Hit the Books! A Fixed Asset or Cost Segregation Study Could Boost Manufacturers’ Cash Flow

If you’re seeking opportunities to improve your company’s cash flow, consider a fixed asset or cost segregation study. Manufacturing is a capital-intensive industry, so it’s critical to ensure that fixed assets are classified properly to recover their costs as quickly as possible.

Fixed asset study

A fixed asset study examines all depreciable assets — including real property, equipment, machinery, fixtures and furniture — to determine whether you’ve misclassified any assets. Properly classifying assets in a category with a shorter depreciable life will accelerate depreciation deductions, potentially lowering taxes and boosting cash flow.

These studies aren’t just for the most recent tax year. A fixed asset study may also create an opportunity to claim refunds for depreciation deductions missed in previous years.

Cost segregation study

A cost segregation study is a type of fixed asset study that focuses on the costs of buying, constructing or substantially improving a building or other real property. Generally, commercial real estate (other than land) is depreciable over 39 years. A cost segregation study identifies assets that might be treated as building components but are properly classified as personal property depreciable over five or seven years, or as land improvements depreciable over 15 years.

Examples of building components that may qualify for accelerated depreciation include:

Reinforced foundations,
Specialized electrical, plumbing, cooling or ventilation systems, and
Other structural components that are required by the manufacturing process rather than for the operation of the building.

By allocating a portion of the building costs to these shorter-lived assets, you can accelerate depreciation deductions and substantially reduce your tax bill.

Now’s the time

If you’ve recently reconfigured your plant or office space, or otherwise made improvements to your buildings, now may be an ideal time to conduct a fixed asset or cost segregation study. Doing so can help maximize the tax benefits associated with these investments.

Many small businesses start out as “lean enterprises,” with costs kept to a minimum to lower risks and maximize cash flow. But there comes a point in the evolution of many companies — particularly in a tight job market — when investing money in employee benefits becomes advisable, if not downright mandatory.

Is now the time for your small business to do so? More specifically, as you compete for top talent and look to retain valued employees, would launching a retirement plan help your case? Quite possibly, and the good news is the federal government is offering some intriguing incentives for eligible smaller companies ready to make the leap.

Late last year, the Consolidated Appropriations Act, 2023 was signed into law. Within this massive spending package lies the Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0). Its provisions bring three key improvements to the small employer pension plan start-up cost tax credit, beginning this year:

1. Full coverage for the smallest of small businesses. SECURE 2.0 makes the credit equal to the full amount of creditable plan start-up costs for employers with 50 or fewer employees, up to an annual cap. Previously only 50% of costs were allowed — this limit still applies to employers with 51 to 100 employees.

2. Glitch fixed for multiemployer plans. SECURE 2.0 retroactively fixes a technical glitch that prevented employers who joined multiemployer plans in existence for more than three years from claiming the small employer pension plan start-up cost credit. If your business joined a pre-existing multiemployer plan before this period, contact us about filing amended returns to claim the credit.

3. Enhancement of employer contributions. Perhaps the biggest change wrought by SECURE 2.0 is that certain employer contributions for a plan’s first five years now may qualify for the credit. The credit is increased by a percentage of employer contributions, up to a per-employee cap of $1,000, as follows:

100% in the plan’s first and second tax years,
75% in the third year,
50% in the fourth year, and
25% in the fifth year.

For employers with between 51 and 100 employees, the contribution portion of the credit is reduced by 2% times the number of employees above 50.

In addition, no employer contribution credit is allowed for contributions for employees who make more than $100,000 (adjusted for inflation after 2023). The credit for employer contributions is also unavailable for elective deferrals or contributions to defined benefit pension plans.

To be clear, though the name of the tax break is the small employer pension plan start-up cost credit, it also applies to qualified plans such as 401(k)s and SIMPLE IRAs, as well as to Simplified Employee Pensions. Our firm can help you determine whether now is indeed the right time for your small business to launch a retirement plan and, if so, which one.

If your small business has a retirement plan, and even if it doesn’t, you may see changes and benefits from a new law. The Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0) was recently signed into law. Provisions in the law will kick in over several years.

SECURE 2.0 is meant to build on the original SECURE Act, which was signed into law in 2019. Here are some provisions that may affect your business.

Retirement plan automatic enrollment. Under the new law, 401(k) plans will be required to automatically enroll employees when they become eligible, beginning with plan years after December 31, 2024. Employees will be permitted to opt out. The initial automatic enrollment amount would be at least 3% but not more than 10%. Then, the amount would be increased by 1% each year thereafter until it reaches at least 10%, but not more than 15%. All current 401(k) plans are grandfathered. Certain small businesses would be exempt.

Part-time worker coverage. The first SECURE Act requires employers to allow long-term, part-time workers to participate in their 401(k) plans with a dual eligibility requirement (one year of service and at least 1,000 hours worked or three consecutive years of service with at least 500 hours worked). The new law will reduce the three-year rule to two years, beginning after December 31, 2024. This provision would also extend the long-term part-time coverage rules to 403(b) plans that are subject to ERISA.

Employees with student loan debt. The new law will allow an employer to make matching contributions to 401(k) and certain other retirement plans with respect to “qualified student loan payments.” This means that employees who can’t afford to save money for retirement because they’re repaying student loan debt can still receive matching contributions from their employers into retirement plans. This will take effect beginning after December 31, 2023.

“Starter” 401(k) plans. The new law will allow an employer that doesn’t sponsor a retirement plan to offer a starter 401(k) plan (or safe harbor 403(b) plan) that would require all employees to be default enrolled in the plan at a 3% to 15% of compensation deferral rate. The limit on annual deferrals would be the same as the IRA contribution limit with an additional $1,000 in catch-up contributions beginning at age 50. This provision takes effect beginning after December 31, 2023.

Tax credit for small employer pension plan start-up costs. The new law increases and makes several changes to the small employer pension plan start-up cost credit to incentivize businesses to establish retirement plans. This took effect for plan years after December 31, 2022.

Higher catch-up contributions for some participants. Currently, participants in certain retirement plans can make additional catch-up contributions if they’re age 50 or older. The catch-up contribution limit for 401(k) plans is $7,500 for 2023. SECURE 2.0 will increase the 401(k) catch-up contribution limit to the greater of $10,000 or 150% of the regular catch-up amount for individuals ages 60 through 63. The increased amounts will be indexed for inflation after December 31, 2025. This provision will take effect for taxable years beginning after December 31, 2024. (There will also be increased catch-up amounts for SIMPLE plans.)

