Year : 2016

Regional Accounting Firm Rebranded Crosslin

By Crosslin
by Crosslin

crosslin logoNASHVILLE, Tenn. – October 24, 2016 – Experiencing a surge of growth within the firm and an expansion of both services and departments, regional accounting firm Crosslin & Associates has rebranded the company Crosslin. The name change more accurately reflects the cohesion of the numerous related companies and services now offered by the firm. It also creates a greater sense of brand identity throughout the company, while leaving room for even more expansion opportunities in the future.

“Over the last few years, our team members have listened to our customers about their growing needs,” said Managing Principal Dell Crosslin. “Fortunately, we have been able to respond and grow with them, adding several more service lines including entrepreneurial business services, religious organization services, state and local tax consulting, cybersecurity, and managed technology services, among others.”

“Given these new offerings and the rapid growth in new team members, it made sense to unite and simplify our name under one consistent brand,” Crosslin added. “Crosslin allows us to better communicate who we are and what we do.”

Crosslin earlier unveiled the new branding, along with a new logo and website, for its customers and team members. The company also kicked off an internal celebration and shared a company-wide intranet. “It is such an exciting time to be a team member at Crosslin,” noted Marketing Director Jordan Waldron. “This rebrand reflects the palpable enthusiasm within the company right now and a renewed commitment to connect with our customers and team members alike.”

“We were thrilled to be able to share the next phase of Crosslin’s journey with our customers, “Crosslin added. “The loyalty and friendship of our customers has been crucial in helping elevate our firm to the next level and we are so appreciative.”

In undertaking the rebranding, Crosslin made a significant investment in its marketing strategy to build a strong brand presence and to communicate the strong history of Crosslin and how the firm has evolved over the years. The new brand also looks ahead to the firm’s ambitions for the future.

With an emphasis on company culture, Crosslin also is focusing on building a solid internal brand, which will result in external efficiencies. “Do More. Be More.” will be the firm’s tagline, reflecting a commitment to customers that Crosslin will do more, so the customer can in turn be more. The tagline also pays homage to Crosslin’s unwavering commitment to give back to the community in which they live and serve.

Founded in 1987, Crosslin was created out of the desire to provide companies with an alternative to the national or large regional accounting firm options. As these firms focused on larger, multinational clients, Crosslin set out to serve privately owned companies, not-for-profits and governmental clients as well as to offer alternative services for the SEC market. Its membership in the BDO Alliance USA helps provide a platform for rendering these services.

The Crosslin brand includes Crosslin Certified Public Accountants, Crosslin Technologies, and Crosslin Healthcare.

Crosslin, which offers audit and assurance, tax services, accounting and IT forensics, entrepreneurial business services, religious organization services, healthcare consulting, information technology security and consulting services, valuation services, and litigation support, will celebrate its 30th anniversary in 2017.

Crosslin Expands Tax and Operations Teams

By Crosslin
by Crosslin

jamie-templer-400x600 katie-almond-400x600 karen-catron-400x600

Crosslin has expanded its tax and operations teams.  Jamie Templer and Katie Almond have joined as tax seniors and Karen Catron is the firm’s new human resources generalist.

Templer is a certified public accountant and most recently worked as a tax senior accountant for Cherry Bekaert in Greenville, South Carolina.  She received both her master’s degree in professional accountancy and her bachelor’s degree in accounting from Clemson University.

Almond is a certified public accountant and most recently worked as an assistant manager of the global investments tax group for American International Group.  She received both her master’s and bachelor’s degree in accountancy from Auburn University.

Catron most recently served as the human resources/payroll analyst for Noranda Aluminum.  She attended Tennessee Technological University and has received the Society for Human Resources Management Certified Professional (SHRM-CP) designation.

Sales Compensation – Be Careful What You Wish For!

