Could a Yacht Be Considered Your Second Home?

They say that a home is where the heart is. However, when it comes to a second home, it can be where your heart is, or just about anywhere else, as far as the IRS is concerned. In fact, not only can a second home be just about anywhere, it can actually be just about any structure, including a yacht or even a sailboat.

That’s right, boats typically count as a second home in the IRS’s book for figuring tax breaks, as long as the boat has cooking, sleeping and toilet amenities. According to the IRS, when it comes to your federal income tax, home mortgage interest is any interest you pay on a loan that is secured by your home. If you itemize your deductions and you own a qualified home with a mortgage you can deduct the interest from that mortgage.

Likewise, for your federal income taxes, you can also deduct taxes on personal property based on the value of that personal property, including any taxes due on a boat. However, you must be using your yacht or other boat for personal use. You don’t even have to stay in the boat or second home anytime during the year in order to claim real estate, property and interest taxes as deductions.

So if you’re considering buying a yacht or you already have one, then make sure you are fully maximizing the tax breaks that could come with it. If you want to make sure you are taking advantage of every tax break possible, then contact CROCO today for help. Just call 1-877-CPA-2006.

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Is Your Company in the Market for a Fairness Opinion?

Is that really fair? In my opinion, yes it is. Obviously a fairness opinion is much more than that in the financial and business world. So what is a fairness opinion, exactly? One of the final parts of any sale or merger is a fairness opinion, wherein an independent financial advisor gives a complete review of the financial aspects of a given transaction to the board of directors to the companies involved.

The financial advisor must look at every aspect of the deal in regards to financing, including pricing and compare those aspects to the market for similar businesses. After his or her review, the financial advisor must then either agree or disagree that the transaction is fair from a financial aspect, including whether or not it’s fair to minority shareholders.

A fairness opinion is important because it demonstrates that the company’s board of directors is doing its due diligence in order to prove that it is acting in the company’s shareholders’ best interest. This can help shareholders see that the board’s decisions are financially sound.

Although statutes or regulations do not require fairness opinions, they can be very helpful in any merger or acquisition process. At GROCO, we have years of experience providing business valuations and fairness opinions for hundreds of different companies and we can help you too. Just click here to learn more about fairness opinions or click here to contact us.

 

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India Teaming Up With United States in Joint Effort to Find Hidden Cash

India is reportedly going after so called “black money” which Indian citizens who are living abroad, are apparently hiding in offshore accounts, including here in the United States. According to reports, the Indian Government believes that as much as $350 billion is hiding in unreported bank accounts and other financial institutions.

India is already gathering and using information from several countries, including Japan, Sweden and Portugal among them. However, the biggest boon is expected to come from a new program created by the U.S. Government known as the Foreign Account Tax Compliant Act, or FATCA.

Under the program, India will indirectly inform the IRS of any Americans with money and/or investments in India of $50,000 or more. It is expected that the IRS will return the favor to India and report the same information regarding Indians with bank accounts and other financial interests in the United States.

Government officials in India have already begun their efforts to find and track the necessary information for the U.S. government. They have also started to gather a large amount of information regarding their own non-taxpayers. Millions of Indians are known to work around the world but are suspected of leaving significant portions of their income in the country where they worked when they return home to India.

Whether you agree with FATCA or not, it looks like it’s here to stay and it looks like it will be successful in finding noncompliant taxpayers. If you need help to make ensure that you are compliant with your international taxes, then contact GROCO at 1-877-CPA-2006 or click here.

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Communication Between Managers and their Employees

By Emily Topham

            Managers have a daunting task—finding the right level of communication between them and their employees. It can be difficult for new managers to transition into the level of communication that is required by a leadership position. But discovering how to communicate well can make or break a manager’s, as well as the company’s, success. As a manager, connecting with employees can be ten times more important than employees relating to one another. The relationship between managers and employees greatly affects if a company’s goals are achieved. Managers set the tone of the workplace. Creating a comfortable and stable relationship between manager and employee is what “allows the unit to work effectively and productively,” says professor Martin N. Davidson of Darden School of Business.

The best way to reflect an ideal attitude to the group is to be an attentive listener and supportive leader. Effective and meaningful communication between a manager and his employees boils down to those two principles.

Be an Attentive Listener.

