To better serve its growing client base, RDHB CPAs recently completed an office expansion and renovation that effectively doubled its workspace. The additional square footage enables even greater collaboration among RDHB’s staff and its clients in order to help them prosper and grow alongside RDHB.

The Pittsford-based, boutique accounting firm purchased a neighboring property in April 2016 and partnered with Hamilton Stern Construction to combine and refresh the office spaces.

“Our approach is different—it’s fresh and it’s energizing. To our clients, we are more than accounting and tax professionals. We are partners who actively help them grow their businesses,” said John Rizzo, managing partner, RDHB CPAs. “In designing our new space, it was important for it to reflect who we are as a firm. And as more companies realize the benefits of our partnership, we needed the additional space to accommodate our team.”

The expansion added 3,000 square feet to RDHB’s offices, and the renovation included not only office spaces but a new reception area, new conference rooms and collaboration areas, a training room, and a kitchen. Throughout the three-month renovation, RDHB never closed its doors. Employees and clients were able to work amidst the construction, and the new office is now open.

RDHB CPAs provides its clients with personalized tax, business planning, accounting, auditing, and wealth management services. For more information, visit www.rdhbcpa.com.

 

For the greatest tax savings, it is necessary to be conscious of tax planning throughout the whole year. Your team at RDHB is always available to discuss available tax strategies that are applicable to your business. But with the end of 2016 just weeks away, there is still time to make some moves that can be beneficial. Consider the following year-end tax-planning strategies for business and business owners:

  • Businesses should consider making expenditures that qualify for the business property expensing option. For tax years beginning in 2016, the expensing limit is $500,000 and the investment ceiling limit is $2,010,000. Expensing is generally available for most depreciable property (other than buildings), off-the-shelf computer software, and qualified real property—qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property. The generous dollar ceilings that apply this year mean that many small and medium sized businesses that make purchases before the end of 2016 will be able to currently deduct most if not all their outlays for machinery and equipment. What’s more, the expensing deduction is not prorated for the time that the asset is in service during the year. This opens up significant year-end planning opportunities.
  • Businesses also should consider making expenditures that qualify for 50% bonus first year depreciation if bought and placed in service this year. The bonus depreciation deduction is permitted without any proration based on the length of time that an asset is in service during the tax year. As a result, the full 50% first-year bonus writeoff is available even if qualifying assets are in service for only a few days in 2016.
  • Businesses may be able to take advantage of the “de minimis safe harbor election” (also known as the book-tax conformity election) to expense the costs of lower-cost assets and materials and supplies, assuming the costs don’t have to be capitalized under the Code Sec. 263Auniform capitalization (UNICAP) rules. To qualify for the election, the cost of a unit of property can’t exceed $5,000 if the taxpayer has an applicable financial statement (AFS; e.g., a certified audited financial statement along with an independent CPA’s report). If there’s no AFS, the cost of a unit of property can’t exceed $2,500. Where the UNICAP rules aren’t an issue, purchase such qualifying items before the end of 2016.
  • A corporation should consider accelerating income from 2017 to 2016 if it will be in a higher bracket next year. Conversely, it should consider deferring income until 2017 if it will be in a higher bracket this year.
  • A corporation should consider deferring income until next year if doing so will preserve the corporation’s qualification for the small corporation AMT exemption for 2016. (Note that there is never a reason to accelerate income for purposes of the small corporation AMT exemption because if a corporation doesn’t qualify for the exemption for any given tax year, it will not qualify for the exemption for any later tax year.)
  • A corporation (other than a “large” corporation) that anticipates a small net operating loss (NOL) for 2016 (and substantial net income in 2017) may find it worthwhile to accelerate just enough of its 2017 income (or to defer just enough of its 2016 deductions) to create a small amount of net income for 2016. This will permit the corporation to base its 2017 estimated tax installments on the relatively small amount of income shown on its 2016 return, rather than having to pay estimated taxes based on 100% of its much larger 2017 taxable income.
  • If your business qualifies for the domestic production activities deduction (DPAD) for its 2016 tax year, consider whether the 50%-of-W-2 wages limitation on that deduction applies. If it does, consider ways to increase 2016 W-2 income, e.g., by bonuses to owner-shareholders whose compensation is allocable to domestic production gross receipts. Note that the limitation applies to amounts paid with respect to employment in calendar year 2016, even if the business has a fiscal year.
  • To reduce 2016 taxable income, consider deferring a debt-cancellation event until 2017.
  • To reduce 2016 taxable income, consider disposing of a passive activity in 2016 if doing so will allow you to deduct suspended passive activity losses.
  • If you own an interest in a partnership or S corporation, consider whether you need to increase your basis in the entity so you can deduct a loss from it for this year.

