Yeo & Yeo Goes Pink

Kicking off October 1, organizations around the globe will support Breast Cancer Awareness Month, and Yeo & Yeo is joining in by being casual for a cause. Firm employees across Michigan will dress in pink shirts and wear jeans on Fridays throughout October. In addition, Yeo & Yeo’s professionals will be encouraged to donate, wear a Breast Cancer Awareness lapel pin and participate in local Yeo & Yeo office fundraisers throughout the month. For example, the firm’s Saginaw and Greater Detroit offices are forming teams to participate in their local Making Strides Against Breast Cancer walk.

The Breast Cancer Awareness initiative is also part of the firm’s efforts to recognize Wellness & Health Observance during the month of October.

The Michigan accounting firm is proud to support Breast Cancer Awareness Month by promoting and providing opportunities for firm-wide support to unite in life-saving awareness. Yeo & Yeo’s professionals are proud to support their family, friends and co-workers who have been a victim of this disease that strikes nearly 200,000 women each year in the United States.

Please join Yeo & Yeo in recognizing Breast Cancer Awareness Month.

In determining if a payment to a shareholder is proceeds from a tax-free loan from a corporation to a shareholder or a tax-free repayment of a loan from the shareholder to the corporation (as opposed to a potentially taxable corporate distribution to the shareholder), courts look at whether:

1. There’s a written promise to repay evidenced by a note or other document.

2. There’s a stated principal repayment schedule or balloon repayment date.

3. Principal payments are actually made on time.

4. Stated interest is charged.

5. Interest is actually paid on time.

6. There’s adequate security for the purported loan.

7. The borrower has a reasonable prospect of being able to repay the loan.

8. The parties conduct themselves as if the transaction is a loan (for example, by shareholders showing loans they purportedly owe to their corporations as liabilities on personal balance sheets).

These days, anyone looking to form a new business relationship — especially one that involves credit — is wise to check out the risk involved first. After all, we know that even giant companies that once seemed untouchable, may be teetering on too narrow a pedestal.

With that in mind, various parties might be checking out your company’s credit rating to determine whether they want to do business with you. That’s why, just as with your personal credit report, you need to be on top of what is in your business credit file.

If your company is in good standing, is free of legal hassles and has a good reputation, your credit file has the power to work for you. A good business credit score can:

Lead to lower financing costs on loans and credit cards.
Enable you to qualify for better credit terms from suppliers.
Lower your insurance premiums.

Of course, this pendulum swings both ways. Negative information, even if it’s false, can leave your company with higher interest rates, lower credit limits and elevated insurance premiums, plus a loss of revenue if customers decide not to take a chance doing business with you.

What Factors Are Included?

Information in a business credit report is gleaned from a wide variety of public and private sources, including:

The Yellow Pages and other print directories;
Contracts and loans connected to the federal government; people and companies you’ve done business with;
Corporate financial reports;
Legal filings;
Mining from Internet sites; and
The news media.

Does Every Business Have a Credit Score?

No. Many small businesses are judged by the personal credit score of the owner. That often happens when a sole proprietor pays business bills out of a personal checking account. Since business credit reporting agencies do gather information from sources like the Yellow Pages, there might be a bare bones record. And, if there are any recent legal judgments or pending lawsuits, these may show up and raise red flags for anyone who inquires about your business.

Yeo & Yeo’s Government Services Group would like to make you aware of recent changes in the Act 51 Distribution and Reporting System (ADARS).

Investment Reporting Tool Must be Completed First

Effective for the March 31, 2016, year-end entities and later that complete an ADARS Act 51 Report, the Michigan Department of Transportation (MDOT) Transportation Asset Management Council’s Investment Reporting Tool (IRT) must be completed before any entity submits its ADARS Act 51 Report. Failure to complete the IRT will result in rejection of the ADARS Act 51 Report due to noncompliance, and future disbursement of Michigan Transportation Funds will be withheld if the ADARS Report is not resubmitted within a designated time frame.