By Crosslin
by Crosslin

Compensating sales staff can be complicated. You want to structure their compensation so that they are “hungry” to make sales yet you do not want to over pay them or make it too easy or else they may get lazy in their sales efforts. Like other positions within the company, high performing people are worth their weight in gold. Poor performing people can really put a drag on your earnings. A good balance of fixed versus variable compensation usually works well.

Customer #1: The customer was in a rapidly growing sales cycle of their business. Technology was new and quickly adapted by the market. We spend some time in the various retail locations, observing customers, employees, behaviors, and patterns. It is amazing what one can learn by walking around with the people on the front lines and asking questions. Over time, we noticed a flurry of sales activity in the first part of the month and a slower sales pace during the last part of the month. We asked a few sales people if they knew the reason. The answer may surprise you.

The sales compensation structure was set so that they were paid a bonus for hitting certain thresholds each month. Once the last threshold was hit, the sales staff would coach their potential sales to come to the store during the following month. This resulted in a “managed” sales approach which basically pushed sales into the next month in order for the sales staff to hit their quotas and reach their bonuses.

We spent some time explaining the reason to the CEO, who obviously did not want to believe this pattern. Once he finally came around to believing it, he was furious. However, he had no one to blame but himself. People were basically doing what he was paying them to do.

We revised the sales compensation structure whereby sales staff were compensated for every sale they made. Consequently, sales increased. Although sales staff made more money, the company made even more.

Customer #2: We observed sales activity over a period of time. Each week, the CEO held a conference call with his sales staff, who were distributed throughout several states. Each sales call would last two or three hours as his sales staff would make their individual report. The company even went so far as to place tracking devices on their vehicles to monitor how much time they spent driving to customers. The company spent more effort requiring a voluminous amount of sales reports, which was a waste of time. None of this increased sales.

We noticed a pattern of sales staff basically “promising” several sales every week, but nothing of any significance was being sold. We examined the sales compensation structure and noticed that approximately 80% of their compensation was fixed (or a base) while the other 20% was variable (or commission) tied to actual sales activity.

We changed the mix of fixed/variable compensation from 80/20 fixed/variable to about 40/60 fixed/variable. As you can imagine, the sales staff met this change with some resistance. However, they were well-paid and not likely to go elsewhere.

Also, we showed them that if they made their sales targets that they would actually make MORE money than what they made before. Within three months, sales began to increase, sales staff made more money, and the company made even more money.

Are you getting the sales results you want? How are you paying your sales staff?

Crosslin Entrepreneurial Business Services (EBS) is here to free you up to spend time doing what you do best. Outsource your accounting and CFO needs to someone that has been doing this for years. We have the experience and expertise to help you make your business more profitable. Let us do what we do best, so you are free to do what you do best.

Please contact us to help you find cash in your business.

Crosslin Named To Top 300

By Crosslin
by Crosslin

top 100 2011

Crosslin was recently named to INSIDE Public Accounting’s Top 300, which is an annual ranking of the nation’s 300 largest accounting firms.  We were proud to come in at No. 273 – our first time on the list!  Way to go, Team Crosslin!

Crosslin Wins Global Business Excellence Award

By Crosslin
by Crosslin

GBEA-Winner-2016-Oustanding-Community-Initiative

Crosslin has been named winner of the Outstanding Community Initiative category in the 2016 Global Business Excellence Awards (GBEA).  Crosslin was recognized for its overall contributions in supporting the local not-for-profit community.

“Crosslin has demonstrated incredible commitment to the community in the way it tries to help as many people as possible,” the chairman of the GBEA judges noted.  “Many organizations focus on one charity or group alone, but Crosslin’s team is active in an impressive range of areas including fundraising for charity, volunteering, donating items to food banks, supporting healthcare organizations, and working on the boards of not-for-profit organizations.  The judges were deeply impressed by the company’s extraordinary reach across the community.  Congratulations to Crosslin for putting social responsibility high up on its agenda and for making a real difference to others.”

