Professional Accounting Blog

    Accounting For Your Prosperity

    DeWine Signs House Bills Changing Ohio Income Tax Law

    Posted by Jonathan Ciccotelli on Sep 5, 2019 9:33:59 AM

    Topics: Tax Planning & Strategies

    House Bills 62 and 166 were signed by Ohio Governor Mike DeWine on August 23, 2019.  These bills will enact several important changes to the Ohio income tax law for the 2019 tax year.  These changes will apply to income tax returns due on April 15, 2020.  

    The upcoming tax changes are explained below:

    Tax rates

    • Ohio is combining the bottom three tax brackets.  The tax rate for the new configuration is 0%.  This means taxpayers with Ohio Taxable Nonbusiness income of $21,750 or less will pay $0 in Ohio income tax.

    • All Ohio income tax rates have been reduced by 4%. The top tax rate is now 4.797%.

    • There will be no adjustment for Ohio’s personal and dependent exemption amounts for 2019.  The 2019 adjustments will be the same as tax year 2018.

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    Advice for Buying Your First Business

    Posted by Lloyd Bell on Aug 30, 2019 7:30:00 AM

    Topics: Corporate Finance

    Henry Ford famously said, “Whether you think you can or can’t, you’re right.” When it comes to buying your first business, the ability to effectively run a business is a different skill set than what is required to complete an acquisition. As a result, many successful companies and/or executives underestimate the complexities involved in closing a transaction.

    By far the largest hurdle that first-time business buyers need to understand is that sellers don’t have to be rational. A buyer can develop all sorts of financial models projecting certain rates of return on various capital structures, but a seller rarely cares. Their internal rate of return is not calculated on a spreadsheet, but rather, by what they’ve been able to provide for their family and what they hope to enjoy in retirement. A successful transaction, therefore, must meet the personal goals of the seller while protecting the financial goals of the buyer.

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    IRS Announces Automatic Waiver for Estimated Tax Penalty

    Posted by Jonathan Ciccotelli on Aug 27, 2019 9:04:19 AM

    Topics: Tax Planning & Strategies

    On August 14, 2019, the IRS announced it would waive estimated tax penalties for eligible 2018 taxpayers.  This will effect around 400,000 tax filers who have already filed their 2018 federal tax return according to the IRS.

    If you have already filed your 2018 federal tax return and are eligible for the waiver, there is no need to contact the IRS or apply for the waiver.  The waiver will automatically be applied to your tax account by the IRS. 

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    Attention, Virtual Currency Owners: Pay Your Back Taxes - the IRS is Coming for You

    Posted by Jonathan Ciccotelli on Aug 22, 2019 4:15:10 PM

    Topics: Tax Planning & Strategies

    Taxpayers who own cryptocurrency should pay close attention to the IRS’s recent announcement. In July, the department announced they will soon crack down on taxpayers who fail to report their virtual currency transactions. Past activity will not be ignored. In this announcement, IRS Commissioner Chuck Rettig encourages taxpayers to meet their past tax obligations by amending prior returns and paying back taxes. 

    IRS Efforts

    Last month, the IRS sent over 10,000 educational letters that explain what transactions are taxable, when taxpayers should report their transactions, and how taxpayers can remedy past reporting oversights. The IRS has a history of helping taxpayers understand the ins and outs of the tax law, so these educational letters come as no surprise. In 2014, the department released a taxpayer notice explaining how virtual currency should be reported and how it will be taxed. Last year, they unveiled a Virtual Currency Compliance campaign that deployed training resources to the public and collected taxpayer feedback. And most recently, they announced that official guidance on the taxability of cryptocurrency transactions is forthcoming. Although the IRS’s chief concern is enforcement, taxpayer education is high on their priority list.

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    DOL Increases Retirement Plan Options for Smaller Businesses

    Posted by Michelle Buckley on Aug 5, 2019 4:30:53 PM

    Topics: Benefit Plan Advising & Auditing

    The U.S. Department of Labor (DOL) has released a final rule which should make it easier for smaller businesses to provide retirement plans to their employees. According to the DOL, the rule will enable more small and midsize unrelated businesses to join forces in multiple employer plans (MEPs) that provide their employees a defined contribution plan such as a 401(k) plan or a SIMPLE IRA plan. Certain self-employed individuals also can participate in MEPs.  