Retirement savings for military spouses. SECURE 2.0 creates a new tax credit for eligible small employers for each military spouse that begins participating in their eligible defined contribution plan. This became effective in 2023.

These are only some of the provisions in SECURE 2.0. Contact us if you have any questions about your situation.

CPA firms do more than audits and tax returns. They can also help you with everyday accounting-related tasks, such as bookkeeping, budgeting, payroll and sales tax filings. Should your organization outsource its accounting needs? Here are five potential advantages to consider when evaluating this decision.

1. Professional advice. Outsourcing to an experienced CPA firm provides access to professional guidance related to tax, legal and financial matters. This makes it easier to remain compliant with rules and regulations and avoid costly mistakes due to a lack of knowledge or errors in interpreting complex regulations.

By engaging a third-party firm, there’s a second set of eyes on your company’s books. This can provide peace of mind that your books accurately reflect the performance of your business. Additionally, a CPA can help streamline your accounting processes and help record complex transactions correctly.

2. Scalability. As your financial situation evolves, you can dial up (or down) the services provided by your CPA. For example, a start-up that outsources its accounting needs wouldn’t need to worry about outgrowing its bookkeeper over time — or training that individual to take on more advanced accounting and tax needs. Likewise, if you embark on a major financial project — such as a launching a new product, building a new factory or merging with a strategic buyer — your CPA has the expertise on-hand to help you achieve the best possible outcome from a financial and tax perspective.

Outsourcing can also be a viable temporary solution if you unexpectedly lose your CFO. This can provide breathing room while you search for a qualified replacement in today’s tight labor market.

3. Cost savings. Outsourcing can save you money on payroll taxes and insurance costs associated with hiring an in-house accountant. Further, CPAs enjoy economies of scale regarding software usage and purchases, so they likely can provide accounting services cheaper than your firm can by working alone or relying on independent service providers for each task.

4. Efficiency. When you transfer accounting functions to your CPA, your management team has more time for core marketing, product development and other activities. It also frees up resources for higher-value tasks that can increase cash flow and optimize efficiency within the organization, such as negotiating with prospects or building deeper relationships with existing clients.

5. Enhanced confidence with stakeholders. A CPA firm’s involvement can instill confidence in lenders and investors if you intend to borrow money or solicit investment capital. It shows that your firm is committed to maintaining accurate business records and has access to the expertise needed to address complex issues.

Contact us if you’re considering outsourcing your daily accounting tasks, either permanently or temporarily. We can tailor a cost-effective service plan that works for your current and future business needs.

Late last year, the Consolidated Appropriations Act, 2023 (CAA 2023) was signed into law. Much of the discussion about this massive “omnibus” spending package has centered on the Setting Every Community Up for Retirement Enhancement 2.0 Act, a law within the package that addresses qualified retirement plans. However, the CAA 2023 also brings changes to group health plans. Here are some highlights of those provisions.

Telehealth and HDHPs

Tax-advantaged contributions generally cannot be made to a Health Savings Account (HSA) unless the account holder is covered by a high-deductible health plan (HDHP) and doesn’t have disqualifying non-HDHP coverage. Congress created exceptions to these rules to facilitate the use of telehealth during the onset of the pandemic, but the exceptions applied only to plan years beginning on or before December 31, 2021, and for the last nine months of 2022 without regard to plan year.

The CAA 2023 extends the exceptions by providing that telehealth and other remote care services will be considered “disregarded coverage” and, thus, won’t cause a loss of HSA eligibility during plan years beginning after December 31, 2022, and before January 1, 2025. In addition, HDHPs may provide coverage for telehealth and other remote care services during those plan years before the minimum deductible is satisfied without losing their HDHP status.

Apparently, non–calendar-year HDHPs will have a gap between the end of 2022 and the beginning of the 2023 plan year during which the relief doesn’t apply. However, individuals covered under these plans may be able to use the full contribution rule (sometimes referred to as the “last month” or “no proration” rule), which allows a full year’s worth of HSA contributions to be made by someone who’s HSA-eligible for only part of the year.

Mental health parity

The CAA 2023 provides funding to assist states in their enforcement of the CAA 2021 requirement that health plans and insurers prepare comparative analyses of any nonquantitative treatment limitations on mental health or substance use disorder coverage.

It also eliminates the right of self-insured non–federal-government health plans to opt out of compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). Effective immediately, no such new elections may be made, and elections expiring 180 days or more after December 29, 2022, may not be renewed. Provisions that would have imposed civil monetary penalties for violations of the MHPAEA didn’t make it into the final bill but may resurface in future legislation.

More developments ahead

Employers that sponsor group health plans should take note of these provisions and be on the lookout for further developments in 2023. Our firm can answer any questions you might have and provide further assistance managing the administrative burdens and costs of your health care benefits.

According to the Pew Research Center, nearly a quarter (23%) of U.S. children under the age of 18 live with one parent. This is more than three times the share (7%) of children from around the world who do so. If your household falls into this category, ensure your estate plan properly accounts for your children.

Choosing a guardian

In many respects, estate planning for single parents is similar to estate planning for families with two parents. Single parents want to provide for their children’s care and financial needs after they’re gone. But when only one parent is involved, certain aspects of an estate plan demand special attention.

One example is selecting an appropriate guardian. If the other parent is unavailable to take custody of your children if you become incapacitated or die suddenly, does your estate plan designate a suitable, willing guardian to care for them? Will the guardian need financial assistance to raise your kids and provide for their education? Depending on the situation, you might want to preserve your wealth in a trust until your children are grown.

Trust planning is one of the most effective ways to provide for your children. Trust assets are managed by one or more qualified, trusted individual or corporate trustees, and you specify when and under what circumstances the funds should be distributed to your kids. A trust is particularly important if you have minor children. Without one, your assets may come under the control of your former spouse or a court-appointed administrator.

Addressing incapacitation

As a single parent, it’s particularly important for your estate plan to include a living will, advance directive or health care power of attorney. These documents allow you to specify your health care preferences in the event you become incapacitated and to designate someone to make medical decisions on your behalf.

You should also have a revocable living trust or durable power of attorney that provides for the management of your finances in the event you’re unable to do so.

If you’ve recently become a single parent, contact us because it’s critical to review and, if necessary, revise your estate plan. We’d be pleased to help.