The Global Business Excellence Awards are one of the world’s highest profile awards and pride themselves on having a large panel of independent expert judges who select winners according to strict criteria for each category and sector, focusing on financial results, innovation, and customer, employee, investor, and community benefits.

“Giving has been a cornerstone of Crosslin from the beginning,” said Crosslin Operations Principal Justin Crosslin.  “I am extremely proud of the commitment the firm and our team members have made to giving back to our community and we are all truly honored by this recognition from the Global Business Excellence Awards.”

Looking To Clean Up Your Financial Records?

By Crosslin
by Crosslin

Every Spring, some people set aside a weekend or two to “clean up” the place by sorting through all of the junk in their house. Typically, this requires climbing into the attic or crawling down into the basement. The process is usually dirty, hot, smelly, and not a lot of fun. However, the result is positive. A lot of junk is sold, donated, or thrown away leaving the house a much nicer, cleaner place to live and entertain family and friends.

Sometimes, the financial records of a business can get “messy” as well and you need to do a little spring cleaning. Many times, this is not realized until an employee leaves the company. Only then is it discovered that maybe that employee was not performing all of the tasks required for the job. Perhaps the employee knew what to do, but since he was planning to leave anyway, his performance got lax. Perhaps the employee was overwhelmed and not able to handle the workload. Whatever the reason, you did not know but your financial records are a mess. You are not sure of anything now. Investors, board members, and bankers are not pleased, and you are left explaining what did or did not happen. Maybe you feel angry or embarrassed about the situation. Nevertheless, you have lost credibility with your stakeholders and need to get it back quickly.

We have worked with customers on several occasions to help “clean up” the books. Some examples of this are:

Customer #1: Bank statements had not been reconciled in five months. Upon learning of this, the CEO was upset, to put it mildly. We were brought in to “clean up the books” and get everything reconciled. An assignment like this is much like putting together a large puzzle. First, you start with reconciling cash. If cash is not reconciled, then it is highly likely that other areas are not reconciled either. After reconciling cash, then you move to accounts receivable, inventory, and accounts payable. Once working capital is reconciled, the rest is much easier to correct, if needed.

This assignment took two or three months. However, once the financials were correct, and processes put in place to keep them correct, the CEO was much happier. That business is well over $100 million in revenue now.

Customer #2: We started a new engagement and had good reason to believe that the company had the assets to increase its line of credit with the bank. However, upon meeting with the bank, we quickly learned that the company had not reported its financial results in several months so the bank was not interested in increasing its exposure. We were quickly thrown into “damage control” mode. We asked, “What do you need and when do you need it?” The bank gave us a list of reports needed with applicable due dates. We asked again, “If we can correct the situation and provide you with accurate and timely information, would you be willing to consider increasing the line of credit?” The bank replied yes, they would consider it.

Within about 3 months, we were able to get the financial statements accurate and timely. Once we re-established credibility with the bank, they were willing to discuss our needs. This resulted in the bank increasing the line of credit from $1.5 million to about $6 million.

Take a moment and ask yourself if your financial house is in order.

Crosslin Entrepreneurial Business Services (EBS) is here to free you up to spend time doing what you do best. Outsource your accounting and CFO needs to someone that has been doing this for years. We have the experience and expertise to help you make your business more profitable. Let us do what we do best, so you are free to do what you do best.

Please contact us to help you find cash in your business.

What is a good tax saving strategy I should be considering right now?

By Crosslin
by Crosslin

In this month’s Tax Tips, Kevin Hickman and Christina Manis answer the question, “What is a good tax saving strategy I should be considering right now?”  Click here to see the video.

With the stock market at record highs, one strategy to consider is the donation of stock to a qualified charity.

When a taxpayer donates appreciated stock, where you would normally have a long-term capital gain, you will be able to deduct the fair market value of the stock as an itemized deduction.