Performance Audits Required by MDOT

Beginning with the September 30, 2016 year-ends, any entity that submits an Act 51 Report will be required to have a performance audit performed. Please visit the links below for additional information provided by MDOT.

Performance Auditing Under Public Act 298 of 2012

PA 298 of 2012 Frequently Asked Questions

If you have questions about how these requirements will impact your entity, reach out to your Yeo & Yeo professional.

The professionals at Yeo & Yeo are engaged and passionate about what the firm stands for and its goals and culture. The firm has enjoyed a strong reputation in its communities for more than 90 years, and today’s initiatives in employee retention and career advancement make the firm even stronger.

When you listen to our employees talk about their firm, it is the relationships that are cited as the main reason they truly enjoy their careers.

The comradery that is evident at firm events (ball games, tax parties, Christmas parties, office luncheons, etc.) makes Yeo & Yeo such a great place to work.

We often invite outside speakers to present at various functions and firm retreats, and it is a common occurrence to receive feedback pertaining to what a cohesive group we have. I recall one speaker mentioning ‘I have never seen a group of CPAs get along so well.’ I think this is because at our core we all share the same values of hard work, giving back to our communities, respecting each other, and caring for our families and friends.

This partnership, like any relationship, takes hard work and reciprocity. I offer this advice to other public accounting firms – there is no doubt in my mind that when you genuinely care about an employee and their well-being, and work to help them achieve what they want to achieve, the benefits that your firm enjoys are extensive. Listen to employees’ feedback and act. It is very exciting to see all levels of staff and management really embracing the changes that are happening in our profession and the work environment, while remaining committed to our core values.

The firm’s Career Advocacy Team was formed nearly four years ago by way of suggestions culled from a survey of the firm’s female professionals. The team discovered that the issues being raised were relevant to all professionals regardless of gender. Today, team members find out what is not working for professionals in the organization and follow up by implementing new policies, procedures and effective training for both women and men.

In our firm, your voice is heard and your ideas are considered. We’re not so big that you and your ideas get lost in the firm.

You’re able to effect change and make improvements. Our Managers, Principals and our CEO have open doors and welcome conversations to help guide you through career decisions, client concerns, policy changes and whatever is important to you. The Career Advocacy Team gathers this feedback to make changes ensuring our firm is a great place to work.

On the most recent employee survey conducted by the Career Advocacy Team, our employees said they wanted a clear career path for advancement. Our Career Advocacy Team is currently working with leaders within the firm to create more individualized career paths for traditional and nontraditional routes. Our employees also told us they want to improve the mentor process in our firm. Beginning in 2016, we have a two-phase mentoring process that begins the day you start working at our firm. On that same survey, 99% of our employees said that our firm is flexible with respect to family responsibilities.You don’t have to miss the important events and stop participating in your outside interests when you work for Yeo & Yeo.

The Career Advocacy Team works to provide equal access to career development and advocacy experiences, assist women in advancing to leadership positions, and promote the successful integration of personal and professional lives.

Consider Yeo & Yeo for Preparing Form 1095

Under the Affordable Care Act, Applicable Large Employers are required to file Form 1095 along with the respective transmittal Form 1094 early next year. The IRS was lenient in assessing penalties for incorrect or incomplete information reported in 2016, for the 2015 calendar year. However, there is no room for error this year. Learn more about employer reporting requirements.

If you completed the reporting yourself last year, you know how confusing it can be.

Yeo & Yeo can simplify compliance by providing Form 1095 preparation services that are efficient and cost-effective. Companies that may benefit most from this service include those with:

More than 50 full-time and full-time equivalent employees
49 or fewer full-time and full-time equivalent employees, where the company sponsors a self-insured group health plan for employees

Avoid significant penalties, save a considerable amount of time, and gain peace of mind. Learn more about Yeo & Yeo’s ACA Compliance and Form 1095 preparation services.

