Client Spotlight- Ruby Care and A-DOOR-ED

Check out this week’s Client Spotlight! We interviewed Patty Williams, co-founder and Senior Living Advisor at Ruby Care and co-founder of A-DOOR-ED! Keep reading to learn about what led her to start these businesses, some advice on taking care of loved ones this holiday season, and her wreath delivery subscription service!


What led you to a career in senior living placement and starting Ruby Care?

We’re in our fifth year now, and it started because there was really a need for it. Joyce Logan is my business partner, and she was helping her mother-in-law Ruby, who was living in Honey Grove, Texas at the time and was struggling to live on her own. She was living more than an hour away from her only son, and they just wanted to get her closer. When Joyce started looking at places, she realized that in our metroplex we have over 900 senior living communities. That’s just overwhelming, you don’t even know where to start. You don’t know what’s appropriate, what they need, what things to look for. Both of us had been in healthcare and we were both at a crossroads in our careers. So Joyce said “what do you think about starting Ruby Care?” We didn’t call it Ruby Care then, but she just thought of starting a company where we actually helped people find places for their family members. We started doing a lot of research about private companies that do this all over the US and learned about best practices. We decided to call it Ruby Care after Joyce’s mother-in law to honor her. Ruby actually passed away this year at 98 years old. But Joyce was able to find her a great place, and she lived out her days there.


Did you meet Joyce through the healthcare industry?

We were friends when I first moved to Texas in 2004. Joyce and I became friends and we just hit it off. We have similar passions in life; we both love to volunteer, we both really love to be around people, so it was kind of just a good fit for us to be together.

How did you come up with the idea for A-DOOR-ED and what impact do you want it to have?

With A-DOOR-ED, I have a different business partner, Kim Moline. Through our work with Ruby Care and going around to all the different communities, we kept seeing all these empty doors of people that didn’t have a wreath. When you’re in senior living, there’s just a lot that’s the same, but your door is kind of your thing that you get to decorate. You know, it’s your front door! But still there were so many empty ones. Well, Kim used to own a gift store in Colleyville and she’s very creative. She’s the designer for all the wreaths and she was basically saying we could create something where we could have a subscription for them. We could do a wreath of the month, or wreath of the season, and we could deliver them and replace them for people so they don’t have to store them! When you’re in senior living you don’t have a lot of storage space. But with A-DOOR-ED they could have a new wreath, or if they wanted to have the same wreath over-and-over they could do that too– a keepsake wreath. We sell them privately to people’s homes, as well. People that want to buy them outright and have them season-after-season, or people that just want them for a little time and then we come and bring another one! You can do it both ways. I think the biggest thing about it is just the storage; you don’t have to store it or worry about having it in your attic or the racoons eating it. You can just say “okay, now it’s Christmas and I want a new wreath!” and you have this subscription so we bring it. And we actually deliver it and hang it on the door so our customers don’t have to be home after we’ve done the first one.


What is the most rewarding part of owning business that works so closely with people?

You know that’s probably the thing; it’s the different people we get to meet. With Ruby Care it’s finding that place, taking that burden off of the family and being that extra set of eyes and ears to help them. We’re able to give advice and take off some of that stress. With A-DOOR-ED I think it’s that smile when somebody comes home and sees their wreath every day. They know that this person thought of them today and cares about them. We’ve also had a lot of realtors buy wreaths from us. I didn’t think about that industry, but they can honor their clients by giving them a ‘Welcome Home’ wreath. It’s been neat being able to be a part of that sale. Maybe that’s the person’s very first home and then here is our wreath adorning their brand-new home, it’s a neat thing! We feel honored to be able to be there. And we can always add-on, if it’s somebody’s birthday, or their anniversary, or they’re retiring. Our wreaths are handmade and custom-made to whatever you want: the colors that you want, the styles. So it’s always fun!

Is there any advice you would give people going into the holidays to make sure their elderly family members are well taken care of?

I think it’s really good to just pay attention. A lot of people are visiting their loved ones during the holidays. A lot of times that’s when you notice that something is going on, so it’s good to look for those signs. Is the person taking care of themselves? Are medications being taken properly? Does their house look like it is in order? Those are kind of telltale signs that make you say “hmm, okay… things aren’t going as well as they were last year when I was here.”


How did you get connected with Christi, and what’s your favorite thing about working with our firm?