To help you make sure you don’t miss any important 2023 deadlines, we’ve provided this summary of when various tax-related forms, payments and other actions are due. Please review the calendar and let us know if you have any questions about the deadlines or would like assistance in meeting them.

Date	Deadline for
January 10	Individuals: Reporting December 2022 tip income of $20 or more to employers (Form 4070).
January 17	Individuals: Paying the fourth installment of 2022 estimated taxes, if not paying income tax through withholding (Form 1040-ES).
January 31	Individuals: Filing a 2022 income tax return (Form 1040 or Form 1040-SR) and paying tax due, to avoid penalties for underpaying the January 17 installment of estimated taxes. Businesses: Providing Form 1098, Form 1099-MISC (except for those that have a February 15 deadline), Form 1099-NEC and Form W-2G to recipients. Employers: Providing 2022 Form W-2 to employees. Reporting income tax withholding and FICA taxes for fourth quarter 2022 (Form 941). Filing an annual return of federal unemployment taxes (Form 940) and paying any tax due. Employers: Filing 2022 Form W-2 (Copy A) and transmittal Form W-3 with the Social Security Administration.
February 10	Individuals: Reporting January tip income of $20 or more to employers (Form 4070). Employers: Reporting income tax withholding and FICA taxes for fourth quarter 2022 (Form 941) and filing a 2022 return for federal unemployment taxes (Form 940), if you deposited on time and in full all of the associated taxes due.
February 15	Businesses: Providing Form 1099-B, 1099-S and certain Forms 1099-MISC (those in which payments in Box 8 or Box 10 are being reported) to recipients. Individuals: Filing a new Form W-4 to continue exemption for another year, if you claimed exemption from federal income tax withholding in 2022.
February 28	Businesses: Filing Form 1098, Form 1099 (other than those with a January 31 deadline) and Form W-2G and transmittal Form 1096 for interest, dividends and miscellaneous payments made during 2022. (Electronic filers can defer filing to March 31.)
March 10	Individuals: Reporting February tip income of $20 or more to employers (Form 4070).
March 15	Calendar-year S corporations: Filing a 2022 income tax return (Form 1120-S) or filing for an automatic six-month extension (Form 7004) and paying any tax due. Calendar-year partnerships: Filing a 2022 income tax return (Form 1065 or Form 1065-B) or requesting an automatic six-month extension (Form 7004).
March 31	Employers: Electronically filing 2022 Form 1097, Form 1098, Form 1099 (other than those with an earlier deadline) and Form W-2G.
April 10	Individuals: Reporting March tip income of $20 or more to employers (Form 4070).
April 18	Individuals: Filing a 2022 income tax return (Form 1040 or Form 1040-SR) or filing for an automatic six-month extension (Form 4868) and paying any tax due. (See June 15 for an exception for certain taxpayers.) Individuals: Paying the first installment of 2023 estimated taxes, if not paying income tax through withholding (Form 1040-ES). Individuals: Making 2022 contributions to a traditional IRA or Roth IRA (even if a 2022 income tax return extension is filed). Individuals: Making 2022 contributions to a SEP or certain other retirement plans (unless a 2022 income tax return extension is filed). Individuals: Filing a 2022 gift tax return (Form 709) or filing for an automatic six-month extension (Form 8892) and paying any gift tax due. Filing for an automatic six-month extension (Form 4868) to extend both Form 1040 and, if no gift tax is due, Form 709. Household employers: Filing Schedule H, if wages paid equal $2,400 or more in 2022 and Form 1040 isn’t required to be filed. For those filing Form 1040, Schedule H is to be submitted with the return and is thus extended to the due date of the return. Trusts and estates: Filing an income tax return for the 2022 calendar year (Form 1041) or filing for an automatic five-and-a-half-month extension to October 2 (Form 7004) and paying any income tax due. Calendar-year corporations: Filing a 2022 income tax return (Form 1120) or filing for an automatic six-month extension (Form 7004) and paying any tax due. Calendar-year corporations: Paying the first installment of 2023 estimated income taxes.
May 1	Employers: Reporting income tax withholding and FICA taxes for first quarter 2023 (Form 941) and paying any tax due.
May 10	Individuals: Reporting April tip income of $20 or more to employers (Form 4070). Employers: Reporting income tax withholding and FICA taxes for first quarter 2023 (Form 941), if you deposited on time and in full all of the associated taxes due.
May 15	Exempt organizations: Filing a 2022 calendar-year information return (Form 990, Form 990-EZ or Form 990-PF) or filing for an automatic six-month extension (Form 8868) and paying any tax due. Small exempt organizations (with gross receipts normally of $50,000 or less): Filing a 2022 e-Postcard (Form 990-N), if not filing Form 990 or Form 990-EZ.
June 12	Individuals: Reporting May tip income of $20 or more to employers (Form 4070).
June 15	Individuals: Filing a 2022 individual income tax return (Form 1040 or Form 1040-SR) or filing for a four-month extension (Form 4868), and paying any tax and interest due, if you live outside the United States or you serve in the military outside the United States and Puerto Rico. Individuals: Paying the second installment of 2023 estimated taxes, if not paying income tax through withholding (Form 1040-ES). Calendar-year corporations: Paying the second installment of 2023 estimated income taxes.
July 10	Individuals: Reporting June tip income of $20 or more to employers (Form 4070).
July 31	Employers: Reporting income tax withholding and FICA taxes for second quarter 2023 (Form 941) and paying any tax due. Employers: Filing a 2022 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or requesting an extension.
August 10	Individuals: Reporting July tip income of $20 or more to employers (Form 4070). Employers: Reporting income tax withholding and FICA taxes for second quarter 2023 (Form 941), if you deposited on time and in full all of the associated taxes due.
September 11	Individuals: Reporting August tip income of $20 or more to employers (Form 4070).
September 15	Individuals: Paying the third installment of 2023 estimated taxes, if not paying income tax through withholding (Form 1040-ES). Calendar-year corporations: Paying the third installment of 2023 estimated income taxes. Calendar-year S corporations: Filing a 2022 income tax return (Form 1120-S) and paying any tax, interest and penalties due, if an automatic six-month extension was filed. Calendar-year S corporations: Making contributions for 2022 to certain employer-sponsored retirement plans, if an automatic six-month extension was filed. Calendar-year partnerships: Filing a 2022 income tax return (Form 1065 or Form 1065-B), if an automatic six-month extension was filed.
October 2	Trusts and estates: Filing an income tax return for the 2022 calendar year (Form 1041) and paying any tax, interest and penalties due, if an automatic five-and-a-half-month extension was filed. Employers: Establishing a SIMPLE or a Safe-Harbor 401(k) plan for 2022, except in certain circumstances.
October 10	Individuals: Reporting September tip income of $20 or more to employers (Form 4070).
October 16	Individuals: Filing a 2022 income tax return (Form 1040 or Form 1040-SR) and paying any tax, interest and penalties due, if an automatic six-month extension was filed (or if an automatic four-month extension was filed by a taxpayer living outside the United States). Individuals: Making contributions for 2022 to certain existing retirement plans or establishing and contributing to a SEP for 2022, if an automatic six-month extension was filed. Individuals: Filing a 2022 gift tax return (Form 709) and paying any tax, interest and penalties due, if an automatic six-month extension was filed. Calendar-year C corporations: Filing a 2022 income tax return (Form 1120) and paying any tax, interest and penalties due, if an automatic six-month extension was filed. Calendar-year C corporations: Making contributions for 2022 to certain employer-sponsored retirement plans, if an automatic six-month extension was filed.
October 31	Employers: Reporting income tax withholding and FICA taxes for third quarter 2023 (Form 941) and paying any tax due.
November 13	Individuals: Reporting October tip income of $20 or more to employers (Form 4070). Employers: Reporting income tax withholding and FICA taxes for third quarter 2023 (Form 941), if you deposited on time and in full all of the associated taxes due.
November 15	Exempt organizations: Filing a 2022 calendar-year information return (Form 990, Form 990-EZ or Form 990-PF) and paying any tax, interest and penalties due, if a six-month extension was previously filed.
December 11	Individuals: Reporting November tip income of $20 or more to employers (Form 4070).
December 15	Calendar-year corporations: Paying the fourth installment of 2023 estimated income taxes.

