Yeo & Yeo Recognized Among Michigan’s 2016 Best and Brightest in Wellness

Yeo & Yeo CPAs & Business Consultants has been selected as one of Michigan’s Best and Brightest in Wellness for the third consecutive year. The program highlights companies, schools, faith-based groups and organizations that promote a culture of wellness, as well as those that plan, implement and evaluate efforts in employee wellness to make their business and their community a healthier place to live and work.

“This is an exciting achievement that recognizes Yeo & Yeo’s commitment to the health and well-being of our employees,” said Thomas E. Hollerback, president and CEO of Yeo & Yeo. “We are proud to support and encourage employees looking to live a healthier lifestyle at home and in the workplace.”

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 and 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 using an assessment, created and administered by SynBella, the nation’s leading wellness provider. Criteria for selection included wellness programs and policies, culture and awareness, leadership, participation and incentives, communication and measurement, among others. A total of 400 companies and organizations were nominated for the award. Of those organizations, 187 completed the entire selection process, and 107 winners were chosen.

Yeo & Yeo will be honored at a symposium and awards celebration on October 20 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 will be featured in the November issue of Corp! magazine and the November/December edition of Corp! online.

Imagine working a lifetime in hopes of one day passing on the many fruits of your labor to those who you love, but in the blink of an eye as much as 40 percent of it is taken away in the form of estate taxes. While there are many strategies to help protect your estate or at the very least mitigate the effects of the high estate tax rates, the door may soon slam shut on one of the most frequently used strategies. The IRS has proposed regulations that would disallow a discounted valuation method used in valuing assets in family limited partnerships and therefore no longer allow a lower taxable asset value for estate taxes, gifts, and transferring assets.

To utilize this strategy, a family limited partnership is often formed to help manage a family’s wealth and is a tremendously helpful tool in transferring the wealth from one generation to the next through tax-free gifts at a discounted valuation. The partnership is normally formed when senior family members contribute assets to the family limited partnership in exchange for an ownership percentage of the entity. These members most often will retain the role of the general partner and therefore can retain control of the partnership assets, control cash flow and management decisions, and determine and limit the ability of limited partners to transfer their interests. Upon formation, the general partner will transfer partial ownership of the partnership and ultimately their assets to their children, other family members, or trusts for their benefit over time.

In order to transfer ownership interest, the partnership would analyze the fair market value of the partnership assets to arrive at the overall value of the company. This would be used to determine the percentage of ownership that could be transferred as a tax-free gift each year. In the past, a family limited partnership was able to discount this value due to influencing factors such as a non-controlling minority interest and lack of marketability. For instance, without a majority voting percentage, a minority stakeholder is unable to single-handedly have a significant impact in making business decisions and as a result the value of that minority stake in a company would be discounted. Likewise, having a minority stake in a company such as a farm or family business would make it very difficult to find a buyer who would be interested in joining the partnership, which also justifies a discounted valuation due to lack of marketability.

However, with the proposed regulations, widely used discount valuation methods would be drastically limited. As a result, the business assets would have a higher valuation which would have a significant impact on the way businesses are able to plan the transfer of their family business. This most likely would lead to an increased estate tax burden on many of these families and in some cases, the passing of a majority family member could lead to liquidation of all or part of the business to pay the significant estate taxes due. This proposed regulation has been met with quite a bit of pushback and is scheduled for a comment period to begin on December 1, 2016, but final regulations could come out by year-end.

So what can you still do in 2016?

Keep in mind that the federal estate tax exemption is $5.45 million dollars per individual, but make sure your estate plan reflects the new “portability” provision allowing spouses to inherit each other’s unused exemptions.
If you have been considering transferring closely held business interests either through lifetime gifts or at death, we recommend that you consult with your estate planning attorney and other advisors quickly to determine if action before December 1 is advisable.
Make annual gifts of up to $14,000 per beneficiary by December 31, as it will not count against your lifetime estate/gift tax exemption of $5.45 million.

