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5 Steps to the Successful Multi-Office Business

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accounting in auburndale fl - Lynco TaxYour company is expanding — and that’s great! You’ve grown from one office to two, three, or even more. But you need to be able to manage all of them to continue to grow. Click through for some help in multi-office management.

Each new office seems deserving of all your time, but there are still your existing offices, whose need for attention hasn’t diminished. Building, disseminating and maintaining a cohesive business strategy across multiple sites is a challenge, but you need to get it right to continue to be successful.

Step one: Information needs to be shared.

This means that no one is behind on information, and you create a sense of community. Technology makes this happen because it allows immediate, widespread communication. You must ensure that there is one main method of digital communication — inconsistently used initiatives quickly become difficult to manage effectively. Use the one tool that works well and commit to communicating relatively frequently through it. You may want to send a brief weekly email newsletter to all staff. The tricky part is working across time zones, so if possible, send official communications when all offices are open.

Step two: Your leadership team is your greatest asset.

Employing an excellent senior management team to undertake communication on the company’s behalf is as important as digital communications. Have a senior management team member assist in running the firm, coordinating each office to provide local leadership. It’s wise to have a strong chain of command and a team that integrates as much as possible with each other to keep everyone informed about work across the company. Strong departmental management complements the businesswide strategic vision.

Step three: Timing is everything.

It’s essential to maintain a top-level presence across all offices and to be a recognizable face to all employees. If your company is based in one region, try to visit each office every month. If your firm is spread across the country, visit every two or three months. Time your visits within a week of each other and give a little more attention in your weekly email newsletter to any office that hasn’t been visited in a timely manner.

It makes sense to prioritize visits according to the size of the office, while maintaining a high level of inclusion in digital communications to show staff that they are highly valued.

Step four: Integrate wherever possible.

Encourage cross-office collaboration to develop a wider understanding of the business as a whole. It’s healthy to work with a number of different people and conducive to caring about the business beyond each office’s four walls. One means of doing this is to give staff opportunities to shape the company’s image, such as by participating in brand workshops or to be personally involved in company improvements.

Step five: Don’t be afraid to try something new.

Always try new things and commit to change. What suits one business may not suit another. Be prepared to innovate to find what works for you. That’s why building a personal relationship with as many employees as possible works — you’re giving people a chance to mix with others they would never normally work with.

Don’t forget the value of old-fashioned face time among and across teams. By encouraging this, you will contribute to successful integration and a corporate culture across geographies. Local offices need to be held accountable for quality control, scheduling and improving systems, and such efficiencies may work companywide.

All of this can seem like a lot of hard work, but splitting time between offices and building a system of shared information is crucial to the overall success of multi-office businesses. By trying to achieve equilibrium, you create a happy workforce that delivers the best results.

Contact us today by calling (863) 295-9895 or request your free consultation online now. As a thank you for completing a tax consultation, we’ll provide a free tax planning book, The Tax Detective: Uncovering the Mystery of Small Business Tax Planning.

Seriously? Sweat Equity is Not Deductible?

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accountant in auburndale flThe labors of love you pour into your business may have a fair market value on the street, but how do you accurately translate your net worth?

Is it $100 an hour or does it range in the thousands? For the CEOs of some publically traded companies that number is often tens of thousands an hour.

But you won’t be able to calculate the value of your efforts until you have been paid.

What About Charity Donation?

Okay, we know, you’re worth every penny, but when you donate time to charity or you’re looking to deduct the cost of your time spent, it can cause confusion at tax time. For entrepreneurs who assume their sweat equity is deductable this can result in shock and disappointment.

The Startup Phase

Starting a new business is an exciting time for an entrepreneur. Ideas are taking shape and heart-held dreams are becoming tangible realities. But unless they’re backed by a substantial nest egg or loan, most businesses need time to produce enough cash flow to compensate the owner for development time.

Many business owners spend hours establishing their businesses before they even open the front door (virtual or otherwise). Ensuring their company’s viability doesn’t often happen overnight. Market testing and calculating pricing take time.

