Who’s Wearing the “Accounting” Hat in Your Company and Does it Fit?

Can you identify with any of these common scenarios?

  • You are a partner in the company, but also handling the accounting functions. 
  • You are a small business owner, and the front desk or office admin is wearing the accounting hat.
  • Your monthly financials are not completed for months and maybe not till year-end.
  • You lack a big picture, strategic overview of your finances.
  • You’re in the dark about overall profitability, utilization, project performance, and cash flow.
  • You’re relying solely on your tax preparer to provide financial guidance.

If you find yourself identifying with more than one of these situations, it’s more common than you may think, and costlier as well. Having the right resources can turn all these challenges around and provide adequate and timely financial reporting which will allow you to focus on growing your business and increasing profit margins. Fortunately, today there are options in the marketplace that provide the right resources without having to invest in additional full-time team members.

More than ever before, companies of all sizes are embracing the idea of letting go of specific traditional in-house responsibilities. With the lightning-fast pace of technological advancements, more companies are turning to remote resources for technical services, drones for surveying and mapping, and digital plan development, to name a few, so why not professional services as well?

The reason we are even talking about outsourcing is that while almost every company knows the value of healthy financials, many times this area is the last one to get the love and care it needs. Has your company outgrown your accounting department, or is the same person handling things the same way they did five or even ten years ago? As the title implies, the hat just might not fit the person anymore. It’s critical that the right people are in the right role, but sometimes hiring additional employees doesn’t make sense financially.

This is the perfect indication that outsourced accounting services may be worth considering. Outsourcing might not solve all your issues, but it can do some heavy lifting benefit-wise for your company including:

  • Industry and software expertise that provides insight to accelerate growth and profits.
  • Accurate financial reporting provided by certified and experienced accounting experts.
  • Timely, accurate reporting that allows you to make better, more informed decisions.
  • Specialized skills in accounting and technology mean you don’t waste resources on training.
  • Pay only for the work you need – and don’t worry about sick days or time off.
  • Scalable options – utilize for a specific length of time that you determine.
  • Avoid paying for professional assistance to fix mistakes.
  • Extra time for you to focus on growing your business.

Let Crosslin’s Accounting and Business Solutions (ABS) team help you with your outsourcing needs.  Our team works daily with companies that are experiencing the same issues and the same needs.  The payoff to your business and your team will be exponential. Providing the opportunity for your team to focus on managing customers, building your business, and running the office efficiently will have a positive impact on the culture and improve employee retention.  Contact Crosslin today! 


Understanding and adhering to the multitude of personal property tax compliance obligations throughout the thousands of jurisdictions that assess personal property taxes can be administratively burdensome. A company’s personal property tax liabilities can be impacted if a company is not equipped to navigate the differing rules and opportunities in the jurisdictions in which its personal property is located. The following summarizes the most often overlooked items that result in overpayments of personal property taxes by any organization.

