FINANCIALFOCUS
T H I S A R T I C L E C A N B E F O U N D AT
www.mysecbank.com/bank-news.htm
ISSUE: JANUARY 2017
TAX SEASON IS UPON US
LEARN SOME HELPFUL TIPS TO KEEP STRESS LEVELS LOW
Welcome to 2017! It appears this year may again be an interesting year with the possible
changes a new presidency could bring. While there has been no word yet on changes to the
tax code, you are likely in the process of getting your taxes finished for 2016. This month’s
article might be of interest to you as to work on your taxes with some helpful tips. Until next
time, wishing you a prosperous 2017!
Call one of our commercial lenders at any of our five locations, and they will be happy to visit
with you about it more! You can find a lender in your area by going to our website:
www.mysecbank.com/meet-our-team.htm.
Our lenders’ schedules tend to fill up fast this time of year, so set up a time soon!
Best Regards,
SECURITY BANK
NAMED AMONG
TOP 8 EXTRAORDINARY BANKS
IN U.S.A FOR THE
2ND YEAR
KEITH KNUDSEN
PRESIDENT/CEO | SECURITY BANK
TAX SEASON 2017
APPROACHING: TIPS FOR
SMALL BUSINESS OWNERS
TAX LAWS OFTEN CHANGE, HERE’S HOW
TO KEEP UP
October 2016
Even owners who are organized, keep good books and stay in touch with
their accountants can find compiling returns to be a painful process. One
reason is that tax laws change often, says Rosamaria Bravo, a certified
public accountant with the firm MBAF in Miami. One of this year's big
differences: Partnership returns must be filed by March 15, a month earlier
than in the past. And companies known as C corporations have a filing
deadline of mid-April, after having a March due date in past years.
by Joyce M. Rosenberg | Published January 25, 2017
Here's a look at some lessons small business owners learned:
NEW YORK - With the start of tax season, stress levels are
rising at many small businesses.
USING SOFTWARE WISELY
When Christina Divigard started an advertising agency, she bought
accounting software and began keeping the company's books herself.
When tax season arrived, she discovered that out of inexperience, she'd
incorrectly entered some information and misclassified some types of
"It's very hard to stay on top of all the information," Bravo says.
"The average business owner is more worried about their
day-to-day operations."
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JANUARY 2017 | FINANCIALFOCUS
deductions. It took two weeks to get her books in order.
"If I had to do it all over again, I would have put more effort and
budget behind setting up systems properly from the get-go," says
Divigard, managing director of New York-based Valvespring.
Divigard subsequently hired a bookkeeper to help set up accounts
and understand how to input income and expenses. She also
learned more about the need to put expenses into different
accounting categories — for example, meals during a business
trip are different from meals to entertain customers under the tax
law.
Having a system that is correctly set up has reduced the chance of
errors, and even if Divigard has to do repair work, "now it takes me
a day rather than two weeks."
KEEPING UP WITH THE CHANGES
Complying with tax law revisions can be hard even with a
bookkeeper and accountant, Barbara Karpf has learned. As of this
year, businesses must file W-2 forms and 1099 forms with the IRS
by Jan. 31. While companies were previously required to give
those forms to workers by the end of January, they didn't have to
get them to the government until the end of February. The
government can charge a penalty if it gets the forms late.
That created extra pressure for Karpf. Her home decor company,
DecoratorsBest, moved offices in New York right after Black Friday
and Cyber Monday, two of its busiest sales days. After she hired
movers and a painter for the new space, she realized she needed
to get information like Social Security numbers and addresses
from eight people. Well into January she was still getting all the
information together so 1099 forms for freelancers and other
contract workers could get to the government, as well as the
workers, on time.
"It's more work in a shorter period of time," Karpf says.
KEEPING TRACK OF EXPENSES
When an owner is running a business day by day and also trying to
do long-term strategic planning, details like tax-deductible
expenses can get lost in the shuffle, creating a headache later.
Deborah Sweeney has learned to look at her books monthly to be
sure expenses like charitable donations and the costs of employee
meetings are entered properly.
"That way, we don't have to scramble at the end of the year," says
Sweeney, owner of MyCorporation.com, a Calabasas,
California-based company that helps businesses incorporate
online.
Sweeney recalls errors of past years, such as not taking a
deduction for a service contract on a printer. She has also learned
to take her questions to her accountant to be sure she's not missing
some of the finer points of rules about deductions. For example:
"How do we categorize new furniture — do we write it off or depreciate
it? What amount of an owner's health care costs is deductible?"
FINDING THE BEST HELP
Diane Hamilton, though, has struggled to find an accountant who's
a good fit for her company, which makes computer and phone apps.
She has worked with large accounting firms in the Richmond,
Virginia, area where her Binary Formations business is located. But
the bills climbed as she called with questions.
"You look at how much they charge and the amount of revenue you
bring in, and it isn't working," she says.
When Hamilton switched to a much smaller accounting firm, she
found herself doing as much work as when she tried to handle her
taxes herself. She's still hoping to find the right tax professional for
her company.
TRYING TO HOLD COSTS DOWN
Brad Chandler estimates it costs his real estate company $70,000 a
year to compile returns for the federal government and for
Maryland, Virginia, and Washington, D.C. That's a five-fold increase in
five years.
"A lot of it is the sheer complexity of the laws, which are changing so
much," says Chandler, CEO of Springfield, Virginia-based Express
Homebuyers.
For example, Chandler says, depreciation laws are shifting annually,
and the health care law brought more paperwork. Occasionally, the
company gets additional tax bills, which raise a question for
Chandler and his chief financial officer.
"Do we send it to our CPA (to handle) for $200 or $300 an hour, or
just pay the bill?" he says.
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