I love waking up in the morning with my family! I used to be a ‘6:00 in the morning get to work kind of guy’, now there is nothing I enjoy more than having a bowl of cereal with my two boys and a cup of coffee with my wife before the work day starts. We work together to get the kids off to school and it just seems to get all of our days off to a better start.

At Yeo & Yeo, our primary purpose is to position our employees to best serve their families, communities, clients and the firm, while providing a gratifying and challenging career.

The workforce is vocal, they are telling us what they want: career paths with upward mobility, support and feedback along the way, and the ability to successfully integrate their careers and personal lives. At Yeo & Yeo, we are choosing to listen to this feedback and institute change.

Yeo & Yeo’s Career Advocacy Team aims to assist the firm’s emerging leaders in rising to the top. The team’s core focus areas include career development strategies, leadership development, alternative career paths and flexible work arrangements.

A career at Yeo & Yeo fits well in today’s society. Yeo & Yeo has always been a firm that is family oriented, community minded, and responsive to managing the workload that comes with a profession that encounters many ‘busy seasons.’ However, the profession historically left very little room for work-life balance. Technology is changing; in turn, so is the work force. We can stay in contact with our clients more so than in the past, and with the majority of documentation existing in the cloud, a traditional office setting for work is not as necessary. This allows for greater opportunities to integrate work with our family and community life.

This flexibility and the technology at Yeo & Yeo allowed me to trade in my early mornings for later evenings. I not only have breakfast with my family, but I am home for dinner, enjoy play time with the kids, and when the boys go to bed, I log in and access my virtual office from home for a couple hours. That is how I obtained my balance and integrate my work and life.

Everyone’s situation is different, but when an employee displays their commitment to Yeo & Yeo, we want to do our part to help them achieve their balance.

Yeo & Yeo CPAs & Business Consultants is pleased to announce that Nolan Felsing, CPA, has been promoted to senior accountant.

Felsing provides management advisory services for individuals and for-profit companies. He joined Yeo & Yeo in January 2015 and serves in the firm’s Saginaw office. He holds a Bachelor of Science in accounting and a Master in Business Administration from Central Michigan University. He is a member of the Michigan Association of Certified Public Accountants, the American Institute of Certified Public Accountants, and the Young Professionals Network of Saginaw.

In our community, Felsing has volunteered for Underground Railroad through several of Yeo & Yeo’s Young Professionals group initiatives.

Many expenses that may qualify as miscellaneous itemized deductions are deductible only to the extent they exceed, in aggregate, 2% of your adjusted gross income (AGI). Bunching these expenses into a single year may allow you to exceed this “floor.” So now is a good time to add up your potential deductions to date to see if bunching is a smart strategy for you this year.

Should you bunch into 2016?

If your miscellaneous itemized deductions are getting close to — or they already exceed — the 2% floor, consider incurring and paying additional expenses by Dec. 31, such as:

Deductible investment expenses, including advisory fees, custodial fees and publications
Professional fees, such as tax planning and preparation, accounting, and certain legal fees
Unreimbursed employee business expenses, including vehicle costs, travel, and allowable meals and entertainment.

But beware …

These expenses aren’t deductible for alternative minimum tax (AMT) purposes. So don’t bunch them into 2016 if you might be subject to the AMT this year.

Also, if your AGI exceeds the applicable threshold, certain deductions — including miscellaneous itemized deductions — are reduced by 3% of the AGI amount that exceeds the threshold (not to exceed 80% of otherwise allowable deductions). For 2016, the thresholds are $259,400 (single), $285,350 (head of household), $311,300 (married filing jointly) and $155,650 (married filing separately).

If you’d like more information on miscellaneous itemized deductions, the AMT or the itemized deduction limit, let us know.

Imagine walking into work on your first day at your accounting firm. What do you picture? Do you feel nervous? Do you feel confident?

The first day of starting a new job can be as if you just stepped into a whole new world. At Yeo & Yeo, we understand this because we have been there. We do everything we can to make you feel comfortable, confident and welcomed.

