June 28, 2019

Missouri Releases Interactive Map of Pre-Filed Medical Marijuana Application Fees by County

With the passage of Amendment 2, the Missouri Department of Health and Senior Services intends to initially license 338 medical marijuana facilities by the end of 2019. These licenses will include 60 cultivation facilities, 86 manufacturing facilities, and 192 dispensaries.

Current Application Status

As of June 20, the state has received 543 pre-application deposits totaling $3.9 million, far exceeding the number of licenses that will be initially issued by the state. On June 27, the state published an interactive map breaking down the number of pre-filed medical marijuana facility license deposits by county and by facility type.

As expected, counties with the highest population densities tended to have the most pre-filed deposits. This included Jackson County (Kansas City) with 104 pre-filed deposits, St. Louis County with 85, Boone County (Columbia) with 34, Greene County (Springfield) with 30, St. Charles County with 20, and St. Louis City with 13.  These 6 counties represent 286 of the 543 of deposits on file. Interestingly, as of June 27, there are several counties scattered throughout the state that have not received any pre-filed medical marijuana application deposits.

It is important to note that the window for applying for a Missouri medical marijuana facility license does not open until August 3. Pre-filed application deposits are not required by the state and instead can be submitted with the application itself. As a result, it seems likely that the amount of actual facility license applicants will far exceed the 543 deposits that have been received as of June 20.

To learn more about the Missouri medical marijuana facility license application process or the Anders Cannabis Group, please contact an Anders advisor.

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June 28, 2019

Saved Manufacturer Over $350,000 Through R&D Study

Our manufacturing client had utilized the Research & Experimentation (R&D) tax credit in the past, but our team questioned if they were getting the maximum benefit from their current method of capturing research wages and related costs. By completing a full R&D study, we identified additional wages and supplies that could be included to bolster the client’s R&D credit opportunities for each year of the study. By amending the prior three years of tax returns, our team discovered over $350,000 in additional savings.

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June 26, 2019

Rob Berger Shares One of the Top Accounting Mistakes in the St. Louis Business Journal

Anders tax partner Robert L. Berger, CPA, CGMA was featured in the St. Louis Business Journal’s article on Common Accounting Mistakes Businesses Make, and How to Avoid Them. Rob explains how he commonly sees business owners work “in” their business, rather than “on” their business, and how utilizing a team of experienced advisors can help a company succeed.

Read the full article in the St. Louis Business Journal.

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June 26, 2019

Anders Announces 2019 Promotions

2019 promotions were announced at the Anders firm meeting on June 26th. Those promoted include Auditors Stephanie Jones, Laura Long, Sarah Mills, Tom Squires, Stephen Kohler, Raven Lawhorn, Abby McGrath, Ryan Morse, Katie Schmitz and Brian Shull. Tax promotions include Dan Schindler, Cindy Gray, Abby Donnellan, Josh Snyder, Rebekah Eyre, Savannah Greatting, Zach McDowell, Austin Bammer, Bobbie Dampier, Brittney Jostes, Connor Obermeier and Jake Sauer. In the Outsourced Accounting Services group, Laura Faletti, Leigh Reiter and Tanner Hankins were promoted. Alex Grosse, Tyler Kaberline, Rob Kotsybar, Sam Hazel and Katie Young from the Technology Services Group received promotions. Lindsay Suelmann in Marketing, Sarah Beck in Human Resources and Amy Hooker in Health Care were also promoted.

 

Lindsay Suelmann - St Louis CPA Firm Lindsay L. Suelmann has been promoted to Marketing Director. Lindsay is responsible for implementing the marketing strategy at the firm. She has raised the firm’s profile by establishing and growing an online marketing strategy through content creation, promotion and advertising. In her role, Lindsay focuses on brand management, niche development, business development strategies and online marketing.

