior, you help improve the overall quality of your financial statements, which could result in improved transparency, fewer external audit findings and even additional growth and sustainability. Start establishing internal controls today by incorporating these five components into your daily business or organizational activities.

  1. Control environment – There’s no doubt about it, when it comes to setting the tone of your business or organization, all eyes are on you. Employees, volunteers, management and even the general public are more likely to “walk the walk” AND “talk the talk” if they see that you hold them and yourself to the same expectations. When leaders demonstrate a good ethical and moral framework, appear to be approachable about all issues and a commitment to excellence, nearly everybody takes notice and adjusts their behavior accordingly. It also helps to develop a rapport with your management team to encourage engagement throughout all levels of leadership.
  1. Risk assessment – Whether formal or informal, a risk assessment is critical to the process of identifying areas in which errors, misstatements or potential fraud is most likely to occur. By conducting a thorough risk assessment, you can identify which control activities to implement.
  1. Control activities – The best way to safeguard your business or organization is to segregate duties. This means that you should have different employees managing different areas of the company’s accounting responsibilities. When you put one person in charge of your accounting process you are freely giving them the opportunity to alter documents or mismanage inventory – and it’s a clear indication that you have weak internal controls. Dividing the work among your other employees is critical to the checks and balances of your company or organization. It’s also a good idea to develop procedures for recording, posting and filing documentation. Here are a few activities to get you started:
    1. Reconcile bank statements.
    2. Require documentation with expense reports.
    3. Match invoices with the goods and services you received prior to paying off your accounts payable balances.
    4. Make sure the person who has access to your business assets is different from the person responsible for the accounting of those assets, which will establish a form of checks and balances.
  1. Information and communication – Providing your employees with information about the internal control process and the resources available to them is a critical component to your success and the overall success of the internal control activities. In fact, simply knowing there are certain controls in place to promote accuracy and prevent fraud is enough to stop problems before they even start.
  1. Monitoring activities – Your job doesn’t end at the implementation of your internal control procedures; in fact, it’s just beginning. For your internal controls to work (and work well) you must establish your monitoring activities – and monitor frequently. Establishing internal controls is great, but they will have no effect if you neglect to monitor them. Furthermore, your internal controls should grow with your business or organization to ensure their long-term effectiveness.

Risk management and internal controls are necessary for the long-term success of every business and organization and a financial statement audit is a great way to provide you with insight into the internal controls of your organization or business. This kind of review structure can potentially reveal problems you didn’t even know were there – including fraud. But what if you are not planning on conducting an audit on your financial statements this year? Another option could be to work with a CPA who can help you document an understanding of the design and effectiveness of your internal control policies as a way to reassess your current strategies and identify areas for improvement. Email Rea & Associates to find out what options are available and how internal controls can put a stop to fraud in the workplace.

By Christopher A. Roush, CPA (Millersburg office)

 

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Is Simplicity Worth The Cost Of Peace Of Mind?

Wednesday, March 25th, 2015
New Final Tangible Property Regulations - Ohio CPA Firm

Just because the IRS says you are no longer required to file Form 3115 to comply with its final tangible property regulations doesn’t mean it’s a good idea to stop. Read the article and find out why.

The IRS recently made the road on which business owners must travel to comply with final tangible property regulations a little less bumpy.  Currently, most businesses that buy, depreciate, or repair property were required to file Form 3115 basically telling the IRS that the business had changed its accounting methods to comply with the new IRS rules and safe harbor, regardless of whether the change actually impacted their income.

Today, now that Revenue Procedure 2015-20 (15-20 relief) is in effect, small business taxpayers have the option of foregoing that extra paperwork. This relief removes the requirement to file a 3115 or statement with the tax return just to tell the IRS that you are making the changes. But, is that a good idea?

The main reason that you might still want to file a 3115 is if you have favorable tax adjustments from the past that you can harvest and take on your tax return this year. Filing the form is the only way to get at those. You also waive the audit protection for prior years that would be available with filing the 3115.  But, you do get to save some money on tax prep fees and paperwork.

Here’s a brief “true-or-false” quiz to help you decide what to do.  Of course you have to be eligible for the 15-20 relief, so the eligibility statements must be true. You should also consider filing a 3115 if you answer false to the later items.

Eligibility

  • True or False? Your small business’s assets total no more than $10 million or, over the last three years, your gross receipts have totaled no more than $10 million. (only need one of these to be true).
  • True or False? You will not file Form 3115 for any other business activity or any other change in accounting method for the year.

