We believe in creating a strong working relationship with our clients to determine their specific accounting and compliance needs.

Important 2017 Q1 Tax Deadlines

Tax season is upon us. Holbrook & Manter is committed to keeping you informed and compliant in 2017. Please review the important deadlines and information provided below and contact our tax team with any questions you may have.

January 17

  • Individual taxpayers’ final 2016 estimated tax payment is due.

January 31

  • File 2016 Forms W-2 (“Wage and Tax Statement”) with the SSA and provide copies to your employees.
  • File 2016 Forms 1099-MISC (“Miscellaneous Income”) reporting nonemployee compensation payments in box 7 with the IRS and provide copies to recipients.
  • Most employers must file Form 941 (“Employer’s Quarterly Federal Tax Return”) to report Medicare, Social Security and income taxes withheld in the fourth quarter of 2016. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return. Employers who have an estimated annual employment tax liability of $1,000 or less may be eligible to file Form 944 (“Employer’s Annual Federal Tax Return”).
  • File Form 940 (“Employer’s Annual Federal Unemployment [FUTA] Tax Return”) for 2016. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year in full and on time, you have until February 10 to file the return.
  • File Form 943 (“Employer’s Annual Federal Tax Return for Agricultural Employees”) to report Social Security, Medicare and withheld income taxes for 2016. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 10 to file the return.
  • File Form 945 (“Annual Return of Withheld Federal Income Tax”) for 2016 to report income tax withheld on all nonpayroll items, including backup withholding and withholding on accounts such as pensions, annuities and IRAs. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

February 28

  • File 2016 Forms 1099-MISC with the IRS and provide copies to recipients. (Note that Forms 1099-MISC reporting nonemployee compensation in box 7 must be filed by Jan. 31, beginning with 2016 forms filed in 2017.)

March 15

  • 2016 tax returns must be filed or extended for calendar-year partnerships and S corporations. If the return is not extended, this is also the last day to make 2016 contributions to pension and profit-sharing plans.


Mark Rhea Joins the H&M Team

We are happy to welcome Mark Rhea, J.D. to the H&M family. Mark joins us as a Senior Assistant Accountant. He holds a degree in history from Ohio University and a degree in accounting from Franklin University. He is also received his law degree from the University of Toledo. Mark worked for the Franklin County Child Support Enforcement Agency before joining H&M.

Mark has a strong interest in the area of tax and enjoys helping businesses and individuals navigate through their various tax-related needs and challenges.

Mark lives in Powell with his wife, Martha and children, Katie and Matthew. In his spare time he likes watching the Columbus Blue Jackets, cooking and traveling.

H&M Welcomes New Senior Accountant

H&M is pleased to announce the addition of David Herbe, CPA  to our growing team. David holds a bachelor’s degree in accounting from Bowling Green State University. He also went on to earn his Masters of Accountancy from BGSU with a specialization in taxation. David worked for Crowe Horwath LLP before joining the H&M team.

David shares that the element he enjoys most about his job is knowing he is providing a valuable service to businesses and individuals. He looks forward to working with H&M’s many valued clients.

David was raised in Erie, PA. He currently lives in Columbus with his fiancé, Emily. They plan to marry in July 2017. David enjoys playing sports and working out in his spare time. He also loves to spend time with his friends and family.


New Tax Scam Involving Fake CP2000 Notices

By: Molly Pensyl, Business Development Manager

The telephone and email are generally always the communication weapons of choice for tax scammers. They reach out to you via these methods and claim that you owe the IRS money or that the IRS is planning to take legal action against you. Now, we are receiving word that tax scammers are adding U.S. Mail to their arsenal. This is where vigilance becomes very important for taxpayers as to not confuse a piece of counterfeit mail from the IRS with the real thing. Because, as we have told you before- the IRS will always reach out via U.S. Mail in the case of a real issue. Not be telephone, email etc.

