Services Archives - Page 39 of 72

Digital documents with e-signatures aren’t going away

Tax Prep, Planning & Strategy|July 14, 2020

Have you applied for a business loan lately? Or had some repairs done on your facilities? Maybe you’ve signed a contract with a certain technologically inclined customer or vendor. In any of these instances, you (or one of your employees) probably had to electronically sign a digital document.

So, the next question is: Why isn’t your company using this technology? If the answer is, “We are,” kudos to you (assuming it’s working out). But if your reply is, “We’ve always used paper and don’t want to deal with the expense and hassle of converting to digital documentation,” you may want to reconsider — because it’s not going away.

Why go digital?

For businesses, there are generally three reasons to use digital documents with e-signatures:

1. Speed. When you can review and sign a business document electronically, it can be transmitted instantly and approved much more quickly. And this works both ways: your customers can sign contracts or submit orders for your products or services, and you can sign similar documents with vendors, partners or consultants. What used to take days or even weeks, as paper envelopes crisscrossed in the mail, now can occur in a matter of hours.

2. Security. Paper has a way of getting lost, damaged and destroyed. That’s not to say digital documents are impervious to thievery, corruption and deletion, but a trusted provider should be able to outfit you with software that not only allows you to use digital docs with e-signatures, but also keep the resulting files encrypted and safe from anyone or anything who would do them harm.

3. Service. This may be the most important reason to incorporate digital docs and e-sigs into your business. Younger generations have come of age, if not grown up, with digitized business services. They expect this functionality and may prefer a company that offers it to one that still requires them to put pen to paper.

What about the law?

Many business owners hesitate to dive into digital docs and e-sigs because of legal concerns. This is a reasonable concern. However, e-signatures are now widely used and generally considered lawful under two statutes:

The Electronic Signatures in Global and National Commerce Act of 2000, a federal law, and
The Uniform Electronic Transactions Act, which governs each state unless a comparable law is in place.

What’s more, every state has some sort of legislation in place legalizing e-signatures. There may be some limited exceptions in certain cases, so check with your attorney for specifics.

Is now the time?

To be clear, investing in digital documents with e-signatures, and training your employees to use them, is a major strategic initiative. You need to ensure the return on investment will be worth the effort. We can assist you in evaluating whether now’s the time to “go digital” and, if so, in setting a budget for the software purchase and implementation.

How taxes affect your nonprofit’s donors

Accounting & Assurance|July 9, 2020

The deductibility of most charitable gifts hasn’t changed since passage of the Tax Cuts and Jobs Act, but some recordkeeping requirements have. Helping your donors who itemize deductions understand the rules and benefits of their gifts can strengthen your not-for-profit’s ties with them — and may help increase contributions.

Allowable deductions

Generally, donors can deduct total contributions of money or property up to 60% of their adjusted gross income. The amount of the allowable deduction varies, but cash donations are 100% deductible if the donor maintains proof (such as bank records or thank-you letters from your nonprofit).

Donations of ordinary-income property usually are limited to the donor’s tax basis in the property (usually the purchase price). Specifically, donors can deduct the property’s fair market value (FMV) less the amount that would be ordinary income or short-term capital gains if they sold the property at FMV. Property is ordinary-income property when donors would recognize ordinary income or short-term capital gains if they sold it at FMV on the date of donation.

When FMV applies

Donors of capital gains property usually can deduct the property’s FMV. Property is considered capital gains property if the donor would have recognized long-term capital gains had he or she sold it at FMV on the donation date. This includes capital assets held more than one year. But in some circumstances, such as when the donation is intellectual property, only the donor’s tax basis of the property may be deducted.

If your nonprofit uses tangible donated property for its tax-exempt purpose — for example, a museum displays a donated painting — the donor can deduct its fair market value. But if the property is put to an unrelated use (a hospital sells the donated painting) the deduction is limited to the donor’s basis in the property.

For donations of property, the substantiation requirements depend on the deductible value. If someone donates an item worth:

Less than $250, a receipt is sufficient.
Between $250 and $500, the donor must have contemporaneous written acknowledgment.
Between $501 and $5,000, the donor must also file Form 8283.
More than $5,000, the donor must obtain a qualified appraisal.

