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Physician Hospital Contract Negotiations

Many physicians are making the decision to give up their independent medical practices and seek hospital employment. Is it time for you to make a move? Gilmore Jasion Mahler Managing Partner Kevin Gilmore helps physicians regionally and nationally with contract negotiations. 

Learn about Gilmore Jasion Mahler's Healthcare Specialist team and the expertise they have to offer. Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Changes to 529 College Savings Plans

Charlie Heid interviewed on WTOL with Amanda FayA popular tool for parents trying to save for their child’s college education is now even more helpful for families. Gilmore Jasion Mahler’s Charlie Heid tackled the topic during his monthly appearance on WTOL’s “Your Day.” It’s called a “529” plan and is basically like a 401K, but it saves for your child’s education instead of your retirement. It’s an investment account that allows families to let money grow tax free to help pay for a child’s college education. It’s become a popular savings tool to ease the financial burden for parents who want to pay for their child’s college education.

The new tax law now allows families to use up to $10,000 a year in 529 funds for elementary and high school costs as well as college costs.

Some more good news is that the tax deduction you can take has also doubled in Ohio from $2,000 per child to $4,000 per child. That change was part of the budget bill passed last year in Ohio. The Michigan deduction is $5,000.

There is no annual limit for contributions to a 529 plan, but keep in mind you or a family member (like your kids grandparents) can give up to $15,000 a year (or $30,000 per married couple) to your child’s 529 account without having to pay any federal gift tax.

While these are state-run plans, you don’t have to use the 529 plan for your state. You may find you like the rate of return better on an out of state plan.

529 plans pay for college related costs (and now high school and elementary school costs) including:

  • Tuition
  • Mandatory fees
  • Room and board

Be aware, there are fees associated with 529 plans, so you need to ask questions and inquire about potential administrative fees or an application fee. Sometimes these fees can be waived, for example, if you maintain a certain balance, or agree to electronic only document delivery. Also be aware that a 529 plan could impact your child’s eligibility for financial aid based upon need.

529 plans are sponsored by states, state agencies, or sometimes educational institutions. There’s a nice website collegesavings.org established by the National Association of State Treasurers called the College Savings Plan Network with some good information. You can search info on any state’s 529 plans.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

GJM’s Bob Bobek on Starting a New Construction Project

Are you a contractor about to start a new project? Partner Bob Bobek, CPA leads GJM's Construction & Real Estate team and says there are some critical questions to ask before moving forward.

Bob works closely with many construction businesses as a trusted advisor in key business decisions. Interested in learning more about issues, regulations and tax strategy specific to the construction industry? Sign up for GJM's free industry newsletter On-Site. Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

New Tax Law Business Impact: Meals & Entertainment Expenses: So, What’s Still Deductible?

There is much debate and uncertainty amongst accounting professionals over the interpretation of the new tax law as it applies to meals and entertainment deductions. While it is quite obvious that entertainment expenses are no longer deductible and meals provided on-site for employees for the convenience of the employer are just 50% deductible now, the difference in opinion is how meals with clients/customers and prospective customers are handled. For every tax expert that has published an article stating that meals with customers are still 50% deductible, there is another expert that has published a statement that they are no longer deductible.

We will not know with certainty until the IRS and Treasury release some further guidance and clarity on this issue. We do need to know quickly because the rules apply for amounts paid or incurred after December 31, 2017. There are a number of items that will need to be clarified from this new tax law, therefore, I fear it may be a while before this gets addressed by the IRS. To make tax reporting next year simpler, I would suggest tracking your meals and entertainment expenses in separate accounts in your General Ledger system as follows:

  • Entertainment (not deductible)
  • Club Dues (not deductible)
  • Business Association/League Dues (deductible)
  • Meals – 100% deductible (ie. company parties, etc. for the employees)
  • Meals – 50% deductible (ie. meals during business travel, employee or shareholder meetings, business league meetings, meals provided on-site for convenience of employer)
  • Meals – customer and prospect meals (need IRS clarification – either 50% or nondeductible. Until we receive IRS clarification on this, GJM will view these meals as 50% deductible)

