Archive by date ‘2010’
The Power of a Handwritten Note
A week after Thanksgiving, I decided that it was time to do a little holiday decorating. This required me to move boxes out of the storage room to get at my decorations. In this process, I noticed a medium size storage box and my curiosity got the best of me. Upon opening this box, I immediately became absorbed by its contents. It was filled with treasures that stirred my memory and left me feeling tremendously nostalgic. As I sifted through special letters, cards and photos, I came across a handwritten note from a boss that I had over twenty years ago. The note was filled with words that expressed his gratitude, respect and admiration. His words once again inspired me and warmed my heart. I tucked this note back into the box for safe keeping.
With cell phones, email and texting, a handwritten note seems to be a lost art in business. While I love all our new technology, a handwritten note can be a powerful tool that can leave a lasting impression. To help make writing that note easier, I now keep a stack of note cards and stamps close at hand. This is a good reminder for me to write a note to a special customer, vendor, or employee for their excellent service, dedication, or for going above and beyond.
2010 Tax Relief Act – What it Means For You and Your Business
In addition to extending the “Bush Tax Cuts” until December 31, 2012, including the lower tax rates on qualified dividends and long-term capital gains, the recently enacted Tax Relief Act of 2010 includes provisions that provide relief from the AMT, the marriage penalty, as well as a cut to the payroll tax by two percentage points (for employees only).
The Act also extends a host of other important tax breaks for individuals and businesses. Below are some of the important provisions included in the legislation.
New Simple Cafeteria Plan Available to Small Businesses in 2011
Cafeteria plans are designed to allow nontaxable benefits to employees. These benefits include certain medical coverage, group-term life insurance, flexible spending accounts and dependent care assistance. Having a cafeteria plan in place can be an added bonus to employers for finding and keeping quality employees. However, many small businesses have shied away from adopting a cafeteria plan due to the burdens of dealing with the nondiscrimination requirements.
The HealthCare Legislation passed in 2010 introduces a new type of cafeteria plan for small businesses. Starting on January 1, 2011, small businesses can adopt what is known as a “Simple Cafeteria Plan”. A simple cafeteria plan provides a safe harbor from nondiscrimination requirements for cafeteria plans. If the safe harbor tests are met, the nondiscrimination requirements are deemed to be met as well.
6 Ways to Improve Your “Too Busy Mindset”
The Holiday season is upon us and peace is often the last thing we feel during this time of year. Our schedules are already busy enough, so adding in the stress of holiday activities just adds to our overwhelming feeling of being “too busy”. Business owners and professionals constantly tell me that there is not enough time in a day. I concur with this and definitely have times when I feel just “too busy”. However, it’s at this time that I remind myself that this is a mindset. Without changing this mindset, the excuse “I am too busy” can spread like a disease in both my professional and personal life. Instead, I work at changing my thoughts and habits in order to help me accomplish more.
Tax Changes are on the Horizon: Be Prepared with Year-End Tax Planning
As of date, there has been no action taken by Congress on tax rates for 2011. This inaction will lead to higher income tax rates for 2011, including higher tax rates on long-term capital gains as well as qualified dividends.
Year-End Tax Planning can help you take advantage of:
1. Tax rules in place for IRA’s in 2010
- If you have a Traditional IRA or other tax-favored retirement account, you may want to consider converting all or part of your retirement account to a Roth IRA.
- For 2010, the AGI limits have been removed to allow such a conversion, meaning all taxpayers are now eligible to convert to a Roth IRA. Any conversion would be taxable.
- For 2010 only, taxpayers have the ability to elect to have the tax spread over two years, 2011 and 2012.
Preparing Interview Questions
In the fall of each year, our firm spends time recruiting for staff accountants and interns on college campuses and at the A & A Student Conference sponsored by the MNSociety of CPA’s. In doing this, we conduct first and second interviews with various candidates. It’s important to prepare for the interviews, I prepare by:
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Developing effective interview questions to help me determine if the candidate will be able to perform the job.
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Reviewing details of the job requirements, the skill competencies and the behavior qualities that are needed in the position.
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Structuring interview questions and putting them into an interview guide that is issued for each candidate seeking employment for the same position. The guide allows me to compare candidates in fair and nondiscriminatory fashion.
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Brushing up on inappropriate or illegal interview questions. It’s easy to get caught up in small talk and ask something of a candidate that really shouldn’t be asked. I try to stay alert to where the conversation may lead, even if the candidate brings up a topic; I look for ways to steer the discussion in another direction.
R&D Tax Credit Changes That Benefit You
There have been some exciting changes in the R&D tax credit area in recent months. Both Federal and Minnesota tax law changes have turned out favorable for the taxpayer. At a time when businesses of all sizes are looking for ways to cut costs, improve cash flows and retain more profits, it would be natural for your business to take advantage of any federal or state tax credits available.
President Obama Signed HR 5297 Small Business Jobs and Credit Act of 2010
On Monday, September 27th, President Obama signed the small business bill into law. Through various tax relief provisions, the bill will allow small businesses to reinvest in themselves and create new jobs. Notably, businesses that pay the alternative minimum tax (AMT) will be able to claim the R&D tax credit, along with other general business credits.