  Classification of Property
Double taxation of real and personal property can occur if a company incorrectly reports real estate as personal property. By understanding what qualifies as real estate in a jurisdiction and ensuring that real estate assets are not reported on a personal property tax return, taxpayers can avoid overpaying taxes on the same asset. Real estate tax and personal property tax administrators often work in separate divisions that do not share information, making it harder to spot errors. The cost of assets, especially specialized assets, may be included in both building cost and business personal property cost. Taxpayers may unknowingly be paying tax twice on the same asset.
  Proper Asset Useful Lives
Reporting personal property assets to a jurisdiction begins with applying the original acquisition year and acquisition cost to the correct jurisdiction’s depreciation table. Unlike federal depreciation tables, each local jurisdiction can have its own schedule that can change from year to year. Applying assets to an incorrect depreciation table can result in overpayment of personal property tax. A single county can also have multiple tables that segregate classes of assets. Understanding an asset’s use, physical life, and embedded components and then applying that information to the most accurate jurisdictional tables can translate to property tax savings.
  Situs of Property
The “lien date” is an annual date for determining the taxability of personal property in a jurisdiction. The most common annual lien date is January 1. Property is reportable by the owner of the property to the jurisdiction where the property is located on the lien date. Oftentimes, taxpayers mistakenly report property that is not located in the jurisdiction or report to an incorrect jurisdiction. Fixed asset listings do not necessarily provide the detail needed to understand the accurate situs, or legal location, of a property. Inquiries should be made to determine whether capitalized assets were delivered to the location as of the lien date and the physical location of bulk capitalized assets designated to a regional or central location.
  Reporting of “Ghost” Assets
“Ghost” assets are capitalized fixed assets that no longer physically exist, but have not been removed from the fixed asset ledger. Typically, ghost assets have been fully depreciated for GAAP and tax purposes, and, therefore, may not be removed from the fixed asset ledger in a timely manner. Since the fixed asset ledger is the audit trail for personal property reporting purposes, nonexistent or ghost assets often are reported and taxed. A disposal policy or methodology should be instituted to avoid property tax overpayment.
A number of states tax inventory as part of tangible property tax. Among the inventory taxing states, reporting standards vary, including types of inventory and values reported, periods of reporting used, and available exemptions for inventory turnover. Understanding the most advantageous filing methodologies can result in significant savings.
  Execution of Filing Requirements
Personal property tax laws can be unique to each jurisdiction. Understanding and complying with the requirements is essential to avoid overpayments, penalties, and interest. Items that are often overlooked include applicable deadlines and understanding whether the deadline is a received by or postmark date; reporting on the correct form; return signing and notarization; inclusion of all required attachments; jurisdiction mailing address; and additional requirements for exemptions and abatements.
  Capitalized versus Expensed
New tangible property regulations have prompted changes in capitalization thresholds. Generally, all assessable property located in a jurisdiction as of the lien date is reportable, regardless of whether it was expensed or capitalized. Taxpayers often rely on the fixed asset register for reportable assets and may miss assets that were expensed. Certain jurisdictions also tax supplies, which taxpayers frequently overlook. Under audit, taxpayers can incur penalties and interest related to the omitted property.
  Exemptions and Abatements
Personal property tax exemptions and abatements reduce or subsidize the tax on personal property. The availability and requirements vary by jurisdiction. For example, some states exempt entire classes of property such as intangibles, inventory, and software.Other states offer exemptions for pollution control equipment or Freeport inventory. Abatements may be available for capital investments for a length of time or pursuant to alternative agreements that reduce taxes, such as PILOTs (payment in lieu of taxes). Securing the exemption or abatement often requires adherence to a one-time process or may include an annual compliance component. Failing to comply with requirements may trigger a loss of the reduction or a claw-back that may incur a penalty.

Any business that owns property has a property tax obligation. Failure to understand property tax laws could result in overpayment of personal property tax, and failure to comply with property tax laws could result in seizure of property and/or penalties. Business owners should be aware of their property tax obligations, and they should consider a strategic approach to minimize the tax burden. Contact the Crosslin tax team at 615.320.5500 with any questions regarding your property tax obligation. As always, thank you for your business.


Diversification is an important principle of risk management when it comes to saving for retirement. While many investors understand the benefits of spreading their risk exposure across asset classes in their portfolios, many don’t realize that diversifying their tax exposure can have benefits in terms of managing cash flow in retirement.

Despite the potential benefits of diversifying tax exposure, few participants do so, even though these options are offered by many plans. Today, 70 percent of employers offer a Roth 401(k) option, according to the Plan Sponsor Council of America’s (PSCA) 61st Annual Survey Reflecting 2017 Plan Experience, but only 20 percent of employees take advantage of the strategy.

Employers who are concerned about employees’ financial well-being should take the opportunity to educate employees about the potential benefits of saving retirement dollars in plans that are taxed differently. Employers who offer traditional and Roth 401(k) options should make user-friendly information available so participants can make decisions appropriate for their risk tolerance, timeframe and retirement goals.

Pay Taxes Now or Later?

First, it’s important to know the basics between a traditional vs. Roth 401(k) employer-sponsored retirement plan, as well as their retail cousins, the traditional and Roth Individual Retirement Account (IRA). In a traditional 401(k) plan, participants make tax-free contributions from their paychecks. The money grows tax-deferred, but the full amount gets taxed at the participant’s income tax rate when it is withdrawn. There are penalties when money is taken out before reaching age 59 ½. Contributions to a traditional IRA may be fully or partially deductible, and the tax consequences of withdrawals are the same as with a traditional 401(k).