Beginning on the first day that someone joins our firm, we jump-start a complete plan to ensure that they are provided with all the essential information they will need to be successful and enjoy their time at Yeo & Yeo. Within the first six months of employment, our employees receive:

Access to state-of-the-art technology and resources
Introduction into Yeo & Yeo’s Peer program
A comprehensive, full-day orientation
Performance evaluation and feedback, including measurable goals
Continuous technical and non-technical in-house training

With such clear guidance, new employees can become excited about their position and responsibilities, and confident in their performance. As the Talent Manager and a member of Yeo & Yeo’s Career Advocacy Team, I am proud that we are able to provide our employees with the opportunities that will develop them into the future leaders of our organization. It is a responsibility that we take seriously to guarantee our employees have access to every resource and development opportunity they need.

Career development and the prospect of promotional paths are significant decision influencers to employees in the workforce today.

At Yeo & Yeo, we recognize the importance of professionals being able to influence their own career paths. Our Career Advocacy Team is always looking for additional ways to provide clear expectations and opportunities for our employees to move on to the next level of their career.

I understand that career development and training are integral to employee satisfaction and retention; therefore, it is one of my top priorities here at Yeo & Yeo. We are focused on guiding employees from their first day throughout their entire career. We want you to succeed, and we want you to grow.

We empower our employees to create their own career path.

Yeo & Yeo’s professionals focus on tax, audit or business consulting and have the opportunity to become an industry-specialized thought leader. The firm supports them in expanding their skills and knowledge by providing the tools necessary to establish them as a leader in the firm and community.

If you are interested in learning how Yeo & Yeo can be a fit for you, I encourage you to apply on our website or connect with me on LinkedIn.

I hope you are as excited for your first day, as we are.

If you have incomplete or missing records and get audited by the IRS, your business will likely lose out on valuable deductions. Here are two recent U.S. Tax Court cases that help illustrate the rules for documenting deductions.

Case 1: Insufficient records

In the first case, the court found that a taxpayer with a consulting business provided no proof to substantiate more than $52,000 in advertising expenses and $12,000 in travel expenses for the two years in question.

The business owner said the travel expenses were incurred ”caring for his business.“ That isn’t enough. ”The taxpayer bears the burden of proving that claimed business expenses were actually incurred and were ordinary and necessary,“ the court stated. In addition, businesses must keep and produce ”records sufficient to enable the IRS to determine the correct tax liability.“ (TC Memo 2016-158)

Case 2: Documents destroyed

In another case, a taxpayer was denied many of the deductions claimed for his company. He traveled frequently for the business, which developed machine parts. In addition to travel, meals and entertainment, he also claimed printing and consulting deductions.

The taxpayer recorded expenses in a spiral notebook and day planner and kept his records in a leased storage unit. While on a business trip to China, his documents were destroyed after the city where the storage unit was located acquired it by eminent domain.

There’s a way for taxpayers to claim expenses if substantiating documents are lost through circumstances beyond their control (for example, in a fire or flood). However, the court noted that a taxpayer still has to ”undertake a ‘reasonable reconstruction,’ which includes substantiation through secondary evidence.“

The court allowed 40% of the taxpayer’s travel, meals and entertainment expenses, but denied the remainder as well as the consulting and printing expenses. The reason? The taxpayer didn’t reconstruct those expenses through third-party sources or testimony from individuals whom he’d paid. (TC Memo 2016-135)

Be prepared

Keep detailed, accurate records to protect your business deductions. Record details about expenses as soon as possible after they’re incurred (for example, the date, place, business purpose, etc.). Keep more than just proof of payment. Also keep other documents, such as receipts, credit card slips and invoices. If you’re unsure of what you need, check with us.

For those considering a career in accounting, in-demand skills and traits include leadership, team-oriented, attention to detail and interpersonal skills. Yeo & Yeo’s Training Department provides the technical and professional development training accountants need to excel in the profession and provide high-level expertise to their clients.

