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

The Benefits of Being on a Board

 

 

By: William Bauder, CPA, CITP, CGMA- Manager of Assurance and Advisory Services

I was recently elected to the board of the Greater Powell Area Chamber of Commerce. I join the ranks of other H&M team members who currently do, or have in the past, sat on chamber boards. As a firm, we strongly believe in supporting the communities where our offices are located and those that our team members call home. I have been active with the Greater Powell Area Chamber of Commerce for some time now, and I am excited to take my commitment to them and their member businesses to the next level.

My recent election got me thinking about some of the reasons why any professional should consider volunteering for a chamber board, or a board of any non-profit organization for that matter. The reasons to be a board member are many and vary from person to person. For me, the following elements drive my board involvement: 

· Being a board member allows me to give back to the community. Again, our firm stands strong in our commitment to giving back and personally, it is very important to me as well.

· Becoming a board member allows me an opportunity to exercise my leadership skills. Keep this key component in mind when you consider joining a board. Having a seat at the table allows you to share your experiences and professional insight.

· Being on the board allows me to network on a frequent basis with other professionals. Networking isn’t just about sharing referrals and leads. It is about getting to know others both in my field and in other fields. Those relationships help to mold me as a person and as a professional.

·  My board commitment ensures that I am being kept up-to-date on happenings around the community. The more I know about what is taking place, the more I can be present and helpful as a board member.

·  The exercise of interacting with others from different professional and civic backgrounds is invaluable and rewarding. Being a board member allows you to stop, look around, and appreciate and learn from those you sit at the table with.

I look forward to my time as a board member and would encourage anyone else to be of service in the same capacity if it is appealing to them. Giving back and growing on a professional and personal level… it doesn’t get much better than that.

If you are looking to join a board, feel free to reach out and we can point you to various resources available or connect you with others in our network who are currently looking for great volunteers.

Tax Filing Season Set to Kick Off on January 28

While the U.S. Government is still shutdown, the Internal Revenue Service is taking the proper steps to make sure that tax filing season begins this month. The IRS has set January 28, 2019 as the official start date for the season.

This means the IRS will begin accepting tax returns on that date and up until the filing deadline, which is April 15, 2019. This eliminates the fear that there would be a delay in processing returns and issuing refunds due to the shutdown.

The IRS shares the most recent detailed information about this latest development at the link below. As always, reach out to Holbrook & Manter with any questions you may have.

https://www.irs.gov/newsroom/irs-confirms-tax-filing-season-to-begin-january-28

Government Shut Downs Causes the IRS to Press Pause

The recent government shut down has halted operations for a large portion of the Internal Revenue Service (IRS) and given that tax season is fast approaching, this is concerning to both tax preparers and taxpayers. Let’s talk about what we know currently….

Help is sparse at the IRS with only a handful of staff members working- most without pay.  With so few hands on deck and a government that is not fully operational, you guessed it- tax documents aren’t churning. Refunds aren’t being issued. The phone lines are not open.

As for us here at Holbrook & Manter…. like most accountants right now would likely tell you… we wish the circumstances were different heading into tax season. The passage of the Tax Cuts and Jobs Act (TCJA) already presented many changes for tax preparation, and the shutdown certainly complicates things a bit.  However, we are up for the challenge and our commitment to client service will keep us focused on navigating this situation.

The IRS usually announces the opening of tax season around this time each year. The announcement is our cue to begin filing returns electronically. The announcement is the official “let the games begin” for all taxpayers. Due to the shutdown, that announcement has yet to be made.

While we await word, it will be as close to business as usual here at Holbrook & Manter. The shutdown could cause some delays during tax season, but it won’t take the need to be timely out of play.  The TCJA presents major overhauls to the tax code and we won’t be taking our eye off the prize, which is keeping our clients compliant.  We will still be preparing returns for our clients during the shutdown.

Should the shutdown drag on far into the filing season, taxpayers need to be aware that refunds will be delayed because they won’t be processed and issued until operations resume. This is likely not the year you can be certain of a timeframe for your refund to arrive. Planning to spend your refund dollars at a specific time is not advisable this year.

We are still holding tax planning meetings with our valued clients, we are still accepting new tax clients, we are still armed with a talented team that is aware of tax reform…. they will make this unconventional tax season a seamless one for those we work with.

We are monitoring the situation with the shutdown closely and will keep you informed. If you have any questions at all, please reach out to us.

H&M Team Donates Holiday Toys to Nationwide Children’s Hospital

Our commitment to helping those receiving care at Nationwide Children’s Hospital continues on with a donation of toys just in time for the holidays. H&M team members have been collecting toys since just after Thanksgiving.