I love Christi’s heart; I just love her way! I got connected with her through my husband because my husband is a dentist in town and their office used Christi’s services. I met her through that and also through the missions that we do together with Mission Barnabas. I am very impressed with Christi’s heart and her way. I just think she’s wonderful, when I’m with her I always feel happy!

What’s your favorite part of the holidays?

Family, just being around family and getting to do things together, making those memories. We have 3 grandkids so it’s fun to see everything through their eyes. We enjoy the food and getting together and football and trying to be outside if we can. Usually what we do as a family is have everybody bring something– my sister-in law is a great cook and so is her husband. Our family members always bring a few dishes and every year we end up saying “so are we doing pretty much our same thing?” We always have a fried turkey, that’s a big hit. And we get the lights up on the house but we don’t turn them on until after Thanksgiving. The kids are always asking “can we turn them on!?” and we’re always saying “no, not yet!” We do go around and even though people sometimes groan, we always ask everyone what they’re thankful for. We try to at least remember once a year, because we have a lot to be thankful for!

Where can our other clients go to check out your business, and what should they look into this holiday season?

We have the keepsake wreath you can get one time, or the seasonal has been a big hit. We do have people getting orders in now so we can get them done for the holidays. I already made two deliveries on Saturday for people decorating early. A lot of people are decorating early this year!

Thanks for reading our post on Patty Williams! Check out her site for Ruby Care here and learn more about the subscriptions from A-DOOR-ED here!


Client Spotlight- MOD Interiors

Welcome to our new business client profile feature! Each week we will feature one or more of our business clients, giving you a chance to learn more about them and the services they provide. More than ever, it’s important to support and encourage our local businesses. We will also be posting reminders about year-end tax planning opportunities and any potential changes coming for the 2020 tax season. Our first feature is Farrha Hyman, founder and principal designer of Mod Interiors. Keep reading to learn about how her business began, her passion for changing her clients lives, and her philosophy on Christmas décor!

Like us on Facebook and follow us on Twitter and LinkedIn to get updates anywhere you are! 


Why did you decide to go into Interior Design?

Ah, that’s a loaded question! So I guess I got into interior design because literally everyone was telling me I needed to. I was working as a temp for another company when I moved here, my initial background was HR. I would help them move their VPs from another state to here, and I would help them, organize their office, make it pretty, and I would help them with their homes as they got moved over. After about the fifth one in they said “you know you really should do this for a living!” At the same time, I had a friend of mine who’s a realtor and she got me into staging homes. Every one that I would stage would sell, and she  said “You can do this, you really have to do this for a living!” and that’s how I got into the business. She would keep referring me and referring me. I was doing staging and organizing at first, and everybody who I would do work for would tell their friends “she came in to organize my space and look how pretty she made my office!” or whatever I did for them. The business went from staging and organizing into full-blown design. Eventually, people would come to me for design and not necessarily for organizing. So that’s really how I got started.

What was the turning point from this being a side-gig to becoming a full-time business?

When I moved here, my background was HR. I moved here two weeks before September 11th happened, and I did HR for a hotel company. I temped with them for about a year and a half, which is unheard of. The company would pay me holidays, give me bonuses, it was the weirdest thing—but yet, they wouldn’t hire me. I was so disappointed. I’d been there so long and they would keep me busy but they wouldn’t hire me. The guy that I was I was working for was one of the VPs, whom I had a good relationship with. At the end he said “I couldn’t tell you, but we didn’t want to hire you and let you get comfortable because they were going to sell the company.” They didn’t really know what was going to happen or who they were going to keep. So, it was a blessing. And he told me “but you know, you’re so good at this” and I thought, “Okay! One more person tells me…” My whole situation was doing HR, and then I ended up losing that position. It was like, well you know, do it or not… and I kept doing it. Business kept coming to me, it just kept coming. So I just kept doing it. I finally decided, okay, okay, I’ll start a business! I went out and got the business started officially and said “okay guys, this is on you!” I didn’t know what to do, I had never run a business before. But I did take a class and got a certification just to make sure that I knew what I was doing and that I was taking care of my clients. Then, it just became the joy on people’s faces when I would take a space that they dreaded being in, and turn it to one that they now want to spend all their time in. I’ve had people cry. And it’s just all of that– the feeling is overwhelming that you are literally changing people’s lives and how they live. Then it was a no brainer and I was really good at it, so I just kept doing it! This all started in 2001, and I think I officially got the business in 2003, so it’s been 17 almost 18 years.