Non-eligibility

  • True or False? You get no benefit (or you don’t care about the benefit) from harvesting favorable 481(a) adjustments as a result of partial dispositions made in previous years.
  • True or False? You don’t care about prior year audit protection.
  • True or False? You believe that adequate records will otherwise be maintained with regard to what you have done (and are going to do) to protect against an audit. For example, if you have chosen not to do repair X, Y and Z because of your obligation to list it on Form 3115, will you continue to maintain that information in the event an audit were to occur?

Better Safe Than Sorry

Because it’s the only way to harvest prior year benefits and because most taxpayers desire the audit protection on these issues for prior years, we will likely continue to file Form 3115 for many of our clients.

Email Rea & Associates to learn more about Revenue Procedure 2015-20 and to find out if the new simplified method of reporting property changes is right for you.

By Joe Popp, JD, LLM (Dublin office)

 

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How Much Is Your Data Worth To Criminals?

Friday, March 13th, 2015
Ransomware

There is no way to completely protect yourself and your network, but there are ways to preempt an attack against you and your business.

How much would you pay to regain access to your company’s network if it was compromised and held for ransom? Are you willing to shell hundreds of dollars to take your information back from a cybercriminal, or are you willing (and able) to just walk away and start anew? I wish I were asking hypothetical questions but, unfortunately, the increased popularity of Ransomware has made the risk of such an attack a very, very real possibility.

Sandra Ponczkowski, a manager of the IT security company KnowBe4, recently shared Your Money or Your Life Files, a whitepaper that details the history and real threat of Ransomware, a computer infection that encrypts all files of known file types on your local computer and server shared drives. Once infected, it becomes impossible for you to access your documents or applications that use these encrypted files. The only way to recover from such an infection is to either restore your machine by using backup media, or accommodating the hacker’s demands and paying their ransom.

Unfortunately, I know of several situations where the businesses involved in a Ransomware attack had no choice but to pay ransom demands to the cybercriminal. The silver lining for these companies was that, upon paying the ransom, they were able to obtain the assailant’s encryption key code, which allowed them to unencrypt their data and regain access to their data.

Long-term protection, however, cannot be guaranteed and there is a chance that your data can be held for ransom again.

The literature provided by KnowBe4 details the fluency with which the popular Ransomware infection CryptoLocker changes and adapts once a solution to unencrypt infected data files becomes available. When this happens, the CryptoLocker infection will evolve into a new strain, thus making the previous solution unusable.

While there is no way to completely protect yourself and your network, there are ways to preempt an attack against you and your business. I recommend the following best practices.

  1. Train yourself and your employees about computer safety practices.
  2. Complete a yearly review of your employee’s access rights to company-owned computers, server folders and backup media. For example, only a few, strategic employees should have access to the company’s folders and data. As a general rule, employee access should be restricted to include only the programs and software required for them to do their jobs. This also applies to work-from-home employees who typically attach a USB drive to their machines for backup protection.
  3. If you don’t already, put a disaster recovery in place and test it ever year to ensure accuracy and completeness.

Following these practices should make your business’s Ransomware prevention and recovery much easier. Email Rea & Associates to learn find out more about the importance of protecting your company’s online security.

By Joe Welker, CISA (New Philadelphia office)

 

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5 Tax Deductions To Ease Your Business’s Tax Burden

Thursday, March 12th, 2015
Tax Deductions Add Up

If you made a donation to a nonprofit organization last year, it’s almost guaranteed that you are eligible to deduct at least a portion of your contribution from your income.

The Internal Revenue Service (IRS) reported earlier this month that nearly 59 million 2014 federal tax returns have been filed so far this filing season. While that may sound like a lot, there’s still a ways to go as, according to IRS estimates, three of five taxpayers are still waiting to file. For those of you still working on your tax prep, there is still time to claim some valuable deductions. Here are five deduction options to help small businesses make the most of the 2015 filing season:

1. Ohio Small Business Deduction

Many small business owners in Ohio are eligible to receive help from the state on their 2014 tax returns through the Ohio Small Business Deduction. Initiated by Ohio Gov. John Kasich and considered to be “the largest overall tax reduction in the country,” the deduction allows eligible small businesses to take a 50 percent tax deduction on their first $250,000 of business income. However, for the 2014 taxable year only, that percentage was increased to become a 75 percent deduction of “net business income from an individual’s adjusted gross income reported on their Ohio personal income tax return.” Your financial advisor can help you learn more about the Ohio Small Business deduction and help you take your business strategy to the next level.

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2. Section 179 Deduction

When Congress voted in favor of the Tax Extenders Act late last year, among the many tax incentives that were extended included an action to retroactively reinstate the $500,000 depreciation limit on the Section 179 deduction as well as the 50 percent bonus depreciation. Together, these tax incentives have the potential to save you and your company hundreds of thousands of dollars on equipment purchases. Limits and restrictions do apply, however, so make sure to work with a trusted advisor who can make sure your purchases actually qualify.

