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The Tough Discussion Business Owners Need to Have

Do you know when you want to retire from running your own business? Planning for the future of your business with you out of the picture can be tough. Gilmore Jasion Mahler Audit Partner Greg Taylor says many businesses drag their feet when it comes to future planning. He says you need to plan ahead and you need to start talking with your trusted advisors.

 

If you're interested in receiving more informational articles and tax strategy ideas direct to your inbox, be sure to sign up for our free GJM tax newsletter Focus. You may also want to consider signing up for some of our free quarterly industry newsletters, including The Manufacturer (for those in manufacturing & distribution), On-Site (construction & real estate industry), Practice Management Advisor (physician practices and other healthcare practices) and The Expert (with a focus on business valuation and litigation support). Sign up here for any of GJM's free newsletters.

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

World War II Veteran Reflects on Honor Flight and War Service

Norm Heydinger Gilmore Jasion MahlerToledoan Norm Heydinger is really good with dates. He knows where he was and what he was doing over seventy years ago. He talks about it like it was yesterday. Then again… what Norm was experiencing at that time isn’t the kind of stuff you forget. World War II was underway and Norm would soon be a long way from his hometown of Toledo, Ohio.

1944

In January of 1944 Norm says he found himself in the middle of the South Pacific on the Navy ship Aquarius. He says he was an Ensign fresh out of the Coast Guard Academy where he studied enemy planes intensely so he would know with one glance if the enemy was approaching by air.

Norm’s job on that ship was not only to watch for enemy aircraft, but also to help bring U.S. Marines in to shore for invasions. He says he did so for about half a dozen invasions in the South Pacific. He says his first invasion was in the Marshall Islands and his last invasion was Okinawa… a date he remembers very clearly: October 1, 1945.

Only in his early twenties while in the South Pacific, Norm says he was on the main ship and they’d launch about a dozen landing craft that would hit the shore, deploying Marines. Then they would come back on board with the injured.   

“The hallways of the ship would be filled with guys lying there with injuries waiting for the doctor to help them,” he says. Norm remembers with all those injured, there was only one doctor on the ship. Other shocking images are still very vivid for him after all these years.

“I remember Kamakazis flying all over, smashing into the sea, trying to hit ships… It becomes a part of you,” he says of those experiences.

Norm Heydinger and brother Guadalcanal WWIIAnother experience has stayed with Norm through the years, but this is a happy memory. It was an unanticipated family reunion of sorts in 1944, right in the middle of the war. Norm says his brother Edward was serving in the Air Force and it just so happened that they were both at Guadalcanal, an island in the South Pacific that had seen intense fighting earlier in the war. Norm says when he got wind that Edward was so nearby, he managed to find him and they spent the day together. A picture from that day is still on the Heydinger refrigerator. Norm says Edward settled in Findlay after the war and was with Marathon Oil for many years as an economist.   

May 8, 1945

Norm says he left the Aquarius on May 8, 1945, another date very clear in his memory. It was V-E day, or Victory in Europe Day… which marks the formal acceptance by the World War II Allies of Nazi Germany’s surrender, though the war was far from over. Norm says he flew home to the US for a 30 day leave and was supposed to go back to the ship, with plans to go to Okinawa, but says instead he was transferred to shore. He called it the happiest day of his life. But, after spending the summer of 1945 in the states, he was shipped back to the Pacific on a Coast Guard cutter, the USS Gladwin. Named for a city in Pennsylvania, Norm says he’s always wanted to go there to visit.

On the Gladwin Norm says his duty was in the North Pacific in Alaska for rescue and plane guard service. From there he says he went back to the west coast to San Francisco and left the Coast Guard in April of 1946.

Norm and Dorothy Heydinger Flag City Honor FlightTwo years later he met the love of his life and then another important date: June 24, 1950, when he and Dorothy were married. Norm says they just celebrated their 68th wedding anniversary and have four children, seven grandchildren and three great grandchildren.

While many veterans prefer to leave memories of their wartime service in the past, Norm says he enjoys reliving it. He says he feels very fortunate and while he had some horrible experiences, he also had some wonderful experiences. He says shipmates became good friends, and he even had an opportunity to spend some time in Hawaii.

“I certainly have been blessed,” he says. “All of my classmates from college, buddies from the Coast Guard, Miami University classmates – they’re all dead. I’ve been fortunate.”

June 5, 2018

74 years after Norm shipped out to the South Pacific during World War II, came another date he will surely never forget. This past June 5th he was one of 76 veterans to travel with Flag City Honor Flight to Washington D.C. Seventeen of the veterans on board, including Norm, were World War II veterans.   

“We know there are many more veterans out there like Norm who have yet to see the memorials,” says Flag City Honor Flight Executive Director Deb Wickerham. “We serve veterans from Findlay, the Toledo area, across the state and beyond. We need to continue to get the word out to area families that they have access to Honor Flight. They all deserve this one last tour of duty with honor.”

