Category Archives: Business Reports

Business Report: Contractors And The New Tax Reform

February 9, 2018February 9, 2018

Robert L. Kind is a CPA and shareholder with Teal, Becker & Chiaramonte CPAs, PC.
Courtesy Teal, Becker & Chiaramonte

By robert l. kind

As the new tax reform took shape in late 2017 and then was approved just a few days before Christmas, contractor services team were examining what elements could have the most impact on contractors and small business owners.

What is commonly being called the Tax Cut and Jobs Act (TCJA) of 2017 has caused a lot of discussion on whether companies will come out as winners or losers in 2018. While it has enhanced some tax breaks for contractors, it has also reduced or eliminated others.

Let’s start with the good news first. Here are some of the positive outcomes we think may be coming contractors’ way with the new law.

Expanded use of cash basis accounting method

Many contractors with average receipts over $10,000,000 have been required to use the percentage of completion method for tax purposes. The TCJA provides that, for tax years beginning after Dec. 31, 2017, taxpayers that have average annual gross receipts of $25 million or less during the preceding three years are not required to report on the percentage of completion method and can elect to be treated on the cash basis of accounting. The cash basis of accounting should present a more favorable deferral of income for a contractor.

Business Report: Building An Effective Board Of Directors

December 6, 2017December 7, 2017

Matt Young, of Bond Schoeneck & King, deals with nonprofit governance and compliance.
Courtesy Bond Schoeneck & King

By Matt Young

“Nonprofits embody the best spirit and values of our nation. They help millions of individuals and families daily. They protect, feed, heal, shelter, educate, and nurture our bodies and spirits. Nonprofits also give shape to our boldest dreams, highest ideals, and noblest causes. They turn our beliefs into action – as promoters of democracy, champions of the common good, incubators of innovation, laboratories of leadership, protectors of taxpayers, responders in times of trouble, stimulators of the economy, and weavers of community fabric.” — National Council of Nonprofits

The importance of not-for-profit organizations cannot be understated—they are the life-blood of our community. And the most successful not-for-profit organizations have one thing in common—effective boards of directors. Effective boards ensure that the organization stays focused on its mission, manages its funds effectively, and complies with the ever-changing legal and regulatory environment. Selecting the right people to serve on your organization’s board is critical to its success.

As you move forward in your recruitment efforts, these five priorities can help you build an effective board:

1. Commitment to the Mission.

Boards establish and oversee the mission of their organizations. Boards develop and adopt policies and procedures to help management and staff achieve that mission. Effective board members care deeply about, and “buy in” to, the organization’s mission. If they do not, they will not bring much value.

Business Report: Personal Financial Checklist

December 6, 2017December 7, 2017

Stephen Kyne is a partner at Sterling Manor Financial in Saratoga Springs and Rhinebeck.
Courtesy Sterling Manor Financial

By Stephen Kyne

As the year winds down, it is important for us to take a moment to review our financial position and see if there are any steps we can take to capitalize on what’s happened during the year, while proactively setting ourselves up for success in 2018.

Here’s a quick checklist:

1. Pay your school taxes early. In light of the current tax legislation making its way through Congress, it’s important to note the proposed changes in State and Local Tax (SALT) deductions. Since we live in a high-tax state, this is of concern because the current proposals eliminate or significantly reduce SALT deductions.

Talk to your tax accountant to determine if it may be to your advantage to pay the second installment of your school taxes in 2017, rather than waiting for them to be due in early 2018. This could allow you to claim the deduction while it still exists, rather than forego the opportunity.

2. Tax-loss harvesting. The S&P is up nearly 20 percent in 2017, so you may have recognized some capital gains in your non-retirement accounts. In order to offset those gains, thereby reducing your tax liability, be sure to talk to your financial advisor to determine if there are any losses you could recognize before the calendar year runs out.

3. Take your Required Minimum Distributions (RMDs). If you’re at or over the age of 70 ½ , the government requires that you withdraw a certain percentage of your IRAs and other tax deferred accounts, depending on your age, and pay taxes on the withdrawal. The penalty for not taking the required amount is 50 percent of the amount you didn’t take, so talk to your tax accountant and financial advisor to be sure you’ve met this important requirement.

