Friday, December 2, 2016

OASDI Wage Base for 2017

As the end of the year approaches, it’s time to turn our attention to planning for 2017.  This includes ensuring that proper payroll tax rates and wage bases are updated in payroll systems as of January 1.  For 2017, the Old Age, Survivors and Disability Insurance (OASDI) taxable wage base increases to $127,200, an increase from the base of $118,500 in 2016.  The OASDI tax rate for both employees and the employer match remains at 6.2%. 
The Medicare portion of the FICA tax continues to have no limit or cap on its taxable wage base.  The base Medicare rate for both employees and the employer match remains at 1.45% of wages.  Employees earning more than $200,000, however, must pay an additional 0.9%.  This additional tax is withheld and remitted by their employer, but not matched by the employer.  

For guidance with your payroll tax planning, contact our office.  Call us at (219) 769-3616 with your questions, or email them to

Wednesday, November 23, 2016

Questions to Ask Before Signing a Business Loan

Are you thinking of taking out a loan to buy new machinery or additional inventory for your business? Before you sign that loan document or credit application, consider the following questions.

What's the true cost of borrowing? The interest rate on your business loan may be variable, fluctuating over the life of your loan. Calculate the impact of potentially higher future payments on your ability to pay other debt, such as amounts you owe your vendors. Include fees in your assessment. Your lender may ask for loan origination fees, application fees, administrative fees, and fees for gathering financial information about your company. Consider intangible costs too, including how long you have to wait before the loan is finalized and what opportunities you're missing while waiting.

How will the loan be secured? Your lender will most likely require you to provide collateral, meaning you'll be asked to pledge assets as security to ensure loan repayment. If you're unable to pay the loan back, you run the risk of losing those assets. In some cases, you can use your business inventory or accounts receivable as collateral. Keep in mind those assets will be unavailable for other business borrowing. Alternatively, depending on the size of your business, you may have to use personal assets, such as your house or cash savings, as security. Make sure you have assessed the risk of loss before finalizing the loan.

Can you wait to make the purchase? Saving for purchases may be old- fashioned, but you'll be investing in your business, with no lender to repay and no interest expense or other fees. In addition, you retain control of all your assets. Here again, opportunity cost will play a role in your decision, as you may miss out on taking advantage of good deals or possibilities for business growth.

When you're ready to evaluate your financing options, give us a call. We can help you make the right choice.


Call us at (219) 769-3616 with your questions, or email them to

Tuesday, November 8, 2016

Data Security is an Essential Part of Customer Care

Security breaches of confidential data capture the global news headlines on a daily basis. Identity theft has become so commonplace that credit card companies and banks market their protection efforts as free services to their customers. The IRS is at risk too, with impersonators using the fear and authority of the government to prey on victims. It's a scary world out there with the amount of personal data available to criminals looking to take advantage. The world might be scary closer to home too. Have you considered how much personal customer data your business handles? Are you confident in the security measures you have in place?

If you're just beginning a data security review of your company, start by understanding how you may be unintentionally exposing customer data. Then protect yourself by implementing security procedures. Here are questions to consider.

  • Where do you access company email? At the airport, on your phone, or via the free internet at the local cafĂ©? Make sure your phone and your internet connection are both secure.
  • Have you taken a work file home with you? Was the file a printed hardcopy, on a USB drive, or did you send it to a personal email account? Don't make data theft easy for the bad guys.
  • Do you upload data to a free cloud storage account? Know your vendors and their security procedures.
  • Are all of your passwords unique or do you duplicate the same password on multiple accounts? Use a password locker.
  • Do you secure your hardcopy data? Printouts can also be a vulnerable access point for identity theft. Best practices include strong procedures for document destruction, retention, and physical security.
    No matter the type of business you operate, acting wisely to protect sensitive data is an essential part of customer care. Don't let your company become the next headline.

Friday, October 21, 2016

Close is Not Good Enough With New Reporting Rules

The old adage "close only counts in horseshoes" is an accurate reflection of the new IRS information reporting rules. Beginning with 2016 returns, due dates for Forms W-2 and certain Forms 1099 have been moved up, and the penalties for late or inaccurate forms have substantially increased.

Here are the new filing deadlines for 2016 returns.

  • Form W-2 is due to the Social Security Administration on January 31, 2017, instead of February 28, whether you file electronically or by paper. (If you file 250 or more forms, you must file electronically.)

  • Form 1099 must be submitted by January 31 if you're reporting non-employee compensation in Box 7. Otherwise, the forms are due to the IRS on February 28, the same as in prior years, or March 31 if you file electronically.
    In addition to making sure you file on time, you also need to make sure the forms are accurate. Penalties can be assessed for missing or wrong social security numbers, incorrect amounts, filing on paper when electronic forms are required, and failure to provide a copy of the return to the payee.
    How much are the penalties? If you fail to file by the required due date and your business has gross receipts of more than $5 million, penalties can range from $50 per return for being as much as 30 days late, to $260 per return for filing after August 1. The maximum dollar penalty can range from $532,000 to $3,193,000. If the IRS says you intentionally disregarded the rules, you can be fined $530 per return, with no maximum.
    When your receipts are $5 million or less, the same per-return fines apply, but maximum penalties range from $186,000 to $1,064,000.
    Information reporting requirements are no game. Contact our office for assistance.
    Call us at (219) 769-3616 with your questions, or email them to

FDIC and SIPC: Important Allies in Uncertain Times

Worried about the next financial crisis? Reacquaint yourself with two important allies: the Federal Deposit Insurance Corporation (FDIC) and the Securities Investor Protection Corporation (SIPC).