Read More

3. Personal Vehicle Deduction

If you drive your personal vehicle for business, then you may be able to deduct the expenses related to your car or truck as long as the vehicle was actually used for business purposes and not just commuting. A professional advisor can help you determine if you qualify to claim the deduction and can help determine which deduction method is the best one to use given your personal circumstances.

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4. Stock Gains Deduction

Some qualified businesses may also be able to exclude the gains generated by qualified small business stock per provision IRC Sec. 1202. Originally passed by Congress in the 1990s, this provision was designed to help reinvigorate the importance of continued investment into our country’s small business infrastructure. This incentive is a little more difficult than some of the others, but if you qualify, you could realize significant savings. Because of the complicated nature of this particular provision, it is essential that you work with a tax advisor to find out if you qualify.

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5. Charitable Giving Deduction

If you make a donation to a nonprofit organization during the year, it is almost guaranteed that you will be able to deduct at least a portion of your contribution from your income. But there are rules that need to be adhered to. A good financial advisor can help you get the maximum benefit for every dollar donated.

Read More

For more information related to specific tax and deduction questions related to your business, email Rea & Associates.

By Lesley Mast, CPA (Wooster office)

 

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The ‘Van Halen Philosophy’ of Retirement Plan Compliance

Thursday, March 5th, 2015
David Lee Roth Performs

Singer David Lee Roth once said he “found the SIMPLE life ain’t so simple.: We think the same can be said about retirement plan compliance.
Pictured above: David Lee Roth performs with classic rock band Van Halen during a concert in 2012. Photo by Robert Yager

While I don’t really believe David Lee Roth and Van Halen were thinking about SEP or SIMPLE IRA retirement plans when they performed their 1978 classic rock song, “Runnin’ with the Devil,” the connection between the two is an easy one to make.

“I found the SIMPLE life ain’t so simple”

The many small business clients we work with who choose to sponsor these types of retirement plans do so because they are inexpensive to administer and they enable our clients to provide a reasonable retirement benefit for themselves and to their employees. However, these plans are far from simple to operate and, if you’re not on your game, can be full of costly traps. The “Devil” is in the details as they say.

Top 5 SEP and SIMPLE Compliance Failures

Here is a rundown of the top five compliance failures we see. If not identified and corrected in a timely manner, these compliance concerns can result in the loss of favorable tax benefits for you and your employees or potentially large penalties and corrective contributions for your business.

  1. No Current Plan Document – All retirement plans require a governing document that identifies the plan sponsor (and any related employers) and defines the plan’s terms. The IRS provides a model document for you to use for these types of plans, but you have to complete it and keep it in your plan files.
  2. All Employees are Not Covered – Both SEPs and SIMPLE plans require that all employees (including employees of related employers) meeting a minimum eligibility requirement be covered and that they receive the same contribution (as a percentage of their compensation). Other than for minimal service and age requirements specified in the plan document, no other employees may be excluded.
  3. Using the Wrong Definition of Compensation – Compensation used to determine the contributions that need to be made to the plan generally includes all wages, bonuses, tips, commissions and any elective salary deferral contributions, and is limited to a certain dollar amount depending on the year (for 2014 the limit was $260,000).
  4. Untimely Employee Notices and No Summary Plan Description – Sponsors of SIMPLE IRA plans need to tell employees before the beginning of each year whether they intend to make a  match contribution or a profit sharing contribution . Eligible employees must also receive a summary of the basic SEP or SIMPLE plan provisions.
  5. Untimely Remittance of Employee Salary Deferrals – All employee contributions must be remitted to the IRA of each participant within 30 days after the month in which the employee would have otherwise received the money.

A great time to review your compliance with retirement laws and regulations is during tax time at year end. Whether you need help understanding your plan design options or compliance requirements as a retirement plan sponsor, help is available. Email Rea & Associates for more information.

By Paul McEwan, CPA, MT, AIFA (New Philadelphia office)

 

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Is A Sale-Leaseback Transaction Right For Your Business?

Tuesday, March 3rd, 2015
Sales-Leaseback Transaction

Is it a better business strategy to enter into a sale-leaseback transaction on your current office building or other business property? Make sure you know the pros and cons before making any decisions – Rea & Associates – Ohio CPA Firm

Are you looking for a plan to increase your business’s cash flow? If you own business property, you may be able to benefit by entering into a sale-leaseback transaction. But while there several great benefits to this type of agreement, there are also some significant drawbacks. So, before you draw up the paperwork, schedule a time to meet with your financial advisor to find out if the benefit outweighs the risk.

