Yeo & Yeo Receives Process Improvement Award for Lean Audit
Yeo & Yeo CPAs & Business Consultants received the Leading Edge Alliance’s (LEA) prestigious award for Process Improvement, for its Lean Audit Process implementation. The award was announced at the LEA’s 2015 Global Conference held in Miami, Florida. Each year the LEA recognizes accounting firms for their cutting-edge innovations that differentiate LEA members from their competitors.
“It is an honor to be recognized by our peers for implementing a successful Lean Audit process.” said Thomas Hollerback, CEO. “Yeo & Yeo strives to continuously improve processes to strengthen internal efficiencies and the relationships with our clients.”
Yeo & Yeo identified the need for a standardized firm-wide audit process in 2013. “We realized an opportunity existed to streamline our process to better serve the needs of our clients and professional staff,” said Kristi Krafft-Bellsky, senior manager. “Our solution was to eliminate the individual office approach and communicate a new process across our nine offices to efficiently distribute work and increase client satisfaction.” The firm sought out the expertise of LeanCPA, LLC, which uses the Lean Six Sigma methodology to help firms develop lean processes.
The methodologies used throughout the Lean Audit Process helped in identifying inefficiencies and aided in developing techniques that focus on process effectiveness and understanding client value. The new process was rolled out firm-wide in 2013, and all fieldwork performed since 2014 has been completed under the new Lean Audit Process.
“In 2015, we now have a full year of data to prove the benefits this process has garnered which include reduced on-the-job hours, a decrease in write-offs and a 5% increase in realization,” said Krafft-Bellsky. “But the most astute has been the positive feedback from staff and clients, resulting from quicker turnaround times and better communication throughout the audit engagement.”
Yeo & Yeo is a founding member of LEA Global, the second largest international professional association in the world, creating a high-quality alliance of 220 firms in 106 countries that are focused on accounting, financial and business advisory services.
The fate of 51 tax incentives is in the hands of our legislators in Washington. While some bills are pending in Congress, at this time none has gained enough traction to predict approval of extender legislation before December 31, 2015.
Tax extenders are a broad set of temporary tax breaks that sunset every few years and require a new vote to reinstate them. In December 2014 Congress retroactively extended numerous provisions, but only for 2014. As the end of 2015 rapidly approaches, we still have no clear indication that Congress will once again act to reinstate these tax incentives.
Individual tax incentives that expired at the end of 2014 include the above-the-line deduction for classroom expenses incurred by school teachers, above-the-line deduction for tuition and related expenses, the deduction for mortgage insurance premiums and the distribution of charitable contributions from individual retirement plans.
Business tax incentives that expired at the end of 2014 include the research and development (R&D) tax credit, the work opportunity tax credit, the new markets tax credit and the wage credit for employees on active duty. Bonus depreciation and enhanced expensing allowances, which are often viewed as economic stimulus tools, also expired at the end of 2014.
Refer to Yeo & Yeo’s Tax Brief on Expiring Tax Provision to learn more about the specific expired tax incentives for businesses and individuals, as well as the expired energy tax incentives. It is important to consider whether the elimination or revival of these tax laws will impact your tax scenario and plan for it to go either way. You may want to determine the increase in your tax liability and prepare accordingly if they are not revived.
Year-end tax planning is especially challenging this year because Congress may not decide the fate of these tax breaks until the very end of this year or possibly not until next year. We invite you to contact us to discuss your particular tax situation.
If your business exports American-made goods or performs architectural or engineering services for foreign construction projects, an interest-charge domestic international sales corporation (IC-DISC) can help slash your tax bill.
An IC-DISC is a “paper” corporation you set up to receive commissions on export sales, up to the greater of 50% of net income or 4% of gross receipts from qualified exports. Your business deducts the commission payments, while distributions received from the IC-DISC are treated as qualified dividends, not capital gains.
Essentially, an IC-DISC allows you to convert ordinary income taxed at rates as high as 39.6% into dividends taxed at 15% or 20%. An IC-DISC also allows you to defer taxes on up to $10 million in commissions held by the IC-DISC by paying a modest interest charge to the IRS.
Think an IC-DISC might be right for you? Contact us for more information.
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As we wind down the 2015 tax year, year-end tax planning will be especially challenging. Congress has yet to act on a host of tax breaks that expired at the end of 2014. Some of these tax breaks may be retroactively reinstated and extended, but Congress may not decide the fate of these tax breaks until the very end of this year or possibly not until next year.
Yeo & Yeo’s Year-end Tax Planning Checklist provides action items that may help you save tax dollars if you act before year-end. Yeo & Yeo’s tax professionals can help narrow down the specific actions that you can take and tailor a tax plan for your current situation and future changes.