 

Daniel Schindler, CPA - St Louis CPA FirmDaniel K. Schindler, CPA has been promoted to Senior Manager in the Tax Services Group. Dan has successfully combined his love for all things food, spirits, sports and helping people succeed into his career. While he leads operations of the Anders Sports, Arts & Entertainment Group and represents professional athletes, agents and advisors; he also provides savvy advice on operational efficiencies and cash flow analysis to a growing number of restaurant and craft brewery owners.

 

Sarah M. Beck, PHR has been promoted to Human Resources Manager. She brings experience working in corporate recruiting and talent management to her role and enjoys connecting with staff on a variety of needs including employee engagement and performance management. Sarah makes new employees feel welcome through the firm’s onboarding process and continues to engage with them throughout their career with development and training.

 

Abby Tonkin, CPA - St Louis CPA FirmAbby J. Donnellan, CPA has been promoted to Manager in the Tax Services Group. She works with individuals on income tax planning and services businesses in a variety of industries, primarily working with closely-held businesses, partnerships and S-corporations. Abby keeps the tax group abreast of all state and local tax law changes, and also enjoys working with the Family Wealth and Estate Planning Group.

 

Cindy Gray, CPA - St Louis CPACindy M. Gray, CPA has been promoted to Manager in the Tax Services Group. She assists individuals, businesses and professional service firms with tax planning and compliance, tax consulting for family businesses and QuickBooks® consulting. She is a member of the Family Wealth and Estate Planning Services Group and advises clients on preserving their wealth and reaching their financial goals.

 

Stephanie H. Jones, CPA has been promoted to Manager in the Audit and Advisory Services Group. Stephanie performs audits, financial statement reviews and compilations for privately-held businesses in a variety of industries. She also works on employee benefit plan audits for multi-employer benefit plans, local union and not-for-profit organizations.  Stephanie was named a 2015 30 Under 30 by the St. Louis Business Journal.

 

Laura Long, CPA - St Louis CPALaura A. Long, CPA has been promoted to Manager in the Audit and Advisory Services Group. In her role, Laura works with broker/dealer clients, investment funds and not-for-profit organizations. She also specializes in auditing governmental entities, as well as working with startup companies and small businesses on financial statement reviews and conducting audits.

 

Sarah MillsSarah A. Mills, CPA has been promoted to Manager in the Audit and Advisory Services Group. Sarah brings an experienced skillset to her role in the Audit and Advisory Services Group, most especially in the planning and executing of audits for a range of not-for-profit organizations.  She also works with governmental entities and financial institutions and serves clients in the manufacturing industry.

 

Josh Snyder, CPA - St Louis CPA FirmJoshua L. Snyder, CPA has been promoted to Manager in the Tax Services Group. Within his years at Anders, he has experienced a wide variety of tax and family wealth planning and compliance-related engagements. Josh actively works in the firm’s Startup and Sports, Arts & Entertainment Groups. He enjoys working on tax planning opportunities for both individual and business clients, especially in the initial years of startup companies.

 

Alex P. Grosse, VMTSP has been promoted to Senior Systems Engineer in the Technology Services Group. Alex specializes in Virtual Desktop Infrastructure (VDI) deployment and VMware support, with a strong knowledge in network security and intrusion prevention strategies. He assists clients with advanced troubleshooting, network security, firewall installations and management, as well as hosted phone system administration.

 

St Louis Tax PlanningTyler A. Kaberline, CHSP, VCP-DTM has been promoted to Senior Systems Engineer in the Technology Services Group. Tyler manages the technology for end users daily and has extensive knowledge of the day-to-day requirements necessary to maintain seamless operations. He utilizes VMware, VSphere and other programs to provide clients with up-to-date information in a timely and cost-effective manner.

 

Rob A. Kotsybar, MCTS, MCP, MCSA has been promoted to Senior Systems Engineer in the Technology Services Group. With over 7 years of experience selling and installing hardware, Rob enjoys providing optimal support to help technology clients develop and maintain technological efficiency. He has experience consulting with small and mid-sized businesses on hardware and software installation and repair and firewall configuration.