The Employee Retention Credit (ERC) was a valuable tax credit that helped employers that kept workers on staff during the height of the COVID-19 pandemic. While the credit is no longer available, eligible employers that haven’t yet claimed it might still be able to do so by filing amended payroll returns for tax years 2020 and 2021.

However, the IRS is warning employers to beware of third parties that may be advising them to claim the ERC when they don’t qualify. Some third-party “ERC mills” are promising that they can get businesses a refund without knowing anything about the employers’ situations. They’re sending emails, letters and voice mails as well as advertising on television. When businesses respond, these ERC mills are claiming many improper write-offs related to taxpayer eligibility for — and computation of — the credit.

These third parties often charge large upfront fees or a fee that’s contingent on the amount of the refund. They may not inform taxpayers that wage deductions claimed on the companies’ federal income tax returns must be reduced by the amount of the credit.

According to the IRS, if a business filed an income tax return deducting qualified wages before it filed an employment tax return claiming the credit, the business should file an amended income tax return to correct any overstated wage deduction. Your tax advisor can assist with this.

Businesses are encouraged to be cautious of advertised schemes and direct solicitations promising tax savings that are too good to be true. Taxpayers are always responsible for the information reported on their tax returns. Improperly claiming the ERC could result in taxpayers being required to repay the credit along with penalties and interest.

ERC Basics

The ERC is a refundable tax credit designed for businesses that:

Continued paying employees while they were shut down due to the COVID-19 pandemic, or
Had significant declines in gross receipts from March 13, 2020, to September 30, 2021 (or December 31, 2021 for certain startup businesses).

Eligible taxpayers could have claimed the ERC on an original employment tax return or they can claim it on an amended return.

To be eligible for the ERC, employers must have:

Sustained a full or partial suspension of operations due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19 during 2020 or the first three quarters of 2021,
Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021, or
Qualified as a recovery startup business for the third or fourth quarters of 2021.

As a reminder, only recovery startup businesses are eligible for the ERC in the fourth quarter of 2021. Additionally, for any quarter, eligible employers cannot claim the ERC on wages that were reported as payroll costs in obtaining Paycheck Protection Program (PPP) loan forgiveness or that were used to claim certain other tax credits.

How to Proceed

If you didn’t claim the ERC, and believe you’re eligible, contact us. We can advise you on how to proceed.

2023 is an exciting year for Yeo & Yeo, marking the firm’s 100^th anniversary and the launch of our new brand experience. Coming into this year, I am excited to share our refreshed look and feel with everyone, and I am looking forward to celebrating the accomplishment of a century of business.

100 Years

Yeo & Yeo has withstood the Great Depression, World War II, the Space Age, the Tech Revolution, and the pandemic. Our ability to adapt, evolve, and thrive while staying true to our core values and our clients is a point of immense pride.

I have been with the firm for more than 27 years, as a staff accountant to Principal, and now President & CEO. A lot has changed in that time, from technology to regulations, hybrid work, and beyond. But I am proud of our ongoing commitment to our most important asset – our employees.

As we focus on the future and look ahead to the next 100 years, I want to take a moment to acknowledge this accomplishment and thank everyone who has made these last 100 years so successful.

To our clients, thank you for placing your trust in us. We are grateful to be a part of your journey. Your support means we can continue to do what we love – helping our clients, communities, and colleagues thrive.

To our professionals, thank you for your hard work and commitment to delivering unparalleled service to our clients. Because of you, we have reached the milestone of 100 years.

To our communities, families, and friends, thank you for everything you do for us and one another. We are proud to be a Michigan-based business, and we are incredibly thankful for your support.

On behalf of all of us at Yeo & Yeo today, and every day, thank you. I wish you all a fantastic and prosperous new year.

Cheers to 100 years!

Remote work became a buzz topic when the United States went into lockdown mode in 2020 to combat the effects of COVID-19. Like many companies, audit firms quickly shifted to remote auditing with video conferencing and drones. Now that the country has largely reopened, will auditors continue to work remotely?

Remote auditing “definitely continues to be a hot topic today,” said Sara Lord, chair of the AICPA’s Auditing Standards Board, which sets standards that are used by auditors of private companies. Here are some lessons learned about this topic over the last three years.

Looking back

The concept of remote auditing didn’t start during the pandemic. Rather, COVID-related lockdowns served as a catalyst to expand the use of remote audit procedures.

Prior to the pandemic, accounting firms had already been transitioning to remote auditing for certain procedures. Specifically, many firms invested in staff training and technology — such as cloud computing, remote access, videoconferencing software and drones with cameras — to work offsite. This was done primarily to reduce business disruptions and costs during normal operating conditions.

