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Gilmore Jasion Mahler is keeping current on trends and issues affecting our utilities clients in the state of Ohio. Our firm had a team at this year's Ohio Gas Association Technical Seminar this week. It was also a chance to inform utility companies from across the state of our expertise in the industry. Gilmore Jasion Mahler Partner Nikki Clement specializes in accounting for regulated utilities. She and GJM Partner Bob Bobek attended this year's conference. Learn more about GJM's utilitites expertise.

You've put it off long enough. Ready to tackle your tax return? We've compiled a top ten list of some important things to keep in mind.

1. Make sure you’re not missing some typically overlooked deductions:

1. State/local taxes paid on last year’s return
2. Charity donations: cash payments (sit down and go through your online bank statement or checkbook and look for cash spent)

2. Check for tax credits that tend to get missed:

3. Energy tax credit: new doors and windows, etc.
4. Foreign tax credit: if got paid dividends from a foreign company

3. IRA and HSA contributions for 2015: you can still make 2015 contributions up to the tax deadline in April.

4. New Ohio tax return form: major changes in our forms this year.

5. If you own a business: good news this year. Ohio’s helped out with the business income deduction. Don’t overlook it.

6. Extension panic: don’t get nervous if you have to file an extension. It is important to remember that the extension is for the return, not the payment. For example, if you owe $500 to the IRS it will still be due on April 18^th (You have a couple of extra days this year, as the deadline was bumped to April 18th instead of the 15th).

7. If you file and it turns out you owe a lot of money that you don’t have, don’t panic.  You can work out a payment plan with the IRS.

8. Already filed and you got a corrected statement? File an amended return.

9. Double check yourself:

• Check and recheck your figures
• Right Social Security number?
• Sign the forms (if paper return)
• Attach all schedules and forms
• Mail return or extension request by April 18 deadline
• Don’t forget postage

10. Need help?

IRS.gov – resources, forms, etc.

Unitedwaytoledo.org or dial 2-1-1

Charlie Heid is a partner specializing in tax services, who joined Gilmore Jasion Mahler, LTD in 2002. He leads our Manufacturing Specialist Group. Charlie shares tax and financial insight monthly on WTOL 11 and Fox Toledo News.

Question: I am an Ohio business owner concerned about sales tax requirements in the state. The exemptions are so confusing. Do I need to worry about this? Any suggestions would be much appreciated.

Tax Partner Steve Schult's answer: Yes – You should worry about this!  Ohio sales/use tax laws are extremely complicated.  In general, sales and use tax applies to the retail sale, lease and rental of personal property, unless there is a specific exemption (which there are many).  Most services are not subject to sales/use tax.  However there are specific services that are subject to tax. 

I recently heard that approximately 75% of Ohio tax court cases involve sales tax.  I would strongly advise you to meet with your CPA to review the application of these laws.  It is not unusual to see very large assessments on sales tax audits because the company didn’t understand their sales/use tax obligations.

Steve Schult joined Gilmore Jasion Mahler, LTD in 1998. He works with a variety of clients including those in manufacturing and healthcare. Learn more about Steve’s expertise.

Since he was a little boy there’s nowhere Matt Long would rather be than in a farm field. Now 27-years-old, he has fond memories of spending summers with his grandfather on the family farm in Ada.  

“What I always enjoyed about it was just really my dad and my grandpa. I got to spend a lot of time with them every day and I still do. I was with my grandpa every day. He’d have little chores for me to do at the barn. I’d get up and do my chores at home and the barn was just a couple hundred yards away so I’d be gone the rest of the day. “

Matt says his great grandfather John Long purchased the land in 1938 after farming elsewhere in the region dating back to the turn of the century.  He says the Long family farm consists of 420 acres of grain, wheat, beans and corn and is now farmed by Matt, his father Dave Long and his cousin Rod Long.

But you could say Matt is leading a double life. Farmer by day… tax advisor by night.  Actually, the hours sort of mix and mingle with each other.