 

Tammy J. Keller has been promoted to Resource Manager in the Audit and Advisory Services Group. Tammy handles all of the scheduling, manages the audit support staff, and is involved in staff orientation and project management for the Audit and Advisory Services Group. She works with the team to ensure all projects go through quality control and stay on schedule.

 

Rebekah Eyre - St Louis CPA FirmRebekah J. Eyre, CPA has been promoted to Supervisor in the Tax Services Group. Rebekah works with individuals and privately-held businesses on tax planning and compliance. She helps individuals and families with year-end tax planning, as well as filing individual tax, trust and estate tax returns.

 

Laura Faletti, CPA - St Louis CPALaura R. Faletti, CPA has been promoted to Supervisor in the Outsourced Accounting Services Group. Laura works with businesses to perform payroll tax returns and utilizing QuickBooks to make accounting processes more efficient.  Her areas of expertise include federal and multi-state tax planning and compliance for individuals and business, as well as professional services. 

 

Savannah Connaway - St Louis CPA FirmSavannah L. Greatting, CPA has been promoted to Supervisor in the Tax Services Group. Savannah works with individuals on their tax and estate planning. A member of the Anders Family Wealth and Estate Planning Services Group, she enjoys helping families minimize their tax burden today and suggesting tax planning strategies to look towards their financial future.

 

Zacharay McDowell - St Louis CPAZach M. McDowell, CPA has been promoted to Supervisor in the Tax Services Group. Zach helps individuals and privately-held businesses in a variety of industries with tax planning, preparation and compliance. He enjoys working with families and financial advisors in the Family Wealth & Estate Planning Services Group, professional athletes in the Sports, Arts & Entertainment Group and manufacturers and distributors.

 

St Louis Tax PlanningLeigh A. Reiter, CPA has been promoted to Supervisor in the Outsourced Accounting Services Group. Leigh services clients in the Outsourced Accounting Services Group by helping them with their financial management, including payroll services and corporate and individual tax returns. She has experience in private accounting in the software development and manufacturing industries.

 

Tom E. Squires, CPA has been promoted to Supervisor in the Audit and Advisory Services Group. Tom performs financial statement audits and reviews for clients in the manufacturing and distribution, real estate and construction and gaming industries. With three years of Big Four public accounting experience and one year working for his family’s manufacturing business, Tom relates to his clients and their needs to help them grow their business.

 

Sam Hazel | Firewall Maintenance | Technology ServicesSam A. Hazel has been promoted to Systems Engineer in the Technology Services Group. Sam utilizes his years of IT experience to provide technical support to Anders Technology Services clients. He works with businesses to automate processes using technology platforms to make their jobs easier. Sam specializes in network, firewall and server maintenance and believes problems should only need to be fixed once.

 

Austin T. Bammer, CPA has been promoted to Senior in the Tax Services Group. He works with individual and corporate clients on year-end tax planning and compliance, partnership and trust returns. Austin works with clients in a variety of industries, and especially enjoys working with athletes and startup companies on their tax planning.

 

Bobbie A. Dampier, CPA, MBA has been promoted to Senior in the Tax Services Group. Bobbie works with individuals on year-end tax planning and compliance and businesses in a variety of industries on their tax planning needs. A problem solver and numbers person, Bobbie enjoys helping clients with difficult tax situations find the best solution.

 

Tanner Hankins | Anders CPATanner C. Hankins, CPA has been promoted to Senior Accountant in the Outsourced Accounting Services Group. His experience working with businesses on monthly accounting, tax preparation and financial statement preparation is a great asset to his clients. Tanner utilizes cloud-based platforms to streamline processes and increase financial transparency for the businesses he works with.

 

Brittney E. Jostes has been promoted to Senior in the Tax Services Group. Brittney is experienced in individual and corporate tax planning and compliance. Brittney works on year-end tax planning with clients in a variety of industries, including real estate and construction, to learn the ins and outs of their businesses.