Contact the professionals of Yeo & Yeo’s Agribusiness Services Group to discuss the estate and gift tax strategies that are most beneficial for your situation.

Last year, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The new standard, which takes effect in 2018 for privately held companies (2017 for public companies), creates a single, comprehensive revenue recognition model to replace today’s industry-specific — and often inconsistent — rules.

As you prepare to implement the new standard, do not overlook the potential tax implications. In some cases, the new rules may accelerate taxable income or create book-tax differences that you will need to track and report.

A quick recap

The new standard prescribes a five-step model for recognizing revenue: 1) Identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the price among the performance obligations, and 5) recognize revenue when (or as) performance obligations are satisfied.

Today, contractors usually treat a contract as a single performance obligation. Under the new standard, however, certain contracts may be split into two or more distinct performance obligations. Suppose, for example, that a contract calls for you to construct a building and to supply and install certain equipment. Depending on the facts and circumstances, the contract may be divided into two performance obligations, requiring you to allocate the price between construction and equipment installation and to recognize revenue from each separately.

The new standard may also affect accounting for long-term contracts. Typically, contractors use the percentage-of-completion method to recognize revenue over the life of a project. Under the new standard, revenue is recognized when control of a good or service is transferred to the customer. Depending on several factors, control may be transferred when the contract is complete or it may be transferred gradually over the life of a contract.

Other areas potentially affected by the new standard include change orders, uninstalled materials, and claims and warranties.

Impact on tax planning

The new revenue recognition standard may affect taxes and tax planning in several ways. Here are a few examples:

Acceleration of taxable income. Under certain circumstances, revenue recognition for tax purposes is required to align with its treatment for financial reporting purposes. So, if application of the new standard accelerates revenue recognition for financial reporting purposes, it may also accelerate recognition of taxable income. Suppose, for example, that your contracts call for advance payments. Generally, for tax purposes, advance payments are included in taxable income in the year they are received. But there is a limited exception, which allows you to defer tax on advance payments for goods and services for one year, to the extent they are deferred in your audited financial statements.

In some cases, the new standard’s “transfer of control” model may require you to accelerate revenue from advance payments into the year they are received. If this happens, taxable income related to those payments will similarly be accelerated.

Percentage-of-completion method. With certain exceptions, the tax code requires contractors to account for long-term contracts using the percentage-of-completion method. But the new standard may require adjustments to that treatment for financial reporting purposes.

If the tax and financial reporting treatments diverge, applying the new standard may create a book vs. tax income difference (or alter an existing book-tax difference) that must be tracked and reported on your tax returns.

Changes in tax accounting methods. If the new standard requires you to change an accounting method for financial reporting purposes, it may be necessary or desirable to make a similar change to the corresponding tax accounting method. Changing a tax accounting method requires you to file IRS Form 3115, Application for Change in Accounting Method. Depending on the nature of the change, approval may be automatic, or it may require advance consent from the IRS.

System changes. As just described, adoption of the new revenue recognition standard may cause you to change your tax accounting methods, or it may create (or alter) differences between book and tax income. Either way, you must ensure that you have updated systems, policies, processes and controls in place in order to gather the data you need for both financial and tax reporting and to track any book-tax differences.

Start planning now

Even though the new revenue recognition standard will not take effect for two or three years, it is a good idea to begin planning for the change sooner rather than later. As you prepare, be sure to consider the potential impact on your tax returns as well as your financial statements.

There’s a lot to think about when you change jobs, and it’s easy for a 401(k) or other employer-sponsored retirement plan to get lost in the shuffle. But to keep building tax-deferred savings, it’s important to make an informed decision about your old plan. First and foremost, don’t take a lump-sum distribution from your old employer’s retirement plan. It generally will be taxable and, if you’re under age 59½, subject to a 10% early-withdrawal penalty. Here are three tax-smart alternatives:

1. Stay put. You may be able to leave your money in your old plan. But if you’ll be participating in your new employer’s plan or you already have an IRA, keeping track of multiple plans can make managing your retirement assets more difficult. Also consider how well the old plan’s investment options meet your needs.