Entertainment

Entertainment expenses or the use of a facility for entertainment purposes is no longer deductible. Prior to 1/1/18 entertainment expenses were 50% deductible as long as they met the business purpose tests. The new tax law eliminates the deduction for entertainment expenses, eliminating the subjective determination of whether or not there was sufficient business purpose or discussion to warrant a deduction. Meals with customers and prospects may fall under this category of meals as part of the entertainment such as lunch, along with golf.

Meals

Generally, business meals are subject to 50% limitation. This includes meals incurred by employees during travel for business and meals provided on site for the convenience of the employer. The new law expands the 50% limitation to food and beverages provided to employees through an eating facility that meets the requirements for de minimis fringe benefits (a benefit so small that it doesn’t make sense to account for it). The 50% limitation also applies for meals provided to employees on-site for the convenience of the employer from 1/1/18-12/31/25.  After this time period, these expenses are not deductible.

Exceptions to the 50% deductibility rule:

Expenses for recreational or social activities primarily for the benefit of employees (ie. employee holiday party) and meals and facilities made available to the public continue to be 100% deductible.

Club Dues

No change to previous rules. Amounts paid for a membership to a club organized for business, pleasure, recreation, or any other social purpose are not deductible. This includes club dues to country clubs, athletic and golf clubs, airline or hotel clubs, and clubs operated to provide meals for business discussions. Exceptions: dues for boards of trade, chambers of commerce, professional organizations, trade associations, business leagues, etc. are deductible as long as their main purpose is not to conduct entertainment activities for members.

Gilmore Jasion Mahler offered tax education events in early February, outlining some of the key changes in the new tax law. You can learn more in this recent GJM blog summarizing the Tax team's presentation.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm's professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Amy Merkel, CPA contributed this blog. Amy is a Tax Manager with Gilmore Jasion Mahler (GJM). With the firm for a number of years, she works closely with clients across a number of industries on their business and personal tax strategy. Amy is also a member of GJM's Manufacturing & Distribution Specialist team.

Gilmore Jasion Mahler Experts Explain New Tax Law

crowd of over 300 people at GJM tax education eventThe Tax Cuts and Jobs Act signed into law on December 22, 2017 has businesses and individuals around the country trying to get a handle on how the new law affects them. Northwest Ohio is no exception. Many are looking for direction from Gilmore Jasion Mahler (GJM) tax experts. Should they change the classification of their business to take advantage of the new 21% corporate tax rate? How have business deductions changed? What does the new standard deduction mean for their families?

Hundreds turned out for GJM education sessions on the new tax law held in both Maumee and Findlay the first week of February. Tax partners Charlie Heid, CPA and Steve Schult, CPA presented on the big changes for individuals and businesses. Their presentations were followed by a GJM panel of tax experts who tackled some questions on the new tax law's impact.

The GJM panelists included: Tax Partners Dave Baymiller, CPA, Deanna Hall, CPA, Kathi Iott, CPA, Chuck Stumpp, CPA, and Jaimee Weaver, CPA. GJM Managing Partner Kevin Gilmore, CPA welcomed the attendees to the sessions.

“The law passed quickly, just before Christmas and people and businesses haven’t had much time to get a handle on its impact,” says Gilmore. “The new law is anything but tax simplification. We knew our education sessions would help people get a better grasp, but we’ve encouraged all of the attendees to reach out to their tax professionals to discuss their individual situations.”

Major changes for businesses within the Tax Cuts and Jobs Act include:

-Corporate tax rate reduced to a flat 21%

-Corporate Alternative Minimum Tax (AMT) repealed

-Pass-through businesses (businesses that pass their income through to the personal level for tax purposes): 20% deduction of income. Effective tax rate on qualified income will be reduced to 29.6%  

-Sec. 179 limit increased to $1M from $510,000 for property in service after 12/31/17.