The beauty of the donation is that you deduct the higher value of the stock and avoid paying tax on the unrealized gain.  For example, if you purchased 100 shares of Apple at $100 per share and it is selling at about $400 per share, your deduction would be $40,000 and you would avoid paying tax on the $30,000 gain.

If you were to sell the stock then make the same donation, the gain would be included in your Adjusted Gross Income and would likely result in the limitation of certain itemized deductions and possibly make you subject to the Net Investment Income Tax.

This strategy avoids both of those potential negative consequences and would likely give you a better bottom line tax result.

There are some limitations and specific rules related to the donation of stock.  Publicly traded stock values are based on market quotes but closely-held stock may need to be supported with an appraisal.

If you are inclined to make substantial charitable donations during the year and have appreciated stock, you may want to consider this strategy.  Since this is an election year and market conditions may change, this may be a strategy to consider now as opposed to waiting till year end.

Finding Cash in Your Inventory

By Crosslin
by Crosslin

Inventory is another place where cash hides. Since buying inventory is not recognized on the income statement until it is sold, it often increases unless it is properly managed.

There are many reasons why inventory increases excessively such as:

  • No one is managing the level of inventory.
  • Personnel charged with managing inventory lack the skills needed to do so.
  • Sales people generally sell what is easiest to sell. Therefore, older, slower moving inventory may sit a while until someone notices it increasing.
  • Sales people do not want to run out of product, thereby placing pressure on Operations to carry higher than needed levels of inventory.
  • Inventory becomes old or obsolete and just sits there, which can happen quickly if your inventory is technology-based.
  • Excessively high levels of inventory tend to increase the likelihood of theft from your own employees.

Here are a few real examples of the impact of not managing your inventory.

  • Customer #1: We noticed that inventory was increasing and placing a strain on daily cash availability for the company. We met with the CEO and VP of Operations and talked about inventory turnover, but the message was not being heard. ?His position simply was, I do not want to run out of inventory. We had to convince him that by properly managing inventory levels, he would not run out of inventory but would increase the cash levels of the company.
    • Solution: We worked closely with the VP of Operations to establish some formulas and benchmarks to help keep his inventory levels in check. This was a great example of the importance of hiring the right expertise to help you manage your business.
  • Customer #2: We noticed that inventory turnover was only two times per year, meaning that inventory sat in the warehouse for six months before being sold. We met with the VP of Operations and asked, Do you understand what an inventory turnover ratio of two means? He replied, No, what is that? We explained that the higher the levels of inventory in the warehouse, the higher the stress on the cash flow of the company, which was already under extreme pressure. We asked, Would you be willing to work with us to make sure you have what you need when you need it, but not more? We will also ensure that critical pieces of inventory will be purchased in sufficient quantities so that it will not impede manufacturing. He was more than willing to work with us on this project.
    • Solution: We were able to identify critical pieces of inventory to make sure these were purchased in sufficient quantity and with sufficient lead time to have enough on hand. Within a few months, we were able to increase the inventory turnover ratio from six to two.? This meant that, on average, inventory was only in the warehouse two months instead of six. This translated into additional cash of about $2 million to the company. It also saved the customer about $100,000 per year in interest costs at 5%, and reduced G&A costs of handling, storing, and securing higher levels of inventory. This was cash that the client did not have to borrow or seek additional funding from investors.
  • Customer #3: Cash was extremely tight and we noticed that there was about $1 million in additional inventory that was not there previously. After a discussion with the owner, we determined that he had changed his business model. For years, this client received 50% of payment for materials up front from customers, which was used to buy the materials for manufacturing. All products were custom made. In an effort to increase sales, he began to build products and hold them in inventory with the intent of selling them. The economy shifted and the inventory sat on the yard for a long period of time, thus creating a negative drain on cash.
    • Solution: Once identified, we encouraged him to stop this new practice and return to the business model of build to suit which had worked for many years. An increased focus on sales helped liquidate the higher inventory levels so that additional cash was available for operations.