2. Roll over to your new employer’s plan. This may be beneficial if it leaves you with only one retirement plan to keep track of. But evaluate the new plan’s investment options.

3. Roll over to an IRA. If you participate in your new employer’s plan, this will require keeping track of two plans. But it may be the best alternative because IRAs offer nearly unlimited investment choices.

If you choose a rollover, request a direct rollover from your old plan to your new plan or IRA. If instead the funds are sent to you by check, you’ll need to make an indirect rollover (that is, deposit the funds into an IRA) within 60 days to avoid tax and potential penalties.

Also, be aware that the check you receive from your old plan will, unless an exception applies, be net of 20% federal income tax withholding. If you don’t roll over the gross amount (making up for the withheld amount with other funds), you’ll be subject to income tax — and potentially the 10% penalty — on the difference.

There are additional issues to consider when deciding what to do with your old retirement plan. We can help you make an informed decision — and avoid potential tax traps.

Kicking off October 1, organizations around the globe will support Breast Cancer Awareness Month, and Yeo & Yeo is joining in by being casual for a cause. Firm employees across Michigan will dress in pink shirts and wear jeans on Fridays throughout October. In addition, Yeo & Yeo’s professionals will be encouraged to donate, wear a Breast Cancer Awareness lapel pin and participate in local Yeo & Yeo office fundraisers throughout the month. For example, the firm’s Saginaw and Greater Detroit offices are forming teams to participate in their local Making Strides Against Breast Cancer walk.

The Breast Cancer Awareness initiative is also part of the firm’s efforts to recognize Wellness & Health Observance during the month of October.

The Michigan accounting firm is proud to support Breast Cancer Awareness Month by promoting and providing opportunities for firm-wide support to unite in life-saving awareness. Yeo & Yeo’s professionals are proud to support their family, friends and co-workers who have been a victim of this disease that strikes nearly 200,000 women each year in the United States.

Please join Yeo & Yeo in recognizing Breast Cancer Awareness Month.

In determining if a payment to a shareholder is proceeds from a tax-free loan from a corporation to a shareholder or a tax-free repayment of a loan from the shareholder to the corporation (as opposed to a potentially taxable corporate distribution to the shareholder), courts look at whether:

1. There’s a written promise to repay evidenced by a note or other document.

2. There’s a stated principal repayment schedule or balloon repayment date.

3. Principal payments are actually made on time.

4. Stated interest is charged.

5. Interest is actually paid on time.

6. There’s adequate security for the purported loan.

7. The borrower has a reasonable prospect of being able to repay the loan.

8. The parties conduct themselves as if the transaction is a loan (for example, by shareholders showing loans they purportedly owe to their corporations as liabilities on personal balance sheets).

These days, anyone looking to form a new business relationship — especially one that involves credit — is wise to check out the risk involved first. After all, we know that even giant companies that once seemed untouchable, may be teetering on too narrow a pedestal.

With that in mind, various parties might be checking out your company’s credit rating to determine whether they want to do business with you. That’s why, just as with your personal credit report, you need to be on top of what is in your business credit file.

If your company is in good standing, is free of legal hassles and has a good reputation, your credit file has the power to work for you. A good business credit score can:

Lead to lower financing costs on loans and credit cards.
Enable you to qualify for better credit terms from suppliers.
Lower your insurance premiums.

Of course, this pendulum swings both ways. Negative information, even if it’s false, can leave your company with higher interest rates, lower credit limits and elevated insurance premiums, plus a loss of revenue if customers decide not to take a chance doing business with you.

What Factors Are Included?

