Category: Newsletters

Spencer has run a successful restaurant for more than five years, but is now reaching a crossroad. He wants a bigger space for his business to grow, but he can’t afford the prices in his current neighborhood. Should he relocate?

It depends, but know that sometimes bigger isn’t better. While moving is risky business for many companies, it can be especially damaging for restaurants who depend on an often-local crowd of regulars. Spencer should talk to customers about possible move and ask if they frequent restaurants in other neighborhoods. This piece of information means more than a promise to follow him.

If he changes neighborhoods, understanding how far customers will travel for his food will contribute to his success or failure. Before making the decision to move, he should also learn if his kitchen staff and servers will follow.

If Spencer decides to move, he will need to pick the right time of year to make the transition, and update phone and address information on his website and other marketing materials. If he really likes the new spot, he may want to negotiate a longer lease. Moving can be traumatic, but comprehensive planning can make it work.

Client Profile is based on a hypothetical situation. The solutions discussed here may or may not be appropriate for you.

Ask the average person if estate planning is necessary and you will likely hear this answer: “That’s only for the rich.” This is not true. At some level, estate planning is necessary for almost everyone, regardless of income or amount of assets. Let’s count the areas of your life estate planning affects:

1. YOUR ASSETS –

What happens to your assets when you die? If you care, you can dictate how your assets will pass via a will. Without one, your state’s laws will dictate how most of your assets are distributed.

2. YOUR WISHES –

Financial powers of attorney name a person to act in your financial interest if you can’t do so yourself. Healthcare powers of attorney do the same in the event you cannot make your own medical decisions.

3. YOUR MINOR CHILDREN –

If you unexpectedly died, who would take care of your minor children? It happens. You can name a guardian (or guardians) in a will to ensure your wishes become reality if the unthinkable occurs.

4. YOUR BLENDED FAMILY –

Second (and third) marriages often come with additional complications and new family members. These complications can multiply when it comes time to distribute your assets as intended. Again, a will can help.

5. YOUR ADULT FAMILY –

When you pass on, who gets the heirloom jewelry? Who gets the china that has been in your family for generations? While these items may not add up to a lot monetarily, they can mean the world to loved ones. Put your intentions in a will.

GET HELP

Before drawing up your will, talk it over with family to prevent future misunderstandings. Talk to tax and legal professionals, who can ensure your papers are in order and you transfer as much of your estate as tax laws permit.

The IRS has provided guidance on a safe harbor method for determining depreciation deductions for passenger automobiles acquired and put into service after September 27, 2017 that qualify for the 100% additional first-year depreciation deduction.

Limit Increased

Recent tax law changes increased the first-year limitation amount for a passenger automobile that qualifies for this additional first-year depreciation deduction. The safe harbor allows depreciation deductions for the excess during the recovery period. The depreciable amount exceeding the new first-year limit is deductible in tax years immediately after the vehicle was placed in service.

Passenger automobiles placed in service by the taxpayer after 2022 can’t use the safe harbor. Neither can taxpayers that opted out of the 100% additional first-year depreciation deduction or elected under section 179 to expense any portion of the vehicle’s cost. Talk to your tax professional to learn more.

Auditing your human resources, whether you have a department devoted to it or not, can help protect you, your employees and your business while identifying solutions that can make your company stronger.

ASK THE RIGHT QUESTIONS

An effective human resources audit begins with a thorough look at your company’s personnel policies, written procedures and established steps employees can take when they have a work-related issue.

Do you have comprehensive procedures that employees fully understand to prevent potential harassment and discrimination claims? Are performance reviews conducted according to a process understood by both supervisors and employees? Are complaints documented and investigated? Are your employees properly classified? For example, the federal government has gone back and forth about who qualifies for overtime pay, so whether employees are exempt or non-exempt matters.

Also analyze how your company deals with freelance workers and prospects applying for open positions. Does your company comply with tax, legal and professional requirements governing both hiring and freelancers? Do you have both the procedures and contracts in place to help ensure everyone understands their exact working arrangements?

A COMPETITIVE TOOL

Once you develop a comprehensive audit questionnaire and receive your results, you may want to compare your findings with those of your competitors. Who are your biggest or closest competitors? Which peer company follows best practices and how does that compare to your policies and procedures?

Answering these and other questions and applying the right solutions can help your company rise to the next level. Your audit may identify insurance solutions that boost your company’s financial protection in many areas, and it might discover employee benefits that can improve your firm’s ability to attract and retain hard-to-find workers.

If you don’t have the personnel resources to conduct this type of audit, consider looking into tax, legal and consulting professionals who can help.

A Different Type Of Audit – Help protect you, your employees and your business with a human resources audit.

Insights And Tips

5 Reasons Why Estate Planning Matters – Estate planning is necessary for almost everyone.

Client Profile – Should you relocate your business?

Audits For Private Companies – An audit can help you pinpoint problem areas and identify solutions that can improve their company’s prospects.

Benefits Of An Insurance Audit – Individuals can conduct their own insurance review.

