Gross Mendelsohn Blog
A resource to help business owners, nonprofit executives and high net worth families preserve wealth, grow and thrive.
Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
With employee benefit plan audit season not too far in the rearview mirror, it’s a good time to reflect on lessons learned. I’m sharing a few insights, from the point of view of an employee benefit plan auditor, for clients who are required to have their plan audited.
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High Net Worth Families | Service Businesses
As we near the end of 2023, individuals may be surprised to learn of substantial tax provision changes sitting on the horizon. The tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act (TCJA) are sunsetting with the end of the 2025 tax year.
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Any government contractor that procures products from the Xinjiang Uyghur Autonomous Region of the People's Republic of China is affected by a new ruling by the Department of Defense (DoD). This ruling takes effect October 30, 2023.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Depreciation: the unsung hero of every business's accounting saga. It's the silent force that ensures your financial records dance to the rhythm of balance, a vital element in the complex symphony of profit and loss. Yet, for all its importance, selecting the right depreciation tool can be daunting. Fear not! We're here to turn this mundane topic into a thrilling expedition through the world of financial wizardry.
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Construction & Real Estate | Forensics & Litigation Support | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Payroll theft comes in all shapes and sizes and often lies hidden below the surface. Fraudsters who perpetrate ghost employee schemes use the shadow of another employee to cover their tracks. One of the best ways to prevent payroll theft is to understand what ghost employees are, and the motives behind their creation. Through a real-life case study, we look at how payroll fraud can be perpetrated, then offer strategies to uncover and prevent this kind of fraud.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
The IRS announced a moratorium on the popular Employee Retention Credit through at least the end of 2023. Here’s what you need to know about the moratorium.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
There’s a new law that should be on the radar screen of most small- and medium-sized business owners. The Corporate Transparency Act (CTA), passed in 2021, will require many businesses to take action in 2024. Now is the time for business owners to be aware of what’s coming down the pike with the new law, understand how they might be affected and the steps they need to take to comply.
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To properly value a business, adjustments may need to be made to the business’s revenue and expenses to normalize its income statement and accurately reflect the true economic performance of the business. One of the adjustments that commonly may be made during a business valuation is to normalize officers’ compensation, which may result in a more credible business value.
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Service Businesses
If you’re one of the half million Americans who purchased an electric vehicle so far in 2023, you might be eligible for a tax credit.
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Business Valuation | Forensics & Litigation Support
It’s a common saying among data scientists: “garbage in, garbage out.” In other words, bad inputs lead to bad conclusions. It’s no different in business valuation, where an analyst synthesizes many data inputs to arrive at a single estimate of value. Bad data inputs lead to unreliable conclusions, which can be detrimental for the business owner, especially in litigation. Sometimes, the bad data comes from the business owner. Attorneys who hire valuation analysts for their cases should know the pitfalls of relying on client-provided data. Let’s look at some examples of mistakes valuation analysts have made in over-relying on client-provided data.
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Eligible Maryland manufacturing businesses can receive up to $500,000 in state funding as part of the Maryland Manufacturing 4.0 Grant Program. The program supports manufacturing businesses that invest in cutting-edge technologies to remain competitive and contribute to the growth of Maryland’s manufacturing sector. The application window opened July 2023 and will close October 18, 2023.
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Business Valuation | Forensics & Litigation Support
As a CPA, ABV and CVA, my credentials are a source of pride for me. Most people recognize the Certified Public Accountant (CPA) credential. However, very few people recognize other credentials in the accounting and forensic accounting field.
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Construction & Real Estate | High Net Worth Families
Short-term rentals are all the rage in real estate investing. With droves of vacationers and business travelers using Airbnb and VRBO to seek out homey, comfortable spaces that hotels don’t offer, short-term rentals can be an outstanding real estate investment. Although short-term rentals can get special tax treatment from the IRS and have significant benefits, you should know the tax-related pitfalls to avoid.
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If you updated your home in 2022 or 2023 to be more energy efficient, you might be eligible for one or more tax credits. Tax credits are an excellent way to reduce your tax liability.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
There’s new guidance for businesses and nonprofits that are subject to the relatively new lease accounting standard.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
If advertisements about the Employee Retention Credit (ERC) have grabbed your attention, you’re not alone. Scammers have jumped on the opportunity to convince business owners to claim this potentially lucrative tax credit. Here’s what you need to know about the ERC, who qualifies and how to avoid falling victim to a scam.
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Government contractors who do business with the Veterans Affairs Administration (VA) will soon have a great deal of increased cyber security and data privacy responsibilities after the VA recently updated cyber security compliance regulations. These new regulations better protect sensitive VA-related data stored in a contractor’s IT systems. The VA Acquisition Regulation (VAAR) is increasing focus on immediate breach notification requirements, the liquidated damages related to those breaches as well as unscheduled and intermittent site visits to inspect the IT systems housing the VA-related data. Contractors need to be in compliance with the new regulations in order to avoid the possible heavy penalties.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Intuit recently announced that it will discontinue service for QuickBooks Desktop 2020 as of May 31, 2023. If you use QuickBooks Desktop 2020, you have some decisions to make. Let’s look at how this will impact your business and what your options are as May 31 approaches.