Information in a business credit report is gleaned from a wide variety of public and private sources, including:

The Yellow Pages and other print directories;
Contracts and loans connected to the federal government; people and companies you’ve done business with;
Corporate financial reports;
Legal filings;
Mining from Internet sites; and
The news media.

Does Every Business Have a Credit Score?

No. Many small businesses are judged by the personal credit score of the owner. That often happens when a sole proprietor pays business bills out of a personal checking account. Since business credit reporting agencies do gather information from sources like the Yellow Pages, there might be a bare bones record. And, if there are any recent legal judgments or pending lawsuits, these may show up and raise red flags for anyone who inquires about your business.

Yeo & Yeo’s Government Services Group would like to make you aware of recent changes in the Act 51 Distribution and Reporting System (ADARS).

Investment Reporting Tool Must be Completed First

Effective for the March 31, 2016, year-end entities and later that complete an ADARS Act 51 Report, the Michigan Department of Transportation (MDOT) Transportation Asset Management Council’s Investment Reporting Tool (IRT) must be completed before any entity submits its ADARS Act 51 Report. Failure to complete the IRT will result in rejection of the ADARS Act 51 Report due to noncompliance, and future disbursement of Michigan Transportation Funds will be withheld if the ADARS Report is not resubmitted within a designated time frame.

Performance Audits Required by MDOT

Beginning with the September 30, 2016 year-ends, any entity that submits an Act 51 Report will be required to have a performance audit performed. Please visit the links below for additional information provided by MDOT.

Performance Auditing Under Public Act 298 of 2012

PA 298 of 2012 Frequently Asked Questions

If you have questions about how these requirements will impact your entity, reach out to your Yeo & Yeo professional.

The professionals at Yeo & Yeo are engaged and passionate about what the firm stands for and its goals and culture. The firm has enjoyed a strong reputation in its communities for more than 90 years, and today’s initiatives in employee retention and career advancement make the firm even stronger.

When you listen to our employees talk about their firm, it is the relationships that are cited as the main reason they truly enjoy their careers.

The comradery that is evident at firm events (ball games, tax parties, Christmas parties, office luncheons, etc.) makes Yeo & Yeo such a great place to work.

We often invite outside speakers to present at various functions and firm retreats, and it is a common occurrence to receive feedback pertaining to what a cohesive group we have. I recall one speaker mentioning ‘I have never seen a group of CPAs get along so well.’ I think this is because at our core we all share the same values of hard work, giving back to our communities, respecting each other, and caring for our families and friends.

This partnership, like any relationship, takes hard work and reciprocity. I offer this advice to other public accounting firms – there is no doubt in my mind that when you genuinely care about an employee and their well-being, and work to help them achieve what they want to achieve, the benefits that your firm enjoys are extensive. Listen to employees’ feedback and act. It is very exciting to see all levels of staff and management really embracing the changes that are happening in our profession and the work environment, while remaining committed to our core values.

The firm’s Career Advocacy Team was formed nearly four years ago by way of suggestions culled from a survey of the firm’s female professionals. The team discovered that the issues being raised were relevant to all professionals regardless of gender. Today, team members find out what is not working for professionals in the organization and follow up by implementing new policies, procedures and effective training for both women and men.

In our firm, your voice is heard and your ideas are considered. We’re not so big that you and your ideas get lost in the firm.

You’re able to effect change and make improvements. Our Managers, Principals and our CEO have open doors and welcome conversations to help guide you through career decisions, client concerns, policy changes and whatever is important to you. The Career Advocacy Team gathers this feedback to make changes ensuring our firm is a great place to work.

On the most recent employee survey conducted by the Career Advocacy Team, our employees said they wanted a clear career path for advancement. Our Career Advocacy Team is currently working with leaders within the firm to create more individualized career paths for traditional and nontraditional routes. Our employees also told us they want to improve the mentor process in our firm. Beginning in 2016, we have a two-phase mentoring process that begins the day you start working at our firm. On that same survey, 99% of our employees said that our firm is flexible with respect to family responsibilities.You don’t have to miss the important events and stop participating in your outside interests when you work for Yeo & Yeo.

