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Heyward CPA Merges with A-OH Business

February 2, 2019 by Heyward CPA

Father & son unite to expand their top-notch east coast accounting practice


DURHAM, N.C. – Feb. 2, 2019 — James Heyward, Principal: of Heyward CPA PLLC is proud to announce a merger with A OH Business Services, NYC, effective January 2019.  Heyward CPA PLLC, is a prestigious Durham, North Carolina based firm that provides tax, accounting, and advisory services to businesses and their owners.  A-OH Business Services was established in Queens, New York, by Oscar Heyward in 1982 and provides similar services to individuals, businesses, and tax-exempt organizations, with a specialization in pre-k & afterschool, child care centers.

The decision to merge was based on the belief that a more expansive and comprehensive operation will allow the company to provide a wider array of services, faster turnaround time and better client experience. The merger is designed to facilitate a wide range of new financial services in areas of accounting expertise in the future. The firm has attracted high-quality, committed professionals, invested in tools and resources to streamline their processes in order to become more efficient and provide a better client experience. With an exceptional track record in the accounting industry, the father and son teamed up to expand their wealth of experience, skills, and talent, throughout the east coast.

At an early age, emulating his father’s, acumen and professionalism, James developed his knowledge of and love for financial management, while working for his dad’s practice. The lessons he learned while working with his father, coupled with his love for financial management, led to other successful business ventures; ultimately leading him to establish the recent merger of “HEYWARD CPA, PLLC & A-OH Business Services.”

James E Heyward will remain Principal owner, while Oscar Heyward will operate an Executive Associate.

Heyward CPA PLLC is a Durham, North Carolina based firm on a mission to increase the success of small and mid-size companies, with a specialty in minority-owned firms, as a means of strengthening the economy and developing wealth. 

Filed Under: Uncategorized Tagged With: news

An S Corporation Loss Equals a Personal Tax Deduction

November 29, 2018 by Heyward CPA

Business owners aren’t in business to lose money. So there’s not much to like about a nonprofitable year. For a shareholder in an S corporation, however, a down year can have an upside — the corporate loss may give rise to a personal tax deduction.

Standing between an S shareholder and the loss deduction is a tricky tax computation known as “adjusted basis.” Under the tax law, a shareholder’s loss deduction is limited to the shareholder’s adjusted basis in his/her corporate stock and in any debt the company owes the shareholder.

What is adjusted basis, anyway? Essentially, it’s a figure that tracks the shareholder’s investment in the company for tax purposes. The basis number changes every year to account for any money flowing between the company and the shareholder — distributions, capital contributions, loans, and loan repayments — as well as for the shareholder’s allocated share of corporate income or loss.

If a net operating loss is anticipated for the year, S shareholders should find out whether they will have enough basis to benefit from the projected loss deduction. If not, it may be possible to increase basis by making a contribution to capital or by loaning the company money before year-end. When you give us a call today, our tax professionals can offer guidance so that the transaction will pass IRS muster.

Filed Under: Uncategorized Tagged With: s corporation, small business, taxes

The Financial Flipside Podcast, Episode 15: Flat Hierarchy and Luxury Couches: Startups and Startup Culture

November 8, 2018 by Heyward CPA

Facebook, Twitter, Airbnb, and Lyft all began life as startups, and their success has meant that the romance of rapid growth and multi-million dollar exits has permeated not only the world of business but almost every aspect of our daily lives. Popular business magazines draw readers in with breathless company profiles and promises that the morning routine or management style of this or that founder could transform your business too. Away from the office, television shows like Silicon Valley and Shark Tank have turned coding marathons and venture capital pitches into appointment viewing.

Where does our collective fascination leave businesses that don’t follow the startup model? Is there any real difference between startups and small businesses? What can startups and small business learn from each other? These are just some of the questions we tackle in this episode. Enjoy!