    In October 2018, the DOL issued a proposed rule to clarify when an employer group or association, or a professional employer organization (PEO), can sponsor a MEP. (A PEO is a company that contractually assumes some human resource responsibilities for its employer clients.) The final rule, effective September 30, 2019, is similar to the proposal, but not entirely.

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    Using Construction Technology can Result in Significant Cost Savings and Efficiencies

    Posted by Carlin Culbertson on Aug 2, 2019 10:39:44 AM

    Topics: Construction

    I recently attended a construction conference and one of the sessions featured a speaker from Dodge Data and Analytics, who do a lot of research related to the construction industry.  Part of the presentation focused on industry technology and the impact it’s having on construction firms.  Here are some of the takeaways.   

    Building Information Modeling (“BIM”) software is already in use at a lot of contractors.  It is software that allows a contractor to create a digital model/plan of a building, highway, etc. which has significant advantages over a traditional blueprint or paper-based plan.  It provides a great visualization tool to job owners during the bid and planning phases, during the construction process to provide updates/check progress, and when the project is finished provides a complete digital map of the final project to the job owner.  It can be adjusted easily if a change is needed to the design.  It can be used for projections and what if scenarios (like where should I position a large crane, what’s the most efficient placement for materials staging), among other uses that help with planning and in turn reduce inefficiencies.  It can also be used to track progress compared to the plan, catch potential issues earlier, and reduce rework.  Even though it is commonly called BIM, it applies to construction projects other than just buildings, such as civil projects.  To show how BIM can reduce time and costs, the presentation mentioned that Turner Construction reported efficiency increases of 143% for mechanical, 67% for plumbing, and 36% for fire protection from using BIM and related resources.  Some of the other technologies available today integrate with BIM making it even more powerful.  Learn more about BIM here. 

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    Why Business Valuation is About More Than Forecasted Earnings

    Posted by Lloyd Bell on Jul 30, 2019 2:23:00 PM

    Topics: Corporate Finance

    Business valuation is not as simple as multiplying earnings by a number and receiving recent earnings or forecasting earnings. One must get behind the numbers and assess them in order to know the risk of generating those earnings on an annual or go-forward basis.

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    Accounting Acronyms and Definitions When Buying or Selling a Company

    Posted by Lloyd Bell on Jul 30, 2019 9:49:00 AM

    Topics: Corporate Finance

    Acronyms are ubiquitous in the transaction world. Sometimes I forget that the accounting acronyms that are spoken aren't always known to the companies that are actually participating in the deals. I think we've now become accustomed to hearing EBITDA (earnings before interest, taxes, depreciation, and amortization), but what about TTM? That's trailing twelve months, and it's used when we're looking at 12-month periods that don't coincide with the company's FY (fiscal year).

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    Dissenting Shareholders: What’s the Fair Value of the Interest?

    Posted by Meaden & Moore on Jul 29, 2019 8:18:00 AM

    Topics: Investigative and Forensic Accounting

    In Athlon Sports Communications v. Duggan, the Tennessee Supreme Court addressed whether the Delaware Block method was mandated when valuing shares in appraisal rights actions. To determine the appropriate method for determining “fair value,” the state court looked outside of its jurisdiction to Weinberger v. UOP, Inc. 

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    Here Today, Gone Tomorrow: Planning for Employee Turnover

    Posted by Barry Thoman on Jul 25, 2019 10:27:00 AM

    Topics: Accounting & Auditing

    Imagine this: It's 9 a.m. on a beautiful Monday morning and the owner of a flourishing company is sitting at their desk enjoying that morning cup of coffee when in walks the Controller. The Controller smiles and says, “I’d like to thank you for 25 great years, but I’ve decided to retire and pursue my passion of ice fishing in Antarctica. You got me for 12 more months!” While this comes as a complete surprise to the owner, this news is already a distant thought. One year is plenty of time to find a new Controller, right?

    Well, this scenario may be a bit far-fetched since 40% of baby boomers say they will work until they die (baby boomers are reaching age 65 from 2011-2029)*. Employee turnover in the workplace, even in management positions, is inevitable and at times unpredictable.

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