Year-end tax planning should be a part of everyone’s financial routine. Usually there are many tax planning decisions you can make at year-end to drastically improve your tax situation when April 15 comes around. A thorough review of your tax picture before year-end can let you know where you stand and suggest potential tax-saving opportunities. Make sure you are doing all you can to minimize your taxes by taking action soon.
For more extensive tax information, visit Yeo & Yeo’s Tax Guide Online.
Yeo & Yeo CPAs & Business Consultants has been named one of Michigan’s Best and Brightest in Wellness, an initiative that recognizes and celebrates quality and excellence in worksite health. The program highlights companies that promote a culture of wellness, and those that plan, implement, and evaluate efforts in employee wellness.
“We are committed to the health and wellness of our employees, and our goal is to help them be empowered to make real changes in their health and lifestyle behaviors,” said Thomas E. Hollerback, president and CEO of Yeo & Yeo. “We are honored by this recognition and committed to continued advances in our wellness programs.”
Yeo & Yeo supports wellness for its employees by offering a gold level healthcare plan and paying a large portion of the premiums, helping to keep costs low for employees. The firm has a high percentage of participation in its wellness plan/healthcare premium reduction incentive. Another initiative is the firm’s Fitbit Fitness Program. Themed, monthly challenges for individuals and teams, along with prizes and friendly competition, have resulted in a high level of participation. The firm also provides free flu shots.
Nominees were evaluated by a selection committee of leading healthcare and wellness professionals. Criteria for selection included policies, environment, leadership, awareness and motivation, incentives, measurement, and healthcare cost, among others. A total of 300 companies and organizations were nominated for the award. Of those organizations, 142 completed the entire selection process, and 76 winners were chosen.
Yeo & Yeo was honored at a symposium and awards celebration on October 8 at The Henry in Dearborn. The program is co-presented by the Michigan Business & Professional Association, Michigan Food and Beverage Association and Corp! magazine. Winners are featured in the September/October Corp! magazine and Corp! online.
IRS2Go allows users a mobile-friendly way to:
- Check the status of their tax refund
- Make payments
- Stay connected with the IRS on Twitter, Tumblr and YouTube
- Sign up for helpful tax tips
- Find local IRS Volunteer Income Tax Assistance (VITA) locations
- Find local Tax Counseling for the Elderly (TCE) locations
By using the IRS2Go app, if you file your tax return electronically, you can check your refund status within 24 hours of the IRS receiving your return. The app allows you to access mobile-friendly payment options similar to IRS Direct Pay. The mobile pay option is a secure way to directly pay from your bank account, credit or debit card.
The IRS2GO App is available in both English and Spanish. Download the IRS2Go on Google Play, Amazon and iTunes.
Yeo & Yeo does not endorse this app, or the use of any type of software or apps. This information is meant to inform that such an app is available.
Beginning in 2015, the Affordable Care Act (ACA) enacted two reporting requirements that call for employers to file additional forms with the Internal Revenue Service. The reporting requirements are satisfied by filing Forms 1095-B and 1095-C, along with the respective transmittal Forms 1094.
Under the ACA, Applicable Large Employers (ALEs) will have to file Forms 1094-C and 1095-C to provide information to the IRS and plan participants regarding their healthcare benefits for the previous year. In addition, organizations that expect to file Forms 1094 and 1095 electronically can peruse two final IRS publications setting out specifications for using the new ACA Information Returns system.
Keep in mind that ALEs are employers with 50 or more full-time employees or the equivalent. And even ALEs exempt from the ACA’s shared-responsibility (“play or pay”) provision for 2015 (that is, ALEs with 50 to 99 full-timers or the equivalent who meet certain eligibility requirements) are still subject to the information reporting requirements in relation to their 2015 healthcare benefits.
Small employers and ALEs have different requirements. Learn more about the forms, reporting requirements for health insurance issuers, small employers and ALEs, and the reporting penalties. Please contact us for assistance in navigating the ACA’s complex requirements for properly reporting benefits and avoiding penalties.
The Michigan Department of Insurance and Financial Services (DIFS) will hold its second Reinventing MI Retirement program.
Michigan residents age 50+ are encouraged to take advantage of the educational program that will be held at the Doubletree Hotel in Bay City on October 19, 2015, from 9:00 a.m. – 3:00 p.m. The event is free to the public but requires advance registration.
The Director of Tax Services for Yeo & Yeo, Gary Riedlinger, will offer a confidential 1-on-1 “QuickCheck” to those in attendance. As a Personal Financial Specialist (PFS) Gary is delighted to help individuals become engaged, connected and informed with their retirement finances. To read more about Gary Riedlinger, view his bio.
