GMG News – Page 2 – GMG Savings

Building, Purchasing or Renovating a Hotel or Motel? Read This First!

If you haven’t heard, property Cost Allocation (aka Cost Segregation) is back with a vengeance!

A cost segregation study is an essential fiduciary component when building, purchasing or renovating a hotel or motel. Hotel owners and operators who do not work with a qualified expert to perform a cost segregation analysis will fail to take advantage of significant tax benefits!

What Benefits?

Cost Segregation is an engineering based tax analysis in which certain non-structural components of a building are broken out and allocated to a shorter life class thus depreciating them at an accelerated rate. This process reduces a taxpayer’s federal and state taxable income.

Examples of personal property for hotels would include: carpeting, most other flooring, decorative lighting, cabinetry, dedicated electrical and plumbing systems, power generators, security systems, wifi/internet cabling, parking lots, curbs, sidewalks, landscaping, fountains and more.

All hotels and motels have substantial areas requiring daily maintenance and frequent updating due to use. For example entries, lobbies and hallways are notorious for having carpeting and flooring commonly replaced every 3 to 4 years. Most depreciation schedules will reflect all assets being depreciated over 39 years because this is the simplest way, however not the method that provides the most befit to the owner or operator nor is it tax compliant.

Cost Segregation fixes this problem because it applies MACRS to those short life assets thus accelerating the depreciation and reducing the owner or operators income tax burden. What is the benefit?

New purchase or construction will result in increased cash flow in the first 6 years
Owned for 5 or more years qualifies for all unrealized depreciation carried forward into the current tax year
Purchased or constructed from January 1, 1987 – all improvements and renovations will qualify based on individual completion dates

In most cases the ROI for hotel and motel owners engaging in cost segregation is very high. Typically they can see a 200% return on investment. The standard fee that a hotel or motel owner can expect to see when engaging a cost segregation firm should be between ten and twenty thousand dollars per building. The fee is dependent on several factors: size of property, quality of construction, location, availability of construction documents, closing statements and more.

In summary, a Cost Segregation Study performed on a hotel or motel can provide significant immediate and long-term tax savings. Even properties purchased years ago can capture benefit. Any hotel or motel whether purchased, constructed or renovated costing in excess of $500,000 should consider this service.

Specialized Tax Incentives for the Medical & Health Care Industry

If you have yet to hear; Local, State, and Federal Governments have been feverishly enacting numerous incentives to help stimulate business economies. Due to the high tax brackets of most medical practitioners, these incentives are now an essential part of the tax planning process. If you haven’t had a thorough review of your qualifications for incentives, keep reading.

How Much Money is Available?
The average available benefit for a small practice with their own building is $160,000.

Who Qualifies?
The following is a list of common qualified practitioners:

Physicians
Dentists & Orthodontists
Dermatology & Skin Care
Vision & Eye Care
General Practicioners
Surgeons
Therapists
Medical Imaging

How Do I Qualify?
You may qualify if you meet any of the following:

Own Commercial Property
Directly Employ U.S. Staff
Pay Real or Personal Property Tax
Pay State or Federal Income Tax
Perform Energy Efficiency Upgrades
Upgraded Equipment Purchases

How Do I Learn More?
If you would like a thorough analysis of incentive dollars available for you, please contact us today.

Specialized Tax Incentives for Restaurants

You are a small business owner who owns and operates a restaurant. Your time is consumed with ensuring tables are turned and your business is moving forward. You do not have time to research specialized tax incentives let alone determine if you qualify. You are not uncommon.

Below is a brief summary of tax incentives you may be missing out on:

Commercial Building Tax Deduction
Tax deduction for expenses incurred for energy efficient building expenditures

Engineering-based Property Cost Allocation
Recover costs through deprecation of tangible property used in the operation of a restaurant business.Qualified Items Include: Beverage Equipment, Storage Area, Furnishings, Bar Area, Flooring, Lighting, Wiring, Sound System, and Kitchen Area

Employee Tax Credits
Local, State, and Federal Incentives to hire and retain employees. Available credits up to $9,000 per qualified new hire.Credits are available for employees in the following categories: Those living in Empowerment Zones, Young Adults, Wounded or Disabled Veterans, Food Stamp Recipients, and those receiving Supplemental Security Income

Commercial Property Tax Reduction
Reduction available on both Personal and Real Property Taxes paid.

Section 179
Can take an increase in deduction up to $35,000 of the cost of eligible equipment purchases

The above is merely a brief list of some of incentives you could benefit from if you are a restaurant owner. The easiest way to determine your qualification is to ask an expert.

Medical Offices Qualify for over $200K in Tax Incentives On Average

Medical offices of all types are excellent candidates for a Cost Segregation study. This is due to the fact that most medical facilities contain extensive amounts of cabinetry and counter-tops throughout their buildings. In addition, most medical facilities have a high number of dedicated electrical and plumbing work supplying both the medical and office equipment. This could include but would not be limited to: water lines, gas lines and compressed air lines. They also normally include extensive data communications systems, intercom systems and sound or video system which ALL qualify for accelerated depreciation. This list does not even touch on outdoor excavation work that would qualify.

The very best method for identifying qualified property is the use of a cost segregation study provided via an engineer working in conjunction with your CPA to identify and classify all qualified property.

GMG has worked with many medical facilities to uncover tax incentives and credits that allowed their offices to expand, hire additional staff and reinvest in their practices. Your facility should be taking advantage of the potential money that is available for them today.