Each year, between busy seasons, members of each career level take a day out of the office for professional development training. This often involves business development training, leadership training, and how to be an effective mentor and coach. Training is made available through a variety of resources including in-house training, on-the-job training, external seminars and live web-based learning.

The transition from the theoretical knowledge learned in school to the practical implementation in a public accounting firm can be challenging. We support accountants by providing intensive training in-house early in their careers. Initial training immediately meshes the theoretical knowledge with practical implementation as we work on case studies in the computer programs we use on a daily basis. Group sizes are less than 20, to give more individual attention and answer questions. In addition, many of our programs and services have detailed manuals written by Yeo & Yeo personnel to explain how to implement the “Yeo way,” leaving little guesswork on the practical implementation.

We know not all training takes place in the classroom. As a CPA and the firm’s full-time Training Manager, I am dedicated to assist all accountants with questions as they arise, assess training needs, and implement firm-wide trainings. The firm also provides access to research software provided by a leading research company to help with questions. On-the-job training is provided as new challenges arise. There is also a complete library of on-demand courses available to provide accountants with just-in-time knowledge on particular subjects.

In addition, the firm supports accountants in the intense challenge of passing the CPA exam. In fact, the Leading Edge Alliance has recognized Yeo & Yeo’s CPA exam support program nationally with its Cultural & HR Innovation, Retention & Attraction Award.

At Yeo & Yeo, we know ongoing training is vital to your success and I am here to help!

If you invest, whether you’re considered an investor or a trader can have a significant impact on your tax bill. Do you know the difference?

Investors

Most people who trade stocks are classified as investors for tax purposes. This means any net gains are treated as capital gains rather than ordinary income.

That’s good if your net gains are long-term (that is, you’ve held the investment more than a year) because you can enjoy the lower long-term capital gains rate. However, any investment-related expenses (such as margin interest, stock tracking software, etc.) are deductible only if you itemize and, in some cases, only if the total of the expenses exceeds 2% of your adjusted gross income.

Traders

Traders have it better in some situations. Their expenses reduce gross income even if they can’t itemize deductions and not just for regular tax purposes, but also for alternative minimum tax purposes.

Plus, in certain circumstances, if traders have a net loss for the year, they can claim it as an ordinary loss (so it can offset other ordinary income) rather than a capital loss. Capital losses are limited to a $3,000 ($1,500 if married filing separately) per year deduction once any capital gains have been offset.

Passing the trader test

What does it take to successfully meet the test for trader status? The answer is twofold:

1. The trading must be “substantial.” While there’s no bright line test, the courts have tended to view more than a thousand trades a year, spread over most of the available trading days, as substantial.

2. The trading must be designed to try to catch the swings in the daily market movements. In other words, you must be attempting to profit from these short-term changes rather than from the long-term holding of investments. So the average duration for holding any one position needs to be very short, generally only a day or two.

If you satisfy these conditions, the chances are good that you’d ultimately be able to prove trader vs. investor status. Of course, even if you don’t satisfy one of the tests, you might still prevail, but the odds against you are higher. If you have questions, please contact us.

The American Institute of Certified Public Accountants (AICPA) acknowledges that the progress of women within the accounting profession is imperative to organizational sustainability. The organization’s website stresses that growth of accounting firms is at risk if a significant portion of the accounting profession (women) is not maximizing its potential. In addition, firms’ inability to create a family and gender-friendly environment is known to be detrimental to both staff and client retention.

With a similar challenge for Yeo & Yeo in mind, the firm’s leadership team is taking a proactive approach. “Career advocacy is one of the cornerstones within Yeo & Yeo’s five-year strategic plan. The workforce is changing, and firms that do not embrace programs supporting the advancement of women and equal access to leadership development within their firms risk the loss of talented CPAs – both women and men,” says Yeo & Yeo’s president & CEO, Thomas Hollerback.

