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COMING SOON!
All New Strothman and Company Website
We are currently in the process of redesigning our website. The current one will remain in place until the new one is up and running. We look forward to sharing our new look with all of you!
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2017 Strothman and Company Seminar Series
We have three seminars remaining on our 2017 Seminar Series. We hop you can join us for these informative and educational programs. Please invite friends and associates to attend these FREE seminars with you.
Manufacturing, Distribution & Logistics Conference
Strategies for Growth and Profits
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September 21, 2017
8 - 10 AM
Owl Creek Country Club
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New Tax Law Update**
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POSTPONED
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Real Estate & Construction
Conference II
Industry Specific Strategies for Growth
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November 16, 2017
8 AM - 12 PM
University of Louisville - Shelby Campus
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22nd Annual StroCo University
Growth and Independence
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November 30, 2017
8 AM - 12 PM
University of Louisville - Shelby Campus
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**NOTE: We will be postponing this seminar until the new tax law is passed by Congress.
Strothman and Company seminars are designed to qualify for Continuing Professional Education ("CPE") for CPAs.
If you have any questions, please call Leah Fulner at 502.585.1600 or email
[email protected]
To RSVP for any of the seminars online, please
Click Here
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Reviewing Non-Spouse IRA Beneficiary Rules
At the end of last year, Congress was considering tying up a tax revenue loophole known as the Stretch IRA. Currently, a traditional IRA can be passed from one generation to the next, thereby extending tax-deferred growth to a non-spousal beneficiary.
In recent months, Congress has been distracted by budget bills and healthcare legislation; but as Congress turns its attention to tax reform in the coming months, this loophole could be on the table again.
Currently, when a spouse inherits an IRA from a recently deceased partner, he or she is permitted to treat it as his or her own. This is a bit of a misnomer because the surviving spouse must first transfer the assets to his or her own IRA - or open a new account if he or she doesn't have one. Once those assets are transferred, the spouse can take withdrawals any time; however, IRA rules still apply. He or she is responsible for all taxes levied on withdrawals as well as an additional 10 percent penalty on money withdrawn before age 59½ (traditional IRA).
A non-spouse beneficiary, such as a child or grandchild, has a couple of different options depending on whether his or her parent had begun taking required minimum distributions from the IRA by the time he or she died. This is likely if the IRA owner was 70½ or older. If distributions had begun, the non-spouse beneficiary must continue taking those RMDs by the last day of the year the parent died based on whichever is longer - his own life expectancy or the deceased parent's remaining life expectancy.
By recalculating distributions to reflect the beneficiary's life expectancy, a younger beneficiary might receive a smaller amount per distribution - but it will be over a longer period of time. This also allows tax-deferred growth to continue compounding for a potentially larger inheritance over time. Also note that the non-spouse beneficiary should designate a new beneficiary to the account in the event he or she passes away before the account is depleted or closed.
If the original IRA names two or more beneficiaries, each of them should establish their own separate IRA by the end of the year following the year of the owner's death so that proceeds can be divided accordingly. If assets remain in the original account by the end of the year, distributions will be recalculated based on the life expectancy of the oldest beneficiary.
If the original IRA owner had not begun taking RMDs by the time of his or her death, the non-spousal beneficiary must either start taking minimum withdrawals by the end of the year or withdraw all the money by the end of five years. If there are two or more non-spouse beneficiaries, each one can transfer his share of the inherited account into an IRA in his own name and distributions will be based on each new owner's life expectancy.
Note that in both cases, the original parent's IRA also can be distributed as a lump sum. With a traditional IRA, the beneficiary is responsible for the income taxes on assets because they have never been taxed before. All original contributions and gains are taxed as ordinary income. Since a Roth IRA is funded with taxable contributions, no taxes are owed on either original contributions or gains.
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Are We Due a Market Correction?
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Yes, You Can Lower Your Property Taxes
You can pay off your mortgage, never again seeing a bill from the bank for principal or interest, but you can never pay off your property taxes. Property taxes also, unfortunately, only seem to go one way - UP! You'll never be able to get rid of your property taxes completely, but you can take steps to lower them or reduce increases.
Understanding how you can fight to lower your property taxes can be extremely valuable, especially if you live in a high property tax state. According to
wallethub.com, the 10 states with the highest property taxes (ranked with the last being the most expensive) are:
Property taxes are higher in some places versus others depending on how much of the local tax burden (particularly schools) falls on homeowners versus the business tax base. Regardless of your situation, you're probably ready to read about what you can do to potentially lower your property taxes. Here are three things you can do:
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Take every exemption you're allowed
Often, states, counties or municipalities give out tax exemptions for a primary residence. Sometimes they are general and referred to as a homeownership or homestead exemption. Other times, they are available for only certain classes of people, such as senior citizens.
Learn what exemptions are offered where you live and make sure they are factored into your annual assessment or property tax bill. Sometimes you can go back retroactively for a few years to claim the exemption. This won't always be allowed, but it's worth a try if you discover you've missed out on an exemption. In any case, make sure you get it going forward.