Norm Heydinger Honor Flight HomecomingNorm’s son Peter was his guardian for the day, accompanying his father to the memorials. It was the first time Norm had ever seen the World War II memorial. He says one of the most impressive experiences on the trip was to see the Changing of the Guard at The Tomb of the Unknown Soldier at Arlington National Cemetery. Another memorable moment: the reception and homecoming celebration back at the airplane hangar in Toledo. Bad weather delayed the flight’s return a bit, but a large crowd was still waiting. Dorothy and other family members joined hundreds of others who formed a line to welcome the veterans into the hangar.

“I felt like Jesus walking into Jerusalem… I’ll never forget that. Never.”

The capper for Norm: local Boy Scouts handed him a bag full of gifts. Children had written him letters. “Truly amazing,” he says. He saved all the letters, notes and cards.

Norm Heydinger letters and cardsYes, Norm Heydinger has been blessed. He was given an Honor Flight over seven decades after his military service. In fact, at 97 years old, he was the oldest veteran on the flight. He was able to walk the entire day in Washington with his own son and arrive home to a hero’s welcome, and, of course, to his Dorothy.

Flag City Honor Flight operates two flights a year. The next flight is October 2, 2018. The nonprofit organization is run completely by volunteers and is funded solely through donations. Flag City Honor Flight is always in need of sponsors to help pay the way for veterans like Norm. Learn more about how to help at flagcityhonorflight.org.

Gilmore Jasion Mahler is a proud supporter of Flag City Honor Flight, donating proceeds from a special fundraiser to help pay the way for more veterans like Norm to make the trip. The firm’s 2017 event Carnevale raised enough money to pay for an entire flight and then some. The next event, called Wanderlust will be November 1, 2019.

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.

Note: Flight photography courtesy of Flag City Honor Flight photographer Kelly Waird.

IRS Clarifies New Pass-Through Rules

Finally, some long awaited guidance has arrived from the IRS on the rules that benefit owners of pass-through businesses, or businesses whose owners report the business income on their personal tax returns.

Proposed regulations have been issued for the Code Section 199A pass-through or Qualified Business Income deduction. This deduction benefits many owners of sole proprietorships, partnerships, trusts, and S Corporations and allows for a deduction of 20 percent of their qualified business income. However, the 20 percent deduction isn’t available for some so-called Specified Service Trade or Businesses (SSTBs). The IRS is now out with more specifics on which businesses would be classified as these Specified Service Trade or Businesses (SSTBs). We have highlighted below the Specified Service Trade or Businesses (SSTBs) that appear to have had the most demand for clarification.   

Health Services:

Provision of medical services by individuals such as physicians, pharmacists, nurses, dentists, veterinarians, physical therapists, psychologists and any other similar healthcare professionals performing services in their capacity as such who provide medical services directly to a patient (service recipient). This does not include the provision of services not directly related to a medical services field, even though the services provided may relate to health of the service recipient. For example, operation of health club or health spas, payment processing, or the research, testing, and manufacture and/or sales of pharmaceuticals or medical devices.

Legal Services:

Performance of services by individuals such as lawyers, paralegals, legal arbitrators, mediators and similar professionals. This does not include the provision of services that do not require skills unique to the field of law. For example, the provision of services by printers, delivery services, or stenography services.

Consulting Services:  

The provision of professional advice and counsel to clients to assist the client in achieving goals and solving problems. This does not include the performance of services other than advice and counsel, such as sales or economically similar services or the provision of training and educational courses. The determination of whether a person’s services are sales or economically similar services will be based on all the facts and circumstances of that person’s business. Such facts and circumstances include, for example, the manner in which the taxpayer is compensated for the services provided. This does not include the performance of consulting services embedded in or ancillary to the sale of goods or performance of services on behalf of a trade or business that is otherwise not an SSTB (such as typical services provided by a building contractor) if there is no separate payment for the consulting services.

Other Services:

Any trade or business where the principal asset of such trade or business is the reputation or skill of one or more employees or owners (any trade or business that consists of any of the following, or any combination thereof):

  1. Receives fees, compensation, or other income for endorsing products or services
  2. Licenses or receives fees, compensation or other income in the use of an individual’s image, likeness, name, signature, voice, trademark, or any other symbols associated with the individual’s identity
  3. Receives fees, compensation, or other income for appearing at an event or on radio, television, or other media
  4. Receives fees, compensation or other income including the receipt of a partnership interest and the corresponding distributive share of income or the receipt of stock of an S Corporation

There’s been much chatter about how to restructure SSTBs to allow them to benefit from the deduction, but the IRS has made it clear that’s not going to fly and has added new regulations to combat such tax planning strategies. As a result, an SSTB also includes any business that provides 80% or more of its property or services to a specified service business if there is 50% or more common ownership of the businesses. Also, if there is the common ownership above and the business provides less than 80% of property or services, the portion of the property or services provided will be treated as an SSTB, meaning that the income will be treated as income from an SSTB.