The IRS warns that scammers are sending out fake IRS tax bills labeled as CP2000 notices. This scam is not only being circulated in hard copy form through the mail- it can also come to you via email. The IRS shares the following signs that the bill is fake on their website:

  • The CP2000 notices appear to be issued from an Austin, Texas, address;
  • The letter says the issue is related to the Affordable Care Act  and requests information regarding 2014 coverage;
  • The payment voucher lists the letter number as 105C;
  • Requests checks made out to I.R.S. and sent to the “Austin Processing Center” at a  post office box.

What is a CP2000 notice and how you can spot an authentic one? A CP2000 is issued when income reported from third party sources such as an employer does not match the income reported on the tax return. It outlines instructions for the taxpayer regarding what to do in the event that they agree or disagree with what is listed on the notice. Also, a legitimate CP2000 will ask that checks be made out to the United States Treasury, not to a processing center.

No matter how a tax scam finds you or what it asks you to do -if it doesn’t feel right you need to report it. Visit this link to learn more about reporting phishing and online scams to the IRS: https://www.irs.gov/uac/report-phishing

As always, H&M can help walk you through the process and help implement proactive measures to protect you from being a target for scammers. Contact us today for more information.

Changes & Reminders Regarding 1099 & W-2 Reporting

By: Linda Fargo, CPA- Manager

We have important information to share regarding changes to 1099 and W-2 reporting. Please read through this information carefully and contact us with any questions you may have.

Starting this year, 1099s and W-2s must be submitted to the government by January 31.In the past they were required to be issued to the individual by that date but were not required to be sent to the government until the end of February. This had allowed for a little breathing room as well as the ability to make any corrections before submission.

With this change, the penalties for not issuing and/or submitting 1099s and W-2s are becoming more onerous.  A missed form that is neither issued nor submitted would actually result in two separate penalties.  Accordingly,  the following penalties would be double for any required forms that were neither issued nor submitted:

·         $50 per form within 30 days of the 1/31/17 original due date

·         $100 per form between 3/1/17 and 8/1/17

·         $260 per form after 8/1/17

·         $530 per form for an intentional disregard of the rules

·         There are also potential correctness penalties

A more-than-2% shareholder’s health insurance MUST be in box one of the W-2 to be deductible to the business.  This also applies to family members of shareholders.  Included for this purpose – spouse, children, grandchildren, and parents.

To be deductible, the 2% shareholder/partner needs to be reimbursed for the Medicare or other health care premiums they pay personally.  Once reimbursed, these amounts still need to be added to the W-2 or reported as guaranteed payments to the partners.

H&M’s Stephen Smith to Speak at Start-up Event

H&M’s Stephen Smith will serve as a panel expert at a Leadership for Small Business event on Wednesday, December 7, 2016.

The event is presented by The Columbus Chamber of Commerce, Chase, Propel Marketing and the Dispatch Media Group. These events are held quarterly and feature insights and advice from thought leaders on how to set you and your business up for success.

The Columbus Chamber shares the following information about the event, which will be held at Red Brick Occasions in downtown Columbus:

Start Me Up

You’ve got a great idea—whether it is a business, a service, or a product—and you’re ready to get serious about it.

Other than writing a business plan on the back of a napkin, you’re not really sure what to do next.

For this session, we have invited a panel of experts from professional service fields to share insights on common mistakes business owners make early on. From finance, to legal and everything in between, this hour-long session will provide what you need to know before you take the big leap into entrepreneurship.

To learn more about the event, meet the other panelists and the moderator and to register to attend, please visit this link: http://columbus.org/events/leadership-small-business-series-start/

New Overtime Rule Blocked By Judge

The new overtime rule will not take effect on December 1, 2016 as expected. A federal judge has blocked the Obama administration rule which would have extended mandatory overtime pay to more than 4 million salaried workers.

The new rule was issued by the Department of Labor and would have brought the maximum salary number a worker can earn and still be eligible for mandatory overtime pay up to $47,500.