What’s the legal answer to this question?

Well, perhaps it can be found in a recently decided court case. The issue? Whether or not a taxpayer can deduct the value of sweat equity, i.e. services for which he/she is unpaid.

In short, a sole proprietorship reported a loss in his business providing services at no charge. The amount was substantial: $29,500. The taxpayer used this loss as a deduction against his income of $234,000 earned that year (2014). While he had not spent any actual money out of pocket, he argued that research was needed to succeed in his business; yes, sweat equity.

The court ruled against the taxpayer in this case because in order to take a deduction, one must pay or otherwise incur an expense to be eligible to deduct it. The labor itself is not within the meaning of Code Section 162.

Donating Time to Charity

What about taxpayers or business owners who donate their time to a charitable cause? We’ve already determined their time has value. Certainly, the court must allow for this type of deduction, right?

Well, no, not this one. Donations of services are not deductible charitable contributions. However, if business owners or taxpayers donate the value of their work in cash so the organization can hire someone else to do the work, it then becomes a tax-deductible donation.

Donated labor is not deductible even to nonprofits because in the normal earning cycle of a business, the net value of the services donated is zero.

For example, consider service on a nonprofit board. If you charge for the work, you would earn according to your pay scale. However, in donating your services you are not paid.

Now, there’s a way around it.

If the organization pays you for your service and you then donate it, you would be reporting it as income. You would owe and pay taxes on the money earned and then be able to deduct your cash donation. By not receiving the income, you avoid reporting the fees in additional revenue for the year, and you’ll also forego the charitable deduction. Either way, the result is the same.

While your personal valuation of sweat equity you put into your business may result in Fortune 500 positioning, it won’t help you reduce your tax bill.

Contact us today by calling (863) 295-9895 or request your free consultation online now. As a thank you for completing a tax consultation, we’ll provide a free tax planning book, The Tax Detective: Uncovering the Mystery of Small Business Tax Planning.

Auburndale Tax Strategist Earns Certified Tax Planner™ Designation

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Auburndale, FL – Lynn A. Schmidt, EA, ARA, CTP, announced today that she is now a member of an elite group of professionals who has completed the American Institute for Certified Tax Planners’ training program, leading to the designation of Certified Tax Planner™.

“Taxpayers who really want to beat the IRS can’t wait for their accountant to work magic with a stack of receipts on April 15th,” says Schmidt “They need a plan for taking advantage of every deduction, credit, loophole, and strategy allowed.” This year alone I’ve been able to save business professionals between $5,262 and $462,812 in taxes….and that is for just one year!

“Traditional tax preparers focus on putting the right numbers in the right boxes, on the right forms,” says Dominique Molina, a San Diego-based CPA and Director of the American Institute of Certified Tax Planners. Schmidt says “Our program is different. We don’t just help our clients record history, we help them write it – with a complete menu of advanced tax planning concepts and strategies.” Schmidt goes on to say “good tax planning does not just happen by accident.”

The Certified Tax Planner™ program focuses on court-tested, IRS-approved strategies for minimizing Alternative Minimum Tax, maximizing deductions from real estate and passive activities, maximizing retirement savings, and similarly powerful strategies. As taxes rise to cover increased government spending, this sort of proactive planning will become even more important in the future.

To earn the designation, Schmidt completed an initial intense training program followed by ongoing, hands-on training, as well as, working through and strategizing on numerous tax plans. She has also agreed to abide by the AICTP Code of Ethics and complete 24 hours of tax planning continuing education each year. This specialized education is in addition to numerous hours of continuing professional education she completes each year in the areas of Tax, Retirement Planning, Senior Issues, and financial services strategizing and training.