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Forensics & Litigation Support
Determining a couple’s income is one of the most critical financial issues in a divorce case. Reviewing the couple’s Form 1040, to start, can help paint a picture of their financial position and lifestyle. Divorce attorneys who know where to look for key information on tax returns can gain an edge over their opponents. Everyone is required to disclose certain information in their tax returns, including total income, wages and alimony received. These numbers can serve as compelling evidence when making a case for identifying and dividing marital assets, proving the existence of hidden assets and determining income for support purposes. Let’s consider what an individual’s personal tax return can reveal, and where to look.
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Business Valuation | Forensics & Litigation Support
Divorce cases where one party owns a closely-held business can create complications in the valuation and division of the marital estate. One of the many questions commonly encountered in Virginia divorce cases involving a closely-held business is, How is an increase in a marital business’s value from the date of separation to trial treated? Frequently, the time between date of separation and trial is more than a year, and sometimes it’s several years. It’s possible that during this time many factors, from changes in business operations to industry changes, could cause the value of the business to increase. Let’s consider how this increase in business value may be treated in Virginia divorce cases.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Social Security & Medicare Tax As of January 1, 2023, the maximum amount of annual earnings subject to the Social Security increases to $160,200 (from $147,000 in 2022). There is no limit on the amount of earnings subject to the Medicare tax. The maximum Social Security tax to be deducted from an employee’s compensation during 2023 will be $9,932.40 (6.2% x $160,200).
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The manufacturing industry has been the backbone of the U.S. economy since the Industrial Revolution. The success of this industry has helped position the U.S. as the world's largest economy. An economy with a strong manufacturing presence helps ensure that a nation's people can access the food, supplies and commodities they need day-to-day. To help this industry thrive, several states in the Mid-Atlantic region provide state income tax and other tax credits for increasing employment or placing manufacturing equipment into service. Let's look at each state and see exactly what is offered to manufacturers.
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Service Businesses
The SECURE 2.0 Act of 2022 (“Secure 2.0”) was passed on December 29, 2022 and focuses primarily on enhancing retirement plan incentives for individual taxpayers. Let’s review some key provisions of the bill and how they could impact you and your business.
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Construction & Real Estate | Forensics & Litigation Support | High Net Worth Families | Manufacturing & Distribution | Service Businesses
Barbara Chalmers, 74, pleaded guilty in December 2022 to an embezzlement scheme of at least $29 million over the past decade. Ms. Chalmers was the bookkeeper for a charitable foundation and multiple companies run by the family of Jim Collins, a prominent Dallas businessman and former congressman. The family operates Collins American Capital Corp., International Family Investors LTD and the James M. Collins Foundation. Let’s look at how she did it and the red flags that were missed along the way.
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Between the merry-go-round of government changes, staffing shortages and a fluctuating financial market, many youth-focused nonprofits lack one of the most vital tools in securing their future–an endowment.
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Business Valuation | Forensics & Litigation Support
The 2000 Grunfeld v. Grunfeld divorce case out of New York is very instructive and packed with valuation insights. Let’s dig into the case, which considers the valuation of a partner’s interest in his law firm, his law license, the potential for double counting of income in determining both spousal support and equitable distribution, and other nuggets.
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If your organization is like many other youth-focused nonprofits, the generosity of donors is a huge source of funding for some, if not all, of your income. As a result, fundraising is always a top priority. Since child-focused nonprofits often compete for donor dollars and attention, how can your organization stand out in the crowd of nonprofits that help kids?
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
The new lease accounting standard, Accounting Standards Codification (ASC) 842, is out in full force and there are numerous rules, adjustments and transitions accounting departments need to be made aware of—stat.
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High Net Worth Families | Nonprofit
A recent charitable giving report from Blackbaud Institute confirms that donations in the United States grew by 9% in 2021. This increase occurred for nonprofits of all sizes in all sectors, with 12% of charitable giving coming from online donations. This uptick in charitable giving is, of course, excellent news for youth-focused nonprofits. However, your organization can benefit even more when your staff members are equipped to educate potential donors about some key tax benefits of charitable giving – beyond a simple cash donation. To understand the big picture, let’s first dive into the reasons behind the increase in giving and then review two mutually beneficial donation strategies for taxpayers and nonprofits.
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A work in process (WIP) schedule is one of the most important financial tools for a contractor—and it may be underutilized. Not only does a WIP schedule give a construction company and project stakeholders insight into a project’s financial performance, but it can help keep a company on track with a project currently in progress. To ensure your construction company fully leverages WIP’s capabilities, we’ll dive into some basics regarding WIP along with five key tips that will help keep your WIP schedules in good order.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
If there’s one thing for certain, accounting staff members at businesses and nonprofits have more than a few questions about the new lease standard that’s about to take effect. Implementing the biggest new accounting rule to come our way in decades is no walk in the park. That’s why we’re answering 15 frequently asked questions about the new lease standard.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
One of the unexpected consequences of the COVID-19 pandemic is the proliferation of remote employees. If your business has remote employees, there are tax consequences and rules you should be aware of.