The purpose of Crosslin Entrepreneurial Business Services (EBS) is to free you up to spend time doing what you do best. Outsource your accounting and CFO needs to someone that has been doing this for years. We have the experience and expertise to help you make your business more profitable. Let us do what we do best, so you are free to do what you do best.

Please contact us to help you find cash in your business. As always, thank you for your business.

Real Estate Tax Tips

By Crosslin
by Crosslin

In June’s installment of Tax Tips, Lauren Nolin and Kevin Hickman tackle the question, In Nashville’s hot real estate market, I have sold my old home and purchased a new one. What information should I keep for my 2016 tax filing? Click here for video.

In Nashville’s hot real estate market, I have sold my old home and purchased a new one. What information should I keep from my 2016 tax filing?

Nashville’s real estate market is good and many customers are selling and buying new homes. The first documents you need to keep are your settlement statements.

The settlement statement is an important document because it reconciles your purchase price or your selling price to the actual cash disbursed or received at closing.

There also are some hidden tax items in the settlement statement. These include your pro-rated property taxes as well as any points or origination fees that you paid.

These items may be deductible.

Keep in mind, too, that if in the past you had refinanced the home you sold and paid points on the refinance, you will be able to deduct any points that had not been amortized at the time of the sale this year.

Also, when you sell your home, your old mortgage may have had an escrow account. The balance in your escrow account will be refunded by your old mortgage company after the sale. This refund should not be taxable.

Providing us with the settlement statements will be essential when we begin the preparation process of your return next Spring.

IRS Warns of Student Scam

By Crosslin
by Crosslin

The Internal Revenue Service recently issued a warning to taxpayers about bogus phone calls from IRS impersonators demanding payment for a non-existent tax: the Federal Student Tax.

Even though the tax deadline has come and gone, scammers continue to use varied strategies to trick people, in this case students. In this newest twist, they try to convince people to wire money immediately to the scammer. If the victim does not fall quickly enough for this fake federal student tax, the scammer threatens to report the student to the police.

Scam artists frequently masquerade as being from the IRS, a tax company and sometimes even a state revenue department. Many scammers use threats to intimidate and bully people into paying a tax bill. They may even threaten to arrest, deport or revoke the drivers license of their victim if they do not get the money.

Some examples of other tactics seen this year are:

  • Demanding immediate tax payment for taxes owed on an iTunes gift card
  • Soliciting W-2 information from payroll and human resources professionals
  • Verifying tax return information over the phone
  • Pretending to be from the tax preparation industry

The IRS urges taxpayers to stay vigilant against these calls and to know the telltale signs of a scam demanding payment.

The IRS Will Never:

  • Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.

If you get a phone call from someone claiming to be from the IRS and asking for money and you dont owe taxes, heres what you should do:

  • Do not give out any information. Hang up immediately.
  • Contact TIGTA to report the call. Use their IRS Impersonation Scam Reporting web page or call 800-366-4484.
  • Report it to the Federal Trade Commission by visiting FTC.gov and clicking on File a Consumer Complaint. Please add IRS Telephone Scam in the notes.
  • If you think you might owe taxes, call the IRS directly at 1-800-829-1040.

If you have further questions on any tax-related matters, please contact your Crosslin tax team at (615) 320-5500. As always, thank you for your business!

What should be on my 2016 tax to-do list?

By Crosslin
by Crosslin

Tax Advanced Team Member Christina Manis and Tax Principal Kevin Hickman answer the question, Now that tax season has officially passed, what should be one of the top items on my 2016 tax to-do list?

Check out the video here.

It seems that tax season never really ends especially with the filing of extensions.? The first thing that should be on your 2016 tax to-do list is the evaluation of the need to make quarterly estimated payments.

Quarterly estimated payments are designed to pay an amount of tax during the year that closely resembles your tax liability reflected on your 2015 tax return.

