Blog

The Value of Middle Market Bankers

December 4, 2017 @ 3:03 am

See below for a very insightful article by Matthew Keef with Edge Point.  See the original article here. By Matthew Keefe, Managing Director “Do investment bankers add value during an exit process?”  Or, in other words, “Are bankers worth their fee?”  I am confident that countless first-time sellers have wrestled with this question as they began evaluating an exit.  Historically, the answers to these questions were anecdotal.  However, a recent whitepaper by Michael McDonald, an Assistance Professor at Fairfield University’s Dolan School of Business[1] attempted (and succeeded) to be the first to take a more scientific approach to determining if and how an investment banker provides value to a client. The Fairfield University study represents the first comprehensive independent analysis to determine whether or not sellers valued their advisor, and more importantly, what specific actions and counsel the sellers valued the most.  To accomplish this goal, the study used empirical data from 85 business owners who sold their businesses for between $10 and $250 million during the period from 2011 to 2016.  All of the sellers used reputable investment banking firms as advisors and the 85 owners accounted for 24 different investment banks.  (EdgePoint was one of the investment banking firms …

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Tax Reform – Tax Cuts and Jobs Act, H.R. 1

November 7, 2017 @ 3:02 am

The House Ways and Means Committee released draft tax reform legislation on Thursday. The Tax Cuts and Jobs Act, H.R. 1, incorporates many of the provisions listed in the Republicans’ September tax reform framework while providing new details. Budget legislation passed in October would allow for the tax reform bill to cut federal government revenue by up to $1.5 trillion over the next 10 years and still be enacted under the Senate’s budget reconciliation rules, which would require only 51 votes in the Senate for passage. The Joint Committee on Taxation issued an estimate of the revenue effects of the bill on Thursday showing a net total revenue loss of $1.487 trillion over 10 years. The bill features new tax rates, a lower limit on the deductibility of home mortgage interest, the repeal of most deductions for individuals, and full expensing of depreciable assets by businesses, among its many provisions. Lawmakers had reportedly been discussing lowering the contribution limits for Sec. 401(k) plans, but the bill does not include any changes to those limits. The Senate Finance Committee is reportedly working on its own version of tax reform legislation, which is expected to be unveiled next week. It is unclear …

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Initial Overview of Tax Proposal

April 27, 2017 @ 9:00 am

Today the Administration released an initial overview of the upcoming proposal. Our anticipation for today’s release was significantly greater than what details were actually given.  The plan has not yet been released and what was discussed today was simply a broad overview. However, this does give us an initial look of what will come in the following months. Sadly, there has been no specific date given for when actual details will be available.  We will post updates as they come in. In the meantime we’ve assembled the few details currently available. We, like many, have more questions than answers. Take the following for what it is, our summary of the limited information available. 3 tax brackets (but really 4) – No Income brackets yet 0% $0-$24,000 (Possibly for MFJ) 10% 25% 35% Double the current Standard Deduction Eliminate alternative minimum tax Eliminate 3.8% Medicare tax on net investment income Eliminate Estate tax Immediately Remove Eliminate nearly all deductions except: Mortgage Interest Charitable Contributions Retirement Savings Corporate Rate reduced to 15% Possibly on S Corps as well Available to small and medium size business and corporations Rules in place so wealthy people can’t create pass-through to avoid paying higher tax rates …

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Residential Rental Pros and Cons

January 23, 2017 @ 3:24 pm

We regularly have clients ask us about the pros and cons of purchasing rental properties as ways to supplement their income and create long-term investments. Stagnant interest rates on investments and the current real-estate market has pushed many of our clients into this activity. No matter what your reason for considering rental activities you will encounter a laundry list of potential pros and cons related to your taxes at the end of the year.   This is by no means a complete list of the benefits and drawbacks of venturing into rental activities; being a CPA firm, we will focus only on the potential tax impact.  Having a discussion with a Financial Advisor of alternative investments may help you identify if rentals are right for you. If you aren’t a real estate professional there are some pitfalls to be aware of, rental activity is passive and has some loss deduction restrictions. Here are some high points regarding rentals. Pros: Positive cash flow with the potential to offset ordinary income. For most taxpayers, rental properties result in a taxable loss due to the depreciation deduction allowable. If your adjusted gross income (AGI) is lower than 100,000 per year up to 25,000 of …