The regulations also address the issue of aggregation, or pulling all commonly owned entities into one business entity to benefit from the 20 percent pass-through deduction.

When can you aggregate? The IRS has provided some rules to provide multiple business owners with benefits in complying with certain statutory limitations of the 20% pass-through deduction. Aggregation is elective, not required.

The regulations say trades or businesses can be aggregated only if you can prove the following:

  • The same person or groups of persons, directly or indirectly, owns 50% or more of each trade or business to be aggregated
  • The ownership described above exists for the majority of the taxable year in which the items attributable to each trade or business to be aggregated are includible in income
  • All of the items attributable to each to be aggregated are reported on returns with the same taxable year, not taking into account short taxable years
  • None of the trades or businesses to be aggregated is a Specified Service or Trade Business (SSTB)  
  • The trades or businesses to be aggregated satisfy at least two of the following three factors:
  1. The trades or businesses provide products and services that are the same or customarily offered together
  2. The trades or businesses share facilities or share significant centralized business elements, such as personnel, accounting, legal, manufacturing, purchasing, human resources, or information technology resources
  3. The trades or businesses are operated in coordination with, or reliance upon, one or more of the businesses in the aggregated group (for example, supply chain interdependencies)

These are just some of the key clarifications in the regulations, which we can rely on until final regulations are published. The regulations do answer many of the questions that we had and provide some surprises, but they also pose some new questions as well.  

We know it’s a lot to absorb! As always, we encourage you to reach out to your GJM team with any questions.

GJM Tax Partner Dave Baymiller contributed this blog. Dave has over 35 years of public accounting experience. His focus is federal, state and local tax.

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.

GJM Goes Over the Edge to Support The Victory Center

Toledo Edison Building Rappel Gilmore Jasion MahlerGilmore Jasion Mahler (GJM) is upping its game this year in support of The Victory Center’s Over the Edge fundraiser. The firm has a team of people, including Managing Partner Kevin Gilmore, who will rappel down the façade of the Toledo Edison building in downtown Toledo to raise money for The Victory Center’s cancer support services.

GJM tax associates Hannah Nowak and Mackenzie Gross and Mackenzie’s husband Justin were among the first to sign up to rappel.

“Since my mom’s a breast cancer survivor, and Justin lost two grandparents to cancer, we’re both happy to raise money for the cause,” she says.

Kevin Gilmore agreed to rappel as well, but only if Firm Administrator Itzel Krauss would sign up too. Itzel, who is a breast cancer survivor, rappelled last year dressed as Wonder Woman. She was one of the top two fundraisers, bringing in close to $7,500 in donations from her family, friends and other supporters.

Itzel Krauss Rappel Gilmore Jasion MahlerParticipants need to each raise over $1,000 to earn a spot to rappel. The GJM team has raised enough money to secure a spot for each rappeler, but hopes to raise significantly more money in the days and weeks to come.

“We have a friendly challenge going on to see who on our team can get the most donations. If there’s one thing we don’t shy away from at GJM it’s a challenge,” says Hannah Nowak.

The Victory Center offers support services to people affected by cancer and their families. Services include support groups, massage therapy, yoga, facials and counseling. All services are free, supported solely through donations and fundraisers. The nonprofit hopes to raise $165 thousand dollars with this year’s Over the Edge fundraiser.

Rappel Gilmore Jasion Mahler Kevin GilmoreGJM’s support will be evident long after Over the Edge is done. Mackenzie has just joined the Victory Center board as the treasurer, following in the footsteps of GJM Partner Steve Schult and Itzel, who have each served as treasurer. Itzel is currently board vice president and will soon take over as board president.

“We support so many important causes at GJM. This one hits especially close to home for me, and for so many of us. The Victory Center’s services were there for me when I needed them. It feels good to do what we can to make sure these services are there for others when they need them too.”

Our rappelers have given the thumbs up. They're ready to raise some serious money to help those impacted by cancer. If you'd like to support them, you can easily donate online to any GJM rappel team members. Be sure to come join the crowd cheering them on as they go Over the Edge for Victory on September 7 from 4:30-5:30 pm at the Toledo Edison building at 300 Madison Avenue.

You can learn more about Over the Edge at ote4victory.org and more about The Victory Center’s programs and services at thevictorycenter.org.

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.

How Do You Figure Out the Value of Your Business?

It's easy to value a public company. Just refer to the stock price. But private businesses often need to rely on a valuation report from an expert to find out what their business is worth. Gilmore Jasion Mahler Partner Jeff Denning specializes in business valuation. He says a valuation is an in depth report that you might compare to a real estate appraisal, except it's for your business, not your house.

Learn more about Jeff's expertise in business valuation and forensics, and don't forget to sign up for GJM's free quarterly newsletter The Expert. It offers timely and helpful articles with a focus on business valuation and litigation support.

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.