 

Stephen S. Kohler has been promoted to Senior in the Audit and Advisory Services Group. Stephen performs compilations, financial statement reviews and audits, and specializes in multi-employer benefit plans. He works with clients in a variety of industries including local unions and not-for-profit organizations.

 

Raven S. Lawhorn has been promoted to Senior in the Audit and Advisory Services Group. Raven works with businesses in a variety of industries on financial statement audits and reviews. Before joining Anders full-time, Raven started as a summer intern in 2017. Performing year-end audits gives Raven the opportunity to learn how different entities function and impact the community.

 

Abby J. McGrath, CPA has been promoted to Senior in the Audit and Advisory Services Group. Abby has experience working on compilations, financial statement reviews and audits for clients in a variety of industries. She loves meeting the people behind a business and learning their operations to better serve them.

 

Ryan J. Morse, CPA has been promoted to Senior in the Audit and Advisory Services Group. Ryan works with privately-held companies in a wide variety of industries on financial statement reviews and audits. He is passionate about working and collaborating with businesses to meet their financial reporting requirements and develop appropriate business practices.

 

Connor J. Obermeier, CPA has been promoted to Senior in the Tax Services Group. Connor works with individual and corporate clients on tax planning needs. He has experience with personal, trust and business returns for clients in a variety of industries. Connor also works with athletes in the Sports, Arts & Entertainment Group.

 

Jake T. Sauer, CPA has been promoted to Senior in the Tax Services Group. Jake assists individuals and corporate clients with their year-end tax planning and tax return preparation. His motivated personality led him to pass all four sections of the CPA exam upon graduating with his Master’s.

 

Katie L. Schmitz, CPA has been promoted to Senior in the Audit and Advisory Services Group. Katie works with small to mid-size businesses on compilations, financial statement reviews and audits. She has clients in a variety of industries, and enjoys learning the inner workings of different businesses and industries and how to improve financial processes.

 

Brian T. Shull, CPA has been promoted to Senior in the Audit and Advisory Services Group. He specializes in performing compilations, financial statement reviews and audits for clients in a variety of industries, including manufacturing and not-for-profit organizations. Brian enjoys connecting with his clients and providing financial insights to make a positive impact on businesses and organizations.

 

Amy HookerAmy L. Hooker has been promoted to Health Care Coordinator. Amy works with the Health Care Group on drafting engagement letters, proposals and client correspondence. Keeping the group organized is Amy’s top priority, and she helps coordinate meetings, presentations and any other scheduling needs.

 

Katie Young | Anders TechnologyKatie M. Young has been promoted to Technology Coordinator. Katie assists with the Technology Services Group’s business development efforts and reports to keep the group’s efforts and goals aligned. She tracks product licenses and compares vendor pricing with capabilities to get the best solutions for clients.

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June 25, 2019

How More Vacation Time Can Lead to a More Valuable Business

Now is the perfect time to head out to that overdue vacation. Americans in general, and especially business owners, take less time off compared to those in many other countries. Even when we do leave for vacation, many of us are still checking emails and bringing our laptops to squeeze in some work. In addition to the health benefits of taking some time off from work, your business could also benefit.

Running on Autopilot

A recent survey by The Value Builder Score found companies that would perform well without their owner for a period of three months are 50% more likely to get an offer to be acquired when compared to more owner-dependent businesses. The better your company runs on autopilot, the more valuable it will be when you’re ready to sell.

To gauge your company’s ability to handle your absence, start by taking a vacation. Leave your computer at home and hide email notifications on your phone. Upon your return, you’ll probably discover that your employees got resourceful and found answers to a lot of the questions they would have asked you if you had been just down the hall. That’s a good thing and a sign you should start planning an even longer vacation.