You can be a female accounting professional and be successful at Yeo & Yeo. Among the initiatives in the firm to help advance women professionals is our mentor program in which we pair women on a partner track with established female partners who serve as peer models for success. Throughout my career at Yeo & Yeo, my mentors have encouraged me to take on new roles and step outside of my comfort zone. I now have leadership roles within the firm and in the community. The firm also invests in the training needed to successfully develop our professionals. I was the first woman from Yeo & Yeo to attend Upstream Academy’s Emerging Leaders Academy three years ago and since then we have sent five more women to the leadership program.

Everyone has his or her own outside interests, and finding a schedule that works best for you will make your home life and work life manageable … and enjoyable! The flexibility Yeo & Yeo offers is unique compared to other CPA firms. Yeo & Yeo allows you to bank your overtime hours, or you can chose to be paid for those hours. It’s nice to be able to take a little extra time off during non-peak time, or to see the extra money in your paycheck when you are working overtime during busy season. For me, this is very empowering as I am able to set my own schedule and feel as though I am able to keep up with my active kids and my workload.

Being a mom and a new partner, I stress the importance of schedules, planning ahead, flexibility and finding what works best for you. It’s important to me that I have dinner with my family and be there to help my kids with their homework. I make it a priority! This might mean I work a little after the kids go to bed or during my lunch hour. Everyone’s support system at home is different, so having the flexibility to work from home when it is most convenient for me is one of the things I value most about my career at Yeo & Yeo.

Read the stories of our Women Leaders to learn more about advocacy for women at Yeo & Yeo.

If you recently redeemed frequent flyer miles to treat the family to a fun summer vacation or to take your spouse on a romantic getaway, you might assume that there are no tax implications involved. And you’re probably right — but there is a chance your miles could be taxable.

Usually tax free

As a general rule, miles awarded by airlines for flying with them are considered nontaxable rebates, as are miles awarded for using a credit or debit card.

The IRS partially addressed the issue in Announcement 2002-18, where it said “Consistent with prior practice, the IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travel.”

Exceptions

There are, however, some types of mile awards the IRS might view as taxable. Examples include miles awarded as a prize in a sweepstakes and miles awarded as a promotion.

For instance, in Shankar v. Commissioner, the U.S. Tax Court sided with the IRS, finding that airline miles awarded in conjunction with opening a bank account were indeed taxable. Part of the evidence of taxability was the fact that the bank had issued Forms 1099 MISC to customers who’d redeemed the rewards points to purchase airline tickets.

The value of the miles for tax purposes generally is their estimated retail value.

If you’re concerned you’ve received mile awards that could be taxable, please contact us and we’ll help you determine your tax liability, if any.

Ransomware is a malicious software that blocks user access to data and demands payment to restore access. Ransomware criminal networks are continuously finding new ways to hijack your information. Now, we have discovered that cyber criminals have begun to use macro-enabled Word, Excel, Access and Powerpoint files to compromise data. Macros are a set of programming instructions that can be used to eliminate the need to repeat the steps of commonly performed tasks over and over again.

As a precaution, do not open file attachments from senders you are not familiar with. If the email is coming from a sender you know, you should verify with the sender that they intended to send the attached file. In order to keep your vital information secure, we suggest that you inform all of your employees and family members about this issue and advise them to be cautious before opening any files they have received via email. Also be wary of files provided to you on USB drives.

If you would like to learn more about Ransomware or our Security Awareness Training, please contact Yeo & Yeo Technology today.

The FASB recently released the first of two phases of its project to improve the financial reporting for Non-Profit (NFP) entities. Read the Accounting Standards Update.

Who will be affected?

The amendments in this update affect all NFPs and the users of their general purpose financial statements.

What are the main provisions?

The main provisions of this update, which amend the requirements for financial statements and notes in Topic 958, Non-Profit Entities, require an NFP to:

Present on the face of the statement of financial position amounts for two classes of net assets at the end of the period, rather than for the currently required three classes.