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For nonprofits subject to a Single Audit, there’s a delay in the new requirement to use SAM.gov to submit Single Audit filings.
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In any economy, there are only two ways to increase the bottom line: increase revenue and/or decrease costs. Electronic Data Interchange (EDI) is a tool that can help with both. By eliminating operational bottlenecks, EDI helps lower costs while allowing manufacturers and distributors, to focus on strategic objectives, including revenue growth opportunities like taking on a new customer. Let's dive into what EDI is, how you can obtain EDI software and a real-life EDI implementation success story.
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Nonprofit | Service Businesses
President Joe Biden recently signed the Inflation Reduction Act of 2022 into law. The new legislation intends to curb inflation by decreasing the amount of money the government spends, imposing new streams of revenue and lowering both healthcare and energy bills for Americans. The 755-page bill has three major provisions. So, to help break it down, let’s take a look at these key provisions and see what each entails.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
The new lease accounting standard is effective for private companies and nonprofits for fiscal years beginning after December 15, 2021. This new accounting rule requires organizations to report their operating leases on the balance sheet. This will require some new journal entries. Is your organization ready? To help accounting teams at businesses and nonprofits, here are some of the basic journal entries you’ll need to use to account for operating leases under the new lease standard.
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Common area maintenance (CAM) costs are expenses incurred by a landlord to maintain or manage common areas in places like shopping centers or office buildings. For example, a parking lot in a shopping center or the lobby in an office building requires periodic maintenance, which is shared by the tenants who utilize those areas. Commercial real estate managers with retail or office space almost always have CAM costs, and need to be aware of a significant new accounting rule that affects how they are reported.
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Whether it’s part of a contentious divorce hearing or to assist a client in selling their business, a valuation is extremely important in determining the value of a business. Understanding risk factors is essential in determining how a business will be valued. Let’s consider what your business-owning clients need to know about company-specific risks and how they come into play when it’s time for a business valuation.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
When I ask business owners about the challenges facing their business, there is one common theme that runs across all industries — the labor dilemma. By now, we have all experienced the effects of the “Great Resignation.” Local businesses have shortened operating hours, closed on certain days or reduced menu offerings because they simply cannot find enough workers. Some clothing retailers have even closed dressing rooms, citing being short-staffed as the reason. Where are all the workers?
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Nonprofit | Service Businesses
Certain late tax filers are about to see some relief. The IRS is abating the late filing penalties for various tax returns for 2019 and 2020 that were filed late or have not yet been filed. This announcement came on August 24, 2022, when the IRS issued Notice 2022-36. Let’s take a look at why penalties are being waived, which tax returns are affected and what you can expect next.
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After numerous delays, the new lease standard has arrived. Any nonprofit organization with at least one lease will be impacted for years beginning after December 15, 2021, which will generally be your nonprofit organization's accounting year end for the 2022 calendar year or possibly your fiscal year ending June 30, 2023. With some calling this the biggest accounting change of this generation, it's crucial that nonprofits be prepared for the new standard. That’s why we created a list of seven tips to help ensure your nonprofit is set up for success when implementing the new lease standard, also known as Accounting Standards Codification (ASC) 842, Leases.
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Business Valuation | Forensics & Litigation Support
There are many instances when a business valuation report is needed in litigation. During a divorce, if one or both spouses own a business, it may be necessary for the business to be valued for asset distribution purposes. Each party may hire their own business valuation analyst to value the business, and each analyst may come back with very different conclusions as to the value of the business. While differences in value can often be the result of two analysts having justifiable differences of opinion, there sometimes can be something else going on. While most credentialed valuation analysts have high ethical standards, there are some unscrupulous “experts” who will purposefully “rig” their valuation report in order to achieve a desired result in favor of their client. So, how can you spot one of these “rigged” valuation reports?
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Charitable giving is generally a component of a comprehensive tax or estate plan. Receiving a tax benefit for charitable donations used to be a straightforward exercise for taxpayers who itemized deductions. Taxpayers simply made a contribution to a charitable organization and included their donations on Schedule A, Itemized Deductions. Things got a little complicated, however, with the passage of the Tax Cuts and Jobs Act in 2017, when the standard deduction was increased and the deduction for state and local taxes was capped at $10,000. The result was a dramatic decrease in the number of taxpayers claiming itemized deductions, and a corresponding decrease in charitable donations due to the diminished tax benefit. Rest assured, there are still ways for philanthropically-minded taxpayers to squeeze tax benefits out of their charitable giving.
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With a passion for serving child-focused nonprofits, Lisa Johnson’s enthusiasm for helping those organizations — both here at Gross Mendelsohn and in volunteer roles — is absolutely contagious. I sat down with Lisa to learn more about her nonprofit experience, what energizes her as a volunteer and board member, and the advice she has for nonprofit executive directors. Here's a recap of my chat with Lisa.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
The Maryland State Department of Assessments and Taxation (SDAT) made business owners very happy as House Bill 268 (HB268) has officially taken effect. This legislation increases the exemption amount of personal property eligible to be taxed. The exemption has gone from $2,500 to $20,000 for businesses, and from $10,000 to $20,000 for at-home businesses. As an extension of legislation HB90, which exempts from personal property valuation and taxation if the total cost of the personal property was less than $2,500, this new legislation is said to save $44.2 million in taxes for 14,217 Maryland businesses by increasing the exemption limit to $20,000.
