Yeo & Yeo CPAs & Business Consultants is pleased to announce the promotions of Elizabeth Gunnell to Project Manager and Melissa (Dean) Lindsey, PCM®, to Practice Growth Manager.

Gunnell has five years of experience in business project management. She will drive strategic initiatives to advance the goals of the firm and its affiliates by leading teams, overseeing research and providing analysis. Gunnell graduated from the University of Michigan with a Bachelor of Arts in Political Science and Psychology. She is a member of the University of Michigan’s Alumni Association and the Association for Accounting Marketing and is active in the LEA Global Marketing and Business Development special interest groups.

Lindsey has more than ten years of marketing, business development, client service and consulting experience. She will help drive the firm’s growth strategy, provide executive coaching for the firm’s senior employees, and manage lead generation marketing initiatives. Lindsey holds a Bachelor of Arts from Saginaw Valley State University and studied public relations and crisis communication at Vesalius College in Brussels, Belgium. Additionally, she earned the Professional Certified Marketer (PCM®) designation through the American Marketing Association. She is a member of Thomson Reuters’ Checkpoint Marketing for Firms Advisory Board, the Association for Accounting Marketing, the Social Media Club of the Great Lakes Bay Region and the LinkedIn Advisors Community. She is active in the LEA Global Marketing and Business Development special interest groups.

Together Gunnell and Lindsey will further the growth of the firm’s niche and service practice areas.“ Elizabeth and Melissa’s combination of project management, business development and marketing experience will enhance our client service culture,” says Thomas Hollerback, President & CEO. “We have experienced growth in many of our practice areas and they will play a key part in continuing our success by providing our professionals with the strategic direction and resources they need to align Yeo & Yeo’s solutions with their clients’ goals and objectives.”

Gunnell and Lindsey will work cross-functionally with firm leadership and the firm’s three affiliates – Yeo & Yeo Technology, Yeo & Yeo Medical Billing & Consulting, and Yeo & Yeo Wealth Management – across Yeo & Yeo’s nine offices statewide.

As expected, the Financial Accounting Standards Board (FASB) announced that the new lease accounting standard will be delayed for one year for non-public companies. This will give private companies, nonprofits and small companies in particular more time to prepare.

The amendments to the Leases Standard (ASU No. 2016-02, Leases – Topic 842)

amend the effective dates as follows:

• Nonpublic entities (FASB definition) – first annual reporting period beginning after December 15, 2020. This affects 12/31/2021 year-ends.
   
• Nonpublic entities (FASB definition) – first interim reporting period beginning after December 15, 2021. This affects 1/31/2022 month-ends.

For more information, please contact your Yeo & Yeo advisor or read this article about the FASB vote in the Journal of Accountancy.

Is your business depreciating over a 30-year period the entire cost of constructing the building that houses your operation? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. And under current law, the potential benefits of a cost segregation study are now even greater than they were a few years ago due to enhancements to certain depreciation-related tax breaks.

Depreciation basics

Business buildings generally have a 39-year depreciation period (27.5 years for residential rental properties). Most times, you depreciate a building’s structural components, including walls, windows, HVAC systems, elevators, plumbing and wiring, along with the building. Personal property — such as equipment, machinery, furniture and fixtures — is eligible for accelerated depreciation, usually over five or seven years. And land improvements, such as fences, outdoor lighting and parking lots, are depreciable over 15 years.

Often, businesses allocate all or most of their buildings’ acquisition or construction costs to real property, overlooking opportunities to allocate costs to shorter-lived personal property or land improvements. In some cases — computers or furniture, for example — the distinction between real and personal property is obvious. But the line between the two is frequently less clear. Items that appear to be “part of a building” may in fact be personal property, like removable wall and floor coverings, removable partitions, awnings and canopies, window treatments, signs and decorative lighting.

In addition, certain items that otherwise would be treated as real property may qualify as personal property if they serve more of a business function than a structural purpose. This includes reinforced flooring to support heavy manufacturing equipment, electrical or plumbing installations required to operate specialized equipment, or dedicated cooling systems for data processing rooms.

Identifying and substantiating costs

A cost segregation study combines accounting and engineering techniques to identify building costs that are properly allocable to tangible personal property rather than real property. Although the relative costs and benefits of a cost segregation study depend on your particular facts and circumstances, it can be a valuable investment.

Speedier depreciation tax breaks

The Tax Cuts and Jobs Act (TCJA) enhances certain depreciation-related tax breaks, which may also enhance the benefits of a cost segregation study. Among other things, the act permanently increased limits on Section 179 expensing, which allows you to immediately deduct the entire cost of qualifying equipment or other fixed assets up to specified thresholds.

The TCJA also expanded 15-year-property treatment to apply to qualified improvement property. Previously this break was limited to qualified leasehold-improvement, retail-improvement and restaurant property. And it temporarily increased first-year bonus depreciation to 100% (from 50%).

Making favorable depreciation changes

Fortunately, it isn’t too late to get the benefit of speedier depreciation for items that were incorrectly assumed to be part of your building for depreciation purposes. You don’t have to amend your past returns (or meet a deadline for claiming tax refunds) to claim the depreciation that you could have already claimed. Instead, you can claim that depreciation by following procedures, in connection with the next tax return that you file, that will result in “automatic” IRS consent to a change in your accounting for depreciation.

Cost segregation studies can yield substantial benefits, but they’re not right for every business. We must judge whether a study will result in overall tax savings greater than the costs of the study itself. To find out whether this would be worthwhile for you, contact us.

Ann Arbor

Located in southeast Michigan, Ann Arbor is a thriving city with an abundance of opportunities to explore. NICHE magazine ranked Ann Arbor as one of the “Best Cities to Live in America” citing that the city offers a suburban feel that has been dubbed an urban oasis.

What is it like to have a location in Ann Arbor, MI?

Located in a bustling college town near the University of Michigan, Ann Arbor celebrates art, theater, film festivals, athletics, music, academics, history and more. More than 300 restaurants within the Ann Arbor area serve up dishes prepared by world-class chefs. The annual award-winning Ann Arbor Art Fair and the three-week long Ann Arbor Summer Festival enrich the cultural, economic and social vitality of the region. In the fall, more than 100,000 people travel to Ann Arbor each game day to watch the University of Michigan Wolverines compete in “The Big House.” Ann Arbor is one of the biggest cities in Michigan and offers unparalleled opportunities for businesses, cultural experiences and more.

Yeo & Yeo’s Ann Arbor Services