When workplaces were shuttered in the spring of 2020, most audit firms were able to quickly adapt. Plus, many calendar-year audits were already done by mid-March of 2020, giving smaller firms time to adjust their audit procedures to facilitate social distancing and invest in technology and training to work remotely.

Forging ahead

Remote working conditions during the pandemic have altered the traditional audit process, in some ways permanently. Firms recognized that remote procedures offer many benefits over onsite procedures, including lower costs, improved timeliness and fewer disruptions. These benefits have been amplified given the talent shortage in public accounting. Remote work allows audit firms to perform more tasks with a smaller audit staff than they previously could using traditional in-person procedures.

While auditors have learned to embrace remote work for certain types of procedures, most have settled on a hybrid approach that involves both in-person and remote work. Three examples of audit procedures that are generally more effective in-person include:

1. Internal control testing. Auditors must determine whether the controls are adequately designed, put in place and operating effectively. Obtaining an understanding of the company’s control system is difficult through Zoom calls, however. Plus, auditors may need to re-evaluate how companies’ remote workers process transactions and consider additional testing to help ensure effectiveness. Controls that have been effective in prior periods may not suffice in when a company’s employees are working remotely all or part of the time.

2. Fraud-related inquiries. The auditing standard on fraud states that general inquiry of management and those charged with governance with respect to fraud is most effective when it’s done in person. Onsite interviews allow the auditor to read body language and evaluate the dynamics between co-workers.

3. Inventory observations. Auditing standards require auditors to obtain sufficient, appropriate audit evidence that inventory exists and is in good condition. Normally, auditors go where inventory is located and observe the counting process. They also perform independent test counts and check them against the inventory records. Live feeds from drones and security cameras have limits when used to ensure physical inventory counts are accurate. Onsite procedures — even if conducted for a random sample of a company’s locations — may be necessary post-pandemic.

Companies that refuse to allow auditors to conduct these types of procedures in-person may raise red flags to auditors about potential audit risks. When auditors work remotely, they need to have heightened professional skepticism and training on how to use technology effectively.

Auditing smarter

What’s the right blend of in-person and remote procedures for your next audit? There’s no one-size-fits-all solution. Contact us to discuss ways to leverage remote procedures to streamline the audit process, while maintaining audit quality.

Are you charitably inclined? If so, you probably know that donations of long-term appreciated assets, such as stocks, have an advantage over cash donations. But in some cases, selling appreciated assets and donating the proceeds may be a better strategy.

That’s because adjusted gross income (AGI) limitations on charitable deductions are higher for cash donations. Plus, if the assets don’t qualify for long-term capital gain treatment, the deduction rules are different.

Tax treatments by type of gift

All things being equal, donating long-term appreciated assets directly to charity is preferable. Not only do you enjoy a charitable deduction equal to the assets’ fair market value on the date of the gift (assuming you itemize deductions on your return), you also avoid capital gains tax on their appreciation in value. If you were to sell the assets and donate the proceeds to charity, the resulting capital gains tax could reduce the tax benefits of your gift.

But all things aren’t equal. Donations of appreciated assets to public charities are generally limited to 30% of AGI, while cash donations are deductible up to 60% of AGI. In either case, excess deductions may be carried forward for up to five years.

Work the math

If you’re contemplating a donation of appreciated assets that’s greater than 30% of your AGI, crunch the numbers first. Then determine whether selling the assets, paying the capital gains tax and donating cash up to 60% of AGI will produce greater tax benefits in the year of the gift and over the following five tax years. The answer will depend on several factors, including the size of your gift, your AGI in the year of the gift, your projected AGI in the following five years and your ability to itemize deductions in each of those years.
Before making charitable donations, discuss your options with us. We can help you make charitable gifts at the lowest tax cost.

A new year has arrived. For many businesses, this means employees’ paid time off (PTO) arrangements have reset. And at companies with “use it or lose it” policies, workers have likely left a few or perhaps many unused hours on the table.

It’s a growing problem. A July 2022 survey conducted by Sorbet, a provider of PTO solutions, found that 55% of the PTO offered by responding companies was left unused last year — a notable rise from only 28% in 2019. (This is the first such survey the company has done since the pandemic.) Overall, 57% of employees who participated in the study had unused PTO in 2022, up from 37% in 2019.

Conventional methods

There are various ways for businesses to help employees better or, ideally, fully use their PTO. Regular reminders from supervisors and helpful information about wellness might do the trick.

However, taking these steps will require that your company has systems set up to deliver running PTO totals to supervisors and that the supervisors themselves can keep up with the reminders. You may also need to engage a third-party provider to send accurate and easily digestible wellness content to employees.

An alternate strategy

If your business offers a 401(k) plan, there’s an alternate strategy to consider: a PTO contribution program. It allows employees with unused vacation hours to elect to convert them to retirement plan contributions. A 401(k) plan can treat these amounts as a pretax benefit — similar to typical employee deferrals. Alternatively, the plan can treat the amounts as employer profit sharing, converting excess PTO amounts to employer contributions.

A PTO contribution arrangement may be a better option than increasing the number of days employees can roll over, assuming you allow rollovers to begin with. Larger rollover limits can result in employees building up large balances that create a significant liability on your books.

To offer a PTO contribution arrangement, you’ll need to amend your 401(k) plan. And you must still follow the plan document’s eligibility, vesting, rollover, distribution and loan terms.

Many details

Additional rules may apply to creating and administering a PTO contribution arrangement. To learn more about one, including the tax implications, please contact us. We can also help you measure and assess the cost of unused PTO for you and your employees.

Although the national price of gas is a bit lower than it was a year ago, the optional standard mileage rate used to calculate the deductible cost of operating an automobile for business will be going up in 2023. The IRS recently announced that the 2023 cents-per-mile rate for the business use of a car, van, pickup or panel truck is 65.5 cents. These rates apply to electric and hybrid-electric automobiles, as well as gasoline and diesel-powered vehicles.

In 2022, the business cents-per-mile rate for the second half of the year (July 1 – December 31) was 62.5 cents per mile, and for the first half of the year (January 1 – June 30), it was 58.5 cents per mile.

How rate calculations are done

The 3-cent increase from the 2022 midyear rate is somewhat surprising because gas prices are currently lower than they have been. On December 29, 2022, the national average price of a gallon of regular gas was $3.15, compared with $3.52 a month earlier and $3.28 a year earlier, according to AAA Gas Prices. However, the standard mileage rate is calculated based on all the costs involved in driving a vehicle — not just the price of gas.