The Career Advocacy Team works to provide equal access to career development and advocacy experiences, assist women in advancing to leadership positions, and promote the successful integration of personal and professional lives.

Consider Yeo & Yeo for Preparing Form 1095

Under the Affordable Care Act, Applicable Large Employers are required to file Form 1095 along with the respective transmittal Form 1094 early next year. The IRS was lenient in assessing penalties for incorrect or incomplete information reported in 2016, for the 2015 calendar year. However, there is no room for error this year. Learn more about employer reporting requirements.

If you completed the reporting yourself last year, you know how confusing it can be.

Yeo & Yeo can simplify compliance by providing Form 1095 preparation services that are efficient and cost-effective. Companies that may benefit most from this service include those with:

More than 50 full-time and full-time equivalent employees
49 or fewer full-time and full-time equivalent employees, where the company sponsors a self-insured group health plan for employees

Avoid significant penalties, save a considerable amount of time, and gain peace of mind. Learn more about Yeo & Yeo’s ACA Compliance and Form 1095 preparation services.

I love waking up in the morning with my family! I used to be a ‘6:00 in the morning get to work kind of guy’, now there is nothing I enjoy more than having a bowl of cereal with my two boys and a cup of coffee with my wife before the work day starts. We work together to get the kids off to school and it just seems to get all of our days off to a better start.

At Yeo & Yeo, our primary purpose is to position our employees to best serve their families, communities, clients and the firm, while providing a gratifying and challenging career.

The workforce is vocal, they are telling us what they want: career paths with upward mobility, support and feedback along the way, and the ability to successfully integrate their careers and personal lives. At Yeo & Yeo, we are choosing to listen to this feedback and institute change.

Yeo & Yeo’s Career Advocacy Team aims to assist the firm’s emerging leaders in rising to the top. The team’s core focus areas include career development strategies, leadership development, alternative career paths and flexible work arrangements.

A career at Yeo & Yeo fits well in today’s society. Yeo & Yeo has always been a firm that is family oriented, community minded, and responsive to managing the workload that comes with a profession that encounters many ‘busy seasons.’ However, the profession historically left very little room for work-life balance. Technology is changing; in turn, so is the work force. We can stay in contact with our clients more so than in the past, and with the majority of documentation existing in the cloud, a traditional office setting for work is not as necessary. This allows for greater opportunities to integrate work with our family and community life.

This flexibility and the technology at Yeo & Yeo allowed me to trade in my early mornings for later evenings. I not only have breakfast with my family, but I am home for dinner, enjoy play time with the kids, and when the boys go to bed, I log in and access my virtual office from home for a couple hours. That is how I obtained my balance and integrate my work and life.

Everyone’s situation is different, but when an employee displays their commitment to Yeo & Yeo, we want to do our part to help them achieve their balance.

Yeo & Yeo CPAs & Business Consultants is pleased to announce that Nolan Felsing, CPA, has been promoted to senior accountant.

Felsing provides management advisory services for individuals and for-profit companies. He joined Yeo & Yeo in January 2015 and serves in the firm’s Saginaw office. He holds a Bachelor of Science in accounting and a Master in Business Administration from Central Michigan University. He is a member of the Michigan Association of Certified Public Accountants, the American Institute of Certified Public Accountants, and the Young Professionals Network of Saginaw.

In our community, Felsing has volunteered for Underground Railroad through several of Yeo & Yeo’s Young Professionals group initiatives.

Many expenses that may qualify as miscellaneous itemized deductions are deductible only to the extent they exceed, in aggregate, 2% of your adjusted gross income (AGI). Bunching these expenses into a single year may allow you to exceed this “floor.” So now is a good time to add up your potential deductions to date to see if bunching is a smart strategy for you this year.

Should you bunch into 2016?