2010 Small Business Jobs Act
Recently, Congress passed the 2010 Small Business Jobs Act. The Act includes a variety of tax breaks and incentives for small businesses. Below is an overview of the tax changes in the 2010 Small Business Jobs Act:
Promoting Wellness in the Workplace
As the temperature drops and the weather gets colder, I am starting to hear sneezing and coughing around the office. This made me think about scheduling our on-site flu shots. This will be our fifth year having flu shots on-site for employees and their families; it has been a successful benefit with no cost to our organization.
In addition, we have instituted a wellness initiative throughout our firm that has proven to be quite successful. In June, we were presented with the Gold Wellness by Design Worksite award. To my partners and my surprise, by having our wellness program in place, we were able to lower our health care premiums for 2011!
Solar Energy Tax Credit: Reduce Energy & Save
Energy costs can be one of the biggest expenses of owning a building. Currently, the government is trying hard to promote a Green Initiative to help encourage people to find ways to reduce energy usage. One area of focus is solar energy. In Minnesota, there are two programs which might help you reduce your energy and help defray the cost of purchasing solar energy equipment. Federal credits or grants as well as rebates from Xcel Energy are available. Below are brief descriptions of both programs:
Federal Grant in Lieu of Credit
The first incentive is a federal tax credit of 30% of the cost of the solar energy property. This is a general business credit and subject to AMT limitations. However, in lieu of the credit, a federal grant is available for companies to apply for. The grant would also be equal to 30% of the cost of the property and would be received by the company for the grant. In contrast, a credit would pass out to shareholders of any passthrough entities. If the company applied for the grant in lieu of the credit, the grant would be received by the company and can be used to offset the cost of the solar property.
Work Hard, Play Hard
Whenever I mention the word “fun” to a group of business owners, they tend to roll their eyes and think work it just work, it’s not suppose to be fun. The new generation of workers will challenge this idea in a big way.
Did you know that laughter actually creates a bond that brings others together? Imagine a place where employees enjoy one another and share a laugh or two. It may be hard to do but employees who enjoy their time at work will excel. In fact, a fun workplace is not only more productive but it attracts people, profits and customers who like to work with happy people.
2011 Tax Rates
“What will happen to tax rates in the future?” is one of the most popular questions tax accountants get from our clients. The question is even more crucial in the very turbulent time we are in when it comes to taxes right now. Substantial legislation is needed for both personal income taxes and estate taxes in the next year. Although we know Congress is working on resolving these issues for 2011 and beyond, we aren’t sure what the ending outcome will be: Will tax rates go up? Will only the top two brackets go up? One thing is for sure, changes are coming.
New Employee Orientation
A few months ago, my son called to inform me that he had accepted a new position with a different company. He was so excited about his new opportunity and anxious to start his new job. As his first day arrived, I couldn’t help but think about him all day and wonder how things were going. When he called me that evening, I could tell immediately that his day had not gone Well. As our conversation went on, I learned that his new company had not prepared for his arrival. His paperwork wasn’t ready, they had no plan for training him, he had no assignments and they didn’t even have a place for him to sit. In fact, they excused him early. This eager young man left his first day on the new job feeling deflated, unwelcomed and undervalued.
This is precisely why solid orientation programs are so critical. Imagine being invited to a dinner party and upon arrival, they did not have any refreshments, the food wasn’t prepared and there was no place for you at the dinner table. Being unprepared for new hires makes them feel just like a dinner guest without a seat at the dinner table.
Health Care Reform Legislation – What are the immediate impacts to businesses?
I think that the recently passed Health Care Reform Act may be the most profound legislation of our lifetime. The Act contains numerous provisions that will affect you and your employees. Several of the provisions are now in effect or will be in effect this year.
The following are changes taking effect in 2010 that you and your business should be aware of and acting on now:
Conducting An Effective Meeting
If you’re like me, I attend a lot of meetings. And, if you’re like me, I don’t always look forward to them. After leaving a meeting the other day, I was puzzled as why this meeting and others are so often ineffective. After some thought, I realized that not a lot of people have been instructed on how to facilitate an effective meeting. Many individuals call a meeting, show up with a few topics in mind and hope that all communication barriers are lifted. Instead, people often leave more confused and frustrated than they were prior to the meeting. I have been guilty of conducting those ineffective meetings and I have learned that preparation is the key to success.
Generations in the Workplace
What a fascinating time to be working the business world. For the first time in history, we have four separate, distinct generations working together. I have gotten a kick out of how each generation is able to easily find the faults of the other generations. In particular, I find it interesting to hear the negative comments about Generation Y (born between 1980 and 1999).
Personally, I have been recruiting for public accounting for 10 years and have never been so impressed with a group of young professionals. They are intelligent, well spoken, open-minded, techno-savvy and goal oriented. Our business world needs these young minds that excel at multi-tasking and scheduling of work. They appreciate their family, diversity and have a strong social conscience. I believe that business can learn a lot from this generation and should embrace them into our work world.
People Power: Profits Depend on Strong Staff Retention
Many companies claim that people are their most valuable asset, but the most admired and successful companies show it. In handling the human resource area for three organizations, I know that retention is not a human resource issue; it is a management issue. There is a direct correlation between high retention and profits. Turnover costs organizations 30% – 150% of the annual salary of an employee (even more for higher level or specialized employees). Businesses can improve this area by having a retention strategy that is part of the management culture and training.
Don’t let your key performers walk out the door; treat them with respect, understand their needs and help develop their skills. Employees are not a cost to the organization; they are critical, valuable assets that will ultimately increase profits and help companies move to the next level.