Ryan Maddock – Page 2

Two of the Biggest Tax Breaks for the Restaurant Industry

Two of the biggest tax provisions that affect the restaurant industry are the 15-Year Restaurant Depreciation and the Worker Opportunity Tax Credit.

Both tax provisions expired at the end of 2011 but look like they are back with the initial passing Family and Business Tax Cut Certainty Act.

The National Restaurant Association mounted a wide scale campaign to inform Congress of the importance to provide tax certainty to restaurateurs.

15-year Depreciation

Simply put this provision allows a taxpayer to allocate the costs of an asset over the period in which they are used. The 15-year Depreciation provision allows leasehold improvements, restaurant improvements and new restaurant construction, and retail improvements to be depreciated over 15 years rather than the standard 39-year recovery period that would normally apply to nonresidential real property.

Due to the nature of the industry restaurant buildings experience daily wear and tear that many industries do not. As a result of this increased wear and tear, most restaurants remodel or update their buildings every six to eight years. Thus, the 15 year provision more accurately fits the recovery timeframe.

Benefits of the 15-year Depreciation provision:

Reduces cost of capital expenditures
Increases cash flow
Allows hiring more employees
Allows capital expenditures to expand business
Reinvestment in construction & renovations positively affects the economy

Worker Opportunity Tax Credit

This tax credit is made available to employers who hire individuals from several targeted groups facing significant barriers to employment.

Examples of WOTC-target groups:

Veterans receiving food stamps or are unemployed suffering a service related disability
Former Felons
Disconnected Youth
Family Members receiving TANF

Currently the restaurant industry employees over 13 million people nationwide. Many of these individuals were hired specifically due to the WOTC act being in place. The WOTC provision allows workers who may not have been able to, move into self-sufficiency by earning a steady income and becoming contributing taxpayers.

Hiring from the group of qualified job seekers via the WOTC provision can mean direct federal tax savings to your business ranging from $1,200 to $9,000 per qualifying employee. Restaurants tend to experience better than average qualification rates in state and federal hiring credit programs. Hundreds of thousands of dollars are provided via this provision annually.

Who Qualifies for Tax Incentives and Stimulus Money?

We hear a lot about stimulus money these days. We hear who is getting it and what kind of positive things it is doing for the nation. Those stimulus dollars, however, should be working to benefit more local, small to mid-sized businesses. If you fall into this category, your money is likely going to someone else’s business; potentially your competition.

Wading through government forms, even on the simplest level, can be aggravating and time consuming. The idea of ‘free money’ from the government can also be a very scary prospect for skeptical investors and business owners. But there are people out there who have spent a great deal of time learning how these programs work to provide businesses with opportunities that can be extremely beneficial.

Ryan Maddock and Jeremy Harrison of Growth Management Group (GMG) lead a small but growing team of dedicated, positive and knowledgeable staff members that help business owners bridge the daunting gap between not having stimulus money and having it. These funds are not the same as grants which typically need to be used for ultra-specific purposes. Stimulus money can, in many cases, be used as discretionary funds. This frees up the business owner to use the funds as his or her vision sees fit whether it is for new software, equipment, tax offsets, etc. Manufacturing firms in the area, businesses in other states, hotels, restaurants such as Leo’s Coney Island and even Lawrence Moon Funeral Home have capitalized on stimulus money through GMG’s services.

There are currently four programs in full swing for a variety of businesses; manufacturing across the U.S. and in some cases Canada, commercial property owners who have purchased their property within the last twenty years, the HIRE act which pays employers that hire 25 new employees a year (that includes turnaround) and energy credits/energy incentives which is a program that will probably evolve further. Currently the Obama administration has set aside 60 billion dollars for renewable energy. While these programs do have other stipulations and guidelines, GMG has been successfully wading through paperwork for clients in 38 states. Ryan pointed out that stimulus funds have been around since the 1980’s. These programs usually morph into new programs over time and they’re not going anywhere.

If you’re wondering why you’ve not heard much about the eligibility for these funds that is simple to explain; the federal government isn’t always that great at advertising and marketing. As a result, ninety-two percent of companies that qualified for these funds last year didn’t access them and the eight percent that did, were larger companies who tend to have an easier time accessing these sorts of programs

Staying on top of the changes in federal programs is crucial to the success of the service offered by GMG. Fees are based on a percentage of funds obtained, not a flat or hourly rate which business owners have to come out of pocket for. And in many instances, the funds can be applied retroactively from as far back as 2006.

Worried about how your CPA feels about these “too good to be true” stimulus dollars? GMG works with local CPA firms so they understand the hesitancy that comes along with these types of government programs and are able to alleviate those fears. Do you feel a sense of malaise when it comes to paying taxes? There’s good news for you too. Since stimulus funds are made up of tax dollars, this might be your chance to cash in on all the money you’ve doled out over the years to upgrade your business.

See Full Article as Featured in Downtown Revival Magazine. Click Here

2012 Tax Incentives for Manufacturers

The U.S.’s tax system is uncompetitive and makes it difficult for manufacturers to stay competitive. Currently the United States has the number 1 Corporate Tax Rate. However, tax incentives and credits have been put in place that allow manufacturers to reinvest, create and retain jobs to become more competitive.

