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

H&M Hires New Senior Assistant Accountant


The growth continues at H&M as Natalie Bruns joins our team as a Senior Staff Accountant. Natalie holds a degree in accounting from the University of Dayton, where she also earned her MBA. Before coming to H&M, Natalie spent time working with a wealth management company in the Dayton area.

Natalie is excited to interact with H&M’s clients and is enjoying living in the Dublin area. In her free time she loves to travel and states that Budapest is her favorite destination thus far.

Please join us in welcoming Natalie to the team!

Common Roadblocks to Construction Project Management

Construction project management, as a discipline, is evolving. What was once a step-by-step process handled largely through experience and traditional approaches is now virtually a science. Today’s project managers need to be able to oversee not only the execution of a job, but the economics as well.

As your construction business endeavors to complete its jobs, you may encounter a number of common roadblocks. Here are a few to watch out for, with a particular eye toward overcoming them through a contemporary approach to project management.

Rushing to the job site

Sometimes the obstruction to a successful job appears right at the beginning. And it can often be blamed on a distinct lack of formal preconstruction planning. Engaging in detailed discussions about a project before work begins will help you get a better read on whether a job is even viable. For example, you might identify environmental hazards or discover a financially dubious owner.

When a project is viable, a formal preconstruction process should strengthen your odds of reducing costly, unexpected changes. The specifics of such a process will vary depending on company and project type. But contractors and their project management teams should first anticipate all job costs. These include supply, equipment and labor expenses.

In addition, if you’re a general contractor, identify and touch base with subcontractors and vendors. Make sure the job’s scope and schedule are clear. Also, name the team members involved, define their responsibilities and establish clear channels of communication.

Complicating things into oblivion

Many construction companies have “field systems” they use to perform job tasks. For instance, a concrete subcontractor will have standard approaches for forming the footings and slabs, installing bolts, testing for moisture, etc. But project management can go awry when these field systems are subverted or improvised upon.

Make a simple and concise list of your top 10 systems and clearly express — in writing — how they should be carried out. You want to develop standards that will be easily understood and can be verified with minimal dispute. Now you’ve got something to use not only when training new employees, but also when evaluating the performances of your project managers.

Falling behind the times

Historically, project managers have had to focus on traditional duties such as scheduling, contract and change management, and company-specific field systems — with some relatively basic financial management tasks thrown in. But, as mentioned, expectations have grown.

Project managers at best-in-class companies are now much more involved in customer service. In addition, they’re expected to weigh in on strategic business decisions and have a wider grasp of financial metrics and trends. To do so, using project reports and systems to track job progress is critical.

In other words, today’s best project managers aren’t just focused on getting the job done. They’re intent on fitting the job into your company’s strategic objectives and guarding against outside risks (financial and otherwise). For them to be able to do all this effectively, you need to keep them properly trained.

Lacking in leadership

The word “accountability” must hold meaning when applied to your project managers. Start with their job descriptions, ensuring that the language is clear, current and constructive. Rewrite anything vague or unrealistic.

Also, look back at your company’s recent history and pinpoint where accountability failures have occurred. Ask questions such as:

  • Did cost discrepancies occur because of a failure to weigh budgeted vs. actual job costs?
  • Were field production results ignored?
  • Did materials and equipment deliveries fall behind schedule or come up short?
  • Were safety protocols not checked or followed?

Pinpoint danger areas for each project manager that they and you can double-check as jobs go along. For newer managers, make sure they understand the totality of their responsibilities.

Learning new things

No matter how long you’ve been in business, there are always new things to learn about construction project management. Make it a mission priority to continually educate yourself and your managers on the latest improvements. Contact us today for assistance with this process.

Are you Aware of Qualified Charitable Distributions?

By: Justin Linscott, CPA, CFP®, CGMA, CITP- Principal

Qualified Charitable Distributions, otherwise known as QCDs, are cash donations that can be made by IRA owners and beneficiaries age 70 ½ and over to IRS-approved public charities. These donations must come directly out of an IRA account to qualify as a QCD. They are federal income, tax free, but cannot be treated as an itemized write-off on your Form 1040 tax form. However, the tax free element presents an immediate %100 deduction without the concern of restrictions that can simply slow itemized deductions down.

QCDs must come from you or your IRA trustee and go directly to a qualified public charity. Or, the IRA trustee can provide you with a check made out to the charity that you then must deliver. There can be no middle man action where the funds go into another account before being turned over to the charity.  Looking to donate to a private foundation? You may not do so through a QCD. $100,000 is the cap for annual QCD donations. Married couples with separate IRA accounts can both donate $100,000 respectfully.

No matter how much you donate, you must keep record of the contribution- this should be provided to you by the charity and the charity must not provide you with any token of appreciation for your generosity.