The ruling was made by U.S. District Judge Amos Mazzant who sits on the bench in Sherman, Texas. His motion for a nationwide injunction backs the sentiments of 21 states and many business groups who felt the new overtime rule was unlawful.  Judge Mazzant ruled that the federal law governing overtime does not allow the Department of Labor to determine which workers are eligible for overtime pay based on just salary levels.

While the states and business groups that fought the new rule are pleased with the ruling, the Department of Labor is not.  They are reportedly considering all of their options in light of the new ruling. They can appeal the ruling to the New Orleans-based 5th U.S. Circuit Court of Appeals. We will keep you posted on any and all proceedings and developments.

Employers across virtually every industry have been preparing for the new overtime rule for months. This new ruling brings those preparations to a halt, at least for now. It may also create questions for business owners and their employees. Please reach out to us for any assistance that you may need. We would be happy to help.


Documentation: The Key to Charitable Tax Deductions

By: Carmen George, CPA- H&M Manager

It’s hard to duplicate the good vibes that you get when you do something charitable.  However, that feeling can be squashed a bit come tax time when you realize that you don’t have the proper documentation for the cash you so generously donated to a cause that is near and dear to your heart.  The same goes for physical items that you part with in the name of charity.  Each dollar and every item should be documented.  That documentation is your key to charitable tax deductions.

The exercise of receiving the documentation for your donations is often times very easy.  For example, if you make a cash donation to an organization, they will mail you a receipt of the donation for your records.  Be careful not to mistake it for general mail from the organization and mistakenly throw it away.  If you make the donation online, don’t travel away from the organization’s site without printing your receipt.  When you donate physical items to a charity (clothing, household items, etc.) obtaining documentation of your kindness is simple to do.  The drop off location for the organization will have staff members on-hand to receive your donation and give you a written receipt right there on the spot.  Should you donate at a drop off location that is not manned by staff or volunteers, look for a number to call or a website to visit on the drop off box and reach out to have a receipt sent your way.  Any and all donations must go to a qualifying charitable organization and the written acknowledgement they provide should include the name of the charity, the date of the contribution, a description of the contributed item(s) if a non-cash contribution, the amount of the contribution and a statement that no goods or services were provided by the organization in return for the contribution, if that was the case.

In the case of cash donations, you must have written acknowledgement from a charity for any single contribution of $250 or more.  If your cash donation is below the $250 threshold, your record of this donation can be shown in the form of a bank record such as a cancelled check.  It is important to remember that deductions are not given for donations made to political groups, social groups and individuals.

The value of the items you donate and/or the amount of money you give to a charity comes into play at tax time.  If you claim a deduction of more than $500 in donated property, your accountant will work with you to fill out a Form 8283 to submit with your return.

No matter how often or how you give to charity, keep all of your donation documentation in a safe place.  A folder in a desk or a filing cabinet is always a good idea.  That way, come tax time, you simply have to pull it out and hand it over to your accountant.

We would be happy to assist you with identifying deductions you could be eligible for as they relate to your charitable giving habits.  Contact us today.

The Importance of Solid Operating Reserves for Non-Profit Organizations

Operating reserves aren’t a luxury — they’re a necessity for financially savvy nonprofits. Organizations without adequate operating reserves leave themselves vulnerable to the financial instability and damaged reputation that interruptions in incoming revenue might bring.

A recent report from the Nonprofit Finance Fund, a community development financial institution, indicates that operating without an adequate financial cushion is fairly widespread among not-for-profits. The Fund’s 2015 State of the Nonprofit Sector Survey results showed that 53% of nonprofits responding had less than three months of cash on hand and 12% had less than 30 days’ cash in reserve.