Attendees will also benefit from:
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- 12 in-depth workshops on topics crucial to those age 50 and older
- Access to subject matter professionals and guest speakers
- Financial resource fair
- Complimentary breakfast and lunch
- Free copy of the Reinventing MI Retirement Toolkit
To register, visit the DIFS website, the events Facebook page, or call 877.999.6442.
View the Reinventing MI Retirement informative flyer here.
If you’re a collector, donating from your collection instead of your bank account or investment portfolio can be tax-smart. When you donate appreciated property rather than selling it, you avoid the capital gains tax you would have incurred on a sale. And long-term gains on collectibles are subject to a higher maximum rate (28%) than long-term gains on most long-term property (15% or 20%, depending on your tax bracket) — so you can save even more taxes.
But choose the charity wisely. For you to receive a deduction equal to fair market value rather than your basis in the collectible, the item must be consistent with the charity’s purpose, such as an antique to a historical society.
Properly substantiating the donation is also critical, and this may include an appraisal. If you donate works of art with a collective value of $5,000 or more, you’ll need a qualified appraisal, and if the collective value is $20,000 or more, a copy of the appraisal must be attached to your tax return. If an individual item is valued at $20,000 or more, you may also be required to provide a photograph of that item.
If you’re considering a donation of artwork or other collectibles, contact us for help ensuring you can maximize your tax deduction.
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Teenagers’ retirement may seem too far off to warrant saving now, but IRAs can be perfect for teens precisely because they’ll likely have many years to let their accounts grow tax-deferred or tax-free.
The 2015 contribution limit is the lesser of $5,500 or 100% of earned income. A teen’s traditional IRA contributions typically are deductible, but distributions will be taxed. Roth IRA contributions aren’t deductible, but qualified distributions will be tax-free.
Choosing a Roth IRA is typically a no-brainer if a teen doesn’t earn income that exceeds the standard deduction ($6,300 for 2015 for single taxpayers), because he or she will likely gain no benefit from deducting a traditional IRA contribution. Even above that amount, the teen probably is taxed at a low rate, so the Roth will typically still be the better answer.
How powerful can an IRA for a teen be? Here’s an example: Both Madison and Noah contribute $5,500 per year to their IRAs through age 66 and earn a 6% rate of return. But Madison starts contributing when she gets her first job at age 16, while Noah waits until age 23, after he’s graduated from college and started his career. Madison’s additional $38,500 of early contributions results in a nest egg at full retirement age of 67 that’s nearly $600,000 larger than Noah’s — $1,698,158 vs. $1,098,669!
Contact us for more ideas on helping teens benefit from tax-advantaged saving.
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0% capital gains rate. If the child is in the 10% or 15% tax bracket, instead of giving cash to help fund a down payment, consider giving long-term appreciated assets such as stock or mutual fund shares. The child can sell the assets without incurring any federal income taxes on the gain, and you can save the taxes you’d owe if you sold the assets yourself. As long as the assets are worth $14,000 or less (when combined with any other 2015 gifts to the child), there will be no federal gift tax consequences — thanks to the annual gift tax exclusion.
Low federal interest rates. Another tax-friendly option is lending funds to the child. Now is a good time for taking this step, too. Currently, Applicable Federal Rates — the rates that can be charged on intrafamily loans without causing unwanted tax consequences — are very low by historical standards. But these rates are also expected to increase by year end.
If you have questions about these or other tax-efficient ways to help your child or grandchild buy a home, please contact us.
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Yeo & Yeo is proud to sponsor the SPARK FastTrack Awards, Deals of the Year and the economic prosperity of the greater Ann Arbor region. Since 2010, it has been our privilege to support this initiative and aid in the review of the FastTrack applications.
FastTrack is an exciting annual program sponsored by Ann Arbor SPARK, recognizing companies in Washtenaw County for their outstanding business success. FastTrack awards are presented to companies that had at least $100,000 in gross revenue in 2011, with an annual average growth of 20 percent for the following three years. 2014 revenues must be higher than 2013 revenues.
Winners will be announced at MLive Media Group’s 11th Annual Deals of the Year event on November 13, 2015. Deals of the Year is Washtenaw County’s premier black-tie awards ceremony, which recognizes organizations with outstanding financial performance and economic impact over the past year.
FastTrack applications are being accepted now, and the deadline to apply is September 25, 2015. For more information and to apply, visit www.annarborusa.org/grow-here/fasttrack-business-award
If you own developed real estate, you may want to take advantage of this opportunity for substantial tax savings.
