May 31, 2017

Jim Huber Honored For Contributions to Gene Slay’s Girls & Boys Club

Anders partner James D. Huber, CPA was the first recipient of Gene Slay’s Girls & Boys Club of St. Louis’ Annual Pillar of Our Community Award at the annual Golf Classic on May 30th. Jim is an avid supporter of Gene Slay’s Girls & Boys Club, and since 1999, Anders employees have participated in the Golf Classic, which has raised over $9 million for local children in the St. Louis metro area.

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May 30, 2017

Utilizing Personal Goodwill for Tax Savings When Buying or Selling a Business

When selling a business, the buyer and seller are often at odds on determining the structure of a transaction for the best tax advantage. The buyer will generally prefer an asset sale, while the seller usually prefers a stock sale, because closely held C corporations and certain S corporations will incur double-taxation to the seller when the corporation is sold as an asset sale. To avoid double-taxation, consider an alternative option: purchasing the “personal goodwill” of the seller.

Purchasing the Personal Goodwill of the Seller

A strategy that should be considered by the two parties is separately purchasing the personal goodwill of the selling shareholder. Personal goodwill exists when the owner’s reputation, expertise, skills, knowledge, and customer relationships are large contributors to the business’s value and ongoing success. Personal goodwill also exists when there is a possible likelihood that customers may follow the owner rather than the company when the business is sold.

Personal Goodwill Escapes Double Taxation

The portion of the total sale amount determined to be personal goodwill will escape double taxation, as it an asset purchased in a separate agreement directly from the shareholder. The sale of the personal goodwill will be taxed once at the shareholder level using the capital gains rate. The remainder of the sale price is allocated to assets purchased from the business entity. Gain on the assets purchased from the business entity will cause taxation at the C corporation level; then is taxed again at the shareholder level upon the distribution of proceeds or liquidation of the entity.

Calculating Personal Goodwill

Determining the percentage of the sale price allocated to the shareholder’s personal goodwill requires advanced planning and should be well-documented. It is advisable to contact a tax advisor to work with an experienced and credentialed business appraiser to determine the value of the personal goodwill.

The use of personal goodwill is one of many strategies that should be addressed by business owners well in advance of transitioning their business. Find out more about Anders Business Transition Planning Services  or contact an Anders advisor to discuss personal goodwill and other ongoing educational opportunities for business owners.

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May 24, 2017

Determining MIPS Eligibility with the CMS Look-up Tool

Clinicians have been waiting to find out if they are eligible for the new Merit-Based Incentive Payment System (MIPS), and after continued delays, CMS is providing answers. CMS recently mailed letters to Medicare participants based on Tax Identification Number (TIN). The letter will identify clinicians based on their National Provider Identifier (NPI) linked to the TIN and if the clinician individually or the group TIN is exempt or included in MIPS. Letters are mailed to the TIN address on file with Medicare.

If You Have Not Received a Letter

For those who have not received a letter, a look-up tool is available from CMS, searching by individual provider’s NPI.  The look-up tool, similar to the letter, will note if Medicare has an individual linked to more than one organization TIN and the reporting requirement under each provider’s unique NPI/TIN combination. The look-up tool can be especially helpful to practice administrators or clinicians who did not personally view the letter mailed because it was received by administrative leaders or a corporate office.

Determining Eligibility

Keep in mind eligibility determination is based on a first review of Medicare’s claims records from its fiscal year closed August 31, 2016.  Below are reasons why a clinician may be deemed exempt from the 2017 transition year for MIPS:

  • First year for Medicare enrollment
  • Meeting the low-volume threshold
  • Qualified Participant in an Advanced APM

Clinicians with a notice of exemption from MIPS in 2017 will be exempt based on Medicare’s initial determination. A second review of claims data will occur for dates September 1, 2016 through August 31, 2017. Clinicians included in MIPS by the first determination period may be exempt in December 2017 if exclusions were met upon the second claims review.