The business cents-per-mile rate is adjusted annually. It’s based on an annual study commissioned by the IRS about the fixed and variable costs of operating a vehicle, including gas, maintenance, repair and depreciation. Occasionally, if there’s a substantial change in average gas prices, the IRS will change the cents-per-mile rate midyear, as it did in 2022.

Standard rate versus actual expenses

Businesses can generally deduct the actual expenses attributable to business use of vehicles. This includes gas, oil, tires, insurance, repairs, licenses and vehicle registration fees. In addition, you can claim a depreciation allowance for the vehicle. However, in many cases, certain limits apply to depreciation write-offs on vehicles that don’t apply to other types of business assets.

The cents-per-mile rate is beneficial if you don’t want to keep track of actual vehicle-related expenses. With this method, you don’t have to account for all your actual expenses. However, you still must record certain information, such as the mileage for each business trip, the date and the destination.

Using the cents-per-mile rate is also popular with businesses that reimburse employees for business use of their personal vehicles. These reimbursements can help attract and retain employees who drive their personal vehicles a great deal for business purposes. Why? Under current law, employees can’t deduct unreimbursed employee business expenses, such as business mileage, on their own income tax returns.

If you do use the cents-per-mile rate, keep in mind that you must comply with various rules. If you don’t comply, the reimbursements could be considered taxable wages to the employees.

The standard rate can’t always be used

There are some cases when you can’t use the cents-per-mile rate. It partly depends on how you’ve claimed deductions for the same vehicle in the past. In other situations, it depends on if the vehicle is new to your business this year or whether you want to take advantage of certain first-year depreciation tax breaks on it.

As you can see, there are many factors to consider in deciding whether to use the standard mileage rate to deduct vehicle expenses. We can help if you have questions about tracking and claiming such expenses in 2023 — or claiming 2022 expenses on your 2022 income tax return.

Marking their 100th anniversary, the company taps into its authentic differences

Yeo & Yeo, a business success partner serving organizations throughout Michigan, announces a new brand experience to mark its 100th anniversary. The transformation includes all of Yeo & Yeo’s companies: CPAs & Advisors, Technology, Medical Billing & Consulting, and Wealth Management.

“As we look forward to the next century, it is important for us to embrace our partnership approach, our client stories, and our unique spirit and capture them in our brand,” stated Kimberlee Dahl, Yeo & Yeo’s Director of Marketing. “We saw it as more than a new look and feel — we wanted to celebrate our dynamic culture, our diverse services, and our focus on possibilities for our clients.”

The company embarked upon a journey that included team members, clients, and community partners. They uncovered some authentic truths: the company was known for its services, but truly driven by empathy, possibility, agility, and enthusiasm, and was defined by the success of clients and communities. The brand was fully updated to reflect the firm’s true nature.

“We are our stories, and the more stories we captured, the more we realized who we truly are: Business Success Partners helping organizations and individuals thrive on their unique journeys,” said Dave Youngstrom, President & CEO of Yeo & Yeo. “We unearthed a very human company that is relationship- and connection-based, with a spirit of serving.”

Over the next several months, the new brand will be introduced in everything from the website to signage to documents and beyond. But more importantly, it will be embraced in the spirit of the organization in everyday interactions.

“This is a celebration of our work, and a new vision to live up to,” said Youngstrom. “We’re excited to do so — one client, one day, one experience at a time.”

On December 23, 2022, Congress passed the Consolidated Appropriations Act of 2023. The sprawling year-end spending “omnibus” package includes two important new laws that could affect your financial planning: the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act (also known as SECURE 2.0) and the Conservation Easement Program Integrity Act. President Biden is expected to sign the legislation soon.

Bolstering retirement savings

The original SECURE Act, enacted in 2019, was a significant bipartisan law related to retirement savings. In the spring of 2022, with an eye toward building on the reforms in that law, the U.S. House of Representatives passed the Securing a Strong Retirement Act. Despite strong bipartisan support, the bill stalled. Then, the U.S. Senate introduced its own retirement legislation, dubbed the Enhancing American Retirement Now Act.

SECURE 2.0 incorporates provisions from both bills and addresses a wide array of areas that make major changes to retirement planning, including:

Required minimum distributions (RMDs). The first SECURE Act generally raised the age at which you must begin to take RMDs — and pay taxes on them — from traditional IRAs and other qualified plans, from 70½ to 72. The new law increases the age to 73, starting January 1, 2023, and boosts it to 75 on January 1, 2033. This change allows people to delay taking RMDs and paying tax on them.

The law also relaxes the penalties for failing to take full RMDs, reducing the 50% excise (or penalty) tax to 25%. If the failure is corrected in a “timely” manner, the penalty would drop to 10%.

Catch-up contributions. Beginning January 1, 2025, individuals who are ages 60 to 63 can make catch-up contributions to 401(k) plans and SIMPLE plans up to the greater of $10,000 or 50% more than the regular catch-up amount. The increased amounts are indexed for inflation after 2025. (The annual dollar limit on catch-up contributions is $7,500 for 2023, up from $6,500 for 2022.)

The law also changes the taxation of catch-up contributions, though, which could reduce the upfront tax savings for those who max out their annual contributions. Catch-up contributions will be treated as post-tax Roth contributions. Previously, you could choose whether to make catch-up contributions on a pre- or post-tax basis. An exception is provided for employees whose compensation is $145,000 or less (indexed for inflation).

Qualified charitable distributions (QCDs). QCDs have gained in popularity as a way to satisfy RMD requirements while also fulfilling philanthropic goals. With a QCD, you can distribute up to $100,000 per year directly to a 501(c)(3) charity after age 70½. You can’t claim a charitable deduction, but the distribution is removed from taxable income.

Under the new law, you also can make a one-time QCD transfer of up to $50,000 through a charitable gift annuity or charitable remainder trust (as opposed to directly to the charity). The law also indexes for inflation the annual IRA charitable distribution limit of $100,000.

Automatic enrollment. Beginning in 2025, new 401(k) plans must automatically enroll participants when they become eligible. However, the employees may opt out. The initial contribution amount is at least 3% but no more than 10%. Then, the amount is automatically increased every year until it reaches at least 10% but no more than 15%. Existing plans are exempt, and the law provides exceptions for small and new businesses.