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Construction & Real Estate | High Net Worth Families
The like-kind exchange is one of the most money-savvy ways to defer capital gains taxes while building your long-term wealth. A 1031 exchange, which gets its name from Section 1031 of the Internal Revenue Code, can help you swap one investment property for another and defer capital gains taxes. These transactions are complicated, and they're riddled with rules that could make or break your investment. But they can be fruitful, as long as they are executed correctly. Let’s take a look at 1031 exchanges, how they work and their benefits.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
The new lease standard is finally here and effective for all private companies and nonprofits for years beginning after December 15, 2021. After years of discussion and several delays, it’s important for private companies and nonprofits to start preparing for the new lease standard. That’s why we created a list of tips and best practices to get your organization headed down the right path toward a successful implementation of the new lease standard, also known as Accounting Standards Codification (ASC) 842, Leases.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
In wake of the new lease accounting standards, Accounting Standards Codification (ASC) 842 and International Financial Report Standards (IFRS) 16, it’s important that you have the right technology in place to handle complicated lease situations and ensure that your organization is compliant. Many companies without a comprehensive lease management software rely on tedious manual processes, spreadsheets and disparate systems that are cumbersome and prone to errors. Thankfully, there are lease management solutions that can stand alone or seamlessly integrate with ERP systems to consolidate data, reduce inaccuracies and streamline everyday operations.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Some are calling the new lease standard the biggest accounting change of this generation. While the accounting profession moved the goalposts on its effective date for years, the time is finally here for organizations to implement the sweeping changes brought about by FASB’s Accounting Standards Codification (ASC) 842, Leases. The changes that the new lease standard brings are substantial and can impact any business or nonprofit that has at least one lease. Here’s a brief rundown of what you need to know about this new accounting standard and how it will impact your organization’s financial statements.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
It seems like ancient history, but back in 2016, Maryland passed a law requiring any covered employer (i.e., one that didn’t have its own retirement plan and used a payroll system or service) to participate in the Maryland Small Business Retirement Savings Program - MarylandSaves. The program was set to launch in 2020, but like with many things, COVID caused some delays. The implementation is now scheduled for September 2022, and we cover the details you need to know.
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Manufacturing & Distribution | Service Businesses
While nearly every industry was impacted by the COVID pandemic, one could argue that no sector took a beating like the hospitality industry. Government shutdowns and consumer hesitancy plagued bars and restaurants. Even in the post-pandemic recovery phase, many hospitality business owners are still struggling to stay afloat due to labor shortages and continued consumer hesitancy.
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Forensics & Litigation Support
When I tell people that I’m a forensic accountant, they sometimes think of Christian Wolff, Ben Affleck’s character in the movie The Accountant. While it’s true that a forensic accountant can use their skills to investigate a company for potential embezzlement, the majority of cases they help attorneys with are far less glamorous.
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Construction & Real Estate | Fresh Ideas | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
With inflation running high, businesses everywhere are struggling to manage costs. Regardless of whether or not inflation is in check anytime soon, its effect on business revenue and savings requires planning and prioritizing now. We put together a checklist of potential ways you can manage the negative effects of inflation while identifying positive, long-term opportunities for your business.
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Many nonprofit associations get anxious in anticipation of their yearly audit, but there are ways you can make the process less stressful. Here are five tips from our audit team on how to take some of the stress out of your association’s yearly audit.
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Internal controls are vital to protect your nonprofit association from fraud. While most leaders believe employees work at an organization as much for the mission as they do for the paycheck, sometimes that just isn’t the case.
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Student loan forgiveness is getting substantial media attention, thanks to the Biden administration’s recent announcement that more than a half million borrowers will see their student debt balances wiped out automatically. This forgiveness cancels nearly $6 billion in federal student loans for 500,000+ former students of the now defunct Corinthian Colleges. All the recent chatter about student loan forgiveness, along with the mention of several exceptions, has many student loan borrowers wondering whether loan forgiveness is taxable.
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Construction & Real Estate | Manufacturing & Distribution | Service Businesses
A new Virginia law allows the owners of a pass-through entity (PTE) to shift their income tax burden generated from the PTE away from them personally and instead to the PTE itself.
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Certain provisions of the Tax Cuts and Jobs Act (TCJA) could have a significant impact on technology companies in 2022. Here’s what technology companies need to know about an amendment to Section 174 of the tax code that can affect taxable net income.
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Healthcare providers who received funding from the Provider Relief Fund must report the use of funds to the Health Resources & Services Administration according to a specific reporting schedule. Here’s what healthcare providers need to know.
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Forensics & Litigation Support
In dissolution of marriage cases, the valuation of marital property is necessary to ensure fair equitable distribution. But before values can be placed on marital property, the property first needs to be identified. As family law attorneys know, that process is more complicated than ever due to the rise of a new asset class: digital assets.