 

Effective tax planning is a year-round effort—especially as your overall financial position changes—and at RDHB, we work with our clients to minimize tax liability and maximize tax savings.

As the end of the year approaches, it is a good time to review several ways that you can potentially lower your tax bill for 2016. Consider the following ideas for individuals:

  • Realize losses on stock while substantially preserving your investment position. There are several ways this can be done. For example, you can sell the original holding, then buy back the same securities at least 31 days later. It may be advisable for us to meet to discuss year-end trades you should consider making.
  • Postpone income until 2017 and accelerate deductions into 2016 to lower your 2016 tax bill. This strategy may enable you to claim larger deductions, credits, and other tax breaks for 2016 that are phased out over varying levels of adjusted gross income (AGI). These include child tax credits, higher education tax credits, and deductions for student loan interest. Postponing income also is desirable for those taxpayers who anticipate being in a lower tax bracket next year due to changed financial circumstances. Note, however, that in some cases, it may pay to actually accelerate income into 2016. For example, this may be the case where a person’s marginal tax rate is much lower this year than it will be next year or where lower income in 2017 will result in a higher 2017 tax credit for an individual who plans to purchase health insurance on a health exchange and is eligible for a premium assistance credit.
  • If you believe a Roth IRA is better than a traditional IRA and you are eligible to convert a traditional IRS to a Roth IRA, consider converting traditional-IRA money invested in beaten-down stocks (or mutual funds) into a Roth IRA. Keep in mind, however, that such a conversion will increase your AGI for 2016.
  • If you converted assets in a traditional IRA to a Roth IRA earlier in the year and the assets in the Roth IRA account declined in value, you could wind up paying a higher tax than is necessary if you leave things as is. You can back out of the transaction by recharacterizing the conversion—that is, by transferring the converted amount (plus earnings, or minus losses) from the Roth IRA back to a traditional IRA via a trustee-to-trustee transfer. You can later reconvert to a Roth IRA.
  • It may be advantageous to try to arrange with your employer to defer, until early 2017, a bonus that may be coming your way.
  • Consider using a credit card to pay deductible expenses before the end of the year. Doing so will increase your 2016 deductions even if you don’t pay your credit card bill until after the end of the year.
  • If you expect to owe state and local income taxes when you file your return next year, consider asking your employer to increase withholding of state and local taxes (or pay estimated tax payments of state and local taxes) before year-end to pull the deduction of those taxes into 2016 if you won’t be subject to alternative minimum tax (AMT) in 2016.
  • Take an eligible rollover distribution from a qualified retirement plan before the end of 2016 if you are facing a penalty for underpayment of estimated tax and having your employer increase your withholding is unavailable or won’t sufficiently address the problem. Income tax will be withheld from the distribution and will be applied toward the taxes owed for 2016. You can then timely roll over the gross amount of the distribution, i.e., the net amount you received plus the amount of withheld tax, to a traditional IRA. No part of the distribution will be includible in income for 2016, but the withheld tax will be applied pro rata over the full 2016 tax year to reduce previous underpayments of estimated tax.
  • Estimate the effect of any year-end planning moves on the AMT for 2016, keeping in mind that many tax breaks allowed for purposes of calculating regular taxes are disallowed for AMT purposes. These include the deduction for state and local property taxes on your residence, state income taxes, miscellaneous itemized deductions, and personal exemption deductions. Other deductions, such as for medical expenses of a taxpayer who is at least age 65 or whose spouse is at least 65 as of the close of the tax year, are calculated in a more restrictive way for AMT purposes than for regular tax purposes. If you are subject to the AMT for 2016, or suspect you might be, these types of deductions should not be accelerated.
  • You may be able to save taxes this year and next by applying a bunching strategy to “miscellaneous” itemized deductions, medical expenses and other itemized deductions.
  • For 2016, the “floor” beneath medical expense deductions for those age 65 or older is 7.5% of adjusted gross income (AGI). Unless Congress changes the rules, this floor will rise to 10% of AGI next year. Taxpayers age 65 or older who can claim itemized deductions this year, but won’t be able to next year because of the higher floor, should consider accelerating discretionary or elective medical procedures or expenses (e.g., dental implants or expensive eyewear).
  • You may want to pay contested taxes before the end of the year, so as to be able to deduct them this year while continuing to contest them next year.
  • You may want to settle an insurance or damage claim in order to maximize your casualty loss deduction this year.
  • Take required minimum distributions (RMDs) from your IRA or 401(k) plan (or other employer-sponsored retirement plan). RMDs from IRAs must begin by April 1 of the year following the year you reach age 70-½. That start date also applies to company plans, but non-5% company owners who continue working may defer RMDs until April 1 following the year they retire. Failure to take a required withdrawal can result in a penalty of 50% of the amount of the RMD not withdrawn. Although RMDs must begin no later than April 1 following the year in which the IRA owner attains age 70-½, the first distribution calendar year is the year in which the IRA owner attains age 70-½. Thus, if you turn age 70-½ in 2016, you can delay the first required distribution to 2017, but if you do, you will have to take a double distribution in 2017—the amount required for 2016 plus the amount required for 2017. Think twice before delaying 2016 distributions to 2017, as bunching income into 2017 might push you into a higher tax bracket or have a detrimental impact on various income tax deductions that are reduced at higher income levels. However, it could be beneficial to take both distributions in 2017 if you will be in a substantially lower bracket that year.
  • Increase the amount you set aside for next year in your employer’s health flexible spending account (FSA) if you set aside too little for this year.
  • If you become eligible in or before December of 2016 to make health savings account (HSA) contributions, you can make a full year’s worth of deductible HSA contributions for 2016.
  • If you are thinking of installing energy saving improvements to your home, such as certain high-efficiency insulation materials, do so before the close of 2016. You may qualify for a “nonbusiness energy property credit” that won’t be available after this year, unless Congress reinstates it.
  • Make gifts sheltered by the annual gift tax exclusion before the end of the year and thereby save gift and/or estate taxes. The exclusion applies to gifts of up to $14,000 made in 2016 and 2017 to each of an unlimited number of individuals. You can’t carry over unused exclusions from one year to the next. The transfers also may save family income taxes where income-earning property is given to family members in lower income tax brackets who are not subject to the kiddie tax.