QCDs present income tax benefits as they are not considered a part of your Adjusted Gross Income which keeps many phase out rules at bay.  There are many more benefits to be had, but now is the time to act. If you are interested in learning more about tax-saving QCD exercises, we should get together now. That way, we can arrange for the proper IRA funds to go to the qualified charities of your choosing by year end.

Celebrating Manufacturing Day!

Holbrook & Manter has been serving manufacturing clients for several years, tracing back to our origin in 1919. That is a long time, so celebrating this industry and the positive impact it has on our economy is something we do on a continuous basis. However, today is special. Today (October 7, 2016) is Manufacturing Day, so we are kicking our celebration up a few notches.

Now in its fourth year, Manufacturing Day℠ is a celebration of modern manufacturing meant to inspire the next generation of manufacturers. Companies and community organizations are holding events today, opening their doors to explain their operations and shine a light on the manufacturing industry. Nearly 2,500 events are taking place across the country today. To search events near you, click this link:


 The mission of MFG Day, as listed on its website is pretty powerful. It reads,

MFG DAY addresses common misperceptions about manufacturing by giving manufacturers an opportunity to open their doors and show, in a coordinated effort, what manufacturing is — and what it isn’t. By working together during and after MFG DAY, manufacturers will begin to address the skilled labor shortage they face, connect with future generations, take charge of the public image of manufacturing, and ensure the ongoing prosperity of the whole industry.

Supported by a group of industry sponsors and co-producers, MFG DAY is designed to amplify the voice of individual manufacturers and coordinate a collective chorus of manufacturers with common concerns and challenges. The rallying point for a growing mass movement, MFG DAY empowers manufacturers to come together to address their collective challenges so they can help their communities and future generations thrive.”

Just like any day of celebration tends to do, MFG Day has caused our team to reflect just a bit on this industry that touches our firm in so many ways. We are accountants and we like facts and figures. The National Association of Manufacturers shares some statistics that are nothing short of impressive. For example, they share that manufacturers contributed $2.7 trillion to the U.S. economy in 2015 and that for every $1.00 spent in manufacturing, another $1.81 is added to the economy. That is the highest multiplier of an economic sector!  Did you know there are currently over 12 million manufacturing jobs in the United States, making up 9% of our workforce? In addition, manufacturers have one of the highest percentages of workers who are eligible for healthy benefits provided by their employer. This is just a glimpse into the Top 20 facts about manufacturing according to NAM. Visit their website here to read them all:


Our firm is proud to offer services specific to businesses involved in manufacturing as well as traditional and management advisory services. To learn more about these services, click here:



Owner-Employees Face Distinctive Tax Planning Challenges

Many business owners launch their companies from the front lines — as an employee. And it’s not uncommon for owners to stay in that role, working with their staff members to grow the business and guide its strategic direction. Come tax time, however, owner-employees face a variety of distinctive tax planning challenges.

Partnerships and LLCs

If you’re a partner in a partnership or a member of a limited liability company (LLC) that has elected to be disregarded or treated as a partnership, the entity’s income (and deductions) flow through to you. Trade or business income that flows through to you for income tax purposes likely will be subject to self-employment taxes — even if the income isn’t actually distributed to you.

You’ll also need to assess whether the additional 0.9% Medicare tax on earned income or the 3.8% net investment income tax (NIIT) will apply. Doing so will involve complex determinations.


For S corporations, even though the entity’s income flows through to you for income tax purposes, only income you receive as salary is subject to employment taxes and, if applicable, the 0.9% Medicare tax. To reduce these taxes, you may want to keep your salary relatively — but not unreasonably — low and increase your distributions of company income (which generally isn’t taxed at the corporate level or subject to employment taxes). The 3.8% NIIT may also apply.

In the case of C corporations, the entity’s income is taxed at the corporate level and only income you receive as salary is subject to employment taxes, and, if applicable, the 0.9% Medicare tax. Nevertheless, if the overall tax paid by both the corporation and you would be less, you may prefer to take more income as salary (which is deductible at the corporate level) as opposed to dividends (which aren’t deductible at the corporate level, are taxed at the shareholder level and could be subject to the 3.8% NIIT).

Tread carefully, however. The IRS remains always on the lookout for misclassification of corporate payments to shareholder-employees. The penalties and additional tax liability can be costly.

The self-employed

If you’re self-employed (such as a sole proprietor, partner or LLC member treated as either of them), your business earnings are subject to self-employment taxes. This means your employment tax liability typically doubles, because you must pay both the employee and employer portions of these taxes. The employer portion of self-employment taxes paid (6.2% for Social Security tax and 1.45% for Medicare tax) is deductible above the line.

As a self-employed taxpayer, you may benefit from other above-the-line deductions as well. You can deduct 100% of health insurance costs for yourself, your spouse and your dependents, up to your net income from the business. You also can deduct contributions to a retirement plan.