If your income is over certain thresholds and you owed tax with your return, you should consider either increasing withholding from your employer or make quarterly estimated payments.? The first of those payments are due on June 15.

The motivation for making quarterly estimated payments is to mitigate the likelihood of underpayment penalties charged by the IRS.? The general rule to accomplish this is to pay in an amount equal to your prior year tax liability.

If your income is more than $75,000 or $150,000 (depending on your filing status), that threshold could be 110 percent of your 2015 tax liability.

If you need to make quarterly estimated payments, there are some other options available to you.? As we mentioned, you could increase your withholding or compute your actual tax liability each quarter and pay that amount.

Crosslin is happy to help with your tax projections for quarterly payments or with any other tax planning and compliance matters.

Crosslin Names Head of Tax Department

By Crosslin
by Crosslin

kevin-hickman-crosslinKevin Hickman, CPA, CGMA, has been named principal-in-charge of the tax department at Crosslin. Hickman merged his local tax practice with Crosslin last year and has served as a leader for the expanding tax team since his arrival. With more than 35 years of experience, he has been instrumental in helping the tax department grow in both revenue and team members, as well as cultivating customer relationships and mentoring the young professionals in the department.

Before joining Crosslin, Hickman served as founding officer of Hickman & Associates and, before founding his own firm, worked as tax manager for a local accounting firm and assistant controller/tax manager for Tom James Company. In addition to his work in the tax arena, Hickman works with several high net-worth clients leading their family offices and has extensive experience with art galleries and private collectors.

He is a past national council member for the American Institute of Certified Public Accountants (AICPA) and is past chair of the Tennessee Society of Certified Public Accountants (TSCPA). Hickman has held several leadership roles within the TSCPA, including treasurer, professional education chair, public relations committee chair, and president of the Nashville Chapter Board.

Hickman received his bachelors degree from David Lipscomb University and his masters in European History from American Military University. He is an accomplished tennis player, having received numerous local and state recognitions.

Crosslin Adds Marketing Coordinator

By Crosslin
by Crosslin

Bridget ReynoldsCrosslin has named Bridget Reynolds as the firms marketing coordinator. She brings 10 years of experience to the marketing team and will be involved in the branding, business development, social media, and internal and external communication aspects of the firm.

Reynolds most recently served on the marketing team for another regional accounting and consulting firm. She also worked as an administrator for Belmont University. Reynolds received her bachelors degree from Belmont University.

Crosslin Named the 2016 Business with Purpose Awards Winner

By Crosslin
by Crosslin

Crosslin was named the 2016 Business with Purpose Awards winner in the Professional Firm category today at Lipscomb Universitys Dean Institute for Corporate Governance and Integritys Fifth Annual Business with Purpose Awards. We are so excited and honored to be presented this prestigious award.

The Dean Institute at Lipscomb University began the BWP Awards as a means of identifying the best of the best leaders and Nashville companies, both for profit and nonprofit entities. The awards are based on demonstrated individual and company/organization leadership using best practices of good corporate governance and creating cultures of high integrity. The BWP Awards have also recognized individuals and organizations that have shown significant commitments to community service and to corporate social responsibility.

Go Team Crosslin!

Crosslin Technologies Participates in Cyber Summit

By Crosslin
by Crosslin

Crosslin Technologies Principal Shane Clancy was a panelist at this mornings Nashville Business Journal Cyber Summit. Tackling the subject of how to keep your data secure, Shane and the other panelists broke down cyber security into simple terms to make it easier for all business leaders to understand. Crosslin Technologies also served as a sponsor for this important discussion. Great job, Shane!

Crosslin Adds Two Directors

By Crosslin
by Crosslin

Crosslin has added two directors to the firm’s growing roster.  Steven Apa has joined the team as director of forensic, litigation and valuation services and Gary Aldridge will serve as director of entrepreneurial business services.