Provide enhanced disclosures, including the following about:

1. The effects, if any, of the limits on the use of resources imposed by an NFP’s governing board, donors, grantors, laws, and contracts on an NFP’s liquidity, financial flexibility, and allocation of resources

2. How an NFP manages its liquidity to meet short-term demands for cash

3. The types of resources used and how they are allocated in carrying out an NFP’s activities

4. The effects, if any, of methods used for allocating costs among an NFP’s program and supporting activities

5. The effects, if any, of underwater endowments

Eliminate the current option to release donor imposed restrictions on long-lived assets over the useful life of the acquired asset.

When are the amendments effective?

The amendments in this update are effective for annual financial statements issued for fiscal years beginning after December 15, 2017, or in other words for December 31, 2018 year-ends. Early application of the amendments is permitted. The amendments should be applied on a retroactive basis in the year the update is first applied.

If you have questions about how the FASB update will impact your entity, reach out to your Yeo & Yeo professional.

Recently I attended the Construction Industry CPAs/Consultants (CICPAC) conference in Chicago. The conference is held annually and provides Yeo & Yeo professionals with the latest knowledge of construction industry challenges, and valuable insight that we will use to advise our clients.

I attended eight sessions, and I would like to share my notes about the following topics that I consider especially important to our clients.

1. Be aware of the most common reasons why contractors fail.

Ryan Howsam of FMI, a leading management consulting firm dedicated to serving the construction industry, says that the most common root causes for failure include the following:

Not planning resources needed to complete jobs
Taking on projects too far outside of capabilities
Moving outside of the company’s core competencies
Inadequately managing large, long-duration projects causing significant equity, cash, and working capital to be tied up in uncompleted work

The top risks today include skilled craft labor shortages, contract language/insurance terms, and subcontractor default.

2. Consider cash flows while jobs are plentiful.

Anirban Basu of the sage 100c Policy Group recapped the state of the construction industry over the past few years and shared the detailed economic outlook for construction going forward. Michigan is recovering from the recession and has seen 4.7 percent growth in construction jobs. We may be transitioning very quickly from the mid-cycle stage of the recovery to the late-stage: The 2017-2018 outlook is very murky. He stressed that it is very important to think about cash flows at this time while the jobs are plentiful on the market. The economy is starting to show signs of slowing down during the next few years, so having the necessary reserves now is crucial for all contractors.

3. Maintain a solid workforce.

Finding good help can be a difficult hurdle to overcome, but retaining those individuals is an even harder task. Spending more money on good help will make each job more efficient and, while it costs more in the short term, it bolsters the company’s reputation. The better the reputation of the company, the more likely the company can secure contracts in the future.

4. Data management and asset security are crucial to the construction industry.

Several construction CEOs shared their top concerns for the construction industry. Data management and asset security are the most crucial. Implementing a solid data network with backups is not something that can be overlooked because a disaster can happen at any time. Ask yourself, in the event of a disaster, is your data offsite and secure? If the answer is unknown, or worse, if the answer is no, then the success of your company could hang in the balance with just one mishap. Consider learning more about backup and disaster recovery by seeking technology solutions for your business.

Call on Yeo & Yeo’s Construction Services Group for assistance with business consulting, tax planning, accounting, employee benefits and IT security.

If your loved ones have invested, saved or insured themselves to any degree, you may be named as a beneficiary to one or more of their accounts, policies or assets in the event of their deaths. While we all hope “that day” never comes, we do need to know what to do financially if and when it does.

Legally, just who is a beneficiary? IRAs, annuities, life insurance policies and qualified retirement plans such as 401(k)s and 403(b)s are set up so that the accounts, policies or assets are payable or transferrable on the death of the owner to a beneficiary, usually an individual named on a contractual document that is filled out when the account or policy is first created.

In addition to the primary beneficiary, the account or policy owner is asked to name a contingent (or secondary) beneficiary. The contingent beneficiary will receive the asset if the primary beneficiary is deceased.

Some retirement accounts and policies may have multiple beneficiaries. Charities are also occasionally named as beneficiaries. If you have individually listed one (or more) of your kids or grandkids as designated beneficiaries of your 401(k) or IRA, that designation will usually override any charitable bequest you have stated in a trust or will.