Acronym legend
APM: Alternative Payment Model

CMS: Centers for Medicare and Medicaid Services
QPP: Quality Payment Program
MACRA: Medicare Access and CHIP Reauthorization Act of 2015
MIPS: Merit-based Incentive Payment System
NPI: National Provider Identifier
TIN: Tax Identification Number

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May 24, 2017

House Votes to Repeal Obamacare

The U.S. House of Representatives recently voted 216 to 211 to pass a bill to repeal and replace the Patient Protection and Affordable Care Act (ACA), also known as Obamacare.  As you might suspect, the votes predominantly followed party affiliations.  The new American Health Care Act (AHCA) bill previously received the backing of the House Freedom Caucus on April 26th, which opposed the previous version of this bill.  Although the Congressional Budget Office (CBO) has not separately scored this version of the bill, it has stated that the bill would leave the same number of individuals without insurance as the original bill – 24 million individuals.

Some of the highlights of this bill include:

  1. Eliminate the individual mandate
  2. Medicaid expansion is rescinded and replaced with block grants
  3. The amount insurers may charge an individual based on their age for insurance has increased from 3:1 to 5:1
  4. Various taxes are eliminated including excise taxes, medical device taxes, etc.

The next step in the process is the U.S. Senate will consider the AHCA House bill.  At this point, several organizations oppose this bill and it is not expected to pass the Senate vote, but we will provide updates. Contact the Anders Health Care Group with questions on how the proposed bill could affect your organization.

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May 23, 2017

Tips for Managing Your Parents, Kids and Sanity in the Sandwich Generation

Middle-aged adults “sandwiched” between aging parents and kids are often referred to as the “sandwich generation”. Adults who are part of the sandwich generation have a living parent age 65 or older and are raising a child under age 18 or supporting a grown child. They’re pulled in many directions, providing financial and emotional support to their parents and children.

Why is the sandwich generation a new concept? With advanced health care and nutrition, our life expectancies are changing. Many people now live well into their 80s and 90s.Women are waiting until they are older and more settled before having children. These factors mean that many adults are now saddled with taking care of two generations in addition to themselves.

If you are responsible for aging parents as well as your own children, read the tips below to help you take control and restore order.

  • Consider alternatives to having your parents move in with you. If possible, hire caregivers to help shift some of the responsibility
  • Seek help from others. Don’t be afraid to ask other family members/siblings to chip in.  Communicate with siblings and other family members to let them know what is going on with your parents
  • Make a list of things you need assistance with and communicate that information so others know how to help
  • Talk to your employer about your caregiving responsibilities. Your employer may provide more flexibility if they know what is going on
  • Put your retirement first. Your kids can borrow for college, but you can’t borrow for retirement
  • Don’t dip into your retirement savings. Taking money out of retirement accounts could come with a stiff 10% IRS penalty if you are under 59 ½
  • Consider a bill-paying service to ensure bills are paid automatically and on time so payments are never missed

Having an aging parent while still raising or supporting one’s own child presents a different set of challenges and new family dynamics not faced by other adults. Anders can help you develop and implement a plan to help ease your family’s burdens. Contact an Anders advisor to learn more.

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May 16, 2017

The Business Transition Planning Process: Transitioning to the Next Phase of Life

Developing an identity outside of the business and finding new passions are areas that business owners don’t usually consider before transitioning. After putting a plan in place to maximize the value of the business and prepare personal finances, owners need to figure out how they plan to transition to life after retirement.

Developing a New Identity

Many business owners have identified their life through work. They introduce themselves as a business owner rather than a husband, wife or parent. Taking away the most identifiable association is an emotional step, so it’s important to have a plan in place before retirement. The plan should be discussed with a spouse and other family members to gain their support and help with the transition. Knowing that expectations of retirement may include more traveling, moving or decreased spending will also help determine retirement financial needs.

Finding New Passions

Creating a plan for the third act of life is not an easy task. Work takes up a large amount of time each day, and retirement can be a difficult adjustment to make if there is no plan for all the free time one may suddenly have. After the initial retirement excitement has passed, many people struggle to find a way to keep busy. Creating a plan around passions will lead to a happy retirement. Many people enjoy golfing, hiking, or other activities that also have a social component. There is no longer the excuse of being too busy, so this is a great opportunity to establish new healthy habits. Business owners are used to being constantly busy, so establishing a daily routine before retirement will help ease the transition.

Business transition planning is not a one-time event – it’s an entire process which takes place over several months or years. Creating a master plan that focuses on each category of the business owner’s life is the key. Learn more about Anders Business Transition Planning, or contact an Anders advisor to discuss how to develop your succession plan.