Schmidt is also an Enrolled Agent, a federally licensed tax professional who has demonstrated technical competence in tax law, and is an Accredited Retirement Advisor (ARA). Enrolled Agents are the only taxpayer representatives licensed to practice by the United States Government. Most people think that tax season ends with April 15th. Schmidt contends that April 16th is actually the beginning of a “New Year” for tax planning and adding the Certified Tax Planner designation to her Enrolled Agent and Certified Tax Coach designations strengthens the tax planning skills that Schmidt has at her disposal to empower her clients to pay the “lowest, legal tax possible.”

Visit our Certified Tax Coach website at www.taxplannerfl.com today for more information.

LYNN SCHMIDT ATTENDS CONNECT2019TM, HD VEST’S LEADING NATIONAL INDUSTRY CONFERENCE FOR INDEPENDENT FINANCIAL ADVISORS

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Conference Brings Together Advisors, Industry Experts and Financial Service Providers to Share Best Practices and Latest Concepts in Client Wealth Management Solutions

AUBURNDALE, Fla. – June 25, 2019 – Lynn A. Schmidt attended CONNECT2019— HD Vest Investment Service’s® annual national conference. The independent broker-dealer hosted more than 1,000 Advisors, exhibitors, and other partners for the June conference in Seattle, where HD Vest’s unique focus on integrating other services into wealth management was the highlight.

CONNECT2019 gave Advisors a one-of-a-kind opportunity to network with industry thought leaders, participate in educational workshops, and attend breakout sessions to discuss how to elevate their clients’ experience.

“It was an honor to attend CONNECT2019. The conference was an invaluable resource for networking with peers and interacting directly with HD Vest executives and industry experts. We shared best practices about investment advice, and discussed different ways to grow our individual businesses,” said Lynn Schmidt.

“Our industry is constantly changing, and the ways in which our Advisors grow their businesses are just as dynamic,” said Enrique Vasquez, President of HD Vest. “We are excited to support our Advisors with the tools and services needed to provide their clients with the best advice as they expand and grow their business.”

About HD Vest Financial Services®
Since its inception in 1983, HD Vest Financial Services® has supported an independent network of tax and non-tax professionals who provide comprehensive financial services including securities, insurance, money management services, and banking solutions. Ranked as one of the top 15 independent broker-dealer firms,1 we have over 3,500 independent contractors, who manage over $45 billion in assets for individuals, families and small businesses in all 50 states.2

1Think Advisor 2019 Broker-Dealer Reference Guide, which measured/ranked the top 25 independent broker-dealers by annual revenue.
2As of June 5, 2019

HD Vest Financial Services® is the holding company for the group of companies providing financial services under the HD Vest name. Securities offered through HD Vest Investment Services®, Member FINRA/SIPC, Advisory services offered through HD Vest Advisory Services®, Insurance services offered through HD Vest Insurance Agency LLC, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, (972) 870-6000.

Crowdfunding — Exploring the Tax Implications

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Lynco CrowdfundingCrowdfunding — or funding a project through the online contributions of many different backers — is becoming increasingly popular. If you are considering raising crowdfunding revenue or contributing to a crowdfunding campaign, you will need to address the many tax issues that can arise.

Background

While crowdfunding was initially used by artists and others to raise money for projects that were unlikely to turn a profit, others have begun to see crowdfunding as an alternative to venture capital. Depending on the project, those who contribute may receive nothing of value, a reward of nominal value (such as a T-shirt or tickets to an event), or perhaps even an ownership/equity interest in the enterprise.

Is It Income?

In an “information letter” released in 2016,1 the IRS stated that crowdfunding revenues will generally be treated as income unless they are:

  • Loans that must be repaid
  • Capital contributed to an entity in exchange for an equity interest in the entity
  • Gifts made out of detached generosity without any “quid pro quo”

The IRS noted that the facts and circumstances of each case will determine how the revenue is to be characterized and added that “crowdfunding revenues must generally be included in income to the extent they are for services rendered or are gains from the sale of property.”