Above-the-line deductions are particularly valuable because they reduce your adjusted gross income and modified adjusted gross income, which are the triggers for certain additional taxes and phaseouts of many tax breaks.

Ideal strategies

Owning and working for your own company can be incredibly fulfilling. But tax planning is extra important when you take on this role. Please call H&M for help identifying the ideal strategies for your situation. We would be happy to assist you.

Tax Deadlines- Fourth Quarter 2016

October 17 — Personal returns that received an automatic six-month extension must be filed today and any tax, interest, and penalties due must be paid.

  • Electing large partnerships that received an additional six-month extension must file their Forms 1065-B today.
  • If the monthly deposit rule applies, employers must deposit the tax for payments in September for Social Security, Medicare, withheld income tax, and nonpayroll withholding.

October 31 — The third quarter Form 941 (“Employer’s Quarterly Federal Tax Return”) is due today and any undeposited tax must be deposited. (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 November 10 to file the returns.

  • If you have employees, a Federal Unemployment Tax Act (FUTA) deposit is due if the FUTA liability through September exceeds $500.

November 15 — If the monthly deposit rule applies, employers must deposit the tax for payments in October for Social Security, Medicare, withheld income tax, and nonpayroll withholding.

December 15 — Calendar-year corporations must deposit the fourth installment of estimated income tax for 2015.If the monthly deposit rule applies, employers must deposit the tax for payments in November for Social Security, Medicare, withheld income tax, and nonpayroll withholding.

Please contact us with any questions you may have or for assistance with any tax-related matter.

DOL Hit with Lawsuits Over New Overtime Rule

Lawsuits have been filed  against the U.S. Department of Labor on behalf of 21 states, including Ohio, over the new overtime rule. Nevada Attorney General Adam Laxalt filed the lawsuit in U.S. District Court in Eastern Texas asking that the new rule be blocked. In addition, the U.S. Chamber of Commerce and more than 50 other business groups have filed a challenge against the regulation.

As we have been telling you for some time now, the new rule is set to go into effect on December 1, 2016 and will impact millions or workers across the country.

These lawsuits argue that the DOL has taken things too far with the new overtime rule and the automatic salary increases appear to be big sticking points. As our previous blogs have explained, the salary threshold to be classified as an overtime-exempt employee will double from $455 per week to $913 per week ($47,476 annually) under the new rule.  The lawsuits address the increase in the minimum salary threshold will substantially raise employment costs, which will be cumbersome to employers and could lead to layoffs and other operational challenges.  The filings also contend that the overtime rule violates the Constitutions Tenth Amendment.

Here is a list of all of the states named as plaintiffs in the lawsuit: Alabama, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin, and the governors of Iowa, Maine and New Mexico.

We will continue to keep you posted on further developments regarding the new overtime rule and these legal filings. As always, please reach out to us with any questions or concerns you may have.








Possible Changes on the Horizon for Estate and Gift Taxes

 By: Justin Linscott, CPA, CFP®, CGMA, CITP- Principal

We’ve been waiting and watching for them, and now they are about to be a reality- the proposed regulations issued by the IRS that will place major restrictions on estate valuation discounts. These regulations are significant and present modifications to Internal Revenue Code  Section 2704. They will essentially make it more difficult for wealthy family and closely-held business owners to transfer assets to family members without paying the proper amount of estate and gift taxes.

 IRC Section 2704 was enacted in 1990 and is designed to prevent the reduction of taxes through valuation discount techniques in an attempt to reduce the value of an estate, thus lowering the value of property and assets gifted to taxpayer’s beneficiaries. The new proposed regulations will change the landscape of this tax exercise drastically, no longer allowing for the understatement of the value of assets and interests as they apply to intra-family transfers. IRC Section 2704, as it stands now, only refers to corporations and partnerships. The proposed regulations would broaden the reach and also apply to limited liability companies and other entities and business arrangements.

These regulations would present many valuation rules for family-owned operations. Let’s take a look at just a few of them:

·         The Scope will Broaden: IRC 2704 will no longer cover just partnerships and corporations if the amended proposal becomes a reality. It will also extend to business types including limited liability companies, a classification selected by many family-owned businesses.

·         Family Matters: Family members owning a controlling interest with the privately-held business in aggregate will see the IRS require the interest be valued as if it has the right to liquidate, should the proposed regulations become permanent.

·         Changes to Assignee Interest: The new regulations would banish any discount based on the transferee’s status as an assignee as opposed to a full-voting owner for an interest being transferred to a family-owned business.

