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Are You A Landlord? Don’t overpay your taxes.

14 Jul

Many landlords, especially those who own smaller properties, are unaware of the tax benefits available to them.  Here is something that your CPA may never tell you about.

Real estate investors have a simple alternative.  Most will take the option of depreciating the initial value of their residential rental building in equal amounts over the allowable 27.5 years or their office building over 39 years.  In a $200,000 rented house, you would write off $7.272 per year in depreciation.  Many CPAs will recommend that you do your depreciation this way, the easiest way.


Straight line depreciation may be the easiest way for your CPA to apply your depreciation, but is it the most advantageous way for you and your cash flow?  Depending on your circumstance? Perhaps not.


Cost segregation is an IRS-defined method of accelerating your depreciation and, while it may be more complicated, it need not be difficult for you or your tax professional.  By using engineering-based cost segregation, your property depreciation is applied by depreciating all of its component parts, many of which may be depreciated fully in 5, 7 or 15 year increments.  By depreciating this “short life” property more quickly, you would receive an increased tax deduction now rather than waiting for 27.5 or 30 years to take its value off of your tax bill.  With the 2017 Tax Cuts and Jobs Act, that 5, 7 and 15 year property can all be depreciated the very first year.  That is called “Bonus Depreciation”

In essence, you are getting an interest free loan on your taxes from the US Government.  Think of it this way:  If I was going to give you $100,000, would you rather have it all now, or in 27.5 annual installments.  Getting it right away is a “no-brainer” because that money, if invested back into the business or smart investments, will yield far more money long-term than having me babysit your money for you for many years.

If you:

  • have property worth over $200,000,
  • intend to keep the property over 3 years, and
  • pay taxes

then I believe it would be in your best financial interest to, at least, investigate whether this is a good option for you.   I will complete a no-cost, no-obligation analysis of your property and I will let you know if this strategy would be profitable for you.  Your tax professional cannot, in most cases, provide you with the study necessary to maximize your depreciation.  We will work with your CPA to make sure you get all the cash flow you are entitled to.

I can also advise you of some other tax strategies that may be beneficial to your cash flow and profitability.  The 2014 IRS Repair Regulations, IRS Safe Harbors, and Building Systems Valuations may all be beneficial strategies to consider.  I’ll help you navigate these strategies.

And don’t worry about the IRS.  They have called this method of cost segregation the “certain method” of depreciation.  We have completed over 20,000 studies in all 50 states, and have never triggered an audit.  Should the IRS question your cost segregation during an audit, we will defend the study at no cost to you.  We have never had a study rejected or changed.

Go to my web site at https://davidwiener.cssistudy.com for more information, or schedule a time to talk with me at https://calendly.com/david-wiener/talk.

6 Little-Known Facts about Debt Collection Compliance

13 May

Debt collection is one of the most heavily regulated activities you will ever undertake.

The debt collection industry is one of the most heavily regulated in the United States. That is precisely why it’s risky to undertake debt collections on your own; there are rules for when and how past due clients can be contacted, what mediums you can use to reach out, what you can say, and how often you can say it.

There are federal rules and industry-specific rules, rules for how data is collected and stored, and even rules for what you should do if a consumer or past due client asks you to stop contacting them. These rules can shift quickly, but failing to stay compliant can promptly get a business into hot water.

We’ve compiled half a dozen rules currently governing the debt collection industry. These rules also apply and those businesses seeking a more DIY approach.

Following the Rules for Debt Collection

First, let’s start with the rules under the Fair Debt Collection Practices Act (FDCPA), the federal law that protects consumers from overzealous debt collection agents.

  1. The FDCPA usually does not cover a business debt. If your business is trying to collect a past due mortgage, credit card, medical bill, or personal or household-type debts, your debt collection practices are covered by FDCPA.
  2. The FDCPA regulates time and place of debt collection. For example, your debt collection efforts cannot occur before 8:00 a.m. or after 9:00 p.m. If you attempt debt collection in the workplace and the consumer or client asks you to stop, you may not continue your efforts.
  3. If you’ve been informed that an attorney is representing the client, debt collection must go through them and not the customer.
  4. If the past due client writes to tell you to stop contacting them, you cannot contact them. The exception is that you may tell them there will be no further contact or inform them that other legal action will be taken. It doesn’t mean you can’t pursue other avenues of debt collection, just that you cannot contact them to collect the debt.
  5. A debt collection agent is required to tell you certain things about the debt, specifically who the money is owed to, how much, and how the client can dispute the debt. If this information isn’t provided on initial contact, you have five days to send these details in writing.
  6. If the past due account holder disputes the past due debt within 30-days of receipt of the initial communication, you must stop all collection activityuntil you have verified the past due debt.