Cost segregation studies identify shorter-life assets within real estate such as certain electrical and mechanical systems, decorative features, specialty fixtures, equipment and land improvements. Using cost segregation, these types of assets, typically depreciated over 39 years, are segregated and reclassified to qualify for 5-, 7- or 15-year depreciable lives. Maximizing available depreciation deductions reduces current taxes and accelerates cash flow.
The accelerated depreciation can be applied now, going forward and going back all the way through 1987. The IRS allows owners of real estate to claim depreciation deductions that were unclaimed on prior tax returns. Assets can be reclassified without amending tax returns.
Just about every taxpayer who owns developed real estate can benefit from cost segregation.
- Do you own depreciable real property acquired in 1987 or later?
- Are you constructing or purchasing real property?
- Are you expanding your existing facility?
- Do you have extensive leasehold improvements?
- Do you have acquisitions or investments in real estate properties?
If you answered yes to any of these questions, contact us for a free initial consultation to unlock your property’s tax savings opportunities. We partner with several qualified providers for cost segregation studies, which have helped our clients save taxes and added thousands to their bottom lines.
Welcome!
We have kept many items in the same place to keep navigation familiar to our visitors, but have implemented new features to enhance your experience. Some of those features include:
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- Mobile-friendly design that will adapt to the device and screen you are viewing it on.
- Video of the month featuring a new informative business or personal financial insight each month on the homepage.
- Yeo & Yeo’s social media feeds located on our homepage to share a transparent view into our firm culture.
- More robust News section allowing you to more easily find articles of interest by clicking on specific content categories. Now available is also the option to quickly share the timely news we post with your network by clicking on the social share buttons.
- Client Testimonials so you can learn more about our client’s experiences.
- Updated eNewsletter sign-up – This fall, we will offer more robust eNewsletters with news and insights tailored to your business or industry. Be sure to subscribe!
- Request for Proposal – when you are ready to get the conversation started, simply fill out the request for a proposal form, or use our contact form to be connected with our professionals.
- New Locations pages featuring maps to each of our offices and photos.
We recommend to bookmark our website as we will continuously be adding information to keep our clients and friends well-informed of the latest changes in tax and audit, and more insightful articles to help you run a successful business.
We hope you enjoy exploring our newly designed website!
Yeo & Yeo CPAs & Business Consultants has been named one of Metropolitan Detroit’s 101 Best and Brightest Companies to Work For by the Michigan Business & Professional Association for the fourth consecutive year.
“It is an honor to be recognized as one of the 101 Best and Brightest Companies to Work For,” said Thomas O’Sullivan, managing principal of the Ann Arbor office. “We credit the excellent work environment we’ve created to our dedicated employees. They are engaged in the work they do for our clients and committed to teamwork. They are an essential piece of our success and I am very proud of them,” says O’Sullivan.
Yeo & Yeo offers rewarding careers for individuals who have the desire and drive to grow as leaders in the accounting profession. More than 200 employees in offices throughout Michigan, including locations in Ann Arbor, Auburn Hills and Southgate, take pride in the firm’s reputation for personal service, commitment to clients and community support. Yeo & Yeo has a culture of developing future leaders through its in-house training department, professional development training and formal mentoring, while sustaining a family friendly work environment. The firm also offers an award-winning CPA certification bonus program. Yeo & Yeo is a strengths-based organization where employees benefit from collaboration across offices and teams, and have access to advisors and resources that help them succeed.
The annual competition is a program of the Michigan Business & Professional Association (MBPA) and recognizes organizations that display a commitment to excellence in their human resource practices and employee enrichment. An independent research firm scored each company’s entry based on key measures in categories such as work-life balance, compensation, employee education and development, recognition and retention, and community initiatives.
This year the geographic area included in the Metropolitan Detroit competition was expanded considerably to include 21 counties. Companies in counties as far north as Midland, Bay and Saginaw, as far west as Clinton, Ingham and Jackson, and those in the entire Thumb and Metropolitan Detroit regions were eligible to participate. A total of 500 companies fully completed the program this year compared to 400 companies last year.
Winning companies will be honored at MBPA’s annual awards program and human resources symposium on September 17 at the Detroit Marriott at the Renaissance Center.
Yeo & Yeo CPAs & Business Consultants was proud to join with the Young Professionals group of the Leading Edge Alliance (LEA YPs) for its fifth annual Global Volunteer Week. LEA member firms worldwide were encouraged to donate to or volunteer for a local charity.
Bradley Booms, member of the LEA YP SIG Steering Committee and senior accountant at Yeo & Yeo said, “This is an excellent opportunity for Yeo & Yeo’s Young Professionals to work together and volunteer for causes they are passionate about with an end result of making a positive impact in the communities that we work in.”