Annuities. Annuities can help reduce retirees’ risk of depleting their savings before they die. But RMD regulations have interfered with the availability of annuities in qualified plans and IRAs. For example, the regulations prohibit annuities with guaranteed annual increases of only 1% to 2%, return of premium death benefits and period-certain guarantees. SECURE 2.0 removes these RMD barriers to annuities.

The law also makes qualified longevity annuity contracts (QLACs) — inexpensive deferred annuities that don’t begin payment until the end of the individual’s life expectancy — more appealing. Among other things, it repeals the 25% cap on the maximum annuity purchase and allows up to $200,000 (indexed for inflation) from an account balance to be used to purchase a QLAC.

Matching contributions on student loan payments. The law also aims to help employees who miss out on their employers’ matching retirement contributions because their student loan obligations prevent them from making retirement contributions. It allows them to receive matching contributions to retirement plans based on their qualified student loan repayments. Employers can make matching contributions to 401(k) plans or SIMPLE IRAs. These provisions are effective for contributions made for plan years beginning January 1, 2024.

Part-time employee eligibility. SECURE 2.0 lowers the hurdles for long-term, part-time employees to participate in 401(k) plans. They’ll still need to work at least 500 hours before becoming eligible but they’ll have to work for only two consecutive years, rather than the three years required by the first SECURE Act. The provision takes effect for plan years beginning January 1, 2025.

Small business tax credits. To incentivize small businesses to establish retirement plans, SECURE 2.0 creates or enhances some tax credits. For example, it increases the startup credit from 50% to 100% of administrative costs for employers with up to 50 employees. An additional credit is available for some non-defined benefit plans, based on a percentage of the amount the employer contributes, up to $1,000 per employee.

Tax-free rollovers from 529 plans to Roth IRAs. The new law permits a beneficiary of a 529 college savings account to make direct rollovers from a 529 account in his or her name to a Roth IRA without tax or penalty. This provides an option for 529 accounts that have a balance remaining after the beneficiary’s education is complete. The 529 account must have been open for more than 15 years and other rules apply. The provision is effective for distributions beginning in 2024.

Cracking down on certain tax shelters

The retirement provisions in the omnibus law are partially offset by the law addressing conservation easements. Current law generally allows taxpayers to claim a charitable deduction for qualified donations of real property to charity. According to the IRS, though, promoters have twisted the relevant tax provision to develop abusive “syndicated” conservation easements that use inflated appraisals and partnership arrangements to reap “grossly inflated” deductions.

Going forward, the Conservation Easement Program Integrity Act disallows charitable deductions for qualified conservation contributions if the claimed deduction exceeds 2.5 times the sum of each partner’s relevant basis in the partnership making the contribution. An exception is granted if the contribution meets a three-year holding period test, substantially all of the partnership is owned by family members or the contribution relates to the preservation of a certified historic structure.

More to come

These are only some of the provisions in the new law. The entire omnibus law is sure to generate additional questions and guidance. We’ll keep you apprised of the developments that could affect your financial health.

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2023. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. If you have questions about filing requirements, contact us. We can ensure you’re meeting all applicable deadlines.

January 17 (The usual deadline of January 15 is on a Sunday and January 16 is a federal holiday)

Pay the final installment of 2022 estimated tax.
Farmers and fishermen: Pay estimated tax for 2022. If you don’t pay your estimated tax by January 17, you must file your 2022 return and pay all tax due by March 1, 2023, to avoid an estimated tax penalty.

January 31

File 2022 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.
Provide copies of 2022 Forms 1099-NEC, “Nonemployee Compensation,” to recipients of income from your business where required.
File 2022 Forms 1099-MISC, “Miscellaneous Income,” reporting nonemployee compensation payments in Box 7, with the IRS.
File Form 940, “Employer’s Annual Federal Unemployment (FUTA) Tax Return,” for 2022. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it’s more than $500, you must deposit it. However, if you deposited the tax for the year in full and on time, you have until February 10 to file the return.
File Form 941, “Employer’s Quarterly Federal Tax Return,” to report Medicare, Social Security and income taxes withheld in the fourth quarter of 2022. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return. (Employers that have an estimated annual employment tax liability of $1,000 or less may be eligible to file Form 944, “Employer’s Annual Federal Tax Return.”)
File Form 945, “Annual Return of Withheld Federal Income Tax,” for 2022 to report income tax withheld on all nonpayroll items, including backup withholding and withholding on accounts such as pensions, annuities and IRAs. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

February 15

Give annual information statements to recipients of certain payments you made during 2022. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient. This due date applies only to the following types of payments:

All payments reported on Form 1099-B.
All payments reported on Form 1099-S.
Substitute payments reported in box 8 or gross proceeds paid to an attorney reported in box 10 of Form 1099-MISC.

February 28

File 2022 Forms 1099-MISC with the IRS if: 1) they’re not required to be filed earlier and 2) you’re filing paper copies. (Otherwise, the filing deadline is March 31.)

March 15

If a calendar-year partnership or S corporation, file or extend your 2022 tax return and pay any tax due. If the return isn’t extended, this is also the last day to make 2022 contributions to pension and profit-sharing plans.

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Yeo & Yeo, a leading Michigan CPA and advisory firm, announces the election of Jamie Rivette, CPA, CGFM, and the re-election of David Jewell, CPA, to Yeo & Yeo’s board of directors, effective January 1, 2023.

“It’s a privilege to have such talented and accomplished leaders who are committed to our firm’s people, clients and communities,” says Dave Youngstrom, President & CEO. “I look forward to serving with each of them in the coming year as the firm celebrates its hundredth anniversary.”

Jamie Rivette, CPA, CGFM, is a principal based in Yeo & Yeo’s Saginaw office and leads the firm’s Assurance Service Line. Holding the Certified Government Financial Manager accreditation, Rivette is highly knowledgeable in governmental accounting, auditing, financial reporting, internal controls and budgeting. As assurance service line leader, Rivette is responsible for the quality management and growth of Yeo & Yeo’s firm-wide audit and assurance practice. She serves on the Accounting and Auditing Standards Committee for the Michigan Government Finance Officers Association. In the community, she is treasurer of the Hemlock School Board of Education and a member of the Junior League Community Advisory Board.

David Jewell, CPA, will serve his second two-year term. Jewell is the Managing Principal of Yeo & Yeo’s Kalamazoo office and leader of the firm’s Tax Service Line and Tax Advisory Group. In this role, Jewell develops strategy and manages growth of the firm’s tax practice, workforce and capabilities. His areas of expertise include tax planning and preparation, business succession planning and business consulting services. He joined Yeo & Yeo in 2008 and has more than 20 years of experience in public accounting. In the community, Jewell serves on the board of directors for the Boys & Girls Clubs of Greater Kalamazoo and the Portage Community Center.

