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March 23, 2011 - Jennifer Harrison, Tax Reminders for the Procrastinator/ Beyond Bookkeeping
  • Wednesday, March 23, 2011  
  • Guest:  Jennifer Harrison. HLB Gross Collins, P.C. Tax Supervisor
  • Listen to show. 

Welcome to the Gross Reality.  My name is Steve Gross and I will be your host for the next hour.  Our show is dedicated to helping businesses and individuals survive and prosper in good times and in bad.  We do this by allowing prominent business owners, entrepreneurs, and educators the opportunity to tell their success story and share their insights and expertise that will resonate with our audience and add value.  

I’d like to invite you to visit our website www.hlbgrosscollins.com where you will find frequent updates and timely information, as well as all of our past shows for your listening pleasure. 

As founder of HLB Gross Collins, P.C., founder of the Business Builders Seminar Series, and host of the Gross Reality, my goal is to help you, the listener, in growing your business, identifying new business and revenue opportunities, and maximize your financial success. My CPA firm combined with our value added offerings of the Gross Reality and the Business Builders Seminars are designed to work in unison to offer you tools, techniques and insights to benefit your overall financial health. 

Our show today is topical for every taxpaying listener in our audience.  How to file taxes to your advantage, and plan for this year under our temporary laws for next two years?  Jennifer Harrison is a CPA with many years experience in tax compliance and planning for private businesses and their owners in the Southeast.  We will talk about strategies you can use in your personal and business life when we join Jennifer in our interview segment.  

Our show also includes our regular segments - Business tips and strategies to improve your business or change your business for the better, our weekly segment on what’s happening around us that may impact our businesses:  “The Good, The Bad & The Ugly”. 

Our Business Tip feature this week is a discussion of:  Beyond bookkeeping, how to get real time insights and analyze your business for troubling or promising trends that need action and how analysis can spot problems in time to act, change, and make a difference in your business. 

Analytical review for client financials 

  1.  Data – information – insights – action is goal.
    1.  Today, we gather data and convert to information with ProFx Engagement.
    2. We layout, separate and consolidate info to create financial statements – still information.
    3. We then post financial information to iLumen Analytics.
    4. Automatic analytics are computed and the ability to do customer analytics is available.
    5. Significant analytics are then accomplished and available. 
  2. Analytics, while interesting, and segmented by function are still information.   All reports or graphs – still information.
    1.  Solvency
    2. Liquidity
    3. Profitability
    4. Solidity
    5. Compliance with finance or investor covenants 
  3. Insights need to be identified
    1.  Insight is a clear articulation to a financial or non-financial manager, of a subject he needs to address or handle.
    2. Analysis without insight is not valuable.
    3.  Insight should say:   Because of this ……….., then there is something to address……… Red, yellow, green is a start – it distinguishes up, down or N/A, but it is not a completed insight.
    4. Insights are usually, causes for action, but may be a cause for further understanding.
    5.  Insights should be:   Based on these trends over…..periods, liquidity is strained and may cause us to run out of cash by a certain period if specific trends are not solved.
    6.  Insights could be:
      1. Certain trends are troubling, and added to a lack of planning to correct these trends, danger exists.
      2. Based on increases in DSO, and corresponding increases in A/P, it appears LOC will be maxed out in 3-6 months with a negative outlook for increased LOC
    7. Insights look at trends, variances, analytics and then identifies, in priority, areas of concern.
    8. We need to add or develop an Insight Review of our analytic offering in order to demonstrate clearly the advantage of our system. 
  4. Action alternatives should be considered as a result of insights observed.  If liquidity is challenged, alternative courses of action could include:
    1.  Working A/R more directly, revisit terms, payment discounts, credit allowed by customers, work outs for past due accounts.
    2. Improving customer service to highlight issues with customers quicker and get A/R speeded up.
    3. Converting from LOC to ABL with higher authorized draw amounts.
    4. Redoing vendor agreements to get longer terms, or increased account balance limits.
    5. Raise additional capital. 
  • Point is – analytics are still information – must provide in our product offering 
  • Insights – clearly pointed out
  • Action – alternative solutions for management to consider.