If your miscellaneous itemized deductions are getting close to — or they already exceed — the 2% floor, consider incurring and paying additional expenses by Dec. 31, such as:

Deductible investment expenses, including advisory fees, custodial fees and publications
Professional fees, such as tax planning and preparation, accounting, and certain legal fees
Unreimbursed employee business expenses, including vehicle costs, travel, and allowable meals and entertainment.

But beware …

These expenses aren’t deductible for alternative minimum tax (AMT) purposes. So don’t bunch them into 2016 if you might be subject to the AMT this year.

Also, if your AGI exceeds the applicable threshold, certain deductions — including miscellaneous itemized deductions — are reduced by 3% of the AGI amount that exceeds the threshold (not to exceed 80% of otherwise allowable deductions). For 2016, the thresholds are $259,400 (single), $285,350 (head of household), $311,300 (married filing jointly) and $155,650 (married filing separately).

If you’d like more information on miscellaneous itemized deductions, the AMT or the itemized deduction limit, let us know.

Imagine walking into work on your first day at your accounting firm. What do you picture? Do you feel nervous? Do you feel confident?

The first day of starting a new job can be as if you just stepped into a whole new world. At Yeo & Yeo, we understand this because we have been there. We do everything we can to make you feel comfortable, confident and welcomed.

Beginning on the first day that someone joins our firm, we jump-start a complete plan to ensure that they are provided with all the essential information they will need to be successful and enjoy their time at Yeo & Yeo. Within the first six months of employment, our employees receive:

Access to state-of-the-art technology and resources
Introduction into Yeo & Yeo’s Peer program
A comprehensive, full-day orientation
Performance evaluation and feedback, including measurable goals
Continuous technical and non-technical in-house training

With such clear guidance, new employees can become excited about their position and responsibilities, and confident in their performance. As the Talent Manager and a member of Yeo & Yeo’s Career Advocacy Team, I am proud that we are able to provide our employees with the opportunities that will develop them into the future leaders of our organization. It is a responsibility that we take seriously to guarantee our employees have access to every resource and development opportunity they need.

Career development and the prospect of promotional paths are significant decision influencers to employees in the workforce today.

At Yeo & Yeo, we recognize the importance of professionals being able to influence their own career paths. Our Career Advocacy Team is always looking for additional ways to provide clear expectations and opportunities for our employees to move on to the next level of their career.

I understand that career development and training are integral to employee satisfaction and retention; therefore, it is one of my top priorities here at Yeo & Yeo. We are focused on guiding employees from their first day throughout their entire career. We want you to succeed, and we want you to grow.

We empower our employees to create their own career path.

Yeo & Yeo’s professionals focus on tax, audit or business consulting and have the opportunity to become an industry-specialized thought leader. The firm supports them in expanding their skills and knowledge by providing the tools necessary to establish them as a leader in the firm and community.

If you are interested in learning how Yeo & Yeo can be a fit for you, I encourage you to apply on our website or connect with me on LinkedIn.

I hope you are as excited for your first day, as we are.

If you have incomplete or missing records and get audited by the IRS, your business will likely lose out on valuable deductions. Here are two recent U.S. Tax Court cases that help illustrate the rules for documenting deductions.

Case 1: Insufficient records

In the first case, the court found that a taxpayer with a consulting business provided no proof to substantiate more than $52,000 in advertising expenses and $12,000 in travel expenses for the two years in question.

The business owner said the travel expenses were incurred ”caring for his business.“ That isn’t enough. ”The taxpayer bears the burden of proving that claimed business expenses were actually incurred and were ordinary and necessary,“ the court stated. In addition, businesses must keep and produce ”records sufficient to enable the IRS to determine the correct tax liability.“ (TC Memo 2016-158)

Case 2: Documents destroyed

In another case, a taxpayer was denied many of the deductions claimed for his company. He traveled frequently for the business, which developed machine parts. In addition to travel, meals and entertainment, he also claimed printing and consulting deductions.