The FDIC. The FDIC is an independent agency of the U.S. government and provides up to $250,000 in protection for qualified bank accounts in case of a bank failure. The insurance applies to each unique account owner, regardless of the number of accounts held at the failed bank.

Knowing how ownership is defined can be tricky. For example, every individual who is a co-owner of a joint account receives $250,000 of coverage as long as each has equal withdrawal rights and has signed the bank card. Each uniquely designated beneficiary of a revocable trust receives $250,000 in coverage when certain requirements are met. But coverage for irrevocable trusts is generally limited to $250,000. All accounts owned by a corporation or partnership at the same bank are generally limited to $250,000 of coverage.

The SIPC. The SIPC is a nonprofit membership corporation that is overseen by the U.S. Securities and Exchange Commission. The SIPC helps preserve investment accounts when a participating brokerage firm goes out of business and assets are missing. In that situation, the SIPC will work to restore the cash and securities held in your account at the time of closure, with protection of up $500,000. That includes up to $250,000 for cash.

The SIPC does not safeguard you from market losses or worthless stocks, nor protect you from bad investment advice. In addition, certain types of investments, such as commodities futures contracts, generally do not qualify for coverage.

Protection is determined by the way you hold accounts. For example, if you have a regular taxable brokerage account and an IRA with the same firm, each account is generally eligible for separate coverage.

Keep in mind that your financial institution must be an FDIC or SIPC member to qualify. For more information about determining your level of protection, contact our office.

Call us at (219) 769-3616 with your questions, or email them to

Get Familiar With These Estate Planning Documents

Basic estate planning begins with completing documents that allow your last wishes to be carried out as you choose. But are you familiar with the documents you'll need? Here's a list of common estate planning documents and their purpose.

Advance Directive. Your instructions for end-of-life and quality of life wishes regarding medical treatments. Share your directive with your healthcare providers and family.

Asset inventory. A list of all your financial assets that shows how much you paid for the asset (your basis), and how the asset is titled, such as joint tenancy or payable on death.

Beneficiary designations. Forms you complete to specify who will receive the proceeds of accounts and assets that aren't distributed via your will, such as life insurance policies, IRAs and 401(k)s. Be sure to appoint contingent beneficiaries as well, in case your first choice predeceases you.

Power of attorney. Gives the person of your choice the ability to act on your behalf if you become incompetent or incapable.

Power of attorney for healthcare. Gives the person of your choice the authority to make healthcare decisions for you that are not specified in your Advance Directive.

Record of locations. A list of the location of legal and financial documents and assets, including safety deposit boxes and keys, mortgage deeds and titles to property, bank and retirement accounts, and your will.

Trust agreement. Trusts are legal arrangements that can be used to carry out your wishes to distribute income, provide for your long-term care, transfer your assets, and make sure a favorite charity receives donations.

Will. Also called a last will and testament. Explains how you want to transfer your property.

Estate planning is about much more than taxes. It's also about peace of mind, for both you and your family. We're happy to work with your financial team to make sure your plan accomplishes what you intend.
Call us at (219) 769-3616 with your questions, or email them to

Navigate Business Changes Successfully

Change happens. That's especially true in the business world, where changes may be mandated by tax or regulatory requirements, increased competition, shifts in customer needs, or technological advances. Whatever your reason for making a change in your business, managing the process effectively is the best way to succeed. Here are suggestions for handling change.

Clarify your desired outcome. Determine what actions are needed to achieve your goal, then identify the employees, vendors, or other stakeholders who will be affected and anticipate their reactions. Depending on your business structure, you may want to bring one or more key managers and/or employees into this initial analysis. You also may want to consult with an outside expert, such as a financial and accounting professional, particularly if the changes relate to tax, regulatory, or accounting questions. An expert can clarify the issues involved, help you create a comprehensive plan, and assist in updating your systems and procedures to accommodate the changes.

Communicate your plan. Once you've established and outlined your course of action, make sure everyone who will be affected understands their role and what's expected. Explain what changes are needed and why they're necessary. Encourage feedback, and be open to suggestions for alternative procedures.

Establish a reasonable timetable for each expected action. Include allowances for the unforeseen complications and glitches that will inevitably arise.

Monitor, evaluate, and make adjustments. As the changes are being implemented, stay on top of the process. Otherwise, your employees may put change-related work on the back burner while focusing on more familiar day-to-day activities. Watch for unanticipated adverse effects on your business and act quickly to mitigate them.

Ask for help. If you're considering a significant change in the way you run your business, contact us for assistance. We'll help you address the issues, create a plan, and carry it forward.


Call us at (219) 769-3616 with your questions, or email them to