With a Roth 401(k), the taxation is basically reversed, and contributions are taxed at the participant’s income tax rate at the time of the contribution. But, once the participant has reached age 59 ½, withdrawals from a Roth account are tax-free, including the growth of the funds. Roth IRAs have income eligibility limits, but work similarly to the Roth 401(k) in terms of the timing of when taxes are paid. Also, it’s important to note that participants need to hold onto their Roth account for a minimum of five years before withdrawing funds to receive the full benefits.

Roth users are typically betting that they will be at a higher tax rate when they withdraw funds in retirement than when they are contributing during their working years. This theory is particularly appealing for younger workers who have yet to reach their peak income years and will have many years of growth before they begin withdrawing funds.

Showing the Impact of Taxation

There is much debate among investors about which vehicle provides higher income at retirement after tax considerations – traditional pre-tax or Roth retirement accounts. What many people don’t realize is that the decision does not have to be made exclusively for one account or the other.

While participants can contribute a maximum of $19,000 into all types of 401(k) accounts in 2019, there is no playbook outlining how those deferrals may be split between traditional and Roth accounts.

Participants may think paying taxes up front on Roth contributions might be too steep, but they may reconsider this upfront cost when learning what may happen in retirement if they are solely invested in a traditional account.

For example, a retiree may need to pay for a major expense in retirement, like a new car, a new home (that is not a first home purchase) or a significant medical expense. Taking a large withdrawal from a traditional 401(k) plan to pay for these expenses may bump the retiree into a higher tax bracket. Withdrawing funds from a Roth account, however, won’t have that effect.

The Tax Cuts and Jobs Act of 2017 (TCJA) made significant changes to the tax code, including lowering many people’s rates—and with them the rates that participants pay on Roth contributions. The fact that these tax cuts are scheduled to “sunset” and return to pre-2018 levels in 2026 highlights the unpredictable nature of taxes. Employers can explain that contributing to a Roth is one way to mitigate the unpredictability of tax rates. For funds that have been contributed to a Roth, participants don’t need to worry about what Congress may do about tax rates in the future. 

Other Roth Opportunities and Restrictions

Some employers allow traditional plan participants to convert all or a portion of their assets into a Roth 401(k), but assets in a Roth cannot be converted to a traditional 401(k). Rules allow high-income earners to convert their traditional IRA to a Roth IRA, so long as they are able to pay the appropriate taxes at the time of the conversion. Previously, only people earning less than $100,000 could do this. A new drawback to a Roth conversion is that it cannot be reversed.  The TCJA removed the ability to undo the conversion to Roth by a later characterization back to a traditional IRA.  So if the asset value declines before the income taxes are paid, you will still owe the taxes on the value at the conversion date.

In addition, traditional 401(k)s and IRAs require participants to take a Required Minimum Distribution (RMD) each year, starting at age 70 ½. While RMD rules don’t apply to Roth IRAs, these rules do apply to a Roth 401(k). This distribution requirement can be avoided by rolling the Roth 401(k) assets into a Roth IRA upon retiring or leaving the company.

Roth IRA accounts can be passed along to spouses tax-free when the retiree dies, and non-spouse heirs may be able to spread RMD’s over their own life expectancies, effectively extending the tax deferral period even longer.

Roth accounts are more flexible than traditional accounts. For example, after the Roth account has been open for five years, a retiree can take out the principal any time they want tax-free. And the IRS allows exceptions to the 10% early withdrawal penalty before age 59-1/2 for the first-time purchase of a home or for college expenses. Aside from the many advantages of Roth accounts, an individual should contribute enough to their employer’s plan to get the match, before they contribute to a Roth IRA. Getting the full employer match is almost always more valuable than tax differences between traditional and Roth accounts.

Lastly, it’s important for participants to realize that company matching 401(k) contributions must go into a traditional account even if the participant uses a Roth 401(k) for his or her own contributions.

Time to Boost Roth Education

Understanding the tax rules about the various types of retirement accounts can be tricky, even for the savviest of investors. The lack of understanding surrounding Roth accounts may explain why they aren’t very popular with plan participants. Even when they are used, PSCA found that contribution rates are lower in Roth than in traditional accounts.

Plan sponsors can play an important role in outlining the differences so participants can think strategically about taxes and retirement. In addition, plan sponsors have a unique opportunity to help participants understand that diversifying their retirement dollars across traditional and Roth accounts can be an effective way to mitigate some of the risk related to taxes in retirement.