 

We are excited to announce that Debra L. Ange, CPA has joined Rizzo, DiGiacco, Hern & Baniewicz CPA’s as a manager in our small business division. Deb brings over 18 years of small business experience including month end reporting, annual reporting, sales tax, corporate and individual tax and consulting experience to the firm.  She has served a variety of industries including extensive experience in the Restaurant and Medical industries.

The addition of Deb to our team enhances our ability to provide a full range of client services to businesses and individuals.  If you have any projects or are aware of anyone in your network that could benefit from our expertise with the addition of Deb, please pass along our information.

 

RDHB is excited to announce the promotion of Krystal Zawodzinski to Tax Director where she will be responsible for managing our tax department.  Krystal has over 12 years of experience in public accounting and the firm looks forward to continued growth under her leadership.

You may contact Krystal at kzawodzinski@rdhbcpa.com or by calling her at 585-662-5046.

 

In an effort to make electronic filing easier, new guidance has been issued that will expand the use of electronic signatures on two authorization forms for individual income tax returns, Forms 8878 and 8879.

Electronic signatures are accepted on:

  • Form 8878, IRS e-file Signature Authorization used by filers of extension requests, that is, Form 4868 or Form 2350. The latter form is for taxpayers living outside the United States;
  • Form 8879, IRS e-file Signature Authorization used by filers of Form 1040, 1040A, Form 1040EZ or Form 1040-SS.

The e-signature guidance adds another signing option for taxpayers. For example, taxpayers can e-sign either Form 8878 or Form 8879 from their home computer. Taxpayers can also physically sign the authorization form in their electronic return originator’s office or physically sign and mail the form to their ERO.