During mid-June and early July, Yeo & Yeo employees volunteered at several different Non-Profit organizations across Michigan. Yeo & Yeo’s Young Professional’s focus this year was to work together to assist a variety of Non-Profits in their efforts to provide food, shelter and safety to families in need by:
- Volunteering at Food Gatherers, a nonprofit food bank committed to alleviating hunger in the Ann Arbor community
- Planting and weeding an urban garden in downtown Detroit that provides sustainable, locally grown vegetables to 1,400 families, communities and schools across Detroit
- Inspecting and sorting 13,183 pounds of donated food items for the Food Bank of Eastern Michigan
- Golfing to raise donations for charities in Kalamazoo
- Working in the community gardens of Lansing for the Greater Lansing Food Bank
- Painting and doing yard work at Shelter House of Midland, an organization committed to provide safety, advocacy and counseling for survivors of domestic violence and sexual assault
- Landscaping at the Underground Railroad of Saginaw. The work included cleaning, digging out shrubs, mulching and planting
This is the fifth consecutive year that Yeo & Yeo employees have participated in the annual LEA YP Global Volunteer Week. The firm is proud of its employees’ outreach and pleased to participate in these efforts to support communities both locally and globally.
The Michigan Unemployment Agency has announced a reduction in the taxable wage base beginning with the third quarter of 2015.The taxable wage base on which businesses (that are not delinquent) pay unemployment tax has been reduced from $9,500 to $9,000.
This reduction is a result of legislation enacted to properly fund the Unemployment Trust Fund during the recession. In 2011, amendments to the Michigan Employment Security Act included a wage base increase from $9,000 to $9,500. This legislation also included a condition that if the Trust Fund balance maintained a $2.5 billion balance for two consecutive quarters, the wage base would be reduced back to $9,000. That condition has been met.
The taxable wage base reduction is effective with the third quarter tax filings and will save unemployment tax dollars for employers across Michigan that are not delinquent. While this third quarter reduction does not change the tax obligation for the first and second quarters, it will result in less tax paid by Michigan employers in the upcoming quarters.
For more information, please contact one of the professionals at Yeo & Yeo.
With nonqualified stock options (NQSOs), if the stock appreciates beyond your exercise price, you can buy shares at a price below what they’re trading for. This is the same as for the perhaps better-known incentive stock options (ISOs).
The tax treatment of NQSOs, however, differs from that of ISOs: NQSOs create compensation income — taxed at ordinary-income rates — on the “bargain element” (the difference between the stock’s fair market value and the exercise price) when exercised. This is regardless of whether the stock is held or sold immediately. Also, NQSO exercises don’t create an alternative minimum tax (AMT) preference item that can trigger AMT liability.
When you exercise NQSOs, you may need to make estimated tax payments or increase withholding to fully cover the tax. Keep in mind that an exercise could trigger or increase exposure to top tax rates, the additional 0.9% Medicare tax and the 3.8% net investment income tax.
Have tax questions about NQSOs or other stock-based compensation? Let us know — we’d be happy to answer them.
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If you usually receive a large federal income tax refund, you’re essentially making an interest-free loan to the IRS. Rather than wait until you file your 2015 tax return in 2016, why not begin enjoying your “refund” now by reducing your withholdings or estimated tax payments for the remainder of 2015?
It’s particularly important to review your withholdings, and adjust them if necessary, when you experience a major life event, such as marriage, divorce, birth or adoption of a child, or a layoff suffered by you or your spouse.
If you’d like help determining what your withholding or estimated tax payments should be for the second half of the year, please contact us.
With the U.S. Supreme Court’s June 25 decision to uphold the Affordable Care Act (ACA) yet again, employers subject to the act’s information reporting provision can no longer afford to put off planning in the hope that the requirements might go away.
Beginning in 2016, “large” employers as defined by the act (generally employers with 50 or more full-time employees or the equivalent) must file Forms 1094 and 1095 to provide information to the IRS and plan participants about health coverage provided in the previous year (2015).
Fortunately, recent IRS guidance helps clarify the reporting requirements. Furthermore, a new IRS Q&A document addresses more specific issues that may arise while completing the forms.
Keep in mind that, while some “midsize” employers (generally employers with 50-99 full-time employees or the equivalent) can qualify for an exemption from the play-or-pay provision in 2015 if they meet certain requirements, these employers still will be subject to the information reporting requirements.
If your organization is among those that are required to file Forms 1094 and 1095, and you need assistance in complying with the requirements, please reach out to us.