The boxes you see in the pictures below were filled with many fun items. Coloring books and card games… legos and hot wheels… puzzles and board games. We didn’t forget about the littlest patients, as light up toys, teethers and rattles rounded out our annual toy donation.

H&M’s Jennie Schott and Molly Pensyl hand delivered the toys on behalf of the entire H&M team. The hospital does an amazing job of making the donation process an easy one, complete with a designated donation drop off point and and friendly people to greet and thank you.

It was our pleasure to donate all of these fun items!  It is our hope that they brighten up the holiday season for the kiddos and families at Nationwide Children’s Hospital.

 

 

 

 

Things to know about TCJA and personal exemptions

The Tax Cuts and Jobs Act (TCJA) made many changes to tax breaks for individuals. Let’s look at some specific areas to review as you lay the groundwork for filing your 2018 return.

Personal exemptions

For 2018 through 2025, the TCJA suspends personal exemptions. This will substantially increase taxable income for large families. However, enhancements to the standard deduction and child credit, combined with lower tax rates, might mitigate this increase.

Standard deduction

Taxpayers can choose to itemize certain deductions on Schedule A or take the standard deduction based on their filing status instead. Itemizing deductions when the total will be larger than the standard deduction saves tax, but it makes filing more complicated.

The TCJA nearly doubles the standard deduction for 2018 to $12,000 for singles and separate filers, $18,000 for heads of households, and $24,000 for joint filers. (These amounts will be adjusted for inflation for 2019 through 2025.)

For some taxpayers, the increased standard deduction could compensate for the elimination of the exemptions, and perhaps even provide some additional tax savings. But for those with many dependents or who itemize deductions, these changes might result in a higher tax bill — depending in part on the extent to which they can benefit from enhancements to the child credit.

Child credit

Credits can be more powerful than exemptions and deductions because they reduce taxes dollar-for-dollar, rather than just reducing the amount of income subject to tax. For 2018 through 2025, the TCJA doubles the child credit to $2,000 per child under age 17.

The new law also makes the child credit available to more families than in the past. For 2018 through 2025, the credit doesn’t begin to phase out until adjusted gross income exceeds $400,000 for joint filers or $200,000 for all other filers, compared with the 2017 phaseout thresholds of $110,000 for joint filers, $75,000 for singles and heads of households, and $55,000 for marrieds filing separately. The TCJA also includes, for 2018 through 2025, a $500 tax credit for qualifying dependents other than qualifying children.

Assessing the impact

Many factors will influence the impact of the TCJA on your tax liability for 2018 and beyond. For help assessing the impact on your situation, contact us Holbrook & Manter. 

It’s the Most Wonderful Time of the Year?

By: Linda Yutzy, Administrative Assistant

December is here and most of our thoughts are turned to the holidays, celebrations, and family.  We often refer to this as the “most wonderful time of the year.”  There is even a song with those words in the title!  But what we tend to overlook is that after December comes January.  And, January means that we will begin receiving envelopes with “Important Tax Documents Enclosed” written on them. Those important tax documents may include 1099 forms, broker statements, and W-2s – all documents that we need to prepare the dreaded tax returns. 

While December is a time for holiday celebrations, it is also a key time for tax planning.  The Tax Cuts and Jobs Act made major changes in the tax rules for both individuals and businesses.  Now is a great time to contact your accountant to discuss those changes and how they could impact your tax filings for 2018.  It is good to be proactive in tax planning and we will happily assist you with it.

The Tax Cuts and Jobs Act may change your business and personal tax filings, but the requirements for issuing 1099 forms did not change.  Businesses, and individuals who file a Schedule C, Schedule E, or Schedule F, are required to prepare Form 1099 for any individual or non-incorporated business that meet certain requirements.  The 1099-MISC reports miscellaneous income that falls into different categories. 

Below is a partial list of some of the 1099 types and what the requirements are for issuing them.  Please be aware that this is not an all-inclusive list.  There are many types of 1099 forms. 

FORM 1099-DIV:-

In general, a Form 1099-DIV is required for each person to whom you have paid $10 or more in dividends.

FORM 1099-INT:-

A Form 1099-INT must be filed for each person to whom you have paid $10 or more of interest in the course of your trade or business.

FORM 1099-MISC:-

Form 1099-MISC must be filed to report royalties, rents, prizes and awards, non-employee compensation, and payments to medical assistance programs.  Form 1099-MISC is used to report payments made only in the course of a trade or business.  Payments are required to be reported only if the payments for the year are $600 or more, except for royalties, which require reporting if payments aggregate $10 or more.  Only payments to individuals and non-incorporated businesses are to be reported with the exception of medical and health care payments.  Payments for medical and health care made to individuals, unincorporated businesses, and incorporated businesses must be reported.  Attorney’s fees paid in the course of trade or business must also be reported.