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Potential Tax Law Changes

January 12, 2017 @ 1:03 pm

Over the next few months you are going to be reading and hearing a lot about potential tax law changes that are being recommended by the new administration. The purpose of this article is to look into the future and determine what the tax landscape might look like by reviewing the tax proposals of President-Elect Donald Trump and also a tax proposals from Speaker of the House Paul Ryan. Before we get into reviewing potential tax law changes, let’s step back and review the life cycle of a tax bill. The part of the government that deals with the introduction of all tax bills is the House of Representatives. All of the bills are drafted and reviewed by legislative committees to include the House Ways and Means Committee. Once a bill has passed the House of Representatives, which requires majority vote, it is sent to the Senate for consideration. In the Senate the bill is reviewed by tax legislation and finance committees. Once the billed has passed the Senate, which also requires a majority vote, it is sent to the President for his signature. With tax law first being introduced by the House of Representatives, most observers feel that attention …

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2017 Standard Mileage Rates

December 15, 2016 @ 8:45 am

Beginning on 1/1/17, the standard mileage rates for cars, vans, pickups, and panel trucks will be 53.5 cents per mile for business miles, 17 cents per mile for medical or moving purposes, and 14 cents per mile for charitable purposes. The business expense rate is down half a cent per mile from 2016, and the medical and moving expense rates are down two cents per mile from the 2016 rates. The charitable rate is set by law and remains unchanged from last year’s rate. The portion of the business standard mileage rate treated as depreciation is 23 cents per mile for 2013, 22 cents per mile for 2014, 24 cents per mile for 2015 and 2016, and 25 cents per mile for 2017. When computing the allowance under a Fixed and Variable Rate (FAVR) plan, the standard vehicle cost cannot exceed $27,900 for autos or $31,300 for trucks and vans. Notice 2016-79, 2016-52 IRB.

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Enterprise Zone Pre-Certification

December 12, 2016 @ 4:24 pm

Are you planning on taking an Enterprise Zone Credit for the 2017 Tax year? Pre-certifying ensures the credits are available when it comes time to file your return. Even if you don’t end up qualifying for any specific Enterprise Zone credits, it’s better to be safe than sorry. The pre-certification process is very simple and we highly recommend pre-certifying by December 31st, 2016 in order to be eligible for 2017 credits if you are located in an Enterprise Zone. Please follow the link below for more information and to complete pre-certification. Do not hesitate to call or e-mail if you have any questions. Click here to complete the pre-certification.

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Upcoming Deadline and Changes for Qualified College Saving Plans Contributions

@ 12:00 pm

Qualified 529 plans are a great way to set money aside for future cost of college while saving money on your taxes; CollegeInvest and Scholars Choice are the two approved Colorado 529 plans that gain the subtraction on a Colorado state return. But, the contribution deadline for the 2016 tax year is approaching very quickly. Be sure to have all contributions in by December 31st or you won’t see the benefit on your 2016 return. Moneys set aside in qualified 529 plans can now be used for more expenses. New legislation now allow funds to be used for computers and related equipment. This will included computers, printers, software, and internet access. If you’re concerned about how to fund a child’s future college expenses, or you simply want to take advantage of the additional deduction 529 plans offer, now is the time to make contributions.

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Change in Deadlines

December 8, 2016 @ 3:13 pm

As the fury of filing deadlines slip away and the office begins settling into a slower pace there is only one logical thing to think about; next year’s filing deadlines. I know this may not be the most exciting thing to focus on, however there are a few changes for next year that should be noted now when taxes are still on our minds. If you file a Partnership, Report of Foreign Bank and Financial Accounts (FBAR), or C Corporation return filing deadlines have changed. The 2016 tax year has the potential to catch many Partnerships off guard by changing the due dates from April 15th to March 15th. If partnerships are unable to assembly everything needed by this earlier date a six month extension will be available. To avoid any penalties be sure to mark your calendars now, talk with your CPA and be sure returns or extensions are submitted by the new due date. FBAR returns have also been changed; going from June 30th to April 18th. A six month extension will be available. If you miss the deadline and you are a first time offender we may be able to abate any penalties, the IRS has been …

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