The way to earn a person’s respect and friendship is to stop talking and start listening. Listening teaches a manager about his employees and, in result, make it easier to understand problems that arise and how to best address them. Many people, not just managers, confuse conversing with talking. A well balanced conversation demands attentive listeners that are more interested in what the other has to say than simply spouting out what they think the other wants to hear. Listening is more that hearing—It is learning. Good managers can communicate with their employees by hearing what is being said. This includes paying attention to the words spoken and also to the emotions that are driving the conversation. With this listening tool, manager will be able to speak to their employees in a way that matters to them personally.

Be a Supportive Leader.

As it is with all relationships, you have to give to get. A manager can get by simply listening to his employees, but for a full and more trusting relationship, managers must offer a bit of validation for every bit of conversation the employee gives. Facilitating a discussion requires active participants on either side of the conversation. Dr. Joelle K. Jay, president of Pillar Consulting, suggests three steps to have good conversation:

  • Hearing what is said
  • Integrating it into the topic at hand
  • Saying something to move the conversation forward.

Various studies have show that recognition for their efforts motivates employees to work harder and more efficiently. Encouraging good work is a good way to help employees understand the goals of the company. John Lord, employee at UVA says, “when a manager hires, promotes, recognizes good work or corrects bad, these are all opportunities to convey what really matters, what the organization cares about.”

Managers have the great gift of leadership. They must use this gift to transmit a feeling of mutual trust and respect. Giving meaningful compliments is a way for employees to feel good about themselves and about the work they are doing. Listening to employees with an attentive demeanor will make them feel important and part of the team. These two principles allow managers to communicate with their employees to set a comfortable and effective work environment.

How Are Some Big U.S. Companies Shrinking Their Tax Bill?

Every company wants to save on its tax bill. Although tax inversions have been making a lot of news lately, there are many other methods that corporations use to cut back on their taxes. In fact, seven companies in the S&P 500 index, including some big names that everyone is familiar with, have been able to effectively lower their tax bill every year over the last five years. So who are these companies and what’s their secret?

Google, PetSmart, Kohl’s and TripAdvisor are some of the companies that have been able to lower their effective tax rate while still seeing an increase in their net income from 2008 to 2013. One of the most popular tactics these companies use is to place a lot of cash into overseas accounts where business tax rates are much lower than in the U.S. For example, Google says it is keeping $38.9 billion of its $57.5 billion cash in overseas accounts.

Meantime, TripAdvisor used a restructuring of its operations outside of the U.S. to better manage its treasury and deployment of its global cash, in order to cut its taxes. The company managed to push its effective tax ate down to 27.8 percent in 2013 from 39.3 percent in 2008.

The fact is there are many ways to help reduce a company’s tax bill. If you are looking for ways to cut back on how much your company is giving to Uncle Sam, then contact GROCO today. We can help your company plan and prepare for all of your tax needs. Click here to learn more about our services.

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Which States Are Good, and Bad, for Taxes?

How attached are you to the state you live in? Although most people would rather not relocate, where a person lives can actually make a huge difference in his or her tax bill. That’s because Kiplinger recently released its list of the most and least “tax-friendly” states when it comes to taxes. The business publisher used three important tax factors to determine their results, including state income tax, gas tax and sales tax. Here’s what they found.

If you live in Delaware then chances are you’re happier than most about your tax bill. With an income tax coming in between 2.2 percent to 6.6 percent, along with no sales tax and well below average gas taxes, Delaware was number one on the list of most friendly tax states. Wyoming, Louisiana, Mississippi and Alabama were also on the friendliest list.

Meanwhile the news is not so good if you live in California. With an income tax reaching as high as 13 percent for the top earners, a 7.5 percent sales tax and a gas tax coming in at $.053, the golden state is number one on the list of least friendly tax states. Other states that will keep your tax bill high include New York, Connecticut and New Jersey. Click here to see the entire lists.

Everyone has to pay taxes, but you can click here to learn how GROCO can help you save on your taxes no matter which state you live in. Call us today at 1-877-CPA-2006.

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How to Find the Right Investment Advisor

Are you looking to invest? Perhaps you just want some help with your financial planning or even your estate planning. Finding someone that can truly help you is difficult sometimes, simply because there are so many options to choose from. The Internet is full of so-called experts that can help you make wise investments and financial decisions, but how do you know whom you can really trust?

It takes some work, but we’re talking about your financial future, which is definitely worth the time and effort. There are several things you can do when you are looking for the right investment advisor. Let’s take a look at a few of them.

  • Shop around – take the time to interview several candidates and make sure they can meet your needs.
  • Experience counts – although everyone has to start somewhere, there is definitely something to be said for an investment advisor with real experience.
  • They do get paid – financial and investment advisors get paid for their services so you need to make sure you understand how their pay structure works. That’s because they can all differ. For example, financial planners and stockbrokers are usually paid differently.
  • Considers your needs – look for someone who is invested in you and your needs and who can come up with a plan that fits those needs.