Local Flint Businesses Teaming Up To Stimulate Flint Economy

Flint based organization, Growth Management Group, LLC (GMG) is proud to announce they are teaming with Insight Institute of Neurosurgery and Neuroscience (IINN) to perform a stimulus review allowing both organizations to continue moving towards their combined goal of transforming Flint’s economic state.

GMG’s Total Savings Review will focus on stimulus incentives in the areas of Research & Development, Commercial Property and Hiring. Although it is too early to determine final benefits, GMG anticipates procuring IINN a NET tax benefit of over $1,500,000 over the next five years.

GMG National Director of Sales, Jeremy Harrison states, “We are extremely excited to partner with Amer and the entire IINN team. Procuring these incentive and savings opportunities, especially for local firms is why we are in business. We look forward to a long term relationship that will not only provide a great business partnership but will help facilitate the economic recovery of Genesee County.”

GMG is a Flint-based full service training, development and cost savings consulting firm. Their vision is to stimulate local economies by providing an extensive array of products, services and strategies that help people and businesses fulfill their potential. GMG recently announced their move to a new national headquarters, taking over the recently vacated Diplomat Pharmacy headquarters at Elms and Corunna Roads in Flint Township. With this move the company plans to add up to 100 new employment positions for Genesee County residents.

IINN plans to invest $18 million over the next 10 years in expansion and create an up to 120 additional jobs over the next 5 years. IINN has teamed with Diplomat Specialty Pharmacy to expand the Great Lakes Tech Center – former home to GM Headquarters and create more than 1,000 jobs over the next five years.

GMG and IINN look forward to helping restore the local economic climate and encourage local businesses to pursue all available opportunities to recover incentive dollars.

More information regarding GMG can be found online at www.gmgsavings.com or by calling 888-705-5557. To learn more about IINN, please visit www.iinn.com.

Michigan Company Helps Find Millions in Tax Breaks for Small and Mid Sized Companies

Jeremy Harrison of Growth Management Group interviewed by Michigan Business Magazine about helping small and mid sized businesses find tax breaks and stimulus money.

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For many businesspeople, the word “stimulus” might as well be a four-letter word. For Flint-based Growth Management Group, tax incentives are no dirty word, but rather spell opportunities for businesses to find federal and state incentives to help their bottom lines.

The company seeks out the tax incentives, energy savings and hiring incentives that businesses and many certified public accountants miss during their tax preparation. The company began in the mid 2000s as a lean consulting firm, helping manufacturers remain competitive. By chasing incentives that manufacturers left on the table, GMG stumbled upon a business opportunity as manufacturers in the state were battered by the economic downturn. Sales Manager Jeremy Harrison took time to speak with MiBiz about the 25-person firm and its role turning over the rocks in companies’ books looking for the untapped tax incentives there.

MiBiz: How much is out there for companies in terms of untapped incentives?

Harrison: We target the small to medium size business. The state and federal programs are called stimulus incentives when really they are tax based. If someone is getting ready to write a check (for taxes), they should be looking at every single program to help offset them. The areas of the programs are anywhere from commercial property owners to manufacturing research and development and payroll, such as the HIRE act. That is just part of the hiring incentives out there. There are hundreds of incentives that vary by state and by some municipalities. For our average client, we can save around $200,000. For some people, it is significant. For others it is a drop in the bucket. We don’t go after the GMs or Fords of the world — they’ve got their own teams of lawyers and accountants looking for these incentives. For a client who may have paid a couple thousand in taxes over the last couple of years, they’re excited about getting that back.

MiBiz: What’s preventing companies from tapping these programs themselves?

Harrison: The number one roadblock is that your CPA is not your consultant in these areas. If you have a large firm, they may have an entire division devoted to finding tax incentives. We have 200 attorneys (in our network) and can tap them when needed.

A normal CPA is already buried up to their eyeballs with paperwork for their clients. People assume that their CPAs have a grasp of all the incentives that are out there, (but) almost every CPA says they know the programs are out there. They have been to a seminar and know about them, but are they taking it to the next level and able to file all the necessary paperwork? Standard CPAs don’t have time to dig into those areas without some help. We help the CPAs consult with their clients.

We don’t want Michigan businesses to lose money because of the disconnect that is out there.

MiBiz: The stimulus was a major campaign issue, with many business interests coming out in opposition to the ARRA. Are you encountering reluctance to take part?

Harrison: We hear that “we don’t want any of that Obama money.” There has been stimulus money out there as long as there has been a United States. Nobody paid attention until there was the economic downturn. Until the government came in with TARP and ARRA, no one paid much attention.

Many of these incentives came in the tax reforms of 1986. A lot happened in both Bush Administrations. Manufacturing incentives have been around almost as long as there have been manufacturers. The government makes (these incentives) extremely difficult to get. We have the expertise. That is not money that is out in the middle of nowhere. We are lowering the amount of money you are paying in.

We do have a challenge that customers have to know that there are incentives for them. Mileage is a deduction on a tax return. Now imagine if (the government) said that you have to have a 500-page technical report for that deduction — that is what we’re talking about.

MiBiz: Where do you see opportunities going forward?

Harrison: The manufacturing credits sunset at the end of the year. It is annually updated and used as a political bargaining chip. They never sunset, but it has always been threatened. President Obama himself said that he wants to make these credits permanent. He said that, but it hasn’t happened.

I see the hiring incentives as becoming increasingly important. With the economy and unemployment rate where it is, the government really wants to be seen helping improve the employment picture.

On the energy side, everyone under the sun knows energy is a hot button issue. Government is pushing a number of mandates about renewable energy, federal and state incentives are being talked about at various levels. We truly feel that energy will be at the top of the chart of things that we are going after for clients.

Featured in MiBiz Magazine
By Nathan Peck | MiBiz

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