Apa brings more than 30 years of accounting and consulting experience to the firm, most recently serving as a senior consultant for both Citigroup and MasterCard in New York.  He has worked as an internal audit manager and forensic investigator for the New York Power Authority and earlier with CBIZ, Cohn Reznick, and PwC.  His professional certifications include Certified Public Accountant (CPA), Certified Financial Forensics (CFF), Certified Fraud Examiner (CFE), Certified Fraud Specialist (CFS), Certified Internal Controls Auditor (CICA), and Certified Global Management Accountant (CGMA).

He is a member of the American Institute of Certified Public Accountants (AICPA), the New York State Society of Certified Public Accountants (NYSSCPA), the Association of Certified Fraud Examiners, the Association of Certified Financial Forensics, the Institute of Internal Auditors, and the Association of Certified Fraud Specialists.

Apa received his bachelor’s degree in accounting from Northwestern University.

Aldridge brings nearly 25 years of experience to the entrepreneurial business services division.  He most recently served as consultant and owner of the Aldridge Firm in Ridgeland, Miss.  Aldridge also has worked as chief financial officer for Diamond Wire Technology and Amerigo Restaurant Corporation.  His professional certifications include Certified Public Accountant (CPA), Certified Valuation Analyst (CVA), and Certified Fraud Examiner (CFE).

He is a member of the American Institute of Certified Public Accountants (AICPA) and the Mississippi Society of Certified Public Accountants (MSCPA).  Aldridge received his bachelor’s degree in banking and finance from the University of Mississippi and his master’s degree in business administration from the University of Alabama.

How do I report payments made for a household employee?

By Crosslin
by Crosslin

In this week’s Tax Tips, Tax Principal Kevin Hickman and Tax Team Member Lauren Nolin answer the question, “How do I report payments made for a household employee?”  Click here for video.

With the popularity of Downton Abbey, some taxpayers may be compelled to employ maids, nannies or even butlers.

If you paid $1,900 or more to a household worker in 2015, you are liable under the infamous “nanny tax” rules.

This tax could apply to any household worker such as a gardener, maid, butler, housekeeper, or nanny for small children or aging parents.

If you fall under these rules, you would treat the household employee just as regular employees.  Therefore, you would withhold social security and Medicare tax and potentially federal income tax.

These wages and taxes are reported on Schedule H.  This form is included on your individual income tax return, Form 1040.  If you do not make quarterly estimated payments, these employment taxes will be paid when you file your return.

This can be a bit of surprise to taxpayers. If you know you will be liable for the “nanny tax,” you should consider these taxes when you determine your withholding levels at the beginning of the year or when your quarterly estimated payments are computed.

 

What is the significance of a Schedule K-1?”

By Crosslin
by Crosslin

In this week’s Tax Tips, Tax Team Member Aarika Williams and Tax Principal Kevin Hickman answer the question, “What is the significance of a Schedule K-1?” Click here to watch the video.

What’s the significance of a Schedule K-1?

If you are invested in a partnership or S corporation or a beneficiary of a trust, you should receive a Schedule K-1 that will need to be reported on your individual income tax return.

Schedules K-1 are the reporting forms that provide you with information related to the activity in these types of entities.  S Corporation returns are due March 15 and partnerships and trusts are due on April 18.

These schedules show the activity divided into different categories for tax reporting.  These can include interest income, dividend income, capital gains as well as rental income or losses and the results of the business activity.

The nature of the reporting results is the same on your return as inside the individual entities.  For example, if dividends are reported on the K-1, then they will be reported as dividends on your personal return.

Since the due date on K-1s can be close to the due date of your individual return, they may be received right at the time that your personal return is due.  We normally recommend to customers that they go ahead and provide us with the information needed to prepare their returns and then we can add the late-received K-1s to wrap up the filing.  If K-1s are received after the April 18 due date, there may be the necessity to file an extension to insure that you have reported all of your income for the year.

What kind of documentation do you need to keep for your tax return?