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Business Valuation | High Net Worth Families
When rock star Prince died on April 21, 2016, he didn’t have a will in place. This rather shocking scenario resulted in one of the most complicated probate hearings ever seen in Minnesota, Prince’s home state. Business owners and high net worth families alike can learn from Prince’s mistake by having a proper estate plan in place to minimize tax liability.
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Construction & Real Estate | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
If your Maryland business is subject to unemployment insurance taxes, be aware of potential changes to your tax rate for the 2022 calendar year.
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Backlog is an important measure of the health of a construction company. Here’s what contractors need to know about backlog and how it can help (or hurt) their profitability.
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Forensics & Litigation Support
The personal and adversarial nature of divorce litigation is a potent combination that can cause emotions to run high, sometimes leading the parties to lash out and punish the other financially. This can take the form of deliberately wasting marital assets, but also concealing marital assets, which we will discuss here.
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Maryland manufacturers, as well as other businesses located in certain geographic areas, may be eligible for a potentially significant tax credit, but the application window closes soon. If you anticipate hiring employees in the first half of 2022 for your business, you can take advantage of the More Jobs for Marylanders Incentive Program. However, the program will close to new applicants on June 1, 2022, so you should get your application in now.
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Construction & Real Estate | Government Contractors | High Net Worth Families | Manufacturing & Distribution | Service Businesses
Yesterday, Maryland announced that the deadline for individual income state tax filings and payments will be extended from April 18, 2022 to July 15, 2022.
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If you’re a government contractor and a potential client asked you to fill a position, could you give them a rough price on the spot? What would you charge for that position? What if a fellow contractor who wants to team with you on a proposal asked, “What is your wrap rate?” Just like building a house, laying the foundation may seem like a simple part of the overall construction process, but it’s the most important part of the entire project and in government contracting, it starts with the chart of accounts.
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Construction & Real Estate | Government Contractors
There are several accounting mistakes that government contractors make that can cause major headaches when uncovered during their federal acquisition regulation overhead audit. Here are five of the most common.
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We get a lot of questions from clients about cryptocurrency. Whether you’re new to the cryptocurrency scene or already own it but don’t know exactly what to do with it, it’s important to know the tax and investment ramifications of it. That’s why we asked two members of our team — Brian Nichols of our tax department and Steve Hannigan of GGM Wealth Advisors — to answer some common questions about cryptocurrency from both a tax and investment perspective.
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Many associations think there’s not much worse than going through a financial audit. Some see it as a “necessary evil,” while a mere few actually look forward to the auditors coming in to check the financial information, processes and controls.
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Construction & Real Estate | High Net Worth Families
Most people know the tax benefits of making charitable donations in the form of cash, stocks and non-cash (goodwill). But donating real estate is something you might not have considered as part of your charitable giving plan. This article describes three different ways to donate real estate, and the tax benefits and nuances associated with each.
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The Infrastructure Investment and Jobs Act (IIJA) gives the United States a generational investment in our nation’s infrastructure and competitiveness. According to the White House, this bipartisan infrastructure deal will rebuild America’s roads, bridges and rails, expand access to clean drinking water, and ensure every American has access to high-speed internet. The legislation is intended to help ease inflationary pressures and strengthen supply chains by making long overdue improvements for our nation’s ports, airports, rails and roads. Members of the construction industry largely applauded the bill's passage, saying it provides much-needed resources to modernize the country's aging and overburdened infrastructure. Let’s take a look at how the infrastructure legislation will affect construction contractors.
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Manufacturers and distributors need to have inventory available to ensure a steady flow of goods to producers and consumers. Selling inventory also keeps a steady flow of capital coming into your business. However, handling and storing materials can be costly.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
If your business is looking for ways to invest to increase accessibility for employees, customers and visitors with disabilities, there are two tax provisions that can help offset the cost of those expenses.
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Many nonprofits see IRS Federal Form 990 as an informational return that they send to the IRS every year, but in reality, the Form 990 is much more than that. Your organization’s 990 is open to public inspection, which means that your current and prospective donors may have access to at least the last three years of your organization’s 990s. Using the Form 990, donors can learn about your organization’s governance (or lack thereof), operations and programs.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
The Infrastructure Investment and Jobs Act was signed into law on November 15. While most of the legislation is related to investing in the nation’s infrastructure, there were a couple of tax provisions included in the bill. Here’s what you should know about two of those tax provisions: one affecting businesses and the other affecting brokers of cryptoassets.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
If your business or nonprofit used the fully refundable tax credits to cover the cost of COVID-19-related emergency paid sick leave (EPSL) or expanded family and medical leave (EFML) for employees, there are new reporting requirements for W-2 reporting for 2021.
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Between supply chain hurdles, labor shortages and the pandemic, it’s hard to turn a profit. That’s why it’s more important than ever to take advantage of every tax saving opportunity available to your business. Let’s look at some key tax credits for manufacturers and distributors.