Other donations

In general, only donations of the full ownership interest in property are deductible. The right to use property is considered a contribution of less than the donor’s entire interest in the property. But there are some situations in which a donor can receive a deduction for a partial-interest donation, such as with a qualified conservation contribution.

Donors can’t claim a deduction for the donation of their professional services. However, related out-of-pocket costs, such as supplies and miles driven, are deductible as charitable contributions.

Look out for their interests

Take time to make sure your donors understand the tax implications of their gifts. It can help them avoid unpleasant surprises down the road — and keep them loyal to your nonprofit. Contact us with questions.

Quickbooks Consulting, Training & Configuration

Quickbooks Consulting, Training & Configuration |July 8, 2020

Our QuickBooks certified ProAdvisors can help you get the most out of your software!

QuickBooks is designed for businesses of every size. WCS will help you evaluate whether QuickBooks is right for you and which version will best match your needs. Then our QuickBooks certified ProAdvisors will tailor it to your specific business.

As experienced QuickBooks consultants, we can help you work more efficiently and save time by setting up your accounting system correctly. We offer different levels of service for your QuickBooks needs including on-site training.

Our services include:

Initial consultation
QuickBooks Integration
QuickBooks implementation
Custom QuickBooks programming
Remote and onsite training and support

WCS has developed QuickBooks integration and ongoing consulting for businesses of all types from manufacturing, ecommerce, medical offices, professional services, hospitality, and more.

Click here to contact us about our QuickBooks Consulting services or call 410.339.6464

Merger & Acquisition Analysis

Merger & Acquisition Analysis |July 8, 2020

Merger & Acquisition (M&A) transactions are significant events for any company.

The wrong structure or a bad deal can threaten your financial stability as a buyer; cost millions of dollars, or both. It is imperative to have an experienced, knowledgeable CPA and Business Consulting firm on your side during M&A activity. WCS’ expertise in mergers and acquisitions work is extensive and includes successful engagements involving private mid-market companies, small family businesses, companies wanting to acquire another company or division from both the buy and sell side, and companies seeking capital for growth.

Our Merger & Acquisition Analysis includes, but are not limited to:

Due diligence process
Bank or private financing assistance
Banking relations
Mergers and acquisitions consultation
Management issue solutions
Business succession planning
Conflict resolution
Valuation services
Benchmarking services
General business advice and counseling

Click here to contact us about our Merger & Acquisition Analysis services or call 410.339.6464

Management Advisory Services & Business Consulting

Management Advisory Services & Business Consulting |July 8, 2020

Whether you are a start-up or an established business looking to grow, WCS will help you achieve your goals, resolve business issues, and be there for you when you need it most.

Our management advisory and business consulting services are designed to assist all types of businesses, with solid financial planning and researched, time-tested business advice.

Our management advisory services include, but are not limited to:

Operational assessments and audits
Organizational structure recommendations and restructuring
Internal controls recommendations
Bank or private financing assistance
Banking relations
Financial analysis and planning
Mergers and acquisitions consultation
Management issue solutions

Business expansion recommendations and strategic planning
Business succession planning
New business planning and business venture planning
Conflict resolution
Valuation services
Benchmarking services
General business advice and counseling

Our services can help your business, from solving an ongoing efficiency issue, to resolving a conflict in a small family business, to securing financing for an exciting new venture. All of these services have one thing in common: they are aimed at increasing your company’s profitability, effectiveness, and growth.

From Problem Solving to Goal Setting

WCS’s management advisory and business consultation services are designed to be thorough, unbiased, and accurate. We want to help your business better understand itself, whatever your specific needs are. Whether you are in a crisis and need immediate help, or simply want to do better, we are here for you. WCS works with companies in all phases of the business lifecycle including:

Initial business planning
Business succession
Before, during, and after a merger and acquisition
Resolving problems, issues, or crisis
Launch of a new venture, service, or product
Business restructuring
Closing or selling of a business

Management Advisory Services & Business Consulting - two women looking at a report

Let Us Be Your Trusted Advisor

We believe that our expert analysis paired with our dedication to in-depth, personal attention is what makes our management advisory services shine. We understand that accurate, smart analysis is vital – but that numbers and analysis can only take you so far. We are committed to truly getting to know our clients, from understanding their goals to being familiar with their business philosophies. We believe that to be the best business consultants possible we need to build a meaningful relationship with our clients.