The Good   Economic trends in the U.S. still keep improving, if gradual, and give optimism for improvement over time. 

  1.  Stock market, while volatile, remains at higher levels than expected.
    1. Corporate earnings up and trending more upward
    2. Stock prices tend to follow earnings
    3. P/E ratio for market, historical 18 x earnings, today 14 x earnings.
    4. All signs for higher stock prices, absent surprises. 
  2.  Employment seems to be adding jobs, but at a slow pace.
    1. Location matters – South and North, up.  Midwest and West, down
    2. Industry matters – auto industry, steel and heavy manufacturing, construction, all down.  Services, technology, health care and information service, up. 

The Bad 

  1.  Housing and Real Estate
    1.  Still in decline and unsold inventory not absorbed quick enough.
    2. Major Banks believe foreclosures will peak in 3rd quarter 2011, and decline from there.
    3. Recovery could be five years out. 
  2.  Health care uncertainty
    1.  Current law working thru courts, creates question on planning.
    2. Benefits planning is to reduce or eliminate them.
    3. Benefits of common sense planning yet to appear. 
  3.  International events – throw uncertainty into many areas
    1.  Energy – Libya, Mideast and domestic supplies, all uncertain
    2. Japan – takes a buyer of our debt off table, who will finance our deficit
    3. Social unrest in Mideast (whole) – changing of the guard
      1.  Added to religious conflict? Or
      2. Improve relations?

The Ugly  National conflict arising over Union issue 

  1.  Budgets for union benefits (health care and retirement) are unworkable and bankrupting local governments.
  2. Private unions vs. public unions are being combined (confusing and incorrect).
  3. Unionization is becoming a “freedom or racial cause”.
  4. Demonizing critics confuses the public. 

Issue is Clear 

  1.  Private unions are not being discussed, except in attempts to allow them power in the workplace that is not healthy.
    1.  Card check – require a new employee to vote for or against union, when employed.
    2. No secret ballot – allowing union bosses to know who voted against union and pressure them individually. 
  2.  Issue today is public unions – an unnatural entity
    1.  Negotiations are between:
      1. Politicians – who want money, votes or organized campaign manpower.
      2. Unions – who can offer money, votes and organization to whom they choose. 
      3. Total conflict to let unions buy politicians. 
      4. Taxpayer – at risk - must pay, regardless of ability to pay.  Only recourse is to move, or leave district and job.
  3.  Situation today – unions support Democrats by over 90%.  In exchange Democrats give Unions what they want.  Budget shortfalls now threaten the system.  Cannot pay for promises made for votes.

Now I’m pleased for formally introduce Jennifer Harrison, supervisor with HLB Gross Collins.  You can view her resume here.

  1. We are we in current law and how long will it last? 
  2. What to do in current filing season – (1) file early, (2) file on time (3) extend – Why? 
  3. What to do the remainder of the year? 
  4. Tax reducers?
    1.  Defer vs. accelerate (income vs. surprises)
    2. Credits for good deeds (LIHC, Movies, Jobs, R&D, Conservation)
    3. Temporary law stimulus – purchaser of assets and depreciate others 
  5. Estates and Gifts 
  6.  2 year planning period
  7. Plan your estate tax with shifts
    1. Assets , but not control
    2. Assets and control
    3. Homes, appreciating assets
    4.  Gift rates and limits
    5. Estate rates and limits
  8. For taxpayers who have not yet done their taxes, can you talk a little about the most efficient way to get this completed?
    1. Organizing information
    2. What are the key details that people need to remember to include when bringing information to their tax preparer?
  9. What are some of the things that taxpayers often forget to include when giving information to their preparer?
  10. What are some of the more commonly overlooked deductions?
  11. What should individuals be looking for from their tax preparer that can add value beyond tax preparation?
    1. Tax planning
    2. Identifying missed tax savings opportunities
  12. Can you talk about extending and explain this option and what is still required of tax payers even if extending?

 

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