You’ll also likely come back to an inbox full of issues that need your personal attention. Instead of finding answers to each problem in a frenzied attempt to clean up your inbox, slow down and look at each issue through the lens of a possible problem with your people, systems or authorizations.

Identifying and Fixing Issues

People

Start with your people and answer the following questions:

  • Why did this problem end up on my desk?
  • Who else is qualified to answer this question and why was that person not consulted?
  • If nobody else is qualified, who can be trained to answer this question in the future?

Systems

Next, look at your systems and procedures. Could the issue have been dealt with if you had a system or a set of rules in place? The best systems are hardwired and do not require human interpretation; but if you’re not able to lock down a technical fix, then at least give employees a set of rules to follow in the future.

Authorizations

You may be a bottleneck in your own company if you’re trying to control spending too much. Employees may know what to do but do not have any means of paying for the fix they know you would want. For example:

  • Putting in place a customer service rule in place that gives your front-line staff the authority to make a customer happy in any way they see fit provided it could be done for under $100
  • Allowing an employee to spend a specific amount with a specific supplier each month without coming to you first
  • Giving an employee an annual budget for an amount they can spend without seeking your approval

Given the fires that may need to be extinguished after the fact, taking a vacation may seem more of a hassle than it’s worth. But if you transform the aftermath of a vacation into systems and training that allow employees to act on their own, you’ll find the vacation is worth what you paid for it many times over: your company will increase in value as it becomes less dependent on you personally.

The Anders Business Transition Planning Team can help you get the systems in place to help you get out of the office. Contact an Anders advisor to learn more.

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June 24, 2019

St. Louis Post-Dispatch Names Anders a 2019 Top Workplace

The St. Louis Post-Dispatch has honored Anders as a 2019 Top Workplace. The Top Workplaces list is based solely on employee feedback gathered through a third-party survey administered by research partner Energage, LLC. The anonymous survey measures several aspects of workplace culture, including alignment, execution and connection. Anders has been on the Top Workplaces list several times, and was ranked at the top of the Midsize Employer Category in 2016 and 2017 and second place in 2018.

“Top Workplaces is more than just recognition,” said Doug Claffey, CEO of Energage. “Our research shows organizations that earn the award attract better talent, experience lower turnover, and are better equipped to deliver bottom-line results. Their leaders prioritize and carefully craft a healthy workplace culture that supports employee engagement.”

Attributes that make Anders a top workplace include the open, collaborative work space reflecting the culture of the firm, a generous PTO and benefits package, flexibility and extensive technical and professional training programs. Anders supports and encourages employees to follow their passions in the community, and provides development dollars to help them do so.

The complete list of Top Workplaces can be found in the June 23 issue of the Post-Dispatch. Meet the 2019 St. Louis Post-Dispatch Top Workplaces.

Check out the Top Workplaces Spotlight on Anders.

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June 20, 2019

How to Utilize LinkedIn for Job Searching

Creating a strong presence on LinkedIn can help expand your professional network, land a job and advance in your career. People say LinkedIn is the “Facebook for professionals”, but job seekers need to know how to use it to their full advantage. Following the tips below can help you get the most out of the platform when job searching.

Profile Picture

The picture on your profile says a lot about you. It should be a head shot, not a full body picture. The clothing that is showing should not have any logos, unless it is your current company’s logo. Many recent graduates will use a picture from graduation in their cap and gown, which is perfectly appropriate until they are hired somewhere.

The picture should be current, meaning it is how you currently look. If you get a drastic haircut, it is time for a new picture reflecting that. Recruiters will be confused if you look completely different than the picture they see on your LinkedIn.

Headline and Description

The headline should reflect your present position or if you’re a student it should say what your major is. It should also include any titles or certifications (ex: MD, SHRM-CP, or CPA). The description below the headline is a brief summary of who you are, what experience you have, and what you are looking for.