We want to be more than your accountant. We want to be your trusted business advisor.

Click here to contact us about our Management Advisory Services & Business Consulting or call 410.339.6464

closeup of hand using stylus on a tablet

Tax Prep, Planning & Strategy

Tax Prep, Planning & Strategy |July 8, 2020

WCS tax experts bring your complex tax issues into plain view.

Every business, individual or industry has its own tax complexities and regulations. It’s this intersection of tax complexity and client profitability where we thrive. We bring things into clear view where clients can understand and build on the plans and strategies that ensure a strong financial structure to grow your business or your estate.

Our tax advisors specialize in the following areas:

Individual Tax
Equally as important as understanding the ever-shifting tax regulations is understanding the complexities and goals of each individual and family we work with. We create active relationships with our clients to assure that changes in regulations and changes in their lives can be captured and planning can be adjusted to maximize their income.

Business Tax
Like our lives our businesses experience a lifecycle. From starting up to expansion to transferring or selling the business. Every business and industry has unique and ever-changing tax compliance issues – and world and community events can have positive or negative effects on our success. WCS comprehensive tax planning provides a 360 degree view of how to minimize the impact taxes will have on your business.

R&D Tax Credit
Research and Development isn’t something only big corporations do. Businesses of all sizes are innovating every day – trying different approaches and methodologies to continually improve their products, processes and client services. You may be doing more R & D than you think and we can help you identify and claim R & D Tax Credits to reduce your tax liability.

Estate & Trust
The transfer of wealth from one generation to the next is a critical component to your overall financial strategy. It is a multidisciplinary approach combining the talents of your attorney and financial advisor with our estate tax professionals. Together we will develop, implement and monitor a plan to conserve and transfer wealth

Non-Profits
When it comes to non-profits we have our own mission. Our CPAs and business consultants provide strategic business planning and tax insight to develop non-profit financial systems that meets their present needs and provide a sustainable path for the future of their mission. WCS partners are not only actively involved with our non-profit clients but also served as board members supporting many local non-profits in our community.

Real Estate Tax
At WCS we work with real estate developers, homebuilders, general contractors, subcontractors, specialty trades and common interest realty associations to develop and implement powerful tax planning strategies. Each plan is built from the ground up to meet the exacting needs of your real estate business and adapt to the ever changing real estate markets.

Click here to contact us about our Tax Prep, Planning & Strategy services or call 410.339.6464

Industry Benchmarking

Industry Benchmarking |July 8, 2020

Benchmarking can help you gain the competitive edge.

Benchmarking measures your performance in critical areas against industry standards (benchmarks) and with the leaders in the industry along with the competitors. This helps you get valuable insights on how different segments of the business are performing and compared to the competitors and industry leaders. WCS accountants and business advisors uncover areas for improvement and work with your team to implement the solutions and best practices that could save you money.

WCS uses the latest software to offer industry benchmarking. Data is compiled from public and private companies as well as publicly available sources throughout the North American businesses. These results can help to uncover new opportunities to best service you or set targets for your business.

Industry Benchmarking - business meeting with employees holding a tablet

Click here to contact us about our Industry Benchmarking services or call 410.339.6464

Determine a reasonable salary for a corporate business owner

Tax Prep, Planning & Strategy|July 8, 2020

If you’re the owner of an incorporated business, you probably know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason is simple. A corporation can deduct the salaries and bonuses that it pays executives, but not its dividend payments. Therefore, if funds are withdrawn as dividends, they’re taxed twice, once to the corporation and once to the recipient. Money paid out as compensation is taxed only once, to the employee who receives it.

However, there’s a limit on how much money you can take out of the corporation this way. Under tax law, compensation can be deducted only to the extent that it’s reasonable. Any unreasonable portion isn’t deductible and, if paid to a shareholder, may be taxed as if it were a dividend. The IRS is generally more interested in unreasonable compensation payments made to someone “related” to a corporation, such as a shareholder or a member of a shareholder’s family.

How much compensation is reasonable?

There’s no simple formula. The IRS tries to determine the amount that similar companies would pay for comparable services under similar circumstances. Factors that are taken into account include:

The duties of the employee and the amount of time it takes to perform those duties;
The employee’s skills and achievements;
The complexities of the business;
The gross and net income of the business;
The employee’s compensation history; and
The corporation’s salary policy for all its employees.