Frequently, the IRS learns of the activity because crowdfunding entrepreneurs have used a third-party payment network to process the contributions. Where transactions during the year exceed a specific threshold — gross payments in excess of $20,000 and more than 200 transactions — that third party is required to send Form 1099-K (Payment Card and Third-Party Network Transactions) to the recipient and the IRS. Payments that do not meet the threshold are still potentially taxable.

If It’s Income

“Ordinary and necessary” business expenses are generally tax deductible, but deductions for expenses are limited if the IRS deems the activity a hobby rather than a trade or business. Generally, the IRS applies a “facts and circumstances” test to determine if you have a profit-making motive, which is necessary for a trade or business.

New Businesses

Favorable deduction rules may be available for certain types of expenses incurred in starting a new business. If eligible, the business may elect to expense up to $5,000 of those costs (subject to phaseout) in the year the business becomes active, with the remainder of the start-up expenditures deducted ratably over a 180-month period.

For Contributors

Campaign contributors should not assume that their gifts qualify as tax-deductible charitable contributions. Tax-deductible contributions must meet certain requirements, including that they be made to a qualified charitable organization. If gifts are made to an individual or nonqualified organization, you will generally need to file a gift tax return for gifts to any one recipient that exceed the gift tax annual exclusion ($15,000 for 2018).

These are just some of the potential tax issues that may arise. Give us a call today to schedule a free consultation at (863) 295-9895. As a thank you for completing your tax consultation, we’ll give you a free book, The Tax Detective: Uncovering the Mystery of Small Business Tax Planning.

Source/Disclaimer:

1Information Letter 2016-0036

Are You Facing a Large Capital Gain? Avoid it With a New Tax Break

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Lynco Financial & Tax Services Certified Tax CoachAre you concerned about being stuck with large capital gain in 2018? What if there was a way to avoid it this year? How about for the next 10 years?

If you’re facing beefy tax payments because of capital gains, a new tax break may be worth exploring. The program is part of the Tax Cuts and Jobs Act. It’s called the Opportunity Zone Tax Incentive, and along with saving you money, it’s true purpose is to promote investors to push money into low-income areas to increase their value.

Where Are These Opportunity Zones Located?

An Opportunity Zone is a community nominated by the state and certified by the Treasury Department as qualifying for this special program. Approximately 8,700 Opportunity Zones qualify nationwide. All 50 states have certified zones that qualify, as do Washington DC and US territories.

How Does The Program Work?

Taxpayers who wish to take advantage of this program because they are facing large capital gain after the sale or exchange of appreciated property have a limited amount of time in which to take action. They have 180 days from the date of the sale or exchange to invest into a Qualified Opportunity Zone Fund. The fund is a vehicle organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property.

What happens to the return of principal? Taxpayers may reinvest it along with recognized capital gain. Only the portion attributable to the capital gain will be eligible for the tax exemption on further appreciation of the Opportunity Zone Investment.

Is the Opportunity Zone Fund Similar to Other Investments?

Just as in other investments, the value of an Opportunity Zone Fund investment may increase or decrease over the holding period. The investor may pay income on this investment. Keeping in mind that the purpose of the program is to improve designated low-income areas, the fund is expected to continue investing in the improvement of the property.

What About Cash Flow?

Once the property improvements are complete, the property may be leased or sold to third parties. At this time, cash flow may occur.

Are There Any Risks?

Investing in The Opportunity Zone Tax Incentive may or may not have risks associated. It’s new, and the IRS and Treasury Department are still gathering information on how the fund will work over time. Because of this, the level of risk is difficult to assess. However certain potential risks have been identified.

Among other things, risks may include market loss, liquidity risk, and business risk. Before you make any plans, note that investment in the new tax incentive may or may not be appropriate in your case. It’s best to consult with a tax professional to determine if it’s a fit for you. Contact one of our tax advisors for information.

Contact us today by calling (863) 295-9895 or request your free consultation online now. As a thank you for completing a tax consultation, we’ll provide a free tax planning book, The Tax Detective: Uncovering the Mystery of Small Business Tax Planning.