Really—not every day is a new sales record or winning contract? No new sales office or product placement? I hear you…me neither. Some of my most difficult days are my average days where everything is going along ho-hum—nothing special one way or the other. In fact, the droning of procedure and protocol reeks of boredom. Is all the risk with no guarantee of success really worth it?

I think so. The reason I started this consulting practice was so that every day would be a new day. Regardless of the meeting schedules and business deadlines, I love the idea of having the ability to meet new people and serving their business opportunities. These are only a few of the areas we serve.

- New business start-ups.
- Entity planning for taxes.
- Employee compensation and relations.
- Business valuation.
- Cash flow planning.
- Break-even profit studies.
- Financial analysis.

While these are only a few of the areas we serve, so often we are simply an ear to an idea. Call today and see what is new about our business today.

(Richard H. Veihl CPA, is an author and owner of Veihl Consulting Group, PC., a full-service accounting firm providing tax, accounting and business consulting services to small businesses. We welcome the opportunity to discuss your planning and business considerations. )

Veihl Consulting Group, P.C.
Certified Public Accountant
1416 S. Gratiot Avenue
Mount Clemens, Michigan 48043
(586) 468-6611

Purchasing. Instead of buying supplies all at once, buy similar quantities more frequently. Buy in bulk only if offered a significant price break.

Negotiate the best possible payment terms with vendors. Pay bills on time, but don’t pay early unless offered a discount for prompt payment. Passing up a discount can be costly. Know your vendors terms and work terms that are mutually advantageous.

Getting paid. To help speed up receipts, put the same concept to work by offering customers a discount for paying their invoices early. If that isn’t successful, charge an extra percentage on past-due invoices – and, send bills promptly. I personally know this can be very difficult – especially during busy seasons. Instead of waiting for a 30-day billing cycle, send invoices immediately after the goods and services are delivered. Consider switching perennially slow-paying customers to COD.

Managing inventory. Generate cash flow by getting rid of slow-moving inventory. Return the items where possible and come up with a plan to move the rest, even if it means marking down the items substantially. For new purchases, avoid overstocking by carefully planning the quantities that need to be kept on hand.

Trimming spending. Review operating expenses to make sure they are necessary. Look at ways to cut costs by shopping for better rates on insurance, telecommunications and other overhead items.

Controlling taxes. Take advantage of opportunities to reduce taxes by planning capital acquisitions or setting up tax-deferred retirement plans. Many of these year-end planning opportunities require timing considerations.

Forecasting and budgeting. Using reliable, up-to-date financial information, map out projected cash inflows and outflows. We can help to make standard practices of regularly monitoring Company cash flow’s.

(Richard H. Veihl CPA, is an author and owner of Veihl Consulting Group, PC., a full-service accounting firm providing tax, accounting and business consulting services to small businesses. We welcome the opportunity to discuss your planning and business considerations. )

Veihl Consulting Group, P.C.
Certified Public Accountant
1416 S. Gratiot Avenue
Mount Clemens, Michigan 48043
(586) 468-6611

Tax Treatment During the Rental Period

Overs report their rental income expenses on their personal income-tax returns.  Deductible expenses include money spent on advertising, cleaning and maintenance, insurance, mortgage interest, real estate taxes, repairs, and utilities.

A deduction for depreciation is also available.  Unfortunately, the depreciation period for residential rental property is quite long — 27.5 years.  And, if a home is worth less than its adjusted tax basis (typically, the home’s cost plus improvements) when the rental period begins, the annual depreciation deduction is based on the lower market value.

Even if a rental property is “paying for itself,” it may show a tax loss for the year because of depreciation.  When there is a loss, the tax law’s “passive activity” rules come into play.  Under those rules, a loss of up to $25,000 may be claimed against non-passive income (such as wages) if the owner actively participates in running the home-rental business.  The $25,000 loss allowance phases out with adjusted gross income between $100,000 and $150,000.*

Tax Treatment When the Property Is Sold

Homeowners generally don’t pay taxes on capital gains of up to $250,000 ($500,000 on a joint return) if they’ve owned and used their home as a principal residence for at least two of the five years before the sale.  But this tax break isn’t available for the sale of a residence that has been converted into a rental property unless the rental activity was temporary ad the sale takes place while the owner still meets the ownership and use tests.  Even then, gain is taxable to the extent of all depreciation that was (or could have been) claimed on the property.

What happens if the property is sold at a loss?  For the loss to be deductible, the owner must be able to establish that the property’s conversion into a rental property was meant to be permanent — not merely a temporary measure util it could be sold.

* The loss of allowance for a maried taxpayer filing separately is $12,500.  This allowance phases out with the adjusted gross income between $50,000 and $75,000.

Veihl Consulting Group, P.C.
Certified Public Accountant
1416 S. Gratiot Avenue
Mount Clemens, Michigan 48043
(586) 468-6611