There are some concrete steps you can take to make it more likely that the compensation you earn will be considered “reasonable,” and therefore deductible by your corporation. For example, you can:

Use the minutes of the corporation’s board of directors to contemporaneously document the reasons for compensation paid. For example, if compensation is being increased in the current year to make up for earlier years in which it was low, be sure that the minutes reflect this. (Ideally, the minutes for the earlier years should reflect that the compensation paid then was at a reduced rate.)
Avoid paying compensation in direct proportion to the stock owned by the corporation’s shareholders. This looks too much like a disguised dividend and will probably be treated as such by IRS.
Keep compensation in line with what similar businesses are paying their executives (and keep whatever evidence you can get of what others are paying to support what you pay).
If the business is profitable, be sure to pay at least some dividends. This avoids giving the impression that the corporation is trying to pay out all of its profits as compensation.

Planning ahead can help avoid problems. Contact us if you’d like to discuss this further.

Accounting & Assurance

Accounting & Assurance |July 8, 2020

WCS has proven experience in a broad range of industries, including real estate, construction, non-profits, government, and employee benefit plans, to name a few.

At WCS, we offer a wide range of accounting and assurance services to meet your specific financial reporting needs driven by your management, board or investor needs, regulatory reporting requirements, or financing arrangements. Our audit and accounting professionals specialize in the following areas:

Assurance

Audits of Financial Statements
Reviews and Compilations of Financial Statements
Forecasts and Projections
Overhead Audit and Federal Acquisitions Regulations (FAR)
Employee Benefit Plan Audits
HUD, Uniform Guidance Audits
Personal Financial Statements
Special Audits

Accounting

Budget Preparation
Monthly Bookkeeping
Bank Reconciliations
Bill Paying Services
Outsourced Accounting Services

Reasons why married couples might want to file separate tax returns

Tax Prep, Planning & Strategy|July 7, 2020

Married couples often wonder whether they should file joint or separate tax returns. The answer depends on your individual tax situation.

It generally depends on which filing status results in the lowest tax. But keep in mind that, if you and your spouse file a joint return, each of you is “jointly and severally” liable for the tax on your combined income. And you’re both equally liable for any additional tax the IRS assesses, plus interest and most penalties. This means that the IRS can come after either of you to collect the full amount.

Although there are provisions in the law that offer relief, they have limitations. Therefore, even if a joint return results in less tax, you may want to file separately if you want to only be responsible for your own tax.

In most cases, filing jointly offers the most tax savings, especially when the spouses have different income levels. Combining two incomes can bring some of it out of a higher tax bracket. For example, if one spouse has $75,000 of taxable income and the other has just $15,000, filing jointly instead of separately can save $2,512.50 for 2020.

Filing separately doesn’t mean you go back to using the “single” rates that applied before you were married. Instead, each spouse must use “married filing separately” rates. They’re less favorable than the single rates.

However, there are cases when people save tax by filing separately. For example:

One spouse has significant medical expenses. For 2019 and 2020, medical expenses are deductible only to the extent they exceed 7.5% of adjusted gross income (AGI). If a medical expense deduction is claimed on a spouse’s separate return, that spouse’s lower separate AGI, as compared to the higher joint AGI, can result in larger total deductions.

Some tax breaks are only available on a joint return. The child and dependent care credit, adoption expense credit, American Opportunity tax credit and Lifetime Learning credit are only available to married couples on joint returns. And you can’t take the credit for the elderly or the disabled if you file separately unless you and your spouse lived apart for the entire year. You also may not be able to deduct IRA contributions if you or your spouse were covered by an employer retirement plan and you file separate returns. You also can’t exclude adoption assistance payments or interest income from series EE or Series I savings bonds used for higher education expenses.

Social Security benefits may be taxed more. Benefits are tax-free if your “provisional income” (AGI with certain modifications plus half of your Social Security benefits) doesn’t exceed a “base amount.” The base amount is $32,000 on a joint return, but zero on separate return (or $25,000 if the spouses didn’t live together for the whole year).

No hard and fast rules

The decision you make on your federal tax return may affect your state or local income tax bill, so the total tax impact should be compared. There’s often no simple answer to whether a couple should file separate returns. A number of factors must be examined. We can look at your tax bill jointly and separately. Contact us to prepare your return or if you have any questions.