Questions And Answers

Short Bits

The IRS issued final regulations and more guidance for the new qualified business income (QBI) deduction available to some business owners. Also known as the pass-through deduction, this benefit allows many sole proprietors and owners of partnerships, S corporations, trusts and estates and some real estate investment trusts to deduct up to 20% of their QBI on their tax returns.

The QBI deduction is generally available to taxpayers with 2018 taxable income at or below $315,000 for joint returns and $157,500 for other filers. Taxpayers with incomes above these levels may still be eligible for a full or partial deduction subject to limits, including the type of trade or business, the amount of W-2 wages paid in the trade or business and the unadjusted basis immediately after acquisition of a qualified property.

These are among the most complicated of the new tax provisions, so consult your tax professional to learn more.

UNEMPLOYMENT DOWN.

The national unemployment rate was historically low in 2018 at 3.7%, but rates differed across the country, according to the Bureau of Labor Statistics (BLS). The lowest unemployment rates were 1.4% in Ames, IA and 2.3% in the Nashville, TN metro area. El Centro, CA at 17.3% and Yuma, AZ at 15.4% had among the highest unemployment.

DANGER AHEAD.

BLS compiled statistics on work-related fatalities from 2003 to 2017 and, not surprisingly, found jobs entailing physical labor were among the most hazardous. Tractor trailer drivers, ranchers and farmers, and public safety officers experienced the highest number of deaths. Logging and commercial fishing had the highest rates of fatalities per 100,000 full-time equivalent workers. Those who worked in retail, finance and other office jobs had among the lowest rates of deaths.

TIME OUT.

More from the BLS: The agency looked at consolidated leave plans in 2018 and found the average paid time off for those with these combo plans (sick, personal and vacation) was 14 days after one year of service and 24 days after 20 years. Those who had paid vacation days, not consolidated time, averaged nine days at one year of service and 18 days after 20 years.

MORE UNINSURED.

A Gallup Poll found that the rate of Americans without health insurance rose to a four-year high. One reason could be the repeal of the individual mandate, but the rate has been rising since 2016 before the mandate was repealed. The U.S. adult uninsured rate was at 13.7% in the fourth quarter of 2018, up 2.8 percentage points from its 2016 low. Gallup reports that’s an increase of 7 million uninsured adults.

QUESTION

A competitor of mine claims that he bought a disability income insurance policy that reimburses him for business expenses if he becomes disabled. Is that a thing?

ANSWER

Yes it is. Think of it as a disability income insurance policy for your business to alleviate the difficulty of paying company bills if you became temporarily disabled. Business Overhead Expense Insurance, or BOE, helps defray a company’s regular bills including rent or mortgage, utilities, loan payments and other fixed expenses. This differs from a typical disability income insurance policy, which pays a portion of lost income in the event of disability. An insurance professional can help you decide if BOE is appropriate for your business.

QUESTION

My daughter will attend college next year and most colleges suggest we file something called a FAFSA to qualify for aid. What is this and when does she need to file it?

ANSWER

Most colleges and the federal government require students’ families to file the Free Application for Federal Student Aid — FAFSA — as a way to determine financial aid eligibility. You should hurry if your daughter is attending college this fall. The filing deadline began on October 1, 2018 and generally funds are awarded until depleted, but typically no later than the federal deadline of June 30. Check out https://studentaid.ed.gov/sa/fafsa for more info.

Legendary mutual fund pioneer John Bogle died in January, but his legacy lives on. The inventor of the first mutual index fund more than 40 years ago, Bogle was a huge believer in the power of numbers and low investing costs. His beliefs are as valid today as they were decades ago. Here are three pieces of wisdom that still apply:

STRENGTH IN NUMBERS

Bogle believed in mutual funds’ ability to spread risk by diversifying their holdings. Mutual funds that hold many equities potentially reduce risk because the expected positive performance of some may mute the negative returns of others.

MORE NUMBERS, PLEASE

Bogle took the numbers concept to its next logical conclusion: If holding many stocks could reduce risk, owning shares of every stock in a given index would reduce it even more. In 1976 he introduced what became the Vanguard 500 Index Fund, and followed that up with other stock and bond index funds.

MIND YOUR EXPENSES

A proponent of low-cost investing early on, Bogle’s index funds reduced expenses to levels not typically seen in the mutual fund world. To this day, expenses can have an outsized effect on investment performance, potentially having a greater effect than market performance itself.

If you’re like most business owners, you offer vacation time to your employees. And if your employees are like most workers, they’ll take some time off during the summer when the kids are out of school and the weather is nice. For many business owners, temporary workers help fill the gaps during this time. If your business is considering a temporary staffing solution, consider this:

EXPERIENCE MATTERS

Older workers have the experience businesses want, and many retirees willingly return to the workforce for a few months of extra cash. Tap this source of expertise through groups like AARP and your local business organizations. Conversely, younger workers are hungry to gain experience, which can make them dedicated employees.

BENEFITS ATTRACT

Many businesses don’t offer temporary employees benefits, although some temporary staffing agencies that place temps may. If you hire temps directly, offering some level of benefits can give your business the edge when vying for the best and the brightest.