As always, we want to hear from you: tell us about your startup dreams, adventures in building a strong business culture, or even your favorite (or least favorite) entrepreneurship-entertainment. We’re on Instagram, Twitter, and Facebook @financeflipside, or you can email us at info@financeflipside.com

Mentioned on the show:

Growly.io’s history of startups
Are you running a startup or a small business? What’s the difference?
When does a business stop being a startup?
Homogeneity and diversity in tech startups
Flat vs. hierarchical business structures
5 startup founders discuss company culture
The myth of flat hierarchy in startups (opinion)
Do You Know Where Your Money Is? 3 Tips to Get Your Startup’s Finances in Order
Accounting 101 for Startups
5 reasons why small business owners shouldn’t ignore marketing
101 ways to market your small business and 40 more ideas for small businesses on a budget.
Startup writer and entrepreneur John Westerberg argues that most entrepreneurs should focus on building small businesses instead of startups

Filed Under: Uncategorized Tagged With: entrepreneurship, innovation, small business

Have an S Corporation? Be sure to Give Yourself a Paycheck

October 10, 2018 by Heyward CPA

If your company is organized as an S corporation, you may wonder whether it is better to take income from the company as salary or as cash distributions. Of the two options, distributions carry the least tax cost because they are not subject to employment taxes. But that doesn’t mean you shouldn’t take a paycheck from your firm.

IRS Warning

Over the years, the IRS has made a point of warning S corporations not to attempt to avoid federal employment taxes by having corporate officer/shareholders treat their compensation as cash distributions, payments of personal expenses, or loans instead of as wages. According to the IRS, distributions must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation.

What Is a “Reasonable” Salary?

To avoid problems with the IRS, you should be sure to take a reasonable amount of salary if you receive any direct or indirect payments from your company. However, the tax law has no hard-and-fast guidelines regarding what is considered “reasonable.” When the issue has come up in court, the determination has been based on the facts and circumstances of the particular case. Various factors have come into play, including:

* Duties and responsibilities
* Time and effort devoted to the business
* Training and experience
* What comparable businesses pay for similar services
* Timing and manner of paying bonuses to key people
* Payments to employees who are not shareholders
* The corporation’s dividend-paying history
* Compensation agreements
* The use of a formula to determine compensation

An Exception

What about an S corporation officer who doesn’t perform any services for the corporation — or whose services are very minor? In this relatively unusual situation, assuming the officer receives no direct or indirect pay, he or she would not be considered an employee.

For more help with individual or business taxes, connect with us today. Our team can help you with all your tax issues, large and small.

Filed Under: Uncategorized Tagged With: compensation, entrepreneur, salary, small business, taxes

Growing Pains: Structural Considerations for Growing Your Business

October 3, 2018 by Heyward CPA

Ask any small-business owner what he sees as the major challenges to growing his business, and chances are he’ll say: winning more sales. Ask any medium- or large-business owner what her major challenges have been, however, and she’ll probably say: structural growing pains — putting into place the necessary processes and structure to accommodate a higher volume of business. In fact, one of the most common reasons businesses plateau at a certain level is their inability — or unwillingness — to develop the structure needed for growth.

But aligning structural changes with sales growth is not simple. It is often more of an art than a science. The systems, processes, staff, and organization changes needed to grow are ongoing and dictated by myriad factors such as the nature of the business, its capital requirements and, ultimately, customer demands. Nonetheless, certain structural growth concerns — excluding financing and office/production space issues — are shared among all growing companies and fall into three overall areas: organizational structure, policies and procedures, and systems/technology.
Staffing/Organizational Structure

Among the most common growing pains small companies experience are those related to organizational structure. Organizational structure and reporting hierarchy for a 25-person company is quite different than it is for a five-person organization. Typically, an entrepreneur can manage fine until there are about a dozen people in the organization. At this point, the initial structure — where everyone usually reports to the owner — breaks down. In effect, nothing can be done without involving the owner, creating a communications log jam and a barrier to growth. A telltale sign of such a situation is the line of staff outside the boss’s office — waiting patiently for a decision before work can recommence. The best way to overcome or prevent this from happening is simple: Trust your key employees and learn to delegate. A good place to start is to look at where you are spending your time. You can still have final say on any important decisions, but you need not be involved with the time-consuming, day-to-day issues that can prevent you from focusing on larger, more strategic matters. It’s also important to formalize delegated authority with an organizational chart and job descriptions. These will help you better define functional expertise for a given job and for various departments across the organization, and provide the foundation for the growth of future personnel and key management staff.