Here’s an example of a basic, straight forward description:

“I attend [school name] studying towards [degree]. I chose this degree because of [reason]. Last year, I had the opportunity to intern at [organization] where I learned [skill]. I will graduate [date] and am seeking a [job title] position in the [city/region] area.

For inquiries please contact me at: [email or phone number]”

Experience

Your LinkedIn is basically another resume, so anything that is on your resume should be on your LinkedIn profile. You can even copy and paste directly from your resume so that your LinkedIn reflects each job and your duties. Recruiters will use the duties listed to determine whether you are a fit for the position they have. Having this up to date with your resume will make it very easy to apply for jobs through LinkedIn because a lot of applications will auto-populate the information from your LinkedIn profile. You also have the option to attach your resume, or any other documents/media, to your profile.

If you have held several positions at multiple organizations, only keep the most recent, the last 4 or 5 years, or most relevant experience. Your LinkedIn profile doesn’t need 10 jobs listed- keep it concise.

Education

Just as you would on your resume, you need to list the name of the school and the years you attend(ed), your major, any involvement, and your GPA. If you attended multiple colleges, list them all. College is the most relevant education, but in some cases it makes sense to have information about your high school, as well. If you are from St. Louis and seeking a job in St. Louis, it is very relevant to have your high school listed because the age-old question here is “what high school did you go to?” If a recruiter sees that you went to the same high school as them, it may work to your advantage!

Skills and Endorsements

Under the skills portion of the profile, having at least three skills listed is a good start. This area gives you a chance to mention any skills or qualifications you have that may not be on your resume. Soft skills such as interpersonal skills, customer service, or writing can be listed here as well as technical skills like auditing. Your connections can endorse your skills, which shows that the people you have worked with agree that you are skilled in those areas.

Connections

Your connections on LinkedIn are your professional network. Connecting with your peers is the first step, but chances are those connections won’t be the ones that help you the most. Connecting with people in the industry that you work in or are interested in working in can help you see job postings or find companies that you want to work for. Remember to connect with recruiters that you meet at career fairs or networking events. Connections in your field will also post articles that are relevant to your work or studies. LinkedIn is not Facebook- connecting with people you do not necessarily have a personal relationship with is normal. It is meant to be a platform to connect with other professionals, not just your friends. The more connections you have, the larger your professional network is.

What to Post

Staying active on your LinkedIn is important to keep your face in front of the people in your network. One type of post you can make are updates on your job status- whether you’re seeking, found a position, leave a position, etc. You can also post any articles that you find interesting that have to do with your industry, position or major. Many people post their accomplishments or work they finish and want to share with their peers and colleagues. Posting questions or asking for advice is also a great way to interact with your network.

LinkedIn also allows you to repost others’ posts. I recommend reposting posts made by or about your company/school. You can also follow organizations that post articles pertaining to your industry/major and that is a great place to find articles to repost. Adding a comment of your thoughts or why you are sharing the post makes it more interesting for your connections.

Searching for Jobs

LinkedIn makes searching for jobs very easy. You can search by job title, company name or experience level. After searching one of those things you can also use filters to narrow the search such as; location and full-time or part-time. Now that you have a list of jobs that you are interested in, you can save jobs and apply for them. Some applications allow you to use your LinkedIn profile to auto-populate information which cuts down the application time. Once you have saved jobs, LinkedIn will suggest similar jobs that come up so that you don’t have to keep searching the same criteria multiple times. You can also turn on notifications for specific types of jobs or companies so that you know when any jobs with that title or in that company are posted.

The most important part about utilizing LinkedIn is checking it regularly. Recruiters will often send messages to multiple LinkedIn candidates in one day and if you take a week to answer, you may have missed your shot. You should always respond to messages from recruiters even if it is to tell them you are not interested at that time. This way, if you are ever searching for a job in the future you have that connection to help you.  Checking LinkedIn regularly will help you stay active as well. Follow Anders on LinkedIn to keep up with what’s new at the firm, or check out current openings at Anders.