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A reliable valuation is critical in many different contexts, including private sales, divorce, litigation and estate planning — just to name a few. A frequent challenge in valuing privately-owned businesses involves the treatment of non-operating assets and non-operating liabilities. Attorneys will benefit from having a basic understanding of these nuances of valuation, as they can have a significant impact on the conclusion of value. Let’s look at how the treatment of non-operating assets and non-operating liabilities can impact the value of a company.
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The Build Back Better Act (H.R. 5376) was introduced in the House of Representatives on September 27, 2021. If this bill is signed into law, it will have broad implications on estate planning, including changes to the unified credit, treatment of grantor trusts for tax purposes, and surcharges for high income estates and trusts. Let’s take a close look at those major changes.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Business entities that sponsor employee benefit plans, and plan administrators with the responsibility for regulatory compliance of their benefit plans should take note. There are significant changes coming for 2021 employee benefit plan audits that will include new requirements for plan sponsors.
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A new lease accounting standard for construction companies and contractors takes effect on December 15, 2021. This article covers the rules of the new standard and how your company can prepare.
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There were several big financial and occupancy changes in Maryland’s skilled nursing industry due to COVID-19. This is especially evident in areas like occupancy percentages, overall costs per patient day and nursing costs. In this article, we’ll discuss why these three areas changed in 2020 and what the data looks like compared to prior years.
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Charity watchdog sites are often resources that current and future donors (as well as volunteers and employees) rely on to evaluate a nonprofit. An optimized, up-to-date profile on a watchdog site can serve as a differentiator for your nonprofit, especially if a donor is deciding between two similar organizations. That’s why it’s so important for your nonprofit to know the information reported about your organization on watchdog sites. The following are among the most popular charity watchdog sites that nonprofits should know.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
The Work Opportunity Tax Credit is a long-standing tax benefit that encourages employers to hire employees from ten targeted groups facing barriers to employment.
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Who doesn’t love a good tip? If you have ever worked in hospitality, you know there is nothing better than a customer rewarding your service with a generous tip. For business owners on the other hand, tips can be challenging when it comes to accounting. So, allow us to share some “tips” on tips.
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A primary responsibility of nonprofit directors and officers is to ensure that their organization is accountable for its programs and finances to contributors, its members, the general public and government regulators.
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The U.S. Department of Health & Human Services (HHS) announced on September 10, 2021, that an additional $25.5 billion in COVID-19 relief funds will be made available to healthcare providers. Here’s what healthcare providers need to know and how they can apply for the relief.
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Donor support can have complex accounting requirements for private schools. This can lead to schools improperly recording certain types of donor support, which can result in misstatements or reclassifications. The following are just some of the most commonly overlooked or misstated areas of donor support in private school financial reporting.
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Forensics & Litigation Support
When it comes to stock options and deferred compensation in divorce, attorneys typically have many questions. The division of assets in any divorce is often a complicated process, but when stock options are added to the mix, the work becomes all the more difficult. Let’s look at the questions attorneys ask most often — and the answers to each.
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While no one gets excited about estate planning, for your family's sake, it's important to make sure your plan is up to date. This article covers some of the important information I like to share with clients during the estate planning process.
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Construction & Real Estate | High Net Worth Families
We get a lot of calls from people who want to start dabbling in real estate. While real estate can be a lucrative investment over time, those who want to dabble in real estate should be aware of how their investments will impact their taxes. If you are considering getting into real estate investing, there are a few key things you should know in order to increase your odds of making it a lucrative venture.
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One challenge manufacturing businesses face year in and year out is taxes. Even with a good CPA working alongside them, no business owner looks forward to dealing with taxes, let alone paying a tax bill. The good news? There are tax breaks specifically designed for manufacturers to help lower your tax liability. We’re here to tell you about two tax credits and two tax exemptions that every manufacturer should know about.
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Parents and grandparents establish custodial accounts for children for various reasons. For example, grandma might want to set aside $10,000 for her granddaughter, or maybe Mom and Dad want a tax shelter for their child’s savings. However, many folks who establish custodial accounts fail to recognize these accounts have significant legal and tax implications.
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New mandates regarding COVID-19 vaccinations and mask requirements in federal buildings will mean big changes for government contractors.
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There's good news for Maryland residents who have incurred at least $20,000 in undergraduate and/or graduate student loan debt: you may be eligible for a Maryland tax credit.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
The Paycheck Protection Program (PPP) is in the forgiveness stage for most businesses. Here’s an overview on how to navigate the PPP loan forgiveness process.
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You want board members who can contribute to your mission through their efforts, contacts or money. Stated simply, they need to have a passion for your mission. This ensures a level of interest that will help even if board members have different opinions on how to achieve the mission.
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Construction & Real Estate | Government Contractors
If your architecture or engineering firm is looking into working on state department of transportation awards or other federally funded contracts, you may have heard the term “overhead rate” or “indirect cost rate.” Calculating a rate for the first time can seem daunting. No worries. We’re here to answer some FAQs related to FAR overhead rates and audits.