Advantages Of A Sale-Leaseback Transaction

A sale-leaseback transaction occurs when you, the real estate owner and occupier, sell your property to a third party on the condition that they agree to lease the property to you. Entering into this type of arrangement has several benefits, including increasing your business’ cash flow while freeing your business up to allocate the capital to other areas of your business. Additional benefits include:

  • As the seller and eventual lessor, you essentially maintain control of the property, which prevents operational disruptions from occurring.
  • Assuming the current property is financed with debt, this long-term debt can be eliminated from the balance sheet under certain lease arrangements.
  • From a tax perspective, you gain an additional annual “write-off” for the portion of rent related to the land (as land is not depreciated).

Drawbacks Of A Sale-Leaseback Transaction

Perhaps the most significant disadvantage of entering into this type of agreement is that you stand to lose the flexibility that comes with owning the property outright since these transactions usually are for longer terms than a typical property lease (15 or more years). The typical sale-leaseback transaction takes the form of a “triple net lease,” which usually states that you, as the tenant, will be responsible for the net real estate taxes, net building insurance and net common area maintenance. Other disadvantages include:

  • The loss of the real estate’s appreciation value over the course of a lengthy lease term.
  • Significant income tax impact that comes in to play when a property’s sale price significantly exceeds the property’s “book value.” This typically occurs when you are selling a property that has been owned for a long period of time prior to the sale.
  • A decrease in your Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as your depreciation expense on the property is replaced by the rent expense.

The financial benefits of sale-leasebacks must be balanced with your unique strategic and operating considerations. A financial advisor and business consultant can help identify whether this option is right for you and your business. Email Rea & Associates to learn more about sale-leaseback transactions and other strategic business decisions. By Ben Antonelli, CPA (Dublin office)  

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Who’s Fishing For Your Data Today?

Monday, February 23rd, 2015
Computer company Lenovo informed the public that  desktop and laptop devices it sold between September 2015 and January 2015 may have arrived to users loaded with an extra (and unwelcome) feature - SuperFish.

Computer company Lenovo informed the public that desktop and laptop devices it sold between September 2015 and January 2015 may have arrived to users loaded with an extra (and unwelcome) feature – SuperFish. Users should not enter secure information on their device until they are certain that their security was not compromised.

If you purchased a Lenovo desktop or laptop between September 2014 and January 2015 you could be susceptible to “SuperFish” – adware that can be found lurking in the depths of your device.

Capable of hijacking Internet traffic data typically used for securing Internet transactions, SuperFish was installed on Lenovo devices by the manufacturer per an agreement with Superfish Advertising, a third-party software developer based out of Palo Alto, Calif.

“In our effort to enhance our user experience, we pre-installed a piece of third-party software … on some of our consumer notebooks. The goal was to improve the shopping experience using their virtual discovery techniques,” said the company in a prepared statement. “In reality, we had customer complaints about the software. … We stopped the preloads beginning in January. We shut down the server connections that enable the software (also in January), and we are providing online resources to help users remove this software.”

Until you are certain that your Lenovo system is safe from adware, refrain from online banking, making online purchases or engaging in any other online activity were security is critical.

To determine if SuperFish is present on your device and how to remove it, Lenovo released step-by-step SuperFish Uninstall Instructions on its website. You can also visit this secure site, which will run a basic scan on your device to determine if SuperFish is intercepting your connections.

Unfortunately, in his article about the Lenovo crisis, Zack Wittaker cites ZDNet’s Chris Duckett as saying that “the only confirmed way of completely removing SuperFish appears to be reinstalling Windows … or moving to another operating system entirely” as simply uninstalling the adware may not remove the root certificate authority.

According to reports from IDC Worldwide Quarterly PC Tracker and Gartner, Lenovo shipped more than 16 million desktops and notebooks worldwide during the fourth quarter of 2014. Lenovo’s statement indicates that following models may have been effected:

  • G Series: G410, G510, G710, G40-70, G50-70, G40-30, G50-30, G40-45, G50-45, G40-80
  • U Series: U330P, U430P, U330Touch, U430Touch, U530Touch
  • Y Series: Y430P, Y40-70, Y50-70, Y40-80, Y70-70
  • Z Series: Z40-75, Z50-75, Z40-70, Z50-70, Z70-80
  • S Series: S310, S410, S40-70, S415, S415Touch, S435, S20-30, S20-30Touch
  • Flex Series: Flex2 14D, Flex2 15D, Flex2 14, Flex2 15, Flex2 Pro, Flex 10
  • MIIX Series: MIIX2-8, MIIX2-10, MIIX2-11, MIIX 3 1030
  • YOGA Series: YOGA2Pro-13, YOGA2-13, YOGA2-11, YOGA3 Pro
  • E Series: E10-30

Email Rea & Associates to learn more about the importance of protecting your virtual assets against cyber threats.

By Joe Welker, CISA (New Philadelphia office)

 

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