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June 20, 2019

How the Business Interest Expense Deduction Could Create a Larger Tax Liability for Your Company

The new business interest expense deduction is one of the Tax Cuts and Jobs Act (TCJA) changes that could have a significant effect on a business’s net income and increase a company’s tax liability.

About the Business Interest Expense Deduction

A business’s interest expense deduction for tax years after 12/31/17 could now be limited by tax law changes to the sum of:

  • The businesses interest income
  • 30% of the adjusted taxable income (book net income +/- all tax adjustment items)
  • The floor plan financing interest (vehicle dealerships only)

Two things to note:

  • There is no limitation to the deductibility of interest expense if an entity’s gross receipts are less than $25M
  • Any non-deductible interest expense can be carried forward to future years indefinitely

Business Interest Expense Deduction Example

For 2018 XYZ Company had gross receipts of $30M, operating expenses of $10M, interest income of $2M and interest expense of $12M.  This entity had no floor plan finance interest.

Previous Law

Under the previous tax law, XYZ Company’s taxable income would be $10M.

$30M gross receipts
+ $2M interest income
$12M interest expense
$10M other operating expenses
= $10M adjusted net taxable income.

New Law

Under the new tax law, XYZ Company’s adjusted taxable net income would be $17M.

$30 gross receipts
+ $2M interest income
– $5M interest expense
– $10M other operating expenses
= $17M adjusted net taxable income

Deductible interest expense is calculated by using the adjusted net income of
$10M x 30% = $3M + $2M interest income = $5M deductible interest expense.

The TCJA business interest expense deduction limited deductible interest expenses to only $5M, which resulted in a $7M increase to net adjusted taxable income. Using the highest 2018 individual income tax rate of 37%, the limitation of the deductibility of interest expense could result in an additional tax liability of almost $2.6M.

Impact on Businesses

The Tax Cuts and Jobs Act lowered tax rates for individuals and corporations but other changes, such as the business interest expense deduction limitations, are going to create challenges that business owners need to be aware of and plan for. There may be tax planning opportunities that could help maximize your business interest expense deductions in future years. Contact an Anders advisor with any questions and to find out more about other TCJA tax law changes. Visit our Tax Reform Resource Center for videos, blog posts and resources on how tax reform will impact you, your family and your business.

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June 18, 2019

Top Tax Reform Provisions Impacting Restaurants

The food and beverage industries face a number of advantages and disadvantages brought on by the Tax Cuts and Jobs Act (TCJA). Some of the most important changes impacting restaurants include the lower corporate tax rate, depreciation changes and new pass-through rules.

Corporate Tax Rate

Restaurants structured as a C Corporation may see a dramatic reduction in tax rate. Prior to the TCJA, corporate tax rates varied from 15% to 35%. Beginning January 1, 2018, the C Corporation tax rate is a flat 21%. This change will have a positive impact on all C Corporations that have had taxable income above $50,000. Those C Corporations that had taxable income below $50,000 will actually see an increased tax rate from 15% to 21%.

Pass-through Income

Any restaurants that are structured as pass-through entities may see a benefit from the lowering of the individual tax rate reduction. In 2018, the highest individual tax rate was lowered from 39.6% to 37%. The total income that places an individual in the top tax bracket was also increased resulting in a further tax benefit.

Qualified Business Deduction

All restaurants structured as an S Corporation or Partnership will also see some positive changes regarding tax rates. Pass-through entities can now claim a new 20% Qualified Business Income Deduction. This deduction from taxable income decreases the maximum marginal tax rate on pass-through income from 37% to 29.6%.

Net Operating Losses

As of December 31, 2017, net operating loss deductions are limited to 80% of taxable income.  This calculation is determined without regard to the deduction. These losses arising after December 31, 2017 may also only be carried forward. This 80% limitation may put businesses in a situation where they have substantial losses one year and end up with taxable income in the following year.