What is your favorite part of the creative process with each client?

I love creating something that’s specific to them: the things that they enjoy and the things that experience. Every client is different in that sense. If you go on my website, you’ll see that. Every project is different. I’m not one of those designers that you can go through their portfolio and say “okay, they do it like this” because every one of my projects is different. I love to incorporate my client, who they are, how they live their life, the experience they have. Sharing that and trying to put in things that they collected along the way or maybe something they got from a family member. To me that’s the thing that brings me the most joy is that when I’m done with their space, it is specifically their space. They love every corner; they can see that there is something special to them that they’re not going to find in any other home that I do.

What advice would you have given yourself when starting out given what you know now?

Ohhhh what advice would I have given myself!? I would have told myself “don’t be afraid to hire someone!” At the beginning, I was very nervous to hire someone to support me. That’s the biggest thing I think I would tell myself—hire someone to help you do this, don’t try to do this all by yourself.

How have you, as an individual, grown?

Oh my, leaps and bounds! The changes, the growth, it’s been insane. I’ve grown a lot in my abilities as a designer, just my skill level obviously because of time and different projects and classes and courses and all that. I’m definitely more skilled at what I do. But I think I’ve grown in being more sure. When I’m speaking with a client it’s a lot easier for me now to kind of get to the bottom and pick up the clues that they’re giving me. And sometimes the clues they’re not giving me, right? Sometimes it’s what people don’t say that can really help you. I’ve grown to be really good at being able to read that. It’s funny because sometimes people will ask me how, and I’m like “I don’t know, it’s just one of those things I do!”  When I’m talking to that person and I connect with someone, I just get it.

How did you get connected with Christi, and what’s your favorite thing about working with our firm?

Actually, I was in the market for a new accountant and of course I drive up and down Main Street all the time. I always see her sign so I’m like “you know what, you need to just go in there!” Every time I would think I need to call and I never did, so I think I literally just stopped in. I just found her based on location. And I love that she takes the time… to deal with my crazy! I’m totally the opposite, being what I do, my brain works so very different from an accountant brain and she takes the time to explain things to me and deal with them. When I came to her I had a bit of a mess in my hands and I love that she takes the time to do the things that I need to make sure that I’m comfortable moving forward in the things that we’re doing. I really do love and appreciate that with you all.

What’s your favorite part of the holidays?

Christmas! I love Christmas, and I do remodels, I do all kinds of crazy stuff, but the idea that I do Christmas decorating as well… my friends look at me like “you’re insane”. And I think… “I know! It’s glutton for punishment, like who does that?! Let somebody else do it!” But I love Christmas, and I love helping people create their Christmas. I started because a client of mine forced me into helping her, and she said “well you did such a great job you should come back and do it next year!” Next thing you know I’m doing Christmas decorating. But again, its about that joy that you bring to people. That time of the holidays is either one of those times where people love it and they do everything to make it grand, or they’ll call me because they just want to do something to add a little bit of joy for their child, their family, depending on whatever they’re gone through for the year. I can come in and create that space that just really makes them happy and just brings the joy of the holiday home for them. That’s why I do it, I just love that. It truly is magical; it just takes you to a different mindset.

When do you think is too early to start decorating for Christmas?

It’s never too early to start Christmas decorating! You know how it is, you never see it coming it just sneaks up on you! I don’t think its ever too early. With a lot of our clients, we will start in the summertime. Start planning things out, especially with people who have big parties and our commercial clients. If they’re changing anything, we usually start that early so that we can get everything in place and get everything ordered for them. I’ve had people email me and say “okay, now that we’ve taken everything down, next year we want to do…” and it’s February!

Is there anything else you would want people to know about you and your business?

The one thing I would like to say is that we love to create spaces for our clients that is uniquely them and brings in joy, and still really functions well for them. A lot of time people say “oh you just took a picture” or “the space is cleaned out for the photo.” But when we design for our client’s we design for the way they live, not for a photo. So, we think about all these things and I think that’s the biggest differentiator for us and I love for people to know that’s how we design. We design to help people live better in their space.

Want to check out MOD Interiors?
View Farrha’s portfolio, learn more about the types of services she offers (from commercial to residential), or book a consultation with her today!