The National Association of Manufacturers advocates strongly on behalf of the manufacturing industry nationwide to renew and extend tax credits that directly affect your industry. According to their recent Statement to the Subcommittee on Select Revenue Measures dated June 8, 2012, “Renewing the tax extenders will provide a bridge of certainty and predictability for manufacturers.”

On Friday, August 3, 2012 the Senate Finance Committee approved the Family and Business Tax Cut Certainty Act. This act extends more than 40 programs including the R&D tax credit and the WOTC tax credit through 2013.

The U.S. offers some of the world’s richest tax incentives, but chances are your organization is not taking advantage of them and getting the cash you deserve. Working with an established cost recovery firm with it’s staff of engineers and attorneys specializing in tax and IP will maximize the credits you qualify for and, most importantly, provide a defense for those credits.

The Medical Industry and Tax Credits

What if you were told that you as a Health Care Provider could receive funds for medical equipment, devices, computers, furniture, and other office or medical equipment? You would ask, “How?’. It is a simple process of taking advantage of tax incentives and credits made available specifically to your industry.

The most immediate reply to this statement is, “If it is that simple, why have I not heard about this before?”. Simply put, tax incentives and credits are confusing and most CPA’s are unable to fully capture the available incentives and credits for their clients.

Successful health care providers, from individual practices to large entities, are constantly faced with the decision of when and how to invest in their own businesses. The most important factor being, the total cost of the investment, including the potential tax benefits.

Tax Incentives / Credits Every Medical Facility Owner Should Consider

Cost Segregation
Section 179 D
Property Tax
Historical Tax Credits
Section 45L Tax Credit
R&D Tax Credits
Hiring Tax Credits

This is just a short list of possible tax incentives and credits available to Health Care Providers. The easiest way to determine if your organization would qualify for tax incentives or credits is to ask an expert.

CPA Alliance

GMG offers our CPA Partners a seamless & turnkey solution to offer specialized tax services to their clients across the country. The benefit to our CPA Partners is an increase in billable revenue and added value in the marketplace.

Benefits of joining forces with GMG Solutions Group, LLC

Generating new revenue streams
Attracting new clients to the firm and helping develop desirable niche markets
Solidifying current client relationships and loyalty
Increasing billable hours
Increasing your competitive advantage in the marketplace
Private Label Opportunities

We specialize in providing a suite of engineered accounting solutions to CPA firms and their clients. Our engineers are fully compliant and well versed in IRS Circular 230 – FIN Standards.

GMG Tax Incentive Services

Commercial Building Tax Incentives

Cost Segregation
Section 179 D
Property Tax
Historical Tax Credits
Section 45L Tax Credit

Specialized Tax Incentives

R&D Tax Credits
Hiring Tax Credits
International Sales
Sales & Use Tax

We offer a turnkey partnering program with CPA Firms nationwide to help their clients maximize cash flow and bridge the gap between accounting and engineering.

“R&D, I don’t think we do that!”

If, when you hear R&D, you think of people in lab coats tinkering with chemicals, ultra high tech industries and Fortune 500 companies, you are not alone. However, things have changed!

In 2001 the IRS changed the definition of R&D and the changes were so broad that it virtually encompasses all manufacturing or technology organization in some way.

Why is this? It’s because, by and large what do manufacturing companies do? They design new products, improve existing products, come up with new processes, or make improvements to existing processes used to make products. Most of these organizations don’t have an R&D department and probably don’t consider that what they are doing is “R&D”. They are making these improvements and changes because they MUST stay competitive and yet, as the government sees it, “R&D” is exactly what they are doing.

Here are some of the everyday activities that would qualify for the credit:

Designing the process to fabricate the metal to reduce shrinkage and increase its quality
Programming CNC machines
3D CAD Engineering with programs like SolidWorks
Developing and testing of prototypes
Quality assurance – First-piece quality inspections
Designing and developing of specialty tooling and fixtures
Considering alternative metals to develop the product
Considering different metal thicknesses
Developing engineering drawings
Developing weld procedures
Bending of metal (e.g. sheet metal) has to consider the stressing and stretching
Considering strength of final product for application (meets specifications)

So, the next obvious question is…”How do We get some money?” The IRS allows companies to go back three open tax years to take advantage of the credits they may have missed. (Nice of them isn’t it?) Just 120 days after submitting the amended returns, you can get cash in your pocket. Additionally, you can take credits for current and future years if you continue to perform activities that qualify for this credit.

To find out if your organization would qualify ask yourself a few questions:

Are you expecting to be profitable this year, or were you profitable in any of the last 4 years?
Is your average annual payroll for these years in excess of $1 million?
Is your company structure a C Corp, or an S Corp/Partnership?

If you answered yes to all of these items then you definitely need to have an R&D Tax Consulting firm take a look at your organization. You could potentially have a five-figure credit, even higher credits are available for organizations with higher payrolls.