Jacob Sopczynski, CPA, principal in Yeo & Yeo’s Flint office, and Michael Georges, CPA, principal in the Ann Arbor office, will serve the second year of their two-year terms on the board.

The firm thanks outgoing board member Tammy Moncrief, CPA, for her outstanding service and leadership. Moncrief is Managing Principal of Yeo & Yeo’s Auburn Hills office and served six years on the firm’s board.

“I especially want to thank Tammy Moncrief for her service on the board,” Youngstrom said. “Tammy’s insight is invaluable. She contributed greatly to the success of the entire firm as a board member and will continue to be a valuable leader and mentor for many of our professionals.”

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Timely, accurate financial information is essential to running a successful business. There are a number of accounting methods you can use to record and track your business’s financial performance. Here’s an overview of cash, tax and accrual basis accounting to help you choose a method that’s appropriate for your situation.

Cash basis

Often startups and sole proprietorships default to the cash method of accounting because it’s simple and provides an immediate picture of available funds. This may suffice for small businesses with uncomplicated financial affairs.

Under cash-basis accounting, you record transactions only when money changes hands. For example, if you buy a new computer on credit, you only record it as an expense once you pay cash for it. While this recordkeeping is easy, it can be challenging to get an accurate picture of your business’s financial situation. This method also isn’t suitable for tax purposes.

Telltale signs that a company is using cash-basis accounting can be found on the balance sheet: The company won’t report any accrual-basis items, such as accounts receivable, prepaid assets, accounts payable or deferred expenses.

Tax basis

Another financial reporting option is to use the same accounting method for book and tax purposes. Under tax-basis accounting, you only record transactions when they relate to tax.

This method can be helpful for companies that want to minimize their tax liability. It can also be beneficial if your business doesn’t have complex financial affairs and you don’t need up-to-date information about your financial situation.

Accrual basis

As your business grows and has more sophisticated financial reporting needs, you may decide to transition to the accrual method of accounting. Businesses that issue financial statements under U.S. Generally Accepted Accounting Principles (GAAP) must use accrual-basis accounting. GAAP is considered by many to be the “gold standard” in financial reporting. Most lenders and investors prefer statements prepared using this method because it’s the most reliable for long-term financial planning and decision-making purposes.

Under accrual-basis accounting, revenue is recognized when earned (regardless of when it’s received), and expenses are recognized when incurred (not necessarily when they’re paid). This methodology matches revenue to the corresponding expenses in the proper period. Compared to the cash and tax methods, the accrual method helps you more accurately evaluate growth and profit margins over time and against competitors.

Using the accrual method also can help you manage cash flow. For example, with more timely financial data, you can negotiate payment terms with suppliers, plan for significant expenses and forecast future cash needs.

What’s right for your business?

Choosing the right accounting method for your business depends on your financial needs and accounting skills. Some businesses use a hybrid approach incorporating elements from two or more methods. The method you’ve used in the past may not be appropriate for your current situation. Contact us to help you find the optimal approach.

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“Well, it still works, and everyone knows how to use it, but….”

Do these words sound familiar? Many businesses stick with their accounting software far too long for these very reasons. What’s important to find out and consider is everything that comes after the word “but.”

Managers and employees often struggle with systems that don’t provide all the functionality they need, such as being able to generate certain types of reports that could help the company better analyze its financials. Older software might constantly freeze up or crash. In some cases, the product may even be so old that support is no longer provided.

When it comes to accounting software upgrades, timing is everything. You don’t want to spend money unnecessarily if your system is fully functional and secure. But you also don’t want to wait too long and risk losing a competitive edge, suffering data loss or corruption, or incurring a security breach.

Building a knowledge base

The first question to ask yourself is: When was the last time we meaningfully upgraded our accounting software?

Many more products may have hit the market since you bought yours — including some that were developed specifically for your industry. Although most accounting software has the same essential features, it’s these specialized functions that hold the most potential value for certain types of companies.

To make an educated choice, business owners and their leadership teams need to gain a detailed understanding of their specific needs and the technological savvy of their employees. You can go about this knowledge-building effort in various ways, including conducting a user survey and putting together a comprehensive, detailed comparison of three or four accounting software products that appear best-suited to your business.

If it appears highly likely that a new accounting system would markedly improve your financial tracking and reporting, you’ll be able to make a confident and well-advised purchasing decision.

Preparing for the transition

Bear in mind that buying the software will be the easy part. Transitioning to the new system will probably be much more challenging. When changing or significantly upgrading their accounting software, companies have to walk a fine line between:

Rushing the timeline, potentially mishandling setup issues and not providing sufficient training, and
Dragging their feet, potentially falling behind on financial reporting.

You might need to engage an IT consultant to help oversee the data transfer from the old system to the new, catch and clean up errors, and ensure strong cybersecurity measures are in place.

It’s a big decision

Moving onward and upward from a long-used accounting system is a big decision. Let us help you determine what software features would be most beneficial to your business, identify which current products would best fulfill your needs, and develop a sensible budget for the purchase.

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Yeo & Yeo CPAs & Business Consultants is pleased to announce that Timothy Crosson Jr., CPA, has been promoted to principal.

Dave Youngstrom, President & CEO, says, Tim has excelled in providing professional services to our clients and is committed to helping them succeed. He is a great thinker and is always looking out for his team. We are proud to welcome him to the principal group.”

Crosson provides audit services with an emphasis on nonprofit organizations, government entities and school districts. He has more than 12 years of public accounting and business consulting experience. He is a member of the firm’s Education Services Group and Audit Services Group and serves in the Ann Arbor office. At numerous statewide conferences, Crosson has presented on topics relevant to the education and nonprofit industries.

Crosson holds a Bachelor of Business Administration, majoring in accounting, from The University of Michigan-Dearborn. He is a member of Michigan School Business Officials. Crosson serves as vice chairman of the board for the Community Choice Credit Union and Community Choice Foundation. He is also a member of the University of Michigan-Dearborn Alumni Association.

Crosson said about his promotion, “I have always been dedicated to being a team player and providing the best service and support to my clients and coworkers, and I plan to continue that work in my new role. I am excited about this next chapter in my career. It means a lot to be an integral part of a great firm that continues to grow.”

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