-100% bonus depreciation for qualified property acquired and placed in service after 9/27/2017 and before 1/1/23.

-Limits on business interest deduction

-New restrictions on deduction of fringe benefit expenses:

  • Entertainment expenses are now nondeductible
  • Business meals remain deductible at 50%
  • Meals provided for the convenience of the employer are reduced to 50% deductible, but only through 2025

-NOLs (Net Operating Losses): 2-year carryback repealed, 20-year carry forward changed to indefinite, 80% taxable income limitation on usage

-Tax credits retained include:

  • Research and Development Tax Credit
  • Work Opportunity Tax Credit

Among the changes for individuals under the new tax law:

-Standard deduction essentially doubled (through 12/31/25) to $24,000 (filing jointly) and $12,000 for individuals.

-Itemized deductions no longer allowed include:

  • Tax prep fees
  • Investment advisory fees
  • Unreimbursed employee business expenses

-Itemized deductions also impacted:

  • State and local taxes still deductible, but now limited to $10,000
  • Mortgage interest now deductible only on the first $750,000 in debt for primary or secondary homes

-Affordable Care Act individual mandate penalty eliminated

-Child tax credit increased to $2,000 for children under 17

-Alimony is not deductible or includable in income related to divorces after 12/31/18

-Estate Tax is not repealed

Dave Baymiller answers a panel questionMany of those attending the education sessions were looking for some clarity on the new rules for pass-through businesses. GJM Tax Partner Dave Baymiller says those pass-through businesses that qualify for the 20% deduction include:

  • Partners in partnerships/LLC’s
  • "S" corporation shareholders
  • Sole proprietors (reported on Schedule C)
  • Rental real estate (reported on Schedule E)

He says there are some limitations depending on your taxable income.

“The 20% deduction is limited based on taxable income level, amount of compensation paid by business and/or amount of business property owned,” says Baymiller. “The deduction limitations for what are called specified service businesses are much more severe.”

Baymiller says many businesses are also looking for clarification on what qualifies as a “specified service business”. He says they include:

  • Healthcare professionals (physicians, nurses, dentists)
  • Lawyers, accountants
  • Financial, brokerage, investing, and investment management services
  • Consultants
  • Any business where the principal asset of such business is the reputation or skill of one or more of its employees or owners (the IRS has not issued any guidance on how to interpret this)

If you're looking for more detail, Dave has written a more in depth article on the impact of tax reform on pass-through entities. GJM’s Tax team says many businesses are also trying to determine if they should consider converting from an "S" corporation to corporation (or "C" corp) to take advantage of the reduced corporate tax rate. An "S" corp is a pass-through business in which income "passes through" to the owner's personal tax return. A corporation or "C" corp would be subject to corporate taxation.

It sounds like a simple question, but the answer is anything but simple. Tax Partners Deanna Hall and Chuck Stumpp walked through an example for attendees of a business with a million dollars of taxable income that factored in:

  • Taxes paid at corporate level
  • Taxes paid at shareholder level
  • Taxes paid on cash withdrawn from the business (federal tax on "S" Corporation distributions or federal tax on corporate dividends)

“What we wanted to show is that every business is different,” says GJM Tax Partner Deanna Hall. “Depending upon a number of factors it could make sense for your business to incorporate to take advantage of the new low corporate tax rate, but it may not. That’s why it’s so important to talk to your tax advisor to come up with an individualized plan.”

Many attendees said they walked away with a much better idea of the impact of the Tax Cuts and Jobs Act on their personal and business tax strategy. GJM presenters made it clear that every situation and every business is different, and stressed the importance of a one on one discussion with your tax professional. GJM tax experts are already having these important discussions with clients to ensure the smartest tax strategy for 2018. Learn more about GJM’s approach to tax strategy.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.