2)
Understand how your property value assessment and appeals process works
Dates and time periods for assessment changes and appeals vary depending on where you live. Often, reassessments are performed every three to five years. Other times, towns will render assessments on new construction or reassessments if you've made significant additions to your house (which is also a reason they require you to get building permits - so they know you've improved your property).
After an assessment or reassessment is issued, you have only so long to contest any changes through the appeals process. Approximately six to seven weeks is a typical time frame in many states - and the clock starts ticking from the time the notice is mailed. Check your municipal or county assessor's website or call their office to find out the specifics for where you live.
3)
Ensure your home is compared to similar properties
Professional appeals experts know they need support when challenging an assessment. You don't win an appeal by simply showing up and claiming your assessment isn't fair - you need to find comparable homes with lower assessments to prove your case.
Luckily, assessed values are pubic record and you can find out nearly everything you need to know by going online (although in some places records have not been digitized yet). You'll need to look for homes of similar size, age, amenities and tax classification that are paying lower taxes.
When it comes to lowering your property taxes, the government is not here to help. You can hire a professional appeal expert or do it yourself; but no matter what, you need to be proactive.
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Congress at Work: Making it Easier to Fire Government Employees, Reporting on Public Safety Benefits, and Extending Whistleblower Protections
The Congress at Work series of articles is designed to give you a glimpse of various types of legislation currently under consideration. While either the Senate or the House of Representatives may initiate a bill proposal, be aware that many bills never become law; they may never make it out of committee, be blocked by a Senate filibuster, delayed, lack enough votes, never be agreed upon by the two houses, or vetoed by the president.
Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (S. 1094)
- This was one of Trump's first piece of original legislation signed into law. The VA bill makes it easier for the Secretary of Veterans Affairs to fire and discipline employees by revoking bonuses, as well as protecting whistleblowers who report wrongdoing. This bipartisan legislation is in response to the VA scandal in 2014 in which government employees covered up the excess wait times it was taking for veterans to receive medical care. The bill was sponsored by Sen. Marco Rubio (R-FL) on May 11 and signed into law by the President on June 23.
Public Safety Officers' Benefits Improvement Act of 2017 (S. 419)
- Sponsored by Sen. Chuck Grassley (R-IA), this bill requires timely reporting on the Public Safety Officers' Benefits program, including information on all death, disability and educational assistance claims.
The bill was introduced on February 16, passed by both houses of Congress and signed into law by the President on June 2
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American Law Enforcement Heroes Act of 2017 (S. 583) -
Sponsored by Sen. John Cornyn (R-TX), this bill amends the Omnibus Crime Control and Safe Streets Act of 1968. It authorizes grantees of the Community Oriented Policing Services (COPS) to use grant funds to hire veterans as law enforcement officers. The bill was introduced on March 8, passed by Congress in May and signed into law by President Trump on June 2.
DHS Stop Asset and Vehicle Excess Act or the DHS SAVE Act (H.R. 366)
- Currently, agencies within the Department of Homeland Security, such as Customs and Border Protection, primarily manage their own fleets of vehicles. The act authorizes the Under Secretary to monitor the use of government vehicles, develop a methodology to optimize fleet size, and approve vehicle leases and acquisitions. This bill also requires DHS agencies to submit quarterly reports on vehicle use and annual fleet management plans with a cost-benefit analysis. Sponsored by Rep. Scott Perry (R-PA), the bill was introduced on Jan. 6 and signed into law by the President on June 6.
Follow the Rules Act (H.R. 657)
- The purpose of this Act is to extend whistleblower protections for Federal employees who refuse to violate rules and regulations. While the Whistleblower Protection Act of 1989 protects Federal employees who refuse to follow an order that would violate a Federal law, the Follow the Rules Act protects those who refuse to follow an order by a supervisor that would violate a regulation issued by the Federal government. The bill was introduced on Jan. 24 by Rep. Sean Duffy (R-WI). It was passed by Congress in May and signed into law on June 14.
COVFEFE Act of 2017 (H.R. 2884)
- While the National Archives and Records Administration has issued an advisory opinion that President Trump's social media postings should be preserved for the historical record, currently that advisory opinion is not backed by the force of the law. To rectify this, Rep. Mike Quigley (D-IL) has sponsored a bill that would add the phrase "any personal and official social media account" to the Presidential Records Act of 1978. This would in effect permanently archive all of a president's social media posts, including tweets from any personal non-governmental accounts used during their term(s) of office. The bill was introduced on June 12 and is under consideration by committee before possibly being sent to the House or Senate as a whole.