FORM 1099-R:-

File Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA’s, Insurance Contracts, etc., for each person to whom you have made a designated distribution of $10 or more from profit-sharing or retirement plans, any IRAs, annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc.

FORM 1099-S:-

Form 1099-S is used for most real estate sales.  Reporting requirements include sales and exchanges of commercial, industrial and multi-unit residential structures and unimproved land.

Forms must be received by the recipient of the payments by January 31 and must be filed with the IRS by January 31.  Penalties for late filing and intentional disregard can range from $50 per return up to $530 per return.  Multiplied by the number of returns to be filed, the penalty can be severe. 

Take time in December to begin compiling all the information necessary to prepare any 1099 forms required.  It is a good practice to have W-9 forms filled out by those persons to whom you will need to issue 1099s.  Keeping up-to-date and complete records is critical in being able to timely file these information returns. 

If you need any assistance with 1099 forms and filings, please contact our office.  We are happy to assist!

Ways to Prevent Elder Financial Abuse

As tax season approaches, the efforts of scam artists looking to steal people’s financial data and money are on the rise. Such fraudulent activities often target older adults. Whether you’re in this age bracket or worry about senior parents and other relatives, here are some ways to prevent elder financial abuse:

1. Keep both paper and online financial documents in a secure place. Monitor accounts and retain statements.

2. Exercise caution when making financial decisions. If someone exerts pressure or promises unreasonably high or guaranteed returns, walk away.

3.Write checks only to legitimate financial institutions, rather than to a person.

4. Be alert for phony phone calls. The IRS doesn’t collect money this way. Another scam involves someone pretending to be a grandchild who’s in trouble and needs money. Don’t provide confidential information or send money until you can verify the caller’s identity.

5. Beware of emails requesting personal data — even if they appear to be from a real financial institution. After all, shouldn’t your banker or financial professional already know these things? Ignore contact information provided in the email. Instead, contact the financial institution through a known telephone number.

6. As much as possible, maintain a social network. Criminals target isolated people because often they’re less aware of scams and lack trusted confidants.

7. Work only with qualified professionals, including accountants, bankers and attorneys.

Contact Holbrook & Manter today to protect yourself or an elder loved one from elder financial abuse. 

Not-for-Profit Board Fiduciary Responsibilities

By: Shannon Robinson, CPA- Senior Accountant

You’re on a non-for-profit board and one of your responsibilities is fiduciary responsibility.  What does that mean?  Fiduciary responsibility is the obligation to act in the best interest of another party.  Your responsibility is to protect the property, financial assets, and reputation of the organization.  Along with this you should be able to read and understand financial statements.  So, what if you do not have a financial background?  It is important that the accounting department is providing proper information to the board and its members.  This information needs to be accurate, timely, and decision-useful.  The full board should receive summary reports that include narrative notes prepared by the director or the accounting department that describes any significant changes or unusual balances. The finance committee and other various committees may need more detailed reports to analyze certain areas of the organization. 

Here are some reports you should be looking at, what you should be able to learn from the reports, and some of the questions you should be asking in-regards-to the information provided.

The first repot you should be looking at is the Statement of Financial Position / Balance Sheet.  This report shows the overall financial position of the organization at a given moment in time.  It reflects the accumulated results of the organization since the beginning of its time.  The first section of the report shows the assets of the organization.  This includes what the organization has, what is owed to the organization, and what is invested by the organization.  Some examples included cash, inventory, fixed assets, long term investments, grants promised but not yet received, and loans made to others.  These should be listed in order of declining liquidity or which ones can be converted to cash the quickest. When looking at this report you should be able to see if the organization has enough cash to pay its bills, if the organization is collecting what is owed to them, whether the organization has too much inventory on hand, or if the organization needs to upgrade their equipment. The second section of this report shows the liabilities of the organization.  Liabilities are what the organization owes to others such as vendors accounts payable, payroll liabilities, accrued expenses, and short and long-term loans.  These are reflected in order of their maturity.  Which is due first? Short-term are those items due within one year.  When looking at liabilities, you should be asking, are vendors being paid timely, do we have enough cash to pay our bills, are we meeting our tax liabilities in a timely manner, are we strategically using our line of credit and do we have the means to repay it, and how much has the organization borrowed and is there a plan for repayment.  The third and final part of the statement of financial position is the net assets section.  Net assets reflect the net worth of the organization.