Business Report: Retirement Account RMDs

December 6, 2017December 7, 2017

David Cumming is a senior vice president and financial advisor with Morgan Stanley.
Courtesy Mogan Stanley

By David L Cumming

One retirement fund decision that the government makes for you is requiring that you withdraw at least some of your funds annually, depending on your age and the account type. This is known as a required minimum distribution, or RMD, and it must be taken from your retirement accounts (other than Roth IRAs) by Dec. 31 each year, starting the year after you turn age 70½.

Generally, an RMD is determined using uniform life expectancy tables that take into consideration the account owner’s and/or account beneficiary’s age and marital status, as well as their account balance(s) as of December 31 of the year prior to the distribution year.

The exact distribution amount changes from year to year. It is calculated by dividing an account’s year-end value by the distribution period determined by the Internal Revenue Service (see table below). For instance, an account holder with a $100,000 traditional IRA at age 75 would need to withdraw $4,367 ($100,000/22.9), or 4.37 percent of the total balance.

Here are some important considerations for those entering the distribution phase of their investing lives.

Business Report: Educational Assistance Plans

November 1, 2017November 2, 2017

Frank Mayer, a member of Bond Schoeneck & King, deals with tax-related matters. Courtesy Bond Schoeneck & King

By Frank Mayer

Many human resources professionals are struggling to fill open positions these days. At the same time, the tuition cost for individuals who are pursuing undergraduate or graduate degrees is daunting. One solution that may be a “win-win” for employers and employees is an educational assistance plan.

An educational assistance plan involves the employer agreeing to pay on behalf of, or reimburse, the employee for tuition costs when the employee is taking certain qualifying courses. If structured properly, employer-paid educational expenses may be excluded from the gross income of an employee if provided to the employee under an Internal Revenue Code, Section 127 educational assistance plan, commonly referred to as a “127 Plan,” or if the expenses qualify as a working condition fringe benefit to the employee, under Code Section 132.

This type of educational assistance is a much greater benefit to the employee, and a better retention tool, if the employee doesn’t have to pay income tax on the amount of assistance they receive.

Section 127 Plan. A properly drafted 127 Plan provides an exclusion of up to $5,250 annually from an employee’s gross income for the payment by an employer of certain educational expenses incurred by or on behalf of an employee. The amount excluded from the employee’s gross income includes the cost of tuition, fees, books, supplies and certain equipment.

While the excludable coursework does not need to be job related, no exclusion is available for education involving sports, games or hobbies (unless the education involves the business of the employer or is required as part of a degree program). In addition, no exclusion is available for the cost of meals, lodging and transportation or any payment for the cost of tools or supplies that may be retained by the employee after completion of a course. A qualifying 127 Plan must be a separate written plan and must satisfy certain employee nondiscrimination requirements.

Tips For Wellness In The ‘Golden Years’

November 1, 2017November 2, 2017

Kym Hance, client care services/aging life care manager with Herzog Law Firm. Courtesy Herzog Law Firm

By Kym Hance, CMC

There are a number of myths regarding aging. Some people may mistakenly believe that aging only means getting sick or disabled, while others may think that all adults face memory loss in their later years.

Even more people believe that once you reach a certain age, there is less that you can contribute to society and that you are done learning. All of these beliefs are absolutely false. In fact, many people find that the years following retirement are filled with health, vitality, and meaning.

Since we are all going to get to those golden years eventually, here are a few tips to consider that may help to make that stage of life some of the best years you’ll ever have:

1. Active Mindset. Keeping the brain active and fit is imperative to the health of older adults. Not only does it help stave off memory-loss illnesses like Alzheimer’s and dementia, but it also fosters executive function. Try word games and recall exercises. For example, find 5 red objects during a walk in the neighborhood and recall them when back home. Routines limit brain stimulation so introduce new foods or new ways of eating the same food. For example, replace canned peaches with freshly sliced ones. Also, try taking a different route to the grocery store or shopping center.

2. Balancing Act. In addition to exercises that build strength and improve flexibility and cardiovascular endurance, make sure to add balancing activities to the daily routine. Good balance requires maintaining a center of gravity over the base of support. Tai chi, yoga, walking on challenging surfaces and water exercises all enhance overall balance.

3. Dancing with the Seniors. Older adults getting regular physical exercise are 60 percent less likely to get dementia. Exercise increases oxygen to the brain and releases a protein that strengthens cells and neurons. Dance involves all of the above plus the cerebral activity present in learning and memory.