The taxpayer recorded expenses in a spiral notebook and day planner and kept his records in a leased storage unit. While on a business trip to China, his documents were destroyed after the city where the storage unit was located acquired it by eminent domain.

There’s a way for taxpayers to claim expenses if substantiating documents are lost through circumstances beyond their control (for example, in a fire or flood). However, the court noted that a taxpayer still has to ”undertake a ‘reasonable reconstruction,’ which includes substantiation through secondary evidence.“

The court allowed 40% of the taxpayer’s travel, meals and entertainment expenses, but denied the remainder as well as the consulting and printing expenses. The reason? The taxpayer didn’t reconstruct those expenses through third-party sources or testimony from individuals whom he’d paid. (TC Memo 2016-135)

Be prepared

Keep detailed, accurate records to protect your business deductions. Record details about expenses as soon as possible after they’re incurred (for example, the date, place, business purpose, etc.). Keep more than just proof of payment. Also keep other documents, such as receipts, credit card slips and invoices. If you’re unsure of what you need, check with us.

For those considering a career in accounting, in-demand skills and traits include leadership, team-oriented, attention to detail and interpersonal skills. Yeo & Yeo’s Training Department provides the technical and professional development training accountants need to excel in the profession and provide high-level expertise to their clients.

Each year, between busy seasons, members of each career level take a day out of the office for professional development training. This often involves business development training, leadership training, and how to be an effective mentor and coach. Training is made available through a variety of resources including in-house training, on-the-job training, external seminars and live web-based learning.

The transition from the theoretical knowledge learned in school to the practical implementation in a public accounting firm can be challenging. We support accountants by providing intensive training in-house early in their careers. Initial training immediately meshes the theoretical knowledge with practical implementation as we work on case studies in the computer programs we use on a daily basis. Group sizes are less than 20, to give more individual attention and answer questions. In addition, many of our programs and services have detailed manuals written by Yeo & Yeo personnel to explain how to implement the “Yeo way,” leaving little guesswork on the practical implementation.

We know not all training takes place in the classroom. As a CPA and the firm’s full-time Training Manager, I am dedicated to assist all accountants with questions as they arise, assess training needs, and implement firm-wide trainings. The firm also provides access to research software provided by a leading research company to help with questions. On-the-job training is provided as new challenges arise. There is also a complete library of on-demand courses available to provide accountants with just-in-time knowledge on particular subjects.

In addition, the firm supports accountants in the intense challenge of passing the CPA exam. In fact, the Leading Edge Alliance has recognized Yeo & Yeo’s CPA exam support program nationally with its Cultural & HR Innovation, Retention & Attraction Award.

At Yeo & Yeo, we know ongoing training is vital to your success and I am here to help!

If you invest, whether you’re considered an investor or a trader can have a significant impact on your tax bill. Do you know the difference?

Investors

Most people who trade stocks are classified as investors for tax purposes. This means any net gains are treated as capital gains rather than ordinary income.

That’s good if your net gains are long-term (that is, you’ve held the investment more than a year) because you can enjoy the lower long-term capital gains rate. However, any investment-related expenses (such as margin interest, stock tracking software, etc.) are deductible only if you itemize and, in some cases, only if the total of the expenses exceeds 2% of your adjusted gross income.

Traders

Traders have it better in some situations. Their expenses reduce gross income even if they can’t itemize deductions and not just for regular tax purposes, but also for alternative minimum tax purposes.

Plus, in certain circumstances, if traders have a net loss for the year, they can claim it as an ordinary loss (so it can offset other ordinary income) rather than a capital loss. Capital losses are limited to a $3,000 ($1,500 if married filing separately) per year deduction once any capital gains have been offset.

Passing the trader test

What does it take to successfully meet the test for trader status? The answer is twofold:

1. The trading must be “substantial.” While there’s no bright line test, the courts have tended to view more than a thousand trades a year, spread over most of the available trading days, as substantial.