Tax season is officially open!  Being well organized and getting your data in timely will help make for smoother tax filings. We will begin addressing collection and payment issues with the IRS again now that the shutdown is over, but patience will be required.  As stated in the article, they expect that it could take up to a year to sort through all the correspondence received during the shutdown. 
Tax season opens with shutdown over http://bit.ly/2Uqnuiq 


Client of the Month- Wayfaren

We are so excited to start a new series on the blog, introducing you to our incredible clients that we have the joy and privilege to work with! For August, we’re starting with Wayfaren, an online shop full of travel-related products! You can shop their online store here.

Tell us about what you do, and why you started Wayfaren!

Wayfaren started November 2012 out of love for travel and a creative outlet for my husband and I at the time. After living in Italy for a year and Luke backpacking throughout Europe, we caught the travel bug and a love for other cultures and never looked back. In 2012, after returning home from a summer in Spain, hundreds of beautiful pictures just sat idly on our computer. It seemed like such a shame for these beautiful images to just waste away behind a computer screen. Some friends who had an Etsy shop encouraged us to list the photos, hey it was just $.20 to list an item, essentially risk free! And that’s how it all began.

Now we never sold one of those photos, but we quickly saw a gap in the market for a really well-designed, timeless push pin travel map. We searched high and low for a beautiful Travel Map that could be at the center of your home, but all we found were cheap and sterile looking alternatives- so we made one ourselves! With the launch of our Push Pin Maps was when a hobby quickly turned into a full-time business.

Luke always had an affinity for woodworking, so quickly our two loves collided into the beautiful niche that is now Wayfaren. Today we sell handcrafted and Travel-inspired items, thoughtfully designed for the modern traveler- Push Pin Travel Maps, custom engraved keepsake boxes, and personalized travel journals.

Where did you get the name from?

We came up with the name Wayfaren on a 10hr road trip to Colorado- very fitting right?! A nod to Travel, but not too cheesy…timeless, but not boring…strong, but not intimidating- Wayfaren was a variation that popped out of “wayfarer” and as soon as we heard it we knew!

What is it like running a business with your husband and raising children?

Goodness, HARD. Wonderful, and hard. All the time I say I don’t want to do this for one more day…and I hope we do this forever. Running a family business is equal parts chaos and joy. Entrepreneurship and self-employment…especially when you throw in a marriage and two little ones 3 and under is not for the faint of heart, yet incredible rewarding.

It has taken YEARS to really find a balance, our right roles within the business, and sanity to be quite honest. Once we moved Wayfaren out of our home and to our first commercial space- that really set our family on a trajectory for balance. Every week it can still be a struggle, but we wouldn’t change it for anything.

Tell us all about your recent trip to Italy!

Can we go back? For years, we dreamed about getting back to Europe…but the kids? And could we afford it? Could we get away from the business for that long? This past Spring we said enough, life is too short, we have to stop dreaming about this trip and just do it!

So we booked the trip and took our two kids with us to Italy, a place that is so near and dear to our hearts. We spent a month in Rome and it was just about the best month of our lives. We were able to take it slow really soak up the country, live there like we were living there… which was the whole purpose. The trip served as a launching pad for our blog and brought so much inspiration for new products. We hope to work remotely for one month every year in a new location- our bucket list and we hope to make happen! Read here how we ended up making it happen and our family of four spent that month in Italy for $1k.

http://bit.ly/2OP0Deq

How did you get connected with Christi, and why do you feel it is important for small businesses to have a reliable accountant?

I was a part of a creative community in Dallas a few years ago, the Rising Tide Society, and when polling for great accountants in the area that specialize in small business, Christi‘s name came up over and over. As soon as I met her I knew I wanted to work with her! She took the time to meet with me personally, was so friendly and was so patient in walking me through some questions I had.

The first two years of Wayfaren we did our own accounting, as we have some accountants in the family, but as we grew once our annual taxes got more complicated we knew we needed to bring someone more knowledgeable in. Christi and her team have been such a great guidance and lead as we navigate the logistics behind the business from year to year.

What’s next for Wayfaren?

A lot! We’re in process of expanding our offerings on the woodworking side of the business- custom furniture, corporate clients, and more travel inspired products. As well, we hope to develop the blog facet of our business and continuing to adventure as a family and provide people practical ideas and inspiration for travel.

What we are most excited about though is launching our woodworking classes. It was shocking to us the incredibly limited options in the DFW area, and with Luke’s background in teaching this is always something that was a part of our vision. We hope to launch these by Fall of 2019, for project based, high quality classes in the Dallas area.

