August 31, 2017

Failing Forward: How to Move on from a Startup Setback

As the statistics surrounding new businesses prove, starting a new business is a substantial risk for anyone. Most entrepreneurs have to start multiple businesses before they find an idea and a process that works. In all aspects of life, learning from our failures as much as our successes is crucial in our development.  We have compiled a few tips from our experience working with startups and entrepreneurs to hopefully help you get back into action after a less than successful startup venture.

Don’t rush into any decisions

It is natural to feel pressure to jump back into something new after a failed start up, but don’t let that pressure influence your decisions too heavily. Reflect and wait for the right opportunity. With the right focus and strategy, your next venture will be the one you were meant to start the whole time.

Use the failure as a time of reflection

Again, learning from failures is crucial in eventual success. Ask yourself where things went wrong and analyze the reasons behind the lack of success.  Oh, and be honest with yourself.

Actively seek feedback from others

Ask partners, employees, customers, or any other stakeholders that are available and willing to help for their opinions. Create open dialogue and don’t be afraid to take harsh criticism. Acknowledging our own short comings can be difficult, but it’s essential. Find people who will be upfront and honest with you. Their outside perspective can be as valuable as your own.

Use the time to create a strategy for your next move

Now that you have reflected, and sought the feedback of others, use the information you gained to avoid repeating the same mistakes. You may need to place your focus on different areas, cut down on the number of partners/investors, or start smaller and let your business grow organically. This is a perfect time to get out the whiteboard and start mapping everything out.

Find your motivation

Now you are ready to launch back into the game, but make sure to avoid the pressure to jump into a “get rich quick” scheme. A failed startup will surely come with some debt and a feeling of a need to provide. It’ll be tempting to jump into the first situation that comes along that will allow you to make money to either pay off that debt or to play catch-up. Startups take too much time and effort for money to be the only motivation. If you start a business with money as the only motivation, you will surely burn out fast. Find something you’re passionate and excited about before jumping into another venture.

We are firm believers that we should all embrace our failures and setbacks to learn from them and get back into the game even stronger than before.  We hope these tips are helpful if you are ever faced with a startup business setback. Contact the Anders Startup Team to learn how we can help set up your startup for success.

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August 29, 2017

New Missouri MOABLE Program Introduces Disability Savings Accounts

Missouri has implemented a new financial program to help disabled persons and their families achieve financial stability. Missouri Achieving a Better Life Experience (MOABLE) accounts will operate similarly to 529 education savings plans: Qualifying individuals may deposit money and withdraw tax-free as long as the money is used for disability-related expenses.

MOABLE was passed in December of 2014. In April of 2017 the inaugural MOABLE account was opened by Senator Eric Schmitt. Schmitt opened the account for his disabled son, who was his inspiration for creating the program.

Who is eligible for MOABLE?

In order to be eligible for a MOABLE account, the qualifying individual must have developed their disability before the age of 26, and the disability must have lasted or be expected to last a minimum of one year. Disabilities can be either mental or physical. A list of qualifying conditions can be found in the Social Security Administrations Disability Blue Book. Currently, taxpayers from any tax bracket are eligible for MOABLE accounts; there is no income limitation.

What disability expenses qualify?

Funds in a MOABLE account can be used for Qualified Disability Expenses. An expense is ‘qualified’ if it relates to the individual’s disability or helps them maintain quality of life. The most common examples of Qualified Disability Expenses are tuition, housing, transportation expenses and employment support. Funds in a MOABLE account can be used for non-qualifying expenses, but they will be subject to regular income taxes, plus a 10% additional tax on the withdrawn funds.

Are there contribution limitations?

The maximum yearly contribution an individual can make to a MOABLE savings account is $14,000. Contributions are tax deductible to a certain amount based on filing status. Single taxpayers may deduct up to $8,000 in contributions, and joint taxpayers may deduct up to $16,000 of contributions. There is also an account balance limit of $445,000. Once the account balance reaches this limit, no additional contributions are allowed until the balance drops below $445,000.

Will this affect my other benefits?

MOABLE funds generally do not count against an individual in determining eligibility for federal benefit programs. Money in an account will not affect an individual’s eligibility for Medicaid, SSI, or SNAP benefits, but SSI benefits may be suspended if the individual’s MOABLE account balance reaches or exceeds $100,000.

MOABLE accounts are a new avenue to financial stability that will help many qualifying families.  If you believe you or a loved one qualify for a MOABLE account, please contact an Anders advisor for assistance.