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Hundreds of nonprofits face lawsuits every year, but many nonprofits assume they don’t need directors and officers (D&O) liability insurance. Unfortunately, if your nonprofit doesn’t have a D&O policy, your directors, staff and possibly even your volunteers may be at risk. D&O insurance protects your nonprofit from litigation related to negligence, wrongful termination and asset mismanagement.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
Remote employees can complicate taxes for businesses. In most cases, having a remote employee creates nexus or the obligation to file tax returns and pay taxes in the local jurisdiction and/or state that an employee works.
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A real estate waterfall is a term used to describe how real estate partners distribute cash flow. The “waterfall” is a way of visualizing various “pools” in a real estate partnership. Cash flow fills up each pool in succession, which spills over into the next pool. Each step along the way, the waterfall flows based on an agreed-upon methodology for distributing the profits. Once a pool has filled, remaining cash flows to the next pool, divided per the terms of the partnership agreement between the general and limited partners.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
There are many different ways a business owner can transfer a family-owned business to the next generation. Each method comes with its own set of risks and benefits, especially when it comes to tax implications associated with the transfer or sale.
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If your government contracting business doesn’t have its CMMC certification, you could be ineligible for future contracts — causing a hard hit to your revenue stream. With all eyes on cyber security these days, CMMC compliance is a critical issue that government contractors need to tackle. With CMMC compliance being required by many 2022 contracts, now is the time for government contractors to work toward the certification.
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High Net Worth Families | Service Businesses
The U.S. Tax Court recently issued a 271-page opinion, ending the long-running litigation between the Estate of Michael Jackson and the Internal Revenue Service. The court’s ruling was a major win for Jackson’s estate and the decision has the potential to impact future valuation cases.
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While students might be out for the season, summer is often the time when private schools hit the books to prepare for their yearly audit. Here is a quick guide on how to prepare your private school for this year’s audit.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
Businesses who are subject to Virginia income tax may need to file a one-time Unitary Business Report by July 1, 2021. If your company is required to file this report but fails to file by July 1, your business will be subject to a $10,000 fine. This new filing requirement affects businesses that are part of a “unitary business.”
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
I was on my way home the other day, talking with a client who was stressed about a major decision she was facing. After years of pouring her heart and soul, not to mention money, into building a successful family-owned business, she was ready to move on and pass it along to two of her children. She called to talk about the tax implications of selling the business, but instead of talking about capital gain, avoiding double taxes and minimizing tax liability, I steered the conversation in quite a different direction.
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As every long term care provider knows, effectively managing accounts receivable is critical to an organization’s financial success.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
There’s no magic bullet for making your family-owned business hum smoothly along from one generation to the next. The good news? You can learn from successful family-owned businesses that have made it to the second, third, fourth and even fifth generations. I took some time to think about my most profitable family-owned business clients and identify what they all have in common. Here’s what I came up with.
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Business Valuation | Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
A business valuation is often required to accomplish various personal, estate or business goals. There are certain life events that require business owners to get a business valuation.
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Business Valuation | Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
If the COVID-19 pandemic has taught us anything, it’s that we don’t know what’s coming around the corner. And like the pandemic, the next thing that comes around the corner will likely be out of your control. But there is something you can control with some careful planning: the transfer of your family-owned business. Let’s talk about business exit plans.
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Forensics & Litigation Support
Economic damages claimed by individuals in cases arising from personal injury, wrongful death, wrongful employment termination and employment discrimination typically include lost earnings and fringe benefits. Attorneys frequently retain CPAs as expert witnesses to determine the amount of those economic damages and to provide expert witness testimony. Let’s look at the role of a CPA as an expert in these cases.
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Service Businesses
On March 11, 2021, President Biden signed the American Rescue Plan into law. This $1.9 trillion COVID relief bill contains several tax provisions. Here are the highlights for individuals and businesses.
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Forensics & Litigation Support
A challenging aspect of any divorce proceeding is the division of assets — who gets what and how much?
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Nonprofit | Service Businesses
Maryland Governor Larry Hogan signed the RELIEF Act into law on February 15, 2021. The RELIEF Act is intended to help reverse some of the adverse economic conditions brought about by the COVID-19 pandemic. This legislation includes changes to personal and business tax filings, relief payments for certain individuals, a sales and use tax credit, and changes to pass-through entity taxation. Let’s look more closely at some of the key provisions in the $1 billion plus relief package.
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While it’s not necessarily a secret, there may be some real estate companies that aren’t aware that there’s an alternative to GAAP (Generally Accepted Accounting Principles) for maintaining their accounting records and presenting their financial statements. The accrual-based income tax basis of accounting is an acceptable alternative to GAAP for real estate companies. If income tax basis accounting is the right fit for your company, it could save you time and money when it comes to year-end reporting. Let’s take a closer look at the upside of the income tax basis accounting method.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
They are the last words any business owner wants to hear: “You are being audited by the IRS.”
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
In a recession, the most important thing a business can do is take control of its finances, especially when it comes to cash flow.
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Heads up to architecture and engineering firms: the American Association of State Highway and Transportation Officials has released its 2021 National Compensation Matrix (NCM). This is significant for architecture and engineering firms because the NCM is a tool that helps them demonstrate compliance with a regulation that has a huge impact on their profitability.