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May 12, 2017

Business Transition Planning Cheat Sheet

What is Business Transition Planning?

Business owners invest their time, energy and resources into building their business into a successful enterprise. Yet, many owners find themselves not knowing how to carry out exiting their business while maximizing the value. In most cases, the value of the business is the largest asset on their personal balance sheet, and it is not a liquid asset.

Business transition planning is a business strategy. It is all about creating, harvesting, and preserving the value of the business during a successful transition. A successful business transition planning strategy will focus on three goals:

  • Maximize the value of the business
  • Ensure the business owner is personally and financially prepared for the transition
  • Make certain the owner has planned for the next chapter of their life

Benefits of Business Transition Planning

Business transition planning is an ongoing process that should be prepared for long before transitioning your business. The benefits of having a successful business transition plan are continuous. Business transition planning can help:

  • Control how and when to transition your business
  • Minimize the taxes to put more money in your pocket
  • Place strategic options to choose from during any life event
  • Maximize value during good and bad economic times
  • Create peace of mind knowing your future is secure

A successful business transition strategy can increase annual income and the value of the enterprise. It pushes the team to be the best-in-class business and will serve the owner as a contingency plan. Non-solicited offers do happen, so it is important to have you and your business ready to maximize value.

Business Transition Planning Process

Business transition planning allows the business owner to get actively educated on the process of how to transition their business. With a multi-disciplinary team of advisors working together, discussion of your personal, financial and business goals are aligned to your family’s core values. All of your business transition planning options and opportunities will be identified and you will be guided on development and implementation of the selected transition strategy.

To learn more about our services or arrange a meeting with our team, please contact:

Brent E. McClure, CPA, MBA, CEPA, 314-655-0153, bmcclure@anderscpa.com
Derek A. Barnard, CPA, CEPA, 314-655-5513, dbarnard@anderscpa.com

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May 3, 2017

Saved Manufacturer $19,000 with R&D Tax Credits

Performed an R&D Tax Credit study for a manufacturer of optical targeting products for metrology support systems. We were able to identify nearly $545,000 of Qualified Research Expenses (QREs) for tax year 2016, resulting in a benefit of $19,000 in total tax credits.

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May 2, 2017

Re-energizing St. Louis with the City Energy Project

Energy efficiency is becoming more important than ever for local businesses. St. Louis’ Board of Alderman approved a Building Energy Awareness bill requiring energy monitoring for commercial and residential properties 50,000 square feet or larger.

The City Energy Project Benchmarking and Funding

St. Louis recently received a national grant focusing on energy efficiency in large buildings, known as the City Energy Project. As part of the initiative, the city will receive technical support and funding for energy efficiency benchmarking and improvements. The project will provide information about building energy use to help businesses reduce waste, and also align financial incentives for energy efficiency upgrades. Utility rebate programs and Property Assessed Clean Energy (PACE) financing will be offered to buildings for energy efficiency opportunities.

The City Energy Project is a joint initiative of the Natural Resources Defense Council (NRDC) and the Institute for Market Transformation (IMT). St. Louis is one of 20 cities across the country selected for the City Energy Project energy initiative, including San Jose, Atlanta and Kansas City.

Complying with the City Energy Project

The City Energy Project will affect approximately 900 buildings throughout the community. Participating buildings will be phased in, starting in 2017 with municipally-owned buildings and expanding to large commercial and multifamily residential buildings in 2018. Building owners will have more than a year to comply with the benchmarking reporting requirements.

By 2025, the ordinance is expected to save almost $8 million a year in energy costs for local businesses and residents, and reduce 15,000 cars-worth of greenhouse gas pollution, according to the City Energy Project and the Natural Resources Defense Council.

Be Proactive with Energy Efficiency Financing

Businesses can get ahead of the curve with credits and financing for upgrades now, such as the 179D credit for energy efficient property. Commercial Property Assessed Clean Energy (C-PACE) is another way to pay for energy efficiency upgrades, on-site renewable energy projects and water conservation measures for your company. Contact an Anders advisor to learn how your business can take advantage of these financial incentives. Read the full Building Energy Awareness bill for more information.

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