The bottom line is it’s your money and your future. Make sure you do your homework before making any big decisions regarding your investments and financial planning. You can learn more about choosing a good investment advisor by clicking here. You can also learn more about our other services here.

 

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Democrats Take Dead Aim at Tax Inversions

The democrat lead U.S. Senate has been making a lot of noise lately regarding tax inversions, the practice of U.S. companies moving their corporate headquarters overseas in order to avoid the high price of overbearing U.S. corporate taxes.

Those senators have apparently made good on a recent promise that they would look to put a stop to such deals. According to reports, Senate democrats have introduced a proposal that would make inversions less attractive to U.S. companies. One of the provisions they have added is to eliminate the practice of earnings stripping. This practice allows American companies to borrow from parent companies overseas while still being able to deduct the interest expense on their stateside taxes.

The proposal would no longer allow U.S. companies to have 1.5 times as much debt as equity while deducting all allowable interest costs. The proposal is expected to be part of an even larger far-reaching bill that could be introduced later this year. However, the Republican-lead congress is said to be cautious about passing such a proposal for fear it could make U.S. companies more susceptible to foreign takeover attempts.

Whatever happens, it’s obvious that the practice of tax inversions is going to continue to be a “hot-button” issue amongst U.S. lawmakers and large corporations alike. Do you have questions about tax inversions or other international tax-related issues? Then give us a call at 1-877-CPA-2006 or click here to contact us online.

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Is the Government Going to Tax You for Using the Internet?

Taxes, taxes and more taxes: that appears to be the government’s answer for just about every problem we face in society. There seems to be no end to the list of things that the government wants to tax. Now it seems that Americans could be in for yet another tax, simply for using the Internet.

The subject of taxing Internet use has been broached before, but we have always been protected from such taxes thanks to the Internet Tax Freedom Act. However, time is starting to run out on that act and if the Senate fails to vote to permanently extend the act by November 1, then we could all be seeing a significant increase in our Internet usage bill.

So, what’s the problem? Good old bipartisan politics it appears. Congress has already passed off on the Permanent Internet Tax Freedom Act, but attempts to get it approved in the Senate have so far been unsuccessful. In fact, when the act was brought up in July, Senate Majority Leader Harry Reid put the kybosh on even discussing it.

So what does that mean for the public? It means consumers could be paying as much as $15-$20 more a month for Internet usage. So why are democrats not cooperating? Apparently they are trying to pass a similar act that would also include the Marketplace fairness Act (MFA).

So what is the MFA? It’s essentially another tax. Its purpose is to impose a sales tax for all Internet transactions, in an effort to make the marketplace fairer for online retailers. So apparently the Senate’s answer is to stop one tax by imposing a different one.

At GROCO we believe in saving you money on taxes, despite the government’s efforts to take as much as they can. Click here to see how we can help you do that,

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What’s the Deal With U.S. Corporate Taxes?

There has been a lot of back-and-forth amongst lawmakers and political pundits in the media lately regarding U.S. companies switching their addresses to foreign locations in order to avoid corporate taxes. One side claims that there is nothing wrong with such deals, while many democratic lawmakers, including President Obama, contend that it is un-American and that it should be stopped.

However, if you take a closer look at the issue, then you’ll find that the underlying problem isn’t really whether or not companies do these kinds of inversion deals. The real problem can be found in America’s overbearing corporate tax laws. Instead of trying to prevent U.S. companies from moving overseas, perhaps the government should focus on fixing the corporate tax code.

Depending on whom you ask, there are plenty of problems with the corporate tax code, but here are some basic facts that you should be aware of.

• Tax breaks for U.S. corporations equaled about $150 billion in 2013. However, by comparison, tax breaks for individuals reached $1 trillion.

• Revenue from corporate taxes was responsible for 10 percent of all federal tax revenue in 2013.

• Among all developed countries, the United States has the highest corporate tax rate, coming at 35 percent.

• Corporate tax laws are not equal. Different investments and activities are taxed in different ways.

• More U.S. companies than ever before are looking to leave the country. In the 20 years prior to 2004 only 29 companies opted for inversion. However, since the beginning of 2004 through 2013, 47 have occurred.

The debate will rage on, but by focusing more on fixing the cause of the issue (companies leaving the country to save on taxes), the government may find they could fix issue itself if the corporate tax code received a much-needed overhaul.

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