Business Report: Buying Commercial Real Estate

October 6, 2017October 9, 2017

Kim Salerno is the principal in Salerno Law PC in Ballston Spa.
Courtesy Salerno Law PC

Kimberly A. Salerno, Esq.

Clients we represent who are buying their first home typically have little experience with real estate. Attorneys can hold their hand through the entire purchase from contract review right through to the closing and explain each step to them along the way.

Commercial clients, on the other hand, are usually more sophisticated with the real estate world and often know exactly what they want. The attorney-client relationship, therefore, can vary greatly between the two types of clients.

Residential transactions do not vary dramatically, as they are generally single-family homes and the legal issues are generally the same. As compared with commercial transactions, depending upon the type of property being purchased, the transaction can be much more complicated because there are so many different factors to consider for the client.

Are you purchasing an office building, apartment building or multi-use with leases? Time should be taken to review the leases in detail and if necessary, negotiate changes to the leases with the seller and tenant. Depending upon your plans for the units, the sales contract should include language limiting the seller’s ability to engage in any new leases without the buyer’s approval.

Business Report: The Right Time To Invest In Data Security

October 6, 2017October 9, 2017

Jim Lapointe is president of Colden Co. Inc. in Ballston Spa.
Courtesy Colden Co. Inc.

By Jim Lapointe

It is well known that the cyber world is a dangerous place and becoming more dangerous every day. Threats to businesses like ransomware are causing real concern and notable monetary damage to many small to mid-size businesses.

If the ever-increasing threats are not enough of a reason to take a deeper look at your business’s data security (and those reasons should be enough) there is another reason: regulation. Governments are taking a more active role in security and enforcing regulations for minimum security standards as well as fining businesses that do not meet those standards.

In fact, at the National Governor’s Association recent meeting, a majority of State Governors agreed to increasing cyber security standards. The problem for many small to mid-sized businesses (SMBs) is keeping up with those regulations and finding solutions that are price-competitive.

As an example, each state has their own statutes for protecting personal identifiable information (PII). Some are vague and advise businesses to take “reasonable” precautions. New York has a more defined policy that outlines specific steps businesses need to take to protect PII.

Business Report: What Does Security Mean?

September 11, 2017

Richard Ruzzo, managing partner, COO, Shepherd Communication and Security.
Courtesy Shepherd Communication and Security.

By Richard Ruzzo

When I hear that phrase from a new customer, I know from more than 13 years of experience in the communications and security business that it often means very different things to different people.

The term, “security,” has become a catchword encompassing a range of different issues and challenges being faced by the homeowner or business owner today.

As an expert in access control, surveillance, perimeter alarm systems, and “smart” home/office solutions, it’s my job to ask the right questions and drill down to what that potential customer really needs to make his/her home or business safe and secure.

For most people, “security” usually means cameras, which really means surveillance. Cameras are a great way to protect your business against costly things like shrinkage (employee or customer theft), low employee productivity, or unnecessary and sometimes nefarious insurance claims for trips and falls at your business or home.

Those issues usually occur inside the business or home. But, what about things that happen outside of your office building or home? For some customers, “security” may mean monitoring and protecting against what’s going on outside of the office or home. Has someone been spending too much time “aimlessly” wandering around your business perimeter or residence? Are they looking for patterns in your comings and goings? Are they, in fact, “casing” your home or business for future unlawful entry?

Business Report: Plan Early, Communicate Often

August 3, 2017

David L. Cumming, senior vice president, financial advisor with Morgan Stanley.
Courtesy Morgan Stanley

By David L. Cumming

As the Baby Boom generation continues its march to retirement, a significant number of entrepreneurs will soon begin the process of transitioning family businesses to the next generation.

If you are about to embark on this journey, here are some of the potential pitfalls to avoid.

According to the 2016 U.S. Family Business Survey conducted by Price Waterhouse Coopers, only about 43 percent of private businesses have done any exit planning whatsoever. Failure to execute a business transition may lead to multiple negative outcomes, including:

1. Breakdown of communication and trust within the family unit;

2. Inadequately prepared heirs and absence of a clear vision or mission to align family members;

3. Failure by advisors to properly address taxation, governance and wealth preservation issues.

With success riding largely on a family’s ability to communicate and to clearly articulate a plan for the future, the following guidelines may help to ease the business transition process.

Get the process started years before the actual transition occurs. Some experts recommend building an exit/transition strategy into the initial business plan. As part of the planning process, business owners should create: