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The Government Shutdown & Your Tax Refund

It’s now day 28 of the longest shutdown of our federal government in history… and tax filing season is about to begin. Gilmore Jasion Mahler’s Charlie Heid tackled the topic in his monthly appearance on WTOL-TV.

Charlie says the good news is that all indications are right now that we won’t see a delay in getting our tax returns. The IRS says it has called back to work from furlough about 46 thousand workers, over half of its workforce, to process our tax returns. But it’s not exactly business as usual… Charlie says there are a few things we need to know.

#1: As of right now, the IRS helpline isn’t there as a backup to answer your questions. The government shutdown has closed that phone support service. If you call the IRS 1-800 helpline you’ll just get a recording saying it isn’t available. The IRS just announced earlier this week that it plans to open the call center back up with limited personnel in the coming days…but says if you do call, you need to expect long wait times. Also, IRS walk-in taxpayer assistance centers are closed.

#2: This is the first year we’re filing our tax returns under an overhauled tax code… the biggest changes we’ve dealt with in decades. There’s a new 1040 form, with schedules attached. People are going to have a lot of questions… and they just need to be prepared for the fact that, if the government shutdown continues, they may not be able to reach the IRS for help.

Charlie recommends that people file earlier rather than later. That way if you get stuck on something, you have time to do some research and figure it out before the April 15 deadline.

Something else to keep in mind: the dollar amount of your tax refund could look different this year because of the new law. Tax reform has drastically changed exemptions, deductions, etc. People who are used to getting a certain amount back every year could have a rude awakening. For example, someone who typically gets a refund of $3,000 could wind up with a much smaller refund… or could even owe money. That’s why the IRS has been encouraging people all year to get with their employers to double check that the right amount of tax is being taken out of their paychecks. Charlie says those who haven’t done could have an unwelcome surprise.

Here’s a quick recap of some of the biggest changes in the tax law for the 2018 tax filing year:   

  • Bigger standard deduction
  • Capped deduction for state and local taxes at $10,000
  • Increased child tax credit

Tax filing season starts January 28… that’s a week from Monday. That means the IRS will be accepting and processing tax returns starting January 28th. Charlie says you should file electronically with direct deposit if possible. The IRS says that will speed up the process… and if you are getting a refund, you’ll see it sooner.    

CPA Charlie Heid is a partner specializing in tax services, who joined Gilmore Jasion Mahler in 2002. He serves clients across many industries, with a focus on manufacturing & distribution. Charlie appears monthly on WTOL-TV to discuss tax and money issues.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

GJM Staff Announcements

Gilmore Jasion Mahler, LTD (GJM) has announced some key promotions and new staff members that strengthen the Firm and its leadership team. The promotions are effective January 1, 2019.

Judy Anderson Gilmore Jasion MahlerJudy Anderson and Matt Cavanagh are promoted to partner. Anderson, a Toledo native and graduate of The University of Toledo has been with the firm for 11 years. She has over twenty years of experience in public accounting and in the healthcare industry. A member of Gilmore Jasion Mahler’s healthcare and outsourced accounting group, she works with many of the Firm’s healthcare clients providing practice management and consulting services.  

Matt Cavanagh Gilmore Jasion MahlerCavanagh, a Bowling Green native and BGSU graduate, joined Gilmore Jasion Mahler in November of 2005. Also a member of the Firm’s healthcare team, Matt’s focus is healthcare services. His expertise is in ambulatory surgery centers, outsourced accounting, practice management and modeling.

“Judy and Matt are already valued members of our leadership team,” says Gilmore Jasion Mahler Managing Partner Kevin Gilmore. ”Their hard work and dedication have strengthened our healthcare specialty and the Firm as a whole. I’m thrilled to see them both reach partner level.”

Nikki Clement Gilmore Jasion MahlerThe Firm also announced some other key promotions. Partner Nikki Clement has been named managing partner of Gilmore Jasion Mahler’s Findlay office. Partner Mike Brough will lead growth efforts for the Findlay office. Nikki Clement's focus is the utilities industry. She specializes in accounting for regulated utilities.

Mike Brough Gilmore Jasion MahlerMike Brough works across a number of industries including manufacturing & distribution, government, and nonprofit operations.

Steve Miller is being promoted to senior manager. Both Ryan Avery and Ryan Emerson are promoted to supervisor and Nick Jackson is promoted to senior associate.

Earlier in the year, Diane Stretten and Mary Jo Pitzen were promoted to senior manager. Andrea Jennex moved up to supervisor in the GJM Findlay office. Ben Lochbihler was promoted to manager and Corey Selhorst, Lauren Grana and Clay Barron were all promoted to senior associate.

The Firm also brought on well over a dozen new employees in 2018 to further strengthen GJM’s administrative team and client service. They include Elijah Blackburn, Alyssa Essert, Alexandria Frances, Courtney Haas, Nicole Hartranft, Jennifer Henning, Dana Herr, Thomas Keyser, Jessica Knepper, Dylon Lause, Wendy Long, Tim Merkel, Madeline Mielcarek, Caleb Neeper, Joe Osentoski, Tina Rochowiak and Logan Sager.

“I couldn’t be happier with the staff we have in place headed into 2019,” says Gilmore. “When you have great people, great things happen. I’m excited to see what we can accomplish at a team.”

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

Three Ways to Lower Your 2018 Taxes

As you race to get all your shopping, wrapping and baking done in time for the holidays, you may want to set aside some time to think about your tax return. Some action now could wind up saving hundreds or maybe even thousands of dollars when you go to file your tax return next spring. Gilmore Jasion Mahler Tax Partner Charlie Heid shared some suggestions on WTOL-11, including three ways to lower your taxes before the end of the year. 

#1: Bunch or bundle your charitable contributions

With the new higher standard deduction, which is now $12,000 for individuals and $24,000 for joint filers, smaller charitable donations will no longer get you that tax break that they used to. Many more people will now be taking the standard deduction, and itemizing their deductions won’t apply.

You don’t have to stop giving to charity, just change up your timing a bit. For example, rather than donating $15,000 a year, bump that up to $30,000, but do it every other year instead.

#2: Finalize the divorce

Another change that the new tax law brought will affect anyone going through a divorce right now.  

The big impact will be for the person who will be paying the alimony once the marriage is over.  

If you’re in the process of a divorce and still finalizing the agreement, be aware that December 31, 2018 is a critical deadline… if you finalize the divorce before the 31st any alimony paid can still be deducted, and alimony received is still considered taxable income. After December 31, that alimony paid will no longer be deductible, nor will it be taxable for the recipient of the alimony. So if you’re in the process of a divorce, and you’re the one who will pay alimony, you want to get it finalized before the end of the year.

#3: Feed the 401k

You can protect a good portion of your income from taxes by moving it into a 401k. You won’t pay tax on the money until it is withdrawn during your retirement. You’re allowed to contribute up to $18,500 to your 401k this year. If you’re over 50, you can contribute up to $24,500.

If you don’t have a 401k you can put the money into an IRA. The great news with the IRA is that you have up until April 15th of 2019 to move the money to that IRA and still have it count as a 2018 contribution.

One final thought: If you sold any investments this year and made money, you may be looking at paying capital gains tax… you could take a look at any of your holdings that show a loss and sell them to offset the gains. If you have more losses than gains, you might be able to deduct the difference, up to $3,000 per year.

Tax Partner Charlie Heid contributed this blog. He joined Gilmore Jasion Mahler in 2002 and brings decades of experience to his clients. Charlie serves individuals as well as business clients across many industries, including manufacturing & distribution, retail and construction. He shares timely information on tax and money issues monthly on WTOL's Your Day.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers outsourced accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities

Act Soon To Take Advantage of New Business Tax Credit

Your business could qualify for a new tax credit created when the Tax Cuts and Jobs Act was signed into law at the end of 2017. The Employer Credit for Paid Family and Medical Leave (Section 45S of IRS Code) applies to certain employers who offer paid family and medical leave to their employees. It’s only around for this tax year and next (at least for now), so take advantage of it while you can.

Does your business qualify?

There are certain requirements in place for businesses interested in claiming this tax credit, including:

A written policy in place that meets certain requirements including:  

  • At least 2 weeks paid family and medical leave a year to all qualifying full time employees (prorated for part time employees)
  • The paid leave can’t be less than 50% of the wages normally paid to the employee

Which employees qualify?

  • Employed for a year or more
  • For 2018 credit: employee can’t have made more than $72,000 from the employer

What qualifies for family and medical leave in order to qualify for the tax credit?

  • Birth of a child/care for the child
  • Adoption or foster care placement
  • Care for spouse, child, parent with serious health condition
  • Serious health condition making employee unable to perform his/her job
  • Family member or employee called to active duty
  • Care for a service member who is a spouse, child, a parent, next of kin

What now?

Evaluate your company policies regarding the Family Medical Leave Act (FMLA). You still have time to create a company policy regarding family medical leave. You can also change your existing policy or include additional policies to fill in the gaps needed in order to qualify for and take advantage of the tax credit for 2018. The credit will apply retroactively for family/medical leave already taken in 2018 by qualifying employees. The policy just needs to be in place by and have an effective date of December 31, 2018.

We’ve already spoken to some clients about this tax credit, and expect more conversations in the weeks to come. Now’s the time to figure this out with your tax advisor so you’re not up against the deadline and can actually enjoy ringing in the New Year.

Jessica Nunn contributed this blog. Jessica is a manager in the tax department with nearly 10 years of public accounting experience at Gilmore Jasion Mahler, LTD.  She specializes in for-profit entities, with a concentration in manufacturing & distribution.  

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.

What to Expect When New Tariffs Are Imposed

Tariffs impact Gilmore Jasion MahlerThere's been a lot of upheaval and uncertainty in global markets recently, and, for the United States, part of that is the new imposition—by both America and China—of tariffs. Beyond any financial arguments about whether or not trade wars are good and easy to win, there's no doubt whatsoever that trade wars, specifically in the form of tariffs, will change the market. And though it may take a while for these effects to be felt by the public, the impact of tariffs will be felt first and most deeply by manufacturing.

Big Industries Get Hit

Tariffs can have a huge impact on manufacturing and many other American businesses in unexpected—but understandable—ways. The U.S. has recently gone after the industrial sector with tariffs specifically targeting steel and aluminum.

Any steel or aluminum coming into the U.S. from specified nations now has an additional percentage cost added to the existing price. In other words, tariff impact on manufacturing means foreign steel and aluminum providers now have to pay an additional 25% and 10%, respectively, before they can cross the border into the U.S. and be used by American businesses.

Of course, steel and aluminum are pretty commonly used materials in a wide variety of industries, businesses, and applications. So, that extra cost will affect more than just the materials industries that are importing them into the country.

Tariffs Generate a Widespread Ripple Effect

As steel and aluminum import taxes increase, many businesses feel a ripple effect. Not only do tariffs impact the manufacturers of these metals affected, but also a manufacturer’s clients who turn steel and aluminum into consumable products.

For example, cookware and plumbing manufacturers will pay premiums for the materials needed to produce their goods. Further down the line, bakeries, restaurants, hardware stores, plumbers, and many other tradespeople will see increases in the cost of steel-based and aluminum-based products that are necessary to their professions. In turn, those bakers and plumbers must now decide whether to absorb the loss or raise the prices of goods and services to their customers in order to offset the price increase on metals.

Every link in the chain is affected by tariffs: the first-level producers, manufacturers, small and mid-sized businesses reliant on those products, and finally the everyday consumer.

What to Do About Tariffs

Governments know that tariffs are going to have a huge impact on the economy of the other countries involved a trade war. That’s why they are effective means of negotiating market conditions. However, many businesses and consumers get caught in the middle. So what can a small or mid-sized business do as tariffs are on slapped on the products they need?

While it may not be the solution for every manufacturer, one effective way to mitigate tariffs on manufacturing is to source materials from unaffected nations. Steel and aluminum, for example, are receiving tariffs from many nations, but Australia and Argentina are exempt. Sourcing metals from these countries means business can go on as usual.

For businesses using metal-based products, it may be best to arrange your affairs before tariffs begin to affect you. For example, if you need new tech equipment, with aluminum and steel parts, purchase that equipment soon or second-hand. You can also make more strategic business moves when scaling up. Say you're looking to expand your restaurant business to new cities, consider purchasing a space that's already outfitted with most or all of the features you'll need, so you can reduce the costs associated with acquiring new, and often imported, materials.

If you'd like to know more about tariff impact on manufacturers or which tariffs may affect you, reach out to your GJM team. Let us guide you through a complex, ever-shifting market and global trade climate.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting services and provides comprehensive services including assurance, business advisory, tax, risk advisory and healthcare management. The Firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.