A will is NOT a beneficiary form. When it comes to 401(k)s and IRAs, beneficiary designations are commonly considered first, and wills second. Be mindful of who you select. If you willed your IRA assets to your son in 2008, but named the man who is now your ex-husband as the beneficiary of your IRA back in 1996, those IRA assets are set up to transfer to your ex-husband in the event of your death.

If a retirement account owner passes away, what steps need to be taken? First, the beneficiary form must be found, either with the IRA or retirement plan custodian (the financial firm overseeing the account) or within the financial records of the person deceased. Beyond that, the financial institution holding the IRA or retirement plan assets should also ask you to supply:

A certified copy of the account owner’s death certificate
A notarized affidavit of domicile (a document certifying his or her place of residence at the time of death)

If the named beneficiary is a minor, a birth certificate for that person will be requested. If the beneficiary is a trust, the custodian will want to see a W-9 form and a copy of the trust agreement.

If you are named as the primary beneficiary, you usually have three options for claiming the assets, regardless of what kind of retirement savings account you have inherited:

Open an inherited IRA and transfer or roll over the funds into it.
Roll over or transfer the assets to your own, existing IRA.
Withdraw the assets as a lump sum (liquidate the account, get a check).

Before you make any choice, you should welcome the input of a tax advisor, and discuss any limitations or consequences that may apply to your situation.

What if you are a spousal beneficiary? If that is the case, you may elect to:

Roll over or transfer assets from a traditional IRA, Roth IRA, SEP-IRA or SIMPLE IRA into your own traditional or Roth IRA, or an inherited traditional or Roth IRA.
Withdraw the assets as a lump sum.
Roll over or transfer qualified retirement plan assets from a 401(k), 403(b), etc. into your own retirement account, or take them as a lump sum.

What if you are a non-spousal beneficiary? If this is so, you may elect to:

Roll over or transfer assets from a traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA or qualified retirement plan into an inherited IRA.
Withdraw the assets as a lump sum.

What if a qualified (i.e., irrevocable) trust is named as the beneficiary? If that is the circumstance, the trustee has two choices:

Transfer assets from a traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA or qualified retirement plan into an inherited IRA.
Withdraw the assets as a lump sum.

The next calendar year will be very important. Inheritors of retirement accounts have until September 30 of the year following the original account owner’s death to review and remove beneficiaries, and until December 31 of that year to divide the IRA assets among multiple beneficiaries. Usually, December 31 of the year after the original retirement plan owner’s passing is the deadline for the first RMD (Required Minimum Distribution) from an inherited traditional or Roth IRA.

Now, how about U.S. Savings Bonds? If you are named as the primary beneficiary of a U.S. Treasury Bond, you have three options:

Redeem it at a financial institution (you will need your personal I.D. for this).
Get the security reissued in your name or the names of multiple beneficiaries. You do this via Treasury Department Form 4000, which you must sign before a certifying officer at a bank (not a notary). Then send that signed form and a certified copy of the death certificate to a Savings Bond Processing Site.
Do nothing at all, as the primary beneficiary automatically becomes the bond owner when the original bond owner passes away.

What about savings & checking accounts? Bank accounts are often payable-on-death (POD) assets or “Totten trusts.” All a beneficiary needs to claim the assets is his or her personal identification and a certified copy of the death certificate of the original account holder. There is no need for probate. (Some states limit charities and non-profits from being POD beneficiaries of bank accounts.)

How about real estate? Finally,it is worth noting that about a dozen states use transfer-on-death (TOD) deeds for real property. If you live in such a state, you have to go to the county recorder or registrar, usually with a certified copy of the death certificate and a notarized affidavit which informs the recorder or registrar that ownership of the property has changed. If the deed names multiple beneficiaries and some are dead, the surviving beneficiaries must present the recorder or registrar with certified copies of the death certificates of the deceased beneficiaries.

Provided by Michael L. Espinoza, CRPC