Benefits for Accounting Firms and Taxpayers

Use of e-signatures is optional for accounting firms. The e-signature option helps reduce office expenses like paper, postage and physical storage space and time-consuming efforts spent obtaining a physically signed authorization form.

The new guidance reduces burden on taxpayers who had to physically sign the authorization form either in their Firm’s office or mail it. Identity verification requirements support efforts to protect taxpayers from identity theft.

RDHB’s eSign Service

As an innovative firm, RDHB is leading the way with its eSign capabilities.  We have teamed up with RightSignature, a leader in eSign services, to bring our clients this service.  You may have wondered why we hound you for your email address or have sent mass emails asking you to update your contact information.  We use that information to offer you services like these and others that are not just cutting edge, but also becoming industry standard.

For more information, please visit:

https://www.irs.gov/uac/new-electronic-signature-guidance-for-the-irs-efile-signature-authorization

 

We are excited to announce that David Feor, CPA, MBA has joined Rizzo, DiGiacco, Hern & Baniewicz CPA’s as a manager in our tax division.  David brings excellent tax and consulting experience to the firm.  He has served a variety of industries with skill in corporate taxation, multi-state businesses and individual tax planning, including technical tax expertise in Construction, Manufacturing, Investments, Gifts, Financial Analysis and Tax Strategy. He also volunteers as a member of Sports Car Club of America.  Feor received his MBA in Corporate Finance from The Simon School of Business Administration

The addition of David to our team enhances our ability to provide a full range of client services to businesses and individuals.  If you have any projects or are aware of anyone in your network that could benefit from our expertise with the addition of David, please pass along our information.

 

Consultants in these areas are one of the critical component as it serves as a partner in smooth sailing of the business by providing bank or financing assistance,in development of business plans, integration of bookkeeping, audits and sales tax returns. In a closer inspection, an effective accounting, tax and business consultancy services company should have the following characteristics:

Provides Effective Planning Strategies that Provide Results.

Consultants and advisers uses their knowledge on accounting and business to come up with a clear plan of action in achieving positive financial future. This includes effective creation of strategies in tax legislation, tax advantages and exemptions, accounting, and revenue provisions. Business advisors provide comprehensive review on current standing of your business to come up with strategies to be successful on the competitive Rochester business market or climate.

Customized to Every Client Needs.

Effective business and accounting consultants provides customized plans of action suit to every client’s needs. Whether you are starting out in your business, planning on merger and acquisition, or keeping up on the implications of these strategies, there would be a right solution for a particular target or goal. These can be done by assistance on the creation of business plans that involves assistance on the capital and bank financing, strategic management and financial projections and accounting. Assesment and implementation of the strategies should be customized on what the company wanted to achieve; may it be a timely and trageted return of investment, tax and accounting, creation of financing assistance and business plans.

Communication and Transparency.

The advisory role of the consulting firm is focused on client’s end goals. For instance, compliance activities and its implications that are provided by accountant is explained in simple terms as possible to the client. This transparency improved the effective communication between the two parties. The goals depending on the mission and vision of the company are explained in simple ways for you to understand what to do, the changes, the possible ways you can do when the problems will occur along the way. Whether the client,may it be large or small companies, trusts, partnerships and individuals, can attain effective communication on what practices should be performed.

Improvement and Integration.

Tax and accountant team are professionals that deliver technical services based on the specific objectives. These are customized based on the strategies and functions on particular company’s sets of targets. Services offered increases better control on the tax, business and accounting functions to focus more on the strategic management. This would also help in monitoring and assesment whether the target or goals are met.

Committed to Customer Service.

A total client package service of an innovative and effective tax, business and accounting consultancy company has its commitment to total client service. Building understanding on the particular business practices is needed pushes the company to succeed in their chosen niche or market. Core operating approaches of an effective firm builds lasting relationships by good customer service for long term business development. Effective company understands the culture and dynamics of the client company and to use the strategies and plans to know and undertand what the company wanted to achieve that promotes further growth.

Innovation and Continuous Improvement.