Again, these are just a few of the proposed regulations. Many changes could be taking place and a hearing on this matter will be held on December 1, 2016 in Washington, D.C. – I plan to be in attendance.  Our firm works with too many people that could be impacted for me not to be on the front lines as this takes shape. Depending on how the hearing goes, the Treasury Department has stated that the proposed regulations wouldn’t take effect for at least 30 days.

This means taxpayers have some time to work with and may want to consider taking action ahead of regulations becoming permanent. Valuations discounts can still be taken advantage at this time for those looking to execute a gift, estate or transfer within their estate plan. Contact H&M for assistance with these matters ahead of these regulations becoming final. At the very least, this should prompt you to revisit your estate plan on a whole. We can look at how the regulations will affect you should you elect not to take action ahead of them possibly becoming final.

Five Tips for Safe Intrafamily Loans

If a relative needs financial help, offering an intrafamily loan might seem like a good idea. But if not properly executed, such loans can carry substantial negative tax consequences — such as unexpected taxable income, gift tax or both. Here are five tips to consider:

1.      Create a paper trail. In general, to avoid undesirable tax consequences, one thing you’ll need to do is show that the loan was bona fide. Doing so should include documenting evidence of:

  •   The amount and terms of the debt,
  •   Interest charged,
  •   Fixed repayment schedules,
  •   Collateral,
  •   Demands for repayment, and
  •   The borrower’s solvency at the time of the loan and payments made.

Be sure to make your intentions clear — and help avoid loan-related misunderstandings — by documenting the loan and payments received, as well.

2.      Demonstrate an intention to collect. Even if you think you may eventually forgive the loan, ensure the borrower makes at least a few payments. By having some repayment history, you’ll make it harder for the IRS to argue that the loan was really an outright gift. And if a would-be borrower has no realistic chance of repaying a loan — don’t make it. If you’re audited, the IRS is sure to treat such a loan as a gift.

3.      Charge interest if the loan exceeds $10,000. If you lend more than $10,000 to a relative, charge at least the applicable federal interest rate (AFR). In any case, the interest on the loan will be taxable income to you. (If no or below-AFR interest is charged, taxable interest is calculated under the complicated below-market-rate loan rules.) However, if no or below-AFR interest is charged, all of the forgone interest over the term of the loan may have to be treated as a gift in the year the loan is made. This will increase your chances of having to use some of your lifetime exemption.

4.      Use the annual gift tax exclusion. If you want to, say, help your daughter buy a house but don’t want to use up any of your lifetime estate and gift tax exemption, make the loan, charge interest and then forgive the interest, the principal payments or both each year under the annual gift tax exclusion. For 2016, you can forgive up to $14,000 per borrower ($28,000 if your spouse joins in the gift) without paying gift taxes or using any of your lifetime exemption. But you will still have interest income in the year of forgiveness.

5.      Forgive or file suit. If an intrafamily loan that you intended to collect is in default, don’t let it sit too long. To prove this was a legitimate loan that soured, you’ll need to take appropriate legal steps toward collection. If you know you’ll never collect and can’t bring yourself to file suit, begin forgiving the loan using the annual gift tax exclusion, if possible. Contact us today to learn more about intrafamily loans and the tax issues that come along with them. We would be happy to assist you.

The Many Reasons to Invest in a Business Valuation

 By: Stephen C. Smith CPA, CGMA, MBA, CVA- Principal

Possibly selling your business is not the only reason to have a business valuation performed. There are several scenarios that call for a thorough review of your business’ worth. I have been performing this service for clients for many years, for many different reasons. Yes, if you are preparing to sell your business, a valuation will provide you with the numbers you need to a secure a deal that benefits both you and the new owner. But that is just one reason.

You will need to know the fair-market value of your operation in the event that you consider merging with another entity. Or, you will need to be armed with the right numbers if you plan to add a new owner to the business so you can set the buy-in amount for him/her. The same goes for owners and other shareholders that will be exiting the business.

What about your own exit strategy? Knowing the value of your business sets you up to create a better retirement plan, whether you plan to sell, pass it along or close up shop all together. Many times I work with business owners who must know the value of their operation due to a family-related situation. For example, business owners going through divorce proceedings often need to know the value of their business so they are properly informed during legal proceedings. Or, a family emergency comes into play and the current value of the business is as vital piece of information that is needed as the parties involved work towards a solution.  Sometimes needing to be aware of the true value of your  business has nothing to do with selling or leaving and everything to do with expansion. How you know just how far you can grow without knowing where you currently stand in regards to finances and value?

When looking for someone to assist your privately held enterprise with independent valuation requirements, you want to partner with a CPA with varied experiences and intense training in valuation theory as well as application, litigation support, accounting, tax, auditing, finance, insurance, economics and investments. There is no substitution for experience, so you will want to secure a firm that routinely performs business valuations. Holbrook & Manter is that firm. Contact us today for more information about our services. I would be honored to assist you in assessing the current value of your business.