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August 22, 2017

Are Missouri Delivery Charges Subject to Sales Tax?

Confusion over the taxability of delivery charges in Missouri is beginning to clear up. As of August 28, 2017, separately stated delivery charges are exempt from sales and use taxes.  Missouri Governor Eric Greitens signed Senate Bill No. 16, indicating that gross receipts should not include usual and customary delivery charges, and that delivery charges should be stated separately from the sale price.

Previous Treatment of Sales Tax on Delivery Charges

Prior to 2015, Missouri did not issue sales tax on delivery fees.  After the court ruling of Alberici Constructors Inc. v. Director of Revenue, the Missouri Department of Revenue notified business owners that if delivery was intended to be part of sale of a product, the charge would be subject to sales tax, even when separately stated.  This notice could cost thousands of dollars on a service that originally was not charged sales tax.

Taxable vs. Nontaxable

Starting August 28, 2017, Senate Bill No. 16 will take effect, resulting in “usual and customary delivery charges that are stated separately from sale price” to be exempt of sales and use tax charges.  If shipping charges are stated with sale price, and not separately stated, the charges will follow the taxability of the sale itself.

Learn more about the Senate Bill No. 16, or contact an Anders advisor to discuss whether delivery charges are subject to sales tax for your business.

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August 18, 2017

Rob Berger Talks Tax Reform and Incentives in Commercial Real Estate Table of Experts

Partner and Director of the Anders Real Estate and Construction Group, Robert L. Berger, CPA/CGMA , was featured in a St. Louis Business Journal Table of Experts on commercial real estate. The round table of four industry experts discussed how commercial real estate has evolved in St. Louis, where the industry is heading and where investor activity is happening. Rob talks about pending legislation from a tax perspective and potential positive impacts on the real estate industry.

Read the Commercial Real Estate Table of Experts.

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August 16, 2017

Anders Ranks #113 on IPA Top 200 Accounting Firms

Anders is ranked #113 on the 2017 Top 200 Accounting Firms list by INSIDE Public Accounting (IPA). IPA ranks the top 300 accounting firms in the U.S. by net revenues compiled by analyzing more than 580 firms. This is IPA’s 27th annual ranking of the largest accounting firms in the nation.

In the eighth annual ranking of the IPA 200, this list picks up where the IPA 100 left off, and identifies the largest firms in the nation ranking from No. 101 to No. 200. For the most recent fiscal year, IPA 200 firms range in size from $16.8 million to $36.5 million. Firms in this list grew an average of 8.2% from last year, and generated a total of $2.4 billion in revenue.

INSIDE Public Accounting reports and analyzes the news, trends, strategies and politics that affect the nation’s public accounting firms, and provide information and resources to compete and operate more profitably. View the full list of IPA Top 100, 200 and 300 firms.

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August 15, 2017

File for Unused Estate Tax Portability by January 2, 2018

The IRS is making it easier to file for portability of a deceased spouse’s unused estate tax. A new Revenue Procedure on Portability applies to estates under the minimum filing threshold for an estate tax return. The procedure provides a simpler, less expensive election to file for portability in case the original deadline was missed.

Estate Tax Exclusions Explained

Estates are able to exclude a certain amount of assets from estate tax at death. In 2017, each estate is able to exclude up to $5.49 Million of assets from estate tax. This is a cumulative lifetime exemption that can be used for gifting throughout a lifetime or through asset transfers at death. The amount is adjusted for inflation each year.

Portability Election Update

Smaller estates that do not use their full exemption can elect portability to transfer the leftover exclusion amount to the spouse after death.

Before
Typically, this election had to be made on a timely basis on the deceased’s estate tax return. Form 706 had to be filed within 15 months of the date of death, otherwise a ruling had to be requested from the IRS, which was time-consuming and expensive.

Now
The IRS is granting some temporary relief for small estates that did not timely file Form 706 to elect portability. These estates can file their Form 706 by January 2, 2018, or two years after the date of death, and still be able to elect portability.

To apply for this extension, you must include the statement on Form 706: “Filed Pursuant to Rev. Proc. 2017-34 to Elect Portability Under Section 2010(c)(5)(A)”. The relief is only for small estates that are not otherwise required to file an estate tax return.

The portability election is especially useful in estates where the surviving spouse held the majority of the assets, or the surviving spouse is several years younger than the deceased. Even if the surviving spouse’s assets are less than the current lifetime exclusion, portability may be helpful if assets grow during the surviving spouse’s lifetime or the estate tax exclusions change.