The second report you should be looking at is the statement of activities.  This statement shows the organization’s income and expenses for a specific period-of-time.  This report should show some comparisons for you to look at.  It should include a column showing the prior year balances and it should have a column showing what was budgeted for the year.  It is important to have the line items in the accounting software match the line items in the budget for proper comparison.  This way you can see if the organization is on track compared to the prior year and compared to the current year budgeted amounts.  Expenses should be shown by major program activity, management, and fundraising.  This will show you how the organization spends its resources toward accomplishing its mission activities.

Hopefully after reading this you will have a better understanding of what reports you should be looking at and what information each of those provides for you to look at.  If your organization is not providing these reports with the information mentioned above it is your fiduciary responsibility to ask to see them on a regular basis.  A board cannot make good financial decisions without accurate, timely, and decision-useful reports. Contact Holbrook & Manter today for more information on this topic.

H&M Team Members Volunteer at Ronald McDonald House

Holbrook & Manter believes in giving back to the community. We encourage our team members to support causes that are near and dear to them. Nationwide Children’s Hospital continues to be a place that our firm supports in many ways and recently our team extended the efforts to just across the street at the Ronald McDonald House. Many of our team members hold this cause near and dear to their heart… some have stayed at a Ronald McDonald House before, others know someone who has. All of us believe in their mission.

Here is how RMHC explains who they are and what they do on their website:

For more than three decades, Ronald McDonald House Charities of Central Ohio (RMHC) has been keeping families close at the Columbus Ronald McDonald House. From its beginnings as a grassroots movement established by a partnership between volunteers and local McDonald’s Owner/Operators, the charity has served thousands of families in their deepest times of need.

The reality of having a child sick and in the hospital can be incredibly overwhelming to parents and siblings. What the Ronald McDonald House is able to provide these families is a bit of stability in the midst of unthinkable circumstances. When a child is hospitalized, the comfort of having family nearby is beyond measure. It is this heartfelt purpose that both drives and defines RMHC of Central Ohio.

The staff at the RMHC could not have been more welcoming and gracious as some of our team members arrived to prepare a meal for those utilizing their amazing services. We were greeted by Chef Blair, who was wonderful to work with and passionate about the food she prepares for those at RMHC. On the menu was a pasta bar. We rolled up our sleeves and prepared all that was needed for a healthy meal…. from chicken to pasta… from veggies to fruit. All the major food groups covered and all of it was prepared with love.

Once the meal was ready to be served, our team members greeted some of the families at RMHC and helped them make their food selections. It was our pleasure to meet those staying at RMHC. Our evening on-site ended with a tour of the beautiful facility that so many call home while they must be away from home.

Thank you to RMHC for having us. We plan to return often to continue to fill more bellies, and our souls. Enjoy these snapshots from our experience. To learn more about RMHC, please visit their website: http://rmhc-centralohio.org/

 

 

How to Trim the Fat from your Inventory

Inventory is expensive, so it needs to be as lean as possible. Here are some ways to trim the fat from your inventory without compromising revenue and customer service.

Objective inventory counts

Effective inventory management starts with a physical inventory count. Accuracy is essential to knowing your cost of goods sold — and to identifying and remedying discrepancies between your physical count and perpetual inventory records. A CPA can introduce an element of objectivity to the counting process and help minimize errors.

The next step is to compare your inventory costs to those of other companies in your industry. Trade associations often publish benchmarks for:

  •  Gross margin ([revenue – cost of sales] / revenue),
  •  Net profit margin (net income / revenue), and
  •  Days in inventory (annual revenue / average inventory × 365 days).

Your company should strive to meet — or beat — industry standards. For a retailer or wholesaler, inventory is simply purchased from the manufacturer. But the inventory account is more complicated for manufacturers and construction firms. It’s a function of raw materials, labor and overhead costs.

The composition of your company’s cost of goods will guide you on where to cut. In a tight labor market, it’s hard to reduce labor costs. But it may be possible to renegotiate prices with suppliers.

And don’t forget the carrying costs of inventory, such as storage, insurance, obsolescence and pilferage. You can also improve margins by negotiating a net lease for your warehouse, installing antitheft devices or opting for less expensive insurance coverage.

Product mix

To cut your days-in-inventory ratio, compute product-by-product margins. Stock more products with high margins and high demand — and less of everything else. Whenever possible, return excessive supplies of slow-moving materials or products to your suppliers.

Product mix should be sufficiently broad and in tune with consumer needs. Before cutting back on inventory, you might need to negotiate speedier delivery from suppliers or give suppliers access to your perpetual inventory system. These precautionary measures can help prevent lost sales due to lean inventory.

Often management is so focused on sales, HR issues and product innovation that they lose control over inventory. That is where we come in. Contact Holbrook & Manter today for assistance.