The end of the year is right around the corner. Are you ready?

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(From Left) Brian Godfroid, Julio Davila, Bill Kruse, Abby Romberger, Blake Will, Jessica Murphy

What should small business owners consider before closing their books and heading home for Christmas?  Because of the diversity in small business transactions, a more complete answer can be provided if you’d like to call our office.  However, some of the big picture items which are missed by small business owners are as follows:

1.  Personal use of a business owned automobile.  Go ahead and make at least a rough estimate of the miles in you daily commute.  Include at least these miles in your W2 at the end of the year.    Remember you can’t count the commute as business miles and IRS guidance requires this to be included in your W2.

2.  Health insurance for an S-Corp owner.  If you are an S-Corporation owner, make sure your final W2 includes your personal health insurance cost.  You will not be charged social security tax on the cost of the insurance if it is done properly.  Another IRS required W2 item.

3.  Small business (less than 50 FTE’s) health insurance plans.  The Affordable Care Act is still being tweaked for who or what is required for 2014, however, small businesses should be contacting their health insurance broker and make sure they get their plan renewed prior to December 31 to ensure you miss the big rate increases heading down the pike for coverage of pre-existing conditions.

4.  Prior year Adjusting Journal Entries.  You probably received adjusting journal entries with your 2012 tax return.  If these have not been posted, then your balance sheet will not agree to the 2012 tax return.  Your 2013 return preparation will take longer as we try to figure out why.

5.  Reconcile payroll.  The social security tax hot button is still on fire with the IRS.  Make sure you have reconciled your payroll Form 940 and 941 to your income statement and balance sheet.  This is the first thing they ask for when beginning an audit.  Do it now while the year is fresh.

6.  File Form 1099.  Be careful with contractors and other service providers who have not filed out the appropriate forms for filing Form 1099.  This is another hot button with the Service, so making sure you have filed ALL  of these as necessary is very important.

Getting started early.  Your 2009 return will fall off the grid with the filing of 2013, so let’s file early!  Give us a call and let’s get on your schedule for early January or February. We can be reached at 314-993-4285.

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HKA Year in Review- Spotlight on Chameleon Club Grand Opening in Saint Louis

The HKA team joined in on the fun for the grand opening of The Chameleon Club on October 24th. The club and cigar bar was bustling as new club members, friends and colleagues sipped wine and enjoyed the beautiful ambiance on the main floor of the club inside the historic “Barnett” building just off of Washington Avenue in downtown St. Louis. The upstairs of this breathtaking building also acts as the headquarters for Chameleon Integrated Services who is led by the CEO and Partner, Jeff Kelley.

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Wine Tasting at Chameleon Club Grand Opening.

The private club is currently sponsoring a warm clothing drive for charities in saint louis. They are also performing open membership enrollment throughout the month of December. Membership includes valet parking and club amenities such as music, entertainment and events as well as entry into the coveted “Barnett Room” for the ultimate cigar smoking experience. We wish Chameleon Integrated Services and the club much success in their new endeavor.

Optimizing the Sale of Your Business

Selling Your Business?

Selling a business is now and always has been about a willing buyer and a willing seller. The gray area is about price and structure.

As we look forward to 2013, I believe it may be some time before we see long term capital gains at the 15% level again. Its not a forgone conclusion that capital gains taxes are going to be higher in 2013, but it more likely than not.

That gives us about 300 days to determine if we are ready to sell our company.

The IRS and most financial institutions require a valuation of a business to be historically based and ROI centered. Most business transactions in the U.S. are consummated by public accounting firms like ours. Most transactions result in a 3-4 X multiple of EBITDA (Earnings before income taxes depreciation and amortization) adjusted for excessive owner distribution expenses.

I believe the value of your company, for purposes of selling the business, should be based upon what it can do and what it will do in the future. That may require a better approach, or it may require us to re-evaluate what is meant by a “willing buyer”. What the buyer is willing to pay for your business and what the company is worth to Them is a more palatable approach when attempting to maximize value.

Let us create a Sales Plan for offering your business to strategic buyers and structure the deal for the optimum solution.

Are You Planning for the Changes in Estate Taxes?

Last chance to REALLY plan for the Future:

On December 31, 2012 an opportunity to plan for the future of your family expires. By now we have all heard about the change in the estate tax, as the line goes, Republicans want the tax on estates eliminated and Democrats want to tax all of the value of an estate for redistribution. the only sure bet now is that the estate tax provisions are going to change.

The only real consensus in the industry holds that Congress will take some sort of action on the estate tax issue, however, few believe the current estate provisions will be renewed at present levels.

We believe You should be prepared regardless of which way the wind blows. And we believe much of the industry is missing the REAL opportunity the current law allows.

Generational skipping.

We are able to structure your estate, now, to gift valuable assets to your heirs and still retain control. Under current law, we can accomplish this goal to a successive generation without tax. We of course won’t “skip” your kids in the sense of allowing them to benefit from your assets when you no longer do, but we can skip the estate tax for you kids and allow them to benefit.

Interesting? Let us show you how.