 

Tax Cuts and Jobs Act: Key provisions affecting businesses


The recently passed tax reform bill, commonly referred to as the “Tax Cuts and Jobs Act” (TCJA), is the most expansive federal tax legislation since 1986. It includes a multitude of provisions that will have a major impact on businesses.

Here’s a look at some of the most significant changes. They generally apply to tax years beginning after December 31, 2017, except where noted.

  • Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%
  • Repeal of the 20% corporate alternative minimum tax (AMT)
  • New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025
  • Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023
  • Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million
  • Other enhancements to depreciation-related deductions
  • New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)
  • New limits on net operating loss (NOL) deductions
  • Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers
  • New rule limiting like-kind exchanges to real property that is not held primarily for sale
  • New tax credit for employer-paid family and medical leave — through 2019
  • New limitations on excessive employee compensation
  • New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation

Keep in mind that additional rules and limits apply to what we’ve covered here, and there are other TCJA provisions that may affect your business. Contact us for more details and to discuss what your business needs to do in light of these changes.

© 2017

Timing strategies could become more powerful in 2017, depending on what happens with tax reform


Projecting your business income and expenses for this year and next can allow you to time when you recognize income and incur deductible expenses to your tax advantage. Typically, it’s better to defer tax. This might end up being especially true this year, if tax reform legislation is signed into law.

Timing strategies for businesses

Here are two timing strategies that can help businesses defer taxes:

1. Defer income to next year. If your business uses the cash method of accounting, you can defer billing for your products or services. Or, if you use the accrual method, you can delay shipping products or delivering services.

2. Accelerate deductible expenses into the current year. If you’re a cash-basis taxpayer, you may make a state estimated tax payment before December 31, so you can deduct it this year rather than next. Both cash- and accrual-basis taxpayers can charge expenses on a credit card and deduct them in the year charged, regardless of when the credit card bill is paid.

Potential impact of tax reform

These deferral strategies could be particularly powerful if tax legislation is signed into law this year that reflects the nine-page “Unified Framework for Fixing Our Broken Tax Code” that President Trump and congressional Republicans released on September 27.

Among other things, the framework calls for reduced tax rates for corporations and flow-through entities as well as the elimination of many business deductions. If such changes were to go into effect in 2018, there could be a significant incentive for businesses to defer income to 2018 and accelerate deductible expenses into 2017.

But if you think you’ll be in a higher tax bracket next year (such as if your business is having a bad year in 2017 but the outlook is much brighter for 2018 and you don’t expect that tax rates will go down), consider taking the opposite approach instead — accelerating income and deferring deductible expenses. This will increase your tax bill this year but might save you tax over the two-year period.

Be prepared

Because of tax law uncertainty, in 2017 you may want to wait until closer to the end of the year to implement some of your year-end tax planning strategies. But you need to be ready to act quickly if tax legislation is signed into law. So keep an eye on developments in Washington and contact us to discuss the best strategies for you this year based on your particular situation.

© 2017

Timing strategies could become more powerful in 2017, depending on what happens with tax reform


Projecting your business income and expenses for this year and next can allow you to time when you recognize income and incur deductible expenses to your tax advantage. Typically, it’s better to defer tax. This might end up being especially true this year, if tax reform legislation is signed into law.

Timing strategies for businesses

Here are two timing strategies that can help businesses defer taxes:

1. Defer income to next year. If your business uses the cash method of accounting, you can defer billing for your products or services. Or, if you use the accrual method, you can delay shipping products or delivering services.

2. Accelerate deductible expenses into the current year. If you’re a cash-basis taxpayer, you may make a state estimated tax payment before December 31, so you can deduct it this year rather than next. Both cash- and accrual-basis taxpayers can charge expenses on a credit card and deduct them in the year charged, regardless of when the credit card bill is paid.

Potential impact of tax reform

These deferral strategies could be particularly powerful if tax legislation is signed into law this year that reflects the nine-page “Unified Framework for Fixing Our Broken Tax Code” that President Trump and congressional Republicans released on September 27.

Among other things, the framework calls for reduced tax rates for corporations and flow-through entities as well as the elimination of many business deductions. If such changes were to go into effect in 2018, there could be a significant incentive for businesses to defer income to 2018 and accelerate deductible expenses into 2017.

But if you think you’ll be in a higher tax bracket next year (such as if your business is having a bad year in 2017 but the outlook is much brighter for 2018 and you don’t expect that tax rates will go down), consider taking the opposite approach instead — accelerating income and deferring deductible expenses. This will increase your tax bill this year but might save you tax over the two-year period.