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As I write this, it’s hard to believe we are in February 2021. It’s even harder to believe that we are almost a year into the pandemic. As much as we all want to forget about 2020 and go full steam ahead in 2021, now is the time for associations, societies and other nonprofits, especially those with calendar year ends, to evaluate the effects that COVID-19 had on one of their most crucial benchmarks / metrics — membership retention.
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Business Valuation | Construction & Real Estate | Healthcare | High Net Worth Families | Manufacturing & Distribution | Service Businesses
Whether you want your company to continue growing after you retire or simply want to turn a profit on the sale of your business, every company owner needs an exit plan. As a CPA who has worked with business owners for decades, I’ve seen several companies unravel simply because they failed to plan ahead. Here’s just one example of a company that lost it all.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
After this article was published in February 2021, the Employee Retention Tax Credit was expanded for the entirety of 2021. Then, the Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, set the ERTC to expire at the end of the third quarter of 2021. Read more about the tax provisions in the infrastructure bill here. One of the big highlights of the Consolidated Appropriations Act, 2021 is the expansion and extension of the Employee Retention Tax Credit (ERTC). This change is significant because now, under the new law, some businesses can take advantage of both the Paycheck Protection Program (PPP) and the ERTC — as long as there is no double dipping with the same funds.
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Business Valuation | Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Service Businesses
The sale of a business is often the most significant financial event an owner faces during his or her lifetime. Many times, however, the owner begins negotiating the sale without understanding how critical tax aspects of the deal structure can have a huge effect on the net amount of money they’ll receive. Understanding key factors about your business will result in you being able to negotiate the best deal for you, or at least understand the implications of a deal.
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The spirit of volunteerism runs deep here at Gross Mendelsohn. Recently I sat down for a conversation with Jennifer Rock of our Nonprofit Group. Jenn is a nonprofit auditor and has been an absolute rock star volunteer for several local nonprofit organizations, who I might add, are lucky to have her on their side. I’m excited to share Jenn’s story, and the advice she has for nonprofit leaders from the perspective of both a CPA and a volunteer.
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Construction & Real Estate | Government Contractors
Maybe you have a new contract that requires an audit or maybe your bank requested audited financial statements. If you’re a construction contractor, a first-time audit can seem overwhelming and daunting. Because your work in process schedule is crucial to your company’s revenue recognition, we’ve identified the top three things contractors can do when preparing their WIP schedule as part of the financial statement audit.
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It’s normal for high net worth families to have “family offices” that manage banking, investments, bill paying and more. But most of us aren’t born with the name Rockefeller and we don’t have family offices. However, I believe there are lessons to be learned from family offices that are helpful for any family who wants to get a better handle on their financial situation. As a CPA and Certified Financial Planner, I work with high net worth clients who have family offices. I apply some of the principles behind family offices to my other clients. Let’s look at family offices, their purpose and how we can apply their benefits to the financial matters of everyday folks.
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Running a family-owned construction business comes with its own unique set of opportunities and pitfalls. Between managing employees, some of them family members, and identifying a successor to continue your legacy, the dynamics of a family-owned business are far from cut and dry.
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Construction & Real Estate | Government Contractors | Healthcare | Manufacturing & Distribution | Nonprofit | Service Businesses
There’s a win-win for business taxpayers and restaurants in the latest round of stimulus legislation, known as the Consolidated Appropriations Act, 2021. Under the new legislation, business meals provided by restaurants in 2021 and 2022 are now 100% deductible. Previously, the deduction of food and beverage expenses associated with operating a business was limited to 50%. The new 100% deduction applies to meals in a restaurant, and takeout and delivery meals provided by a restaurant. Let’s dig into the specifics.
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Legendary musician Prince died on April 21, 2016 without a will. As a result, it created one of the largest and most complicated probate hearings in his home state of Minnesota’s history. The Internal Revenue Service is claiming that the executors of Prince’s estate have undervalued the estate by 50%, or about $80 million. The IRS determined that Prince’s estate is worth $163.2 million, well above the $82.3 million valuation submitted by the estate’s administrator, Comerica Bank & Trust. No will, no estate plan and a vast difference of opinion among valuation experts. Let’s look behind the curtain at how this is playing out.
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Business Valuation | Construction & Real Estate
Even when you love your work, it's inevitable that you will eventually have to leave your role as the owner of your construction company. The bad news is, there is significant planning to do. The good news is, there are things you can do to leave your construction business in good hands and get real value out of your business in the transaction. Let's take a look at some of those methods.
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Nonprofit
If you are considering ways to manage your workforce to protect the financial viability of your organization, you’re faced with some tough decisions ahead. It’s important to know what your options are, and how each option affects your business and employees.
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Construction & Real Estate | Government Contractors | Healthcare | High Net Worth Families | Manufacturing & Distribution | Service Businesses
The year ahead could bring major tax changes for businesses and families. President-elect Joe Biden talked about several big tax changes on the campaign trail. What we don’t yet know is how easy it will be for those proposed changes to become law.
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