Business Losses

Business losses at the individual level are now only permitted in the current year to the extent that they do not exceed the following:

  • Taxpayer’s gross income
  • $500,000 for joint filers or $250,000 for other taxpayers

Bonus Depreciation and Section 179

The restaurant industry will also see benefits from changes in depreciation rules. The maximum bonus depreciation expense increased from 50% to 100% on certain capital expenditures. This means that certain fixed assets, including the purchase of used furniture, fixtures, and equipment, purchased after September 27, 2017 can be fully deducted in the current year.

Meals and Entertainment Expense

Beginning in 2018, entertainment expenses are no longer deductible unless already included in employees’ income. This pertains to all expenses including recreation activities, facilities, or any membership dues related to such activities. Any food or beverage expenses associated with operating a trade or business will still receive a 50% deduction.

Minimum Wage

The House version of this bill initially included an increase in the per hour minimum wage used for the FICA Tip Credit. The final bill elected to continue to use the 2007 minimum wage of $5.15 for tax years beginning on January 1, 2018.

The Tax Cuts and Jobs Act has created many new planning points for restaurants. Contact an Anders advisor to determine the most advantageous tax planning opportunities for your restaurant. Learn more about Anders Lodging, Food and Beverage services.

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June 11, 2019

Implementing Internal Controls to Prevent Payroll and Accounting Fraud

Fraud can plague any business. Specifically, employee fraud is more common than we think, with small organizations, less than 100 employees, being the most common victims. Internal controls are critical and help organizations protect themselves against fraud. Proper internal controls ensure that the flow of information into an organization’s accounting system is reliable and accurate. With the proper internal controls in place, management will have accurate and timely reports to run the business. Below we discuss a few internal controls to focus on to prevent payroll and accounting fraud in your company.

Segregate Duties

When thinking of internal controls, most of us think the segregation of duties. Small and medium-sized organizations tend to struggle the most with segregation of duties merely due to their size and number of employees. For a majority of these organizations, there is just one or two employees handling the books and therefore working on all aspects of the accounting process, including authorization, execution, custody and posting of transactions. Ideally, the processing of cash receipts and payments would be separated, with different people approving invoices, preparing checks, signing checks and reconciling the bank accounts. Allowing one individual to handle cash or checks received, the deposits, and the posting of payments in the accounting system increases the risk of fraud. These processes should be segregated amongst different individuals. If this is not feasible for an organization, it may be beneficial to consider an outsourced accounting department to handle your accounting processes as they are able to implement the level of controls and segregation of duties necessary.

Limit Accounting System Access

Access to accounting systems and financial information is another area of opportunity within small and medium sized organizations for an employee to be able to manipulate data to defraud an organization. The most common accounting software systems allow users the rights to edit, add, and delete transactions, vendors and customers. Ideally, users will be set to have separate levels of access within an accounting system. An outsourced accounting department with the administrative rights to the accounting software would greatly reduce the chances of any employee being able to create false entries and/or deleting transactions.

Keep an Eye on Payroll

Another area within an organization that may experience fraud is the payroll department.  Common payroll fraud scenarios include: an employee inflating hours worked on his or her timesheet, and employee access to payroll that allows for the issuance of payments to fictitious workers. Small and medium-sized companies typically manage payroll in house, which leads to a greater risk for these types of payroll fraud. Outsourcing payroll along with your other accounting functions creates the necessary controls over the payroll process and can even include a time tracking system that is monitored and reviewed by outside accountants for accuracy and reliability.

Regardless of the size of your organization, it is possible to reduce the risk of fraud. Outsourcing accounting is one of the easiest ways to increase your internal controls to combat fraud. Outsourcing provides an immediate separation of accounting duties and review process to an organization’s books that will provide peace of mind to business owners. Fraud happens, and accounting and payroll departments should never run on employee trust alone. Contact an Anders advisor to learn how your organization could benefit from outsourcing, or learn more about Anders Outsourced Accounting Services.

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