Be prepared

Because of tax law uncertainty, in 2017 you may want to wait until closer to the end of the year to implement some of your year-end tax planning strategies. But you need to be ready to act quickly if tax legislation is signed into law. So keep an eye on developments in Washington and contact us to discuss the best strategies for you this year based on your particular situation.

© 2017

Tax planning critical when buying a business

If you acquire a company, your to-do list will be long, which means you can’t devote all of your time to the deal’s potential tax implications. However, if you neglect tax issues during the negotiation process, the negative consequences can be serious. To improve the odds of a successful acquisition, it’s important to devote resources to tax planning before your deal closes.

Complacency can be costly

During deal negotiations, you and the seller should discuss such issues as whether and how much each party can deduct their transaction costs and how much in local, state and federal tax obligations the parties will owe upon signing the deal. Often, deal structures (such as asset sales) that typically benefit buyers have negative tax consequences for sellers and vice versa. So it’s common for the parties to wrangle over taxes at this stage.

Just because you seem to have successfully resolved tax issues at the negotiation stage doesn’t mean you can become complacent. With adequate planning, you can spare your company from costly tax-related surprises after the transaction closes and you begin to integrate the acquired business. Tax management during integration can also help your company capture synergies more quickly and efficiently.

You may, for example, have based your purchase price on the assumption that you’ll achieve a certain percentage of cost reductions via postmerger synergies. However, if your taxation projections are flawed or you fail to follow through on earlier tax assumptions, you may not realize such synergies.

Merging accounting functions

One of the most important tax-related tasks is the integration of your seller’s and your own company’s accounting departments. There’s no time to waste: You generally must file federal and state income tax returns — either as a combined entity or as two separate sets — after the first full quarter following your transaction’s close. You also must account for any short-term tax obligations arising from your acquisition.

To ensure the two departments integrate quickly and are ready to prepare the required tax documents, decide well in advance of closing which accounting personnel you’ll retain. If you and your seller use different tax processing software or follow different accounting methods, choose between them as soon as feasible. Understand that, if your acquisition has been using a different accounting method, you’ll need to revise the company’s previous tax filings to align them with your own accounting system.

The tax consequences of M&A decisions may be costly and could haunt your company for years. We can help you ensure you plan properly and minimize any potentially negative tax consequences.

© 2017

Operating across state lines presents tax risks — or possibly rewards

It’s a smaller business world after all. With the ease and popularity of e-commerce, as well as the incredible efficiency of many supply chains, companies of all sorts are finding it easier than ever to widen their markets. Doing so has become so much more feasible that many businesses quickly find themselves crossing state lines.

But therein lies a risk: Operating in another state means possibly being subject to taxation in that state. The resulting liability can, in some cases, inhibit profitability. But sometimes it can produce tax savings.

Do you have “nexus”?

Essentially, “nexus” means a business presence in a given state that’s substantial enough to trigger that state’s tax rules and obligations.

Precisely what activates nexus in a given state depends on that state’s chosen criteria. Triggers can vary but common criteria include:

  • Employing workers in the state,
  • Owning (or, in some cases even leasing) property there,
  • Marketing your products or services in the state,
  • Maintaining a substantial amount of inventory there, and
  • Using a local telephone number.

Then again, one generally can’t say that nexus has a “hair trigger.” A minimal amount of business activity in a given state probably won’t create tax liability there. For example, an HVAC company that makes a few tech calls a year across state lines probably wouldn’t be taxed in that state. Or let’s say you ask a salesperson to travel to another state to establish relationships or gauge interest. As long as he or she doesn’t close any sales, and you have no other activity in the state, you likely won’t have nexus.

Strategic moves

If your company already operates in another state and you’re unsure of your tax liabilities there — or if you’re thinking about starting up operations in another state — consider conducting a nexus study. This is a systematic approach to identifying the out-of-state taxes to which your business activities may expose you.

Keep in mind that the results of a nexus study may not be negative. You might find that your company’s overall tax liability is lower in a neighboring state. In such cases, it may be advantageous to create nexus in that state (if you don’t already have it) by, say, setting up a small office there. If all goes well, you may be able to allocate some income to that state and lower your tax bill.

The complexity of state tax laws offers both risk and opportunity. Contact us for help ensuring your business comes out on the winning end of a move across state lines.

© 2017