Explaining the nuances of the various savings strategies can be difficult as well. The Crosslin team can walk you through simple steps to help educate plan participants on their tax diversification options. Contact us today at (615) 320-5500. As always, thank you for your business.


Part of offering a defined contribution plan, whether a 401(k) or a 403(b) plan, is making sure that the money participants contribute from their paycheck is deposited in their retirement account in a timely manner. While this might seem like a relatively minor and simple task in the scope of a plan sponsor’s fiduciary duties, the Department of Labor (DOL) views non-compliance with remittance rules as a major issue, and missing deadlines for deposits—even by a couple of days—can carry significant penalties.

Unfortunately, there is much confusion about how quickly plan sponsors are required to make these deposits. The DOL expects plan sponsors to separate employee elective deferrals and loan repayments from the employer’s general assets as soon as reasonably possible, but no later than the 15th business day of the following month. Small plans, which have fewer than 100 participants, have a safe harbor of seven business days to make this transaction happen, but larger plans are expected to do this as soon as reasonably possible.

Many plan sponsors mistakenly—and understandably—think this means that they have until the 15th of the next month, which is just what the DOL says. They see this as a safe harbor—which it is not. The DOL requires participant contributions and loan repayments to be transferred as soon as reasonably possible. The 15th deadline is the last possible day that can be considered timely.

Defining What Is “Reasonable”

So what is reasonable? It varies depending on the company’s circumstances. For companies with more streamlined operations, it may be within a few business days of completing payroll withholding taxes. But some companies with multiple locations, it may be up to eight days to be reasonable. Others differentiate between regular and business days. Many companies outline the remittance schedule in the plan document. Whether the plan has a remittance policy or not, the DOL will look at the deposit history and assume that the pattern established by the plan sponsor is the default procedure.

The DOL considers late participant contributions and loan repayments to be prohibited transactions under the 1974 Employee Retirement Income Security Act (ERISA); they are subject to an excise tax based on the amount of the late remittance as well as other possible penalties. After a late remittance is determined, plan sponsors need to report the transaction on their Form 5500.

Often, plan sponsors are unaware of remittance violations. Holidays, key employee absences or other factors could play into the delayed remittance that may go unnoticed by the plan sponsor. It’s not uncommon for BDO experts to find late transfers when conducting the regularly scheduled audit that is required for larger plans.

Avoiding Missed Remittance Deadlines

Given the lack of clarity about remittance rules, what can plan sponsors do to strengthen their practices related to depositing employee contributions? First, it’s important to think about what works for your company. If the company has multiple locations, do you need more time to organize the remittance? And how often are you able to review your transactions to make sure you’re meeting deadlines?

Many organizations find that it’s helpful to review the remittance schedule on a quarterly basis and to tie the 401(k) remittance schedule to the payroll tax withholding timetable. Reviewing the remittance schedule on a quarterly basis will speed up the correction process, making it easier and less expensive to address any mistakes. Delayed deposits mean missed opportunities for employees to earn interest and capital gains from the funds, so the longer the money is missing, the more expensive it will be to make up lost earnings.

Another added protection is to develop a backup strategy. People get sick and go on vacation, so it’s a good idea to have multiple employees trained in completing the remittance procedures. Reviewing possible holidays each quarter also may help in planning around those days when the company, financial institutions or other partners are closed. 

Lastly, if there is a late remittance, it’s critical to document why the transaction was delayed.  This helps your auditor and the DOL understand the situation and your actions to apply a remedy.

Make Remittance Compliance a Top Priority

Protecting participants’ retirement accounts is a top priority for the DOL and making sure plan sponsors stick to a regular remittance schedule is something the DOL monitors very closely. Many plan sponsors are under the false assumption that they have a good bit of time each month to complete the task. The DOL wants it done as soon as reasonably possible—and on a regular basis. Your plan document may help in guiding this schedule, but the DOL looks at the remittance history and considers that as policy.

Following a regular remittance schedule – whether formal or informal – may seem like an easy task, but holidays, employee absences and other unexpected issues may hamper your ability to follow your procedures. Our next post will explain what steps can be taken in the event of a late remittance. In the meantime, if you have questions about depositing employee elective deferrals, please contact the Crosslin team at (615) 320-5500. As always, we appreciate your business.