“Typically we plant in late April or early May. Wheat came off the week of the Fourth of July. We’ll harvest beans in late September or early October, and corn in late October or early November. Tax season fits right in the dead time there.”

Matt is a Senior Tax Associate in the Findlay office of Gilmore Jasion Mahler, LTD and advises clients who work in many industries. He says the tax work he does is very rewarding and it also allows him some flexibility during the farm season.  

He describes farming as the most relaxing thing he does. “I can sit on a tractor for 15 hours a day and it doesn’t bother me a bit. You’re just kind of off by yourself. All that peace and quiet in the outdoors. It just relaxes me.  It’s hard to explain. One thing that helps is I’m not making a living off it. I have a job. For those who make a living off it, a year like this year will hurt them.”

He’s referring to all the rain. Matt guesses they’ve lost 30 to 35 percent of their crop for both corn and beans because of the wet weather. He says it’s not so much the water itself, but the diseases and bacteria the water brings.

While many would think accounting and farming sound like two completely opposing lines of work, Matt says it’s a perfect fit for him. He says an accounting class in high school helped him to decide to pursue a career in the field.  A graduate of Ohio Northern University, Matt says he’s found that his accounting knowledge has also been helpful for his friends and fellow farmers making a living off the land.

“It’s really nice to be able to talk to people and give them advice and that’s what I like about accounting, talking with people. I’m a relationship guy, I guess.”

Bottom line, Matt likes learning about people’s business situations and helping them find solutions to problems. He remembers a particular situation a couple of years ago.

“A lot of guys had grain they weren’t selling until the next year. It kept building up. They were trying to figure out how to handle the situation and minimize the tax burden.” Upon Matt’s advice, many of them gifted grain to their children, which saved them considerable tax. “If you gift grain to someone who’s not a farmer,” Matt explains, “It can be taxed as capital gains and those tax rates are more favorable.”  

His advice could help smaller family farmers to stay in business across Hancock County. That’s not an easy thing in today’s economy. In fact, Matt sometimes wonders about the fate of his own family farm. He’s hopeful his 2 year old son may one day take it over. It sounds like he, too, may have farming in his blood. Matt says that the toddler has a battery-powered tractor and likes to watch him work in the fields. Who knows, maybe he’s also good with numbers, just like his dad.

Ohio Governor Mike DeWine is poised to sign two new tax bills into law that will come as very welcome news to small businesses operating as S-corporations, partnerships, and LLCs in the state. The pieces of legislation clarify the business income deduction (BID) as it relates to gains recognized on the sale of a business and offer relief from the current cap on deducting state and local tax on individual returns.

Ohio Senate Bill 246 authorizes an individual owner of a pass-through entity (PTE) to claim a refundable credit on their individual return equal to the owner’s proportionate share of the tax paid by the PTE. The taxes paid by the PTE do not count towards the cap of $10,000 that currently limits an individual’s ability to deduct taxes on their individual return (Schedule A- Itemized deductions).  

Ohio will become the 29^th state to pass such legislation. The law will address the tax burdens brought about by the $10,000 cap on state and local tax deductions included in the Tax Cuts and Jobs Act of 2017.

Ohio House Bill 515 addresses the business income deduction and makes clear that any gains from selling ownership interest in a pass-through entity (PTE) in Ohio would be considered business income and thus, eligible for the business income deduction (BID). The BID enables an individual to reduce the business income that flows through to their return by up to $250,000.  

Some requirements to benefit from HB 515:

• The sale must be considered the sale of assets for federal tax purposes
• The business seller must have had day-to-day management involvement during the taxable year in which the sale happened, or during the five years leading up to the sale

As noted above, both bills are expected to be signed by Governor Mike DeWine. GJM tax experts are watching the developments and will provide further guidance as needed. As always, should you have any questions or concerns about the impact for your business, your GJM team is here to advise.

**Update: Ohio Governor Mike DeWine's office says both HB 515 and Senate Bill 246 have now been signed into law.

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 & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.