This extension is time sensitive and must be acted on quickly to take advantage. Contact an Anders tax advisor to discuss if this election could benefit you.

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August 11, 2017

Dave Finklang Named a Top Accountant by Small Business Monthly

St. Louis Small Business Monthly has named Dave M. Finklang, CPA/CGMA, MBA a 2017 Top Small Business Accountant. Each month SBM polls readers and ask them to help identify the best in the area in a particular industry. The August issue focuses on the Top Small Business Accountants in St. Louis. In the article, Dave offers his best advice for small business owners and startup companies.

Dave Finklang, CPA - St Louis CPA Firm

About Dave
Dave has wide-ranging, specialized experience in tax planning and compliance, startup services and consulting, and accounting services.  As a senior manager in the Anders Tax Services practice and leader of the startup and entrepreneurial services practice, Dave particularly enjoys working with entrepreneurs and emerging companies by helping them raise capital, structure their businesses,  implement accounting systems, and minimize their tax burdens. He also advises individuals, family and closely-held businesses, as well as their owners, on tax-saving strategies and tax planning. Dave works with technology and software companies,  manufacturers, distributors, and commercial real estate companies. Dave was named the youngest 2016 40 Under 40 by the St. Louis Business Journal.

Read more about Dave and the Top Accountants on page 34 of the August 2017 St. Louis Small Business Monthly.

 

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August 3, 2017

Save on Back to School Supplies during Missouri Tax Free Holiday August 4-6

This weekend is the time to stock up on school supplies in Missouri during the 2017 Sales Tax Holiday. From Friday, August 4th to Sunday, August 6th the following items are exempt from sales tax at Missouri retailers:

  • Clothing up to $100
  • School supplies up to $50
  • Computer software up to $350
  • Personal computers up to $1,500
  • Computer peripheral devices up to $1,500
  • Graphing calculators up to $150

The sales tax holiday applies to state and local sales taxes when a local jurisdiction chooses to participate in the holiday. Read more information for consumers on the Missouri DOR website.

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August 3, 2017

Increased Cash Flow and Net Present Value through Cost Segregation Study

Performed a Cost Segregation study for a manufacturing facility that produces metal parts for the aerospace industry. By reclassifying 30% of the total depreciable property into 5, 7 or 15-year property, the accelerated depreciation deductions resulted in an increased cash flow of $250,000 over the first year and a net present value of $230,000 over the life of the investment.

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August 1, 2017

Creating a Needs vs. Wants Pyramid to Reach Financial Goals

Whether it’s a new car, house, clothing or food for dinner, the word “need” is often thrown around in a fashion that contradicts its true significance. One of the most basic personal finance principles is understanding the difference between needs and wants. Before you can prioritize spending, create a budget and truly set effective and reachable financial goals, it’s important to understand needs vs. wants and how they relate to your income.

Needs vs. Wants When Selling Your Business

This issue takes on additional significance for the business owner who is considering selling their business. Very early in the process of deciding whether or not to exit your business, as a business owner you must determine how much money you need or want to live out your quality of life and accomplish financial goals. Working with a financial planner, start with an analysis of wants vs. needs to help settle on a desired level of annual spending.

The Needs vs. Wants Pyramid

Imagining a pyramid can help conceptualize spending needs vs. spending wants. At the foundation of the pyramid is what we consider “needs” and includes assets or strategies that help the business owner and their family in the case of an emergency or catastrophic event. The first step is to create and maintain an emergency fund with 6-12 months of expenses in cash. Next, review insurance coverage, including health, disability, life and umbrella insurance.

Once the foundation of the pyramid is addressed, focus on financial independence. This area is somewhat of a hybrid of needs and wants. Each of us have a certain amount of money that we need each year to meet our basic commitments. After these commitments are met, we can move into the “wants” portion of financial planning and dream a little. Would we like to travel the world? Purchase a second home? Whatever your dreams entail, address them with an expected level of spending needed to accomplish this goal.

Finally, it’s time to move to the top of the pyramid. This section is composed purely of wants, and provides the opportunity to one day have to consider gifting to the next generation and fulfilling philanthropic desires.

Viewing needs vs wants in the context of the pyramid allows us to keep the horse before the cart and address first things first. Once these basic needs are met, individuals and families can begin to get into the more complex aspects of financial planning and wealth building and preservation. Contact an Anders advisor to discuss your business transition planning strategy and create a needs vs. wants pyramid to reach your financial goals.

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