By Crosslin
by Crosslin

In this week’s Tax Tips, Tax Principal Kevin Hickman and Tax Team Member Caroline Gallagher answer the popular question, “What kind of documentation do you need to keep for your tax return?” Great answers to all of your “to keep or not to keep” questions.  Click here to see the video.

What kind of documentation do you need to keep for your tax return? 

Proper documentation is important for the preparation and defense of your tax return.  While you will receive Forms W-2, 1099s, and other items related to your income, expense documentation can present a challenge.

For example, charitable contributions of $250 or more must be supported not only by documentation of the payment but with a confirmation letter from the charity.

In addition, expenses taken as business deductions must be supported by mileage logs or records, receipts, and payment methods.

Receipts for meals and entertainment must include the 5 Ws – who, what, where, when, and why, as well as the amount.

Business expense documentation is required to be kept in a contemporaneous manner, i.e. recorded close to the time the expense was incurred.

How long should you keep records?  Generally, records used in preparing your tax returns should be kept for at least seven years.

Records related to assets owned such as real estate or stocks may need to be retained longer as those records will be important in determining the gain or loss when those assets are sold in the future.

Crosslin Adds Tax Senior Manager

By Crosslin
by Crosslin

Crosslin has added Dan Warren as a senior manager in its tax department.  He will assist in growing the firm’s expanding tax department and work with individual and business tax customers.

Warren brings more than 25 years of accounting experience to the firm, most recently serving in a tax management and compliance position with a regional accounting firm.

He is a member of the American Institute of Certified Public Accountants (AICPA), the Tennessee Society of Certified Public Accountants (TSCPA), and the Nashville Chapter of the TSCPA.

Warren received his bachelor’s degree in accounting from Kennesaw State University.

Crosslin Announces Promotions

By Crosslin
by Crosslin

Colin Neff 300 x 400Kyle Meek 300 x 400Dan Misar 300 x 400Alexis Oliver 300 x 400

Crosslin has promoted several team members in its entrepreneurial business services (EBS) and audit divisions.

Colin Neff has been promoted to entrepreneurial business services manager.  Neff has been instrumental in the growth and development of this recently created division, both building processes and creating a team environment to attain new business.  He has worked tirelessly to manage the departmental workload, keep the team on task, and maintain EBS division goals.

Kyle Meek has been promoted to entrepreneurial business services supervisor.  Meek has worked diligently to fully serve customers while increasing his knowledge of the industry and the profession.  He also has been key in expanding the EBS team, helping to recruit and train new team members.

Dan Misar and Alexis Oliver have been promoted to advanced audit team members.  With these additional leadership responsibilities, Misar and Oliver continue to become better advisors to customers as they further develop their skills.

Tax Day 2016 Moved to April 18

By Crosslin
by Crosslin

It is a procrastinator’s dream come true!  Due to a combination of federal and state holidays, the 2016 tax day has been moved to Monday, April 18.

The change in date is due to the celebration of Emancipation Day, which is the day President Abraham Lincoln signed into law a bill ending slavery in Washington, D.C.  Emancipation Day is typically observed on April 16, which falls on a Saturday this year.  Because it is a federal holiday, it will be celebrated on Friday, April 15.

To add to the confusion, there is a hiccup with a state holiday observed in Maine and Massachusetts. Patriot’s Day is a statewide legal holiday that’s observed on the third Monday of April.  In 2016, Patriots’ Day will coincide with the altered federal tax deadline.  Therefore, taxpayers in Maine and Massachusetts ONLY will have until Tuesday, April 19, 2016 to file their individual income tax returns.

All that said, just because the tax day has given everyone a bit more time, don’t use it as an excuse to delay.  Your Crosslin tax team is ready to get to work for you.  Contact your Crosslin tax team member to go ahead and begin the tax return process.  Turn in documents as quickly as possible and make a list of your questions now.

If you have any questions, please contact us at 615.320.5500.  We appreciate your business!