2. The trading must be designed to try to catch the swings in the daily market movements. In other words, you must be attempting to profit from these short-term changes rather than from the long-term holding of investments. So the average duration for holding any one position needs to be very short, generally only a day or two.

If you satisfy these conditions, the chances are good that you’d ultimately be able to prove trader vs. investor status. Of course, even if you don’t satisfy one of the tests, you might still prevail, but the odds against you are higher. If you have questions, please contact us.

The American Institute of Certified Public Accountants (AICPA) acknowledges that the progress of women within the accounting profession is imperative to organizational sustainability. The organization’s website stresses that growth of accounting firms is at risk if a significant portion of the accounting profession (women) is not maximizing its potential. In addition, firms’ inability to create a family and gender-friendly environment is known to be detrimental to both staff and client retention.

With a similar challenge for Yeo & Yeo in mind, the firm’s leadership team is taking a proactive approach. “Career advocacy is one of the cornerstones within Yeo & Yeo’s five-year strategic plan. The workforce is changing, and firms that do not embrace programs supporting the advancement of women and equal access to leadership development within their firms risk the loss of talented CPAs – both women and men,” says Yeo & Yeo’s president & CEO, Thomas Hollerback.

You can be a female accounting professional and be successful at Yeo & Yeo. Among the initiatives in the firm to help advance women professionals is our mentor program in which we pair women on a partner track with established female partners who serve as peer models for success. Throughout my career at Yeo & Yeo, my mentors have encouraged me to take on new roles and step outside of my comfort zone. I now have leadership roles within the firm and in the community. The firm also invests in the training needed to successfully develop our professionals. I was the first woman from Yeo & Yeo to attend Upstream Academy’s Emerging Leaders Academy three years ago and since then we have sent five more women to the leadership program.

Everyone has his or her own outside interests, and finding a schedule that works best for you will make your home life and work life manageable … and enjoyable! The flexibility Yeo & Yeo offers is unique compared to other CPA firms. Yeo & Yeo allows you to bank your overtime hours, or you can chose to be paid for those hours. It’s nice to be able to take a little extra time off during non-peak time, or to see the extra money in your paycheck when you are working overtime during busy season. For me, this is very empowering as I am able to set my own schedule and feel as though I am able to keep up with my active kids and my workload.

Being a mom and a new partner, I stress the importance of schedules, planning ahead, flexibility and finding what works best for you. It’s important to me that I have dinner with my family and be there to help my kids with their homework. I make it a priority! This might mean I work a little after the kids go to bed or during my lunch hour. Everyone’s support system at home is different, so having the flexibility to work from home when it is most convenient for me is one of the things I value most about my career at Yeo & Yeo.

Read the stories of our Women Leaders to learn more about advocacy for women at Yeo & Yeo.

If you recently redeemed frequent flyer miles to treat the family to a fun summer vacation or to take your spouse on a romantic getaway, you might assume that there are no tax implications involved. And you’re probably right — but there is a chance your miles could be taxable.

Usually tax free

As a general rule, miles awarded by airlines for flying with them are considered nontaxable rebates, as are miles awarded for using a credit or debit card.

The IRS partially addressed the issue in Announcement 2002-18, where it said “Consistent with prior practice, the IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travel.”

Exceptions

There are, however, some types of mile awards the IRS might view as taxable. Examples include miles awarded as a prize in a sweepstakes and miles awarded as a promotion.

For instance, in Shankar v. Commissioner, the U.S. Tax Court sided with the IRS, finding that airline miles awarded in conjunction with opening a bank account were indeed taxable. Part of the evidence of taxability was the fact that the bank had issued Forms 1099 MISC to customers who’d redeemed the rewards points to purchase airline tickets.

The value of the miles for tax purposes generally is their estimated retail value.

If you’re concerned you’ve received mile awards that could be taxable, please contact us and we’ll help you determine your tax liability, if any.