Lack of functional expertise is another common growing pain of small companies. Too often, businesses fail to recognize that specific expertise is needed as they grow. Typically, small businesses are organized around the manager’s area of expertise, such as marketing, accounting, or production. This specialized expertise often prevents the business owner from recognizing problems that may arise in other parts of the business. It’s a good idea to periodically get an outsider’s opinion of where expertise may be lacking. These need not be paid consultants, but are often trusted business acquaintances. Tapping into this same group, you can also form an advisory board to give you periodic feedback on strategic direction.
Policies and Procedures

For most smaller businesses, written policies and procedures are often nonexistent and sometimes cursed. Typically, they are associated with the bureaucracy and inefficiency of big companies and the enemy of customer responsiveness and quick time to market. Not surprisingly, most smaller businesses have few documented operational policies or procedural guidelines. But it is precisely this lack of documentation — and the thought that goes into it — that can put a stranglehold on rapid growth. If your business is growing fast enough to require frequent additions to staff, formalized policies are a must for training purposes. Even if you are expanding at a moderate pace, documented policies will likely be necessary once you reach 20 or more employees.

What warrants a formal policy and what should be documented? This will depend on the nature of your business and average skill level of your employees. In general, however, it’s a good idea to document all HR policies in detail, expense approval authorization levels, inventory control policies, billing and collection procedures, and any operational policies that could materially affect your business if they went amiss. An annual budget and sales projection, updated monthly, are also a necessity if you are ever to obtain outside funding or sell your company. Later on, consider putting together a comprehensive policy manual where employees can get answers to questions when decision makers are unavailable.

As you grow bigger, you will also need to put into place more formalized communications channels for employees and customers. An informed and involved staff is usually a more productive and enthusiastic one; whereas a staff that is left in the dark often feels alienated and unappreciated. Regularly scheduled employee meetings, periodic e-mail updates, and a cascade communications policy are several ways to make sure your internal communications channels facilitate, not constrict, growth.
Is your business suffering from growing pains?
Here are some sure signs that structural changes may be in order.

* Sales continue to grow but profits do not.
* Everyone is working increasingly long hours.
* People spend too much time putting out fires.
* There are constant lines outside the boss’s door.
* There are no regularly scheduled meetings or employee communications.
* The “system” is constantly down.
* Aging equipment is not replaced.

Systems/Equipment

Perhaps more obvious than organizational or procedural growing pains are those associated with systems and equipment. Smaller businesses are often the last to upgrade to new technology, usually due to cost. Yet the costs of not upgrading are usually much higher. Low productivity, frequent down time, and incompatibility with newer client systems can cripple a business that’s poised for growth. There’s also the matter of keeping up with your competitors both operationally and across product and service offerings.

The average computer is virtually obsolete in just three years, and most of the widely used software applications come out with new versions every two years, so keeping on top of technological advances must be an ongoing endeavor. Start out by working regular capital upgrade costs into your budget. Consider dedicating a full-time person to information technology (IT), if you don’t already have one, and make sure he or she is current on the latest technological developments in your field. Even though you may not be able to afford all the latest equipment, at least you’ll be on top of technology trends in the industry and know what your competitors are up to — or are capable of.

Filed Under: Uncategorized Tagged With: growth, management, preparing to scale, systemization

The Financial Flipside Podcast, Episode 14: Can’t Knock the (Side) Hustle

September 27, 2018 by Heyward CPA

 

According to a recent Banrkate.com survey,  4 in 10 Americans have side hustles, or jobs that they work in addition to their primary source of income. Another survey of 1,000 Americans from CreditLoan.com found that 15% of side hustlers want to start a business of their own. If the legions of breathlessarticles aboutside hustling are any indication, we may be nearing a future in which everyone is living their entrepreneurial dreams and working 50 hour weeks.  Today’s episode tackles the hows and whys of side jobs, including making friends with fear, adjusting to irregular income, ethical side hustling, and turning your side hustle into a full-time business.

Discussed in this episode:

  • The origins of the term “side hustle” and the aestheticization of poverty

  • The dark side of side hustle mania, embodied in Fivver ads

  • Why are millenials so obsessed with side hustles?  This article argues that it’s  (mostly)  the economy, silly.

  • 4 questions to help you work a side job without getting fired

  • How to start a side business while working your day job

  • Tips for building your side business while working full time

  • How to know when it’s time to make the jump to full-time entrepreneurship

  • Time management for side hustlers

  • You may have as many hours in the day as [insert super-accomplished public figure], but research suggests that you should spend some of them away from work.

  • 9 strategies for budgeting with irregular income

  • Fear is the mind killer, but it can also be an entrepreneur’s best friend

Filed Under: Uncategorized Tagged With: entrepreneurship, financial flipside, gig economy, money, new business, side business, side hustle, small business

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