Orientation on the business processes for effectivity and effeciency. Implementation of strategies planned out by both the consultancy firm and the client company will facilitates continuous improvement. Integration or infusion of new technologies can lead to higher quality improvement of developmental process. Innovative firms has widely distributed practices that are widely distributed. Strategies involved in effective implementation involves careful planning on what the goals or the target the company needs to improve, specifically on the business functions, tax and accounting functions of the client firm.

 

There is an obvious connection between accountants and taxes. But what may surprise a lot of people is that for the majority of the year what certified public accounts (CPAs) do has nothing to do with April 15. In order to be fully protected while ensuring your money and assets are working how you want them to, you need CPAs that offer total consulting and accounting services, not just taxes.

Consulting—it’s no secret that small businesses can have a hard time generating capital and obtaining financing. Make sure your CPA will compare business proposals from different lenders so you are getting the best deal. Also inquire about bank financing assistance programs and services.

You CPA should also be helping you move forward. Ask yourself, can my CPA help develop a business plan, can they prepare strategies and financial projections, are they experts in merger and acquisition assistance and do they use remote access accounting systems? Comprehensive CPAs will understand business plans completely and be able to advise you on sale price and strategies while helping you identify prospective buyers.

Accounting—reliable and accurate bookkeeping is essential for any thriving business. Look for a CPA that can design a plan that covers your bookkeeping needs, whether you are outsourcing or not. A good firm will also be able to help with retirement plan audits, sales tax returns, electronic data retention and financial statement engagements.

 

Before signing on the dotted line of a franchise agreement, prospective franchisees are strongly advised to read and re-read the fine print with the assistance of the best Rochester consulting professionals from Rizzo, DiGiacco, Hern&Baniewicz. Otherwise, you may just find yourself being held hostage to the two or more of the top ten dirty franchise provisions!

1.      Gag Order

Prohibitions on discussions about any aspect of the franchise experience with anybody outside of the system are a clear violation of disclosure laws enforced by government agencies including the FTC. These laws require that the list of terminated franchisees should be provided to prospective franchisees for their reference.

2.     Unilateral Amendments

Rochester consulting professionals are on hand to ensure that the franchisee will be notified of changes in the franchiser’s policies and practices including the provisions on the contract, operations manual, and other pertinent documents. Many of these changes will require the expertise of a Rochester CPA such as in the case of the computation of total franchise fees.

3.      Nonreciprocal Non-competition Covenants

Ask the franchiser to change the oppressive provisions related to nonreciprocal noncompetition covenants especially during the duration of the franchise agreement. These covenants can include permitting the franchiser to place competing units within close distance of each other, thus, lowering both of their sales.

4.      Lack of Accountability

Yet another provision that Rochester consulting professionals will see as a red flag is the lack of accountability for the advertising fund. The franchiser must be held accountable and responsible to the franchisee about the money spent for advertising as it impacts on the latter’s market and money.

5.      Lawsuit Venues

In the case of lawsuits between the two parties, the franchisee should be provided with the opportunity to defend itself in its home state instead of wherever the franchiser wants it to be, say, its home state. This will be disadvantageous to the franchisee.

6.       Lack of Mutual Cure Periods

If the franchiser is provided with specific days to cure any alleged defaults on his part of the bargain, then the franchisee should also be provided with the same right.

7.       Restrictive Sourcing Requirements

Many issues wherein Rochester consulting professionals have mediated involve restrictive sourcing requirements wherein the franchisees are required to source their raw materials, supplies and even equipment solely from the franchiser and/or franchiser-designated suppliers.

8.       Kickbacks to Franchisors

Instead of passing promotional fees, commissions and kickbacks provided by vendors who sell goods and services to the franchisee, the franchisor pockets the money. The opposite should be clearly stated on the franchise contract.

9.       Lack of Mutual Legal Fee Terms

In this scenario, the franchisee is required to pay all of the legal expenses incurred by the franchisor in the event of a lawsuit between the two parties. But when the franchisee wins the lawsuit, it will most likely shoulder the legal costs, thus, putting it at a disadvantage despite the win. There should be a provision for reciprocal rights and responsibilities for legal fees incurred.

10.     Substantial Differences in Renewal Terms

Even when the original franchise agreement goes smoothly, franchisees are still well-advised to secure the services of the best Rochester consulting professionals on the renewal phase. The new contract may have significant differences that can put the franchisee at risk in the future.