What reserves are — and aren’t

Operating reserves can be defined as the portion of unrestricted net assets that nonprofits designate for use in emergencies or to sustain financial operations in the unanticipated event of significant unbudgeted increases in operating expenses or losses in operating revenues. Reserves should be liquid, or easily converted to cash, so the organization isn’t forced to sell long-term investments, take out a loan or pursue other undesirable alternatives to quickly generate funds.

Also remember that cash on hand isn’t the same thing as operating reserves. Cash can be restricted for specific purposes while operating reserves must be available to be spent on current operations.

Operating reserves also shouldn’t be confused with donor-restricted endowments. Only the income on these endowments is available to be spent (based on the donor’s wishes), with the principal portion held to perpetuity and, thus, unavailable for daily operations.

Why you need reserves

Remember the last recession? The years following the financial crisis of 2008 were challenging for many nonprofits, with plummeting revenues that led to painful cuts in staffing and programs — despite, at times, an increased demand for services. Some nonprofits shut down altogether. When a turbulent economy reduces revenues to a trickle, operating reserves can help organizations survive.

Healthy reserves also will allow your organization to seize opportunities that require a cash outlay (for example, purchasing a building), set aside funds for long-term goals and plans, and cover unexpected expenses after a natural disaster or other emergency. Reserves also can prove valuable when you need to augment your staff and deliver services under federal contracts that won’t provide payment for 30 to 60 days.

What if you run into skeptics on the board when it comes to keeping sufficient reserves? Consider running a “table-top exercise” with the directors and upper management. Instruct the participants to formulate a strategy for a scenario in which the organization experiences a payment delay — how will it pay its bills and meet its contractual obligations?

How much to set aside as reserves

The Nonprofit Operating Reserves Initiative Workgroup, an all-volunteer group of nonprofit leaders, financial management consultants and others, suggests nonprofits consider several issues when setting a dollar goal for their reserves:

  • · Are your revenue sources subject to large unexpected negative fluctuations?
  •   Are your resources subject to sudden increases in demand?
  •    Are your income and expenses subject to significant day-to-day fluctuations?
  •   Have your planning and budgeting processes been historically accurate in  forecasting financial results?
  •  Are adequate backup funding resources likely to be available?
  •  Is the governing body trying to expand the organization?

The Workgroup advises organizations to maintain a minimum reserve level of 25% of the annual expense budget, enough to cover three months’ expenditures.

Others suggest that a sensible target might be the average gap between revenues and expenses. Under this guideline, organizations with more volatile revenue or spending would require greater operating reserves. Financial advisors typically say the ideal amount for most nonprofits is six months of cash expenditures. Ultimately, the right amount for your organization will depend on its particular circumstances — no single standard applies to all.

A critical layer of protection

Operating reserves add another layer of essential insurance when you run into revenue shortfalls that could threaten your sustainability. Building reserves greatly improves your organization’s odds of continued existence. Contact us today to discuss strategies for building up those reserve funds. We would be happy to assist you.




H&M Honored for Supporting Family Business

Holbrook & Manter was recognized as a finalist for the “Support of Family Business” Award at the 18th Annual Conway Center for Family Business Awards & Expo. The event was held on November 7, 2016 at the Hilton at Easton in Columbus.

As a service provider and peer group leader for the Conway Center for Family Business, H&M was honored to recognized in our category that celebrates organizations that dedicate their time and resources to those working in family business.

The Conway Center for Family Business states the following in the program for the awards ceremony and this sheds light on just how powerful the presence of family business is in our region:

Family businesses are economic powerhouses and the backbone of the American economy. They create many jobs and contribute heavily to the economy that has built vibrant communities in Central Ohio and across the country. In fact, the Conway Center estimates that Central Ohio is home to more than 6,000 family-owned businesses.

Firm principals Robert Buckley, Bradley Ridge and Stephen Smith accepted the finalist award on behalf of the entire H&M team.

Click here to learn more about how H&M assists family-owned and closely-held businesses:


Click here to learn more about the Conway Center for Family Business: