Concierge CPA February 2019

February 2019

8221 Brecksville Rd, STE 205 Brecksville, OH 44141

(440) 340-1030

Are You Falling Between Two Stools? The most frustrating thing is getting pulled over when you are already running late. This is exactly what happened to me recently. One afternoon, I was on my way back to the office, listening to music and enjoying my ride, and out of nowhere, I see those dreaded red and blue lights in my mirror. stools. There is a need for all types of services. Some people offer routine services for cheap and

make good money. Others offer custom services and charge more for it. The only scenario you want to avoid is working on custom projects and not charging for them. ” I prefer not to work on repetitive tasks. It’s a personal choice, but I find complex and involved projects much more rewarding. The only problem is that if I lose money on projects I like to do, then soon I won’t be able to do what I like.

I had a good few years without any traffic incident, so getting pulled over made me nervous at first, but then I became frustrated and angry with myself for not being more careful. After the quick adrenaline rush, I calmed down and realized that getting a ticket was not the end of the world. The stop went smoothly, and after a short delay, I was on my way back to the office. I was going to just pay my ticket and end the story there. A few days later, I received a letter from an attorney who offered to represent me for a very reasonable flat fee. He promised to take care of everything, and I wouldn’t even have to take time off from work to appear in court. I wasn’t expecting to get much for my money. Honestly, I decided to hire this person because I was interested in finding out what kind of service he could provide for such a low price. I work with a good number of attorneys, and I know that good legal service doesn’t come cheap; you usually get what you pay for. Was I satisfied with the results? I can’t really judge my experience. I assume I got some benefit because he went to court and I didn’t get any points on my driving record, but I never spoke to the attorney directly. All communication was automated or went through a receptionist, and I don’t believe the attorney spent more than 10 minutes looking at my case. At the end, I paid the fine, the case was closed, and I was left with one last question: How in the world does this guy make money? How is it possible to hire employees, pay for rent, utilities, and advertising while charging such low prices? Well, I was curious enough to sit down and do some calculations. I ran a few profitability scenarios, and I realized that this guy may make more money per hour than I do on some much more expensive projects.

Unfortunately, too many business owners make this mistake, especially when they start out. For a while, it is possible to get by with working a lot and not charging realistic prices, but it is not sustainable and prevents business owners from growing. What’s even worse is that there are business owners who don’t even know they are losing money on certain projects. Income keeps going up, the owner is happy with the trend, but the employees are stressed out, profits are declining, and the business becomes unsustainable. How can you avoid falling into this trap? The best solution is having timely and accurate financial data and someone who you can sit down with and discuss what the numbers mean. Give us a call if you would like to find a solution.

–Laszlo Szilagyi, CPA

I talked to Borbala about this question and, as always, she simplified the problem for me: “Just avoid falling between two

1 (440) 340-1030

NEW! Join our FACEBOOK LIVE this month on FRIDAYS @ 6:00 p.m. EDT. Search for us at @ConciergeCPAs BORBALA’S SCHEDULE Events We Go to or Host

Feb 5: Entrepreneur Organization Accelerator – Accountability meeting Feb. 11: The Inspired Treehouse, Board meeting Feb. 14: EOA Learning Day by Jumpstart Feb. 20: Daylong Tax Seminar at the Cleveland Institute of Music Feb. 22: Chinese Chamber of Commerce Annual Meeting Feb. 26: Mentor Meeting by Tom Hileman of Hileman Group

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Feb. 8

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March 8

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March 22 March 29

Feb. 15

March 15

March 1

Client Advising and Coaching Days Feb. 6, 13, 16, 21, 23, 27–28 March 6–7, 9, 13–14, 16, 20–21, 23, 27–28, 30 To schedule a time, go to: Prospective client inquiries:

Malissa Bodmann

Client of the Month:

I have the privilege of introducing Malissa Bodmann, owner of Compelling Communications, LLC. Malissa was one of my first clients, and to this day, she’s still one of my favorite clients. She has been referring my services to her friends and circle of influence from the get-go. As a former journalist, Malissa helps her clients tell their stories in ways that portray them in a positive light and build brand affinity. She specializes in health care and nonprofit sectors and works with a range of clients from Fortune 500 corporations, public agencies, and small businesses.

when clients open up to me and I can use their words and life experiences to help them develop an emotional connection with their target audiences. Q: What is your niche, and who are some big players in that industry that you’ve worked with? A: I like to work in industries that directly affect people’s quality of life. I have more than 20 years of experience working in health care. When I worked as a journalist, I covered health care

Q: Malissa, what background does one need to become an expert in strategic communication, media relations, and PR? It seems very complex and multifaceted. A: I have a journalism degree from Ohio University’s E.W. Scripps School of Journalism. I use the skills I developed as a reporter — concise writing, compelling messages, knowledge of the media, and quick research abilities — to structure my clients’ communication messages and outreach. My work requires a lot of research. In order to give sound communication advice to my clients, I need to understand their industries and come up to speed pretty quickly. Many hours in my weeks are spent doing background research on topics like government policies and industry trends or monitoring media coverage. I’m a naturally curious person, so I don’t mind getting lost in the minutiae of Medicare Advantage plans or arts and culture funding. I also enjoy storytelling. Nothing makes me happier than

policy issues in the Ohio legislature. After I left journalism, I worked at Medical Mutual of Ohio before working for a communication agency. Since then, I’ve worked for Cleveland Clinic, The MetroHealth System, CVS/Caremark andWellCare Health Plans, among others. I also help clients on issues such as pre-K education, health and human services, and public funding for arts and culture. Cuyahoga Arts & Culture is a client; they invest more than $12 million a year into Cuyahoga County organizations that make our community culturally vibrant. Q: What are the main services you provide to your clients? A: I help my clients with strategies related to words: what they say, how they say it, and to whom. My services include

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Tiramisu Tiramisu This Italian favorite makes for the perfect Valentine’s Day dessert. It’s easy to whip up and will make the holiday feel extra special. A: Small-business owners have more ways to amplify their voices today than ever before. Social media allows businesses to cut out strategic communication plans and implementation, media relations and strategy, public relations campaigns, donor relations communications, key message development, executive/C-suite communication, and copywriting and editing for print, web, and social. One day, I could be writing a brochure about bariatric surgery offerings, and the next day, I could be handling inquiries from a TV reporter. My clients have had their stories appear in The Washington Post, Los Angeles Times, The New York Times, The Plain Dealer, Crain’s Cleveland Business, NPR, and The Wall Street Journal, as well as on digital and broadcast media around the country. Q: What is your favorite part of your job? A: I feel energized when I learn something new. The journalist in me still loves a scoop. My favorite part of my job, however, is getting to select work that’s professionally and personally meaningful to me. My husband and I are raising two teen daughters, so issues related to health, education, and equity resonate with me. I do my best work when I’m personally invested in a topic. Q: What advice can you give small businesses when it comes to the importance of reaching their current customers and potential customers in a powerful and compelling way? In this day and age of social media, blogging, YouTube channels, and Facebook Lives, it’s easy to feel that it’s a jungle out there and my voice as a small-business owner gets lost in it.

the middle man and speak directly to their core audiences for a very low cost. It can be overwhelming to tackle social media, so I recommend business owners start with one social media channel and be consistent in updating it. My first piece of advice is for small businesses to find their niche. What do they do better than anyone else? Form a storyline around that, then figure out what they want to say and to whom they need to say it. Instagram only needs to be updated a few days a week, so it’s easier to maintain, but you need to have photos to post. This is a great channel for visually interesting work, such as a restaurant, salon, or bakery. LinkedIn is the right place for professional service experts to post advice articles, like how to get ready for tax time. Facebook isn’t dead, contrary to what your kids tell you, but it requires daily updating for your posts to appear in people’s feeds. Twitter is only for those who have time to invest; you need to tweet 3–4 times a day for Twitter users to see your tweets. Whatever channel you choose, really take the time to update it and interact with your followers. Social media is a two-way conversation. Don’t post and run. This is especially important if a client posts a negative review or asks a question in your comments. You’re obligated to respond.

Finally, be honest. Nothing sinks a reputation faster than being disingenuous.