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Technology: Automakers & Cybersecurity Pros Collaborate to Tackle Growing Threat
Over the past three or four years, Internet-connected vehicles have become the norm. Accordingly, cybercrooks have turned their attention to cars and trucks, looking for ways to gain access to vehicular navigational systems and to hack into drivers' smart phones and iPads. Last year, recognizing the ever-increasing potential for breaches, automakers in the United States joined forces to battle the threat, tapping the expertise of some of the nation's leading Internet security experts. Here's an update on what these efforts have yielded.
- Self-driving vehicles have opened up a whole new area of concern. White-hat hackers have shown - in controlled situations - how vehicles could be hijacked to harm their occupants or generate mayhem on a busy highway. These security specialists have demonstrated how vehicles - especially the new breed of semi-autonomous or driverless vehicles - might be tracked and manipulated remotely by cybercrooks. The demonstrations have shown how cybercrooks could take control of a vehicle's headlights, navigation, speed, windshield wipers, blinkers and radio. In some instances, hackers can remotely take control of brakes and/or steering.
- So far, no vehicle has been hacked into by a cybercriminal, but security experts and researchers have shown automakers how it could happen, and car manufacturers have taken the threat seriously. Cars with advanced connectivity - which includes prototype driverless or semi-autonomous vehicles - are potentially more vulnerable. Twenty years ago, the average car had about 1 million lines of code; today, cars can have 10 million lines of code, or about as much as a modern aircraft. Automakers have already felt the financial sting of this new cyberthreat. Major manufacturers are busy recruiting white-hat hackers to identify potential issues. For example, Fiat Chrysler recalled 1.4 million Jeep Cherokees after white-hat hackers exposed vulnerabilities in the vehicle's IT circuitry.
- There is strength in industrywide initiatives. Nearly all automakers based in the United States banded together last year in an industrywide effort - the Automotive Information Sharing and Analysis Center - to develop best practices to combat potential cyberthreats, to develop secure hardware and software, and to draw up guidelines on how to respond to hacking incidents. The industry group's membership is responsible for about 98 percent of the vehicles on U.S. roads.
- The challenge to strengthen cybersecurity in vehicles extends beyond car manufacturers. The notable gig economy transport company, Uber, as well as Didi, a Chinese company like Uber, have both been on the forefront of research to develop safer software and hardware and uncover potential security issues. The possible motivations for hackers to hijack vehicles are many and go beyond compromising highway safety. Smart phones and/or other portable computers that are linked to vehicles' dashboard technology also present a potential entry point into other data centers housing confidential business and personal data.
Savvy consumers will recognize that the vehicles we drive are now a big part of the Internet of Things, and will take measures to shore up security on any personal devices they connect to their dashboards. Automakers will need to be constantly proactive to identify vulnerabilities in computers installed in new model vehicles.
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Is Selling a Product or Service More Effective than Selling an Experience?
With the advent of the Internet, and especially social media, the difference between marketing a product or service to customers versus creating an experience can be a long-term challenge for business owners.
Defining Customer Experience Versus Product/Service Focus
When focusing on the product or service alone, it can often encapsulate a single touchpoint where a customer learns about the product or service through a sales call or product advertisement.
In contrast, through near-instantaneous interactions, the Internet and social media allow the customers' voices to be heard. Coupled with traditional touchpoints or ways the business interacts with customers, businesses have the ability to create an experience around their product or service for each customer. This is accomplished by listening to their customers to understand their desires and goals with a product or service.
Using Social Media to Create a Positive Customer Experience
Being proactive on social media by monitoring and reaching out to customers who use a product or service can resonate well. A simple thank-you note sent via social media or a one-time discount toward a future order can make customers feel valued because the company recognized their patronage. Other examples include having polls incorporated into social media platforms to demonstrate that customers' opinions are considered for current and future product and services.
Social media is effective in customers' eyes because it demonstrates a business' commitment to customer questions and complaints. Developing a dedicated team for answering questions and complaints, along with responding to and keeping users attune to their issue's status can establish trust. Other considerations include how complaints are addressed. For example, when are refunds or replacements given? When user issues cannot be immediately addressed, establishing and informing consumers of time-frames and what channels of communication will be used (phone, email, etc.) is another example of creating a complete experience.
Engaging Customers at Every Stage
To complement a social media strategy, creating a targeted and timed strategy is another way to produce a positive customer experience. Initial steps can include online seminars describing common challenges faced by small businesses owners and how the product or service will help solve the problem. Other touchpoints that follow can include giving interested customers one or two chapters to preview the full product or giving case studies to prospective clients to show how the program helped other customers solve similar problems.
Once a purchase is made, support can be offered to purchasers and can be modified depending on the exact product. Support options might take the form of a 60-day course evaluation and in-person consulting opportunities to complement a self-guided course. Additional follow-ups can include coupons or opportunities for customers to attend peer-to-peer meetings where the product's principles can be reinforced and commonly faced issues can be discussed with like-minded professionals.
While emphasizing the benefits of a product or service are still essential, the information age allows for a greater opportunity to deliver a complete experience for consumers, not just isolated points of contact with a company.
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Tip: Be a Leader, Not a Boss
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