INGREDIENTS • 6 egg yolks •

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2 teaspoons dark rum 24 packaged ladyfingers 1/2 cup bittersweet chocolate shavings, for garnish

3 tablespoons sugar 1 pound mascarpone cheese

1 1/2 cups strong espresso, cooled

DIRECTIONS 1. In a large mixing bowl, use a whisk to beat together egg yolks and sugar until thick and pale, about 5 minutes. 2. Add mascarpone cheese and beat until smooth. 3. Fold in 1 tablespoon of espresso. 4. In a small, shallow dish, combine remaining espresso with rum. Dip each ladyfinger into mixture for 5 seconds. Place soaked ladyfingers at the bottom of a walled baking dish. 5. Spread half of the mascarpone mixture on top of the first layer of ladyfingers. Top with another layer of ladyfingers and another layer of mascarpone. 6. Cover and refrigerate 2–8 hours. 7. Remove from fridge, sprinkle with chocolate shavings, and serve.

Inspired by

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8221 Brecksville Rd, STE 205 Brecksville, OH 44141 (440) 340-1030 Avoid Falling Between Two Stools Page 1 Borbala’s Schedule Page 2

Client of The Month: Malissa Bodmann Page 2 Tiramisu Recipe Page 3

Puzzling Questions

A mericans love puzzles, games, and brain teasers. Newspapers publish crossword puzzles, word search puzzles, and word jumbles. Bookstores sell jigsaw puzzles. Airport gift shops stock sudoku puzzles to pass the hours in the sky. We love puzzles so much that someone found their way to a basement office in Washington where the Department of Bogus Holidays litters our calendars with junk celebrations like National Talk Like Yoda Day (May 21) and National Eat Your Beans Day (July 3) and made it official. And so Tuesday, Jan. 29 was National Puzzle Day. Most people think of puzzles as trivial diversions. But planning to avoid taxes is a puzzle, too. And, as the English economist John Maynard Keynes once said, “The avoidance of taxes is the only intellectual pursuit that still carries any reward.” Consider the basic challenge of choosing how to organize your business. If you operate as a sole proprietor (or an LLC taxed as a sole prop) and earn $200,000, you’ll pay self-employment tax on every dime of it. On the bright side, that’s $21,836 that gets credited to your Social Security account. Of course, that won’t mean much if you don’t believe Social Security will still be there for you when you retire. (Rule of thumb: if you’re young enough to have tattoos, don’t count on it.) Now, if you elect to be taxed as an S corporation and the reasonable compensation for the work you do is $100,000, you could save yourself a sweet $6,535 in tax. It’s even sweeter than contributing to a retirement plan or buying new equipment for your business, because you aren’t spending anything to get a deduction. You’re just paying employment tax on less income. That doesn’t sound like much of a puzzle, right? But consider this ... if you want to hire your minor kids to shift income to their lower bracket, now they’ll owe FICA they wouldn’t if you were still a sole proprietor. Oh, and now you can’t use that corporation to cover yourself under a medical expense reimbursement plan. But wait, there’s a workaround to that problem. You can just buy a high- deductible health plan and establish a health savings account. Or maybe you could establish another proprietorship, or C corporation, and pay MERP benefits from that business. So, while tax planning may not be as fun as finishing a crossword puzzle (in ink), we think you’ll agree it’s far more rewarding.

Having fun yet? Of course, now your“covered comp”for determining retirement plan contributions will be based on the salary only, not your whole income. If you’re used to maximizing an SEP contribution , you’ll find yourself saving a whole lot less with the S corp. Aren’t puzzles great? Now, at that point, you could switch from the SEP to a solo or safe harbor 401(k), perhaps with a cross-tested profit-sharing contribution. You could even look at a defined benefit pension plan . (Yes, it’s the Studebaker of retirement plans, but sometimes it’s the right answer.). But that raises the question of whether you belong in a traditional qualified plan at all —or whether you’re better off with a Roth or insurance-based plan . All of a sudden, the National Puzzle Day that sounded like so much fun about eight paragraphs ago is starting to look about as fun as that new“Escape Room”movie, right?

Don’t worry ... when it comes to organizing your business, or any other tax challenge, we’re here to find the best solution.

We really like these puzzles, and nobody does it better!

–Liao Xiong Staff Accountant, Concierge CPAs, Inc


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