There are also rules under the Fair Credit Reporting Act governing how debt collection and past due balances can be documented in credit reports. There are even state laws governing fair practices by anyone conducting debt collection. Keeping compliant with all of these rules is a full-time job. That’s exactly why businesses turn to TSI. Our track record of compliance with all debt collection laws, along with decades of experience in most industries make us the top company in the nation to partner with companies seeking a better bottom line.

The TSI data-driven approach is designed to boost debt recovery while enhancing the relationship with your valuable customers. Contact me directly at 770-224-8504 for more information.

Hotels and Cost Segregation

6 May

U.S. tax codes require expensing assets such as vehicles, office equipment, and buildings over their designated recovery period. Depreciation accounts for the wear and tear on an asset and reduces the value of the asset over time. Depreciation is a non-cash expense which means money was not spent to create the deduction. To someone who owns commercial property including hotels, depreciation is a huge benefit because it reduces their taxable income.

Generally, on a depreciation schedule, hotels are set up to depreciate over a 39-year period. However, separating the structural and non-structural components of a building and accelerating the depreciation lives of the non-structural components can result in significant tax savings. Structural components include the building’s roof, walls, and foundation which depreciate over 39 years. Non-structural components can be depreciated over five years and include carpeting, molding, window coverings, security systems, and more. Property improvements like curbing, paving, and striping can also be segregated and depreciated over 15 years.

Hotels have many non-structural components that can be reclassified into shorter depreciable lives. Failing to properly separate these components can result in missed tax savings. Having a cost segregation study done on a hotel can help property owners realize these tax savings.

Since 1999, cost segregation studies have been recognized as an accepted method of accelerating the depreciation of property. Through reclassifying a portion of the building’s assets as business use, the cost segregation study lowers the property owner’s income tax liability, thereby increasing cash flow. Average savings to the hotel owner is between $50,000 and $70,000 per $1,000,000 of building cost. This savings can be used to invest in the business, pay off debt, or however they see fit; it is their money.

Cost Segregation studies have the potential to provide significant financial benefits to hotel owners— benefits that are most likely overlooked. With proper guidance from a reputable cost segregation provider, hotel owners can even take advantage of greater expensing of repairs and improvements under the 2014 Tangible Property Regulations.

If you have questions, I can provide answers. Contact me directly at 770-224-8504 for more information, or visit http://davidwiener.cssistudy.com

Best Practices for Collecting Debt from Millennials in 2019

29 Apr

Millennials, those youthful consumers born after 1980, are about to overtake Baby Boomers as the largest living adult population in the U.S., with more than 74 million of them working and accruing debt. Speaking of debt, there is a lot of it; CNBC says the average student loan debt is around $33,000  – and yet that isn’t even the main source of debt for the older millennial.

That’s why the chances are good that your business will often be conducting debt collection from the millennial population. What are some special considerations related to this age group? Are there any communication best practices to follow?

Facts About Millennials and The Debt They Accrue

According to CNBC, Millennials between the ages of 25 and 34 have around $42,000 in debt. The highest level of debt is from credit cards. But CNBC says these young professionals also have other stressors that prior generations didn’t have, such as higher education expenses and student loans as well as the high cost of housing. Almost one-half of Millennials are 90-days past due on at least one bill. In fact, Americans owe more than $1 trillion in debt from student loans. It’s possible that other debts will suffer as these people spend more money on college debt.

While debt is increasing across all age brackets in the United States, these trends are particularly troubling for an age group that is just getting started on a career path. CNBC says that Generation Z, the age bracket that comes behind the Millennials is following in their footsteps with an average debt of $4,343.

Given the high debt ratio for these young people, are there any considerations for handling collecting debt that might be different from older populations?

Best Practices for Collecting Debt from Millennials

Collecting debt from Millennials is actually different from GenX or the Baby Boomers. First, it might be more difficult to reach these young consumers, because most of them have given up a landline for a personal smartphone.

Pursuing debt collection from this youthful population requires a few tricks in order to accommodate their personal preferences and styles:

  • Use technology to reach Millennials. They are one of the first generations to grow up with the immediacy of the internet and a host of software tools. Debt collection must mine this tech-familiarity to reach these consumers.
    Tip: Try setting up a web portal so these customers can explore easy online payment.
  • Make connections with Millennials and use the power of relationships to pursue debt collections.
    Tip: A compassionate and diplomatic approach to debt collection can go a long way when it comes to collecting what’s owed.

Debt collection for the Millennial population requires some flexibility to handle the special needs of this population. Contact me today at 770-224-8504 for more information.

Businesses and Cash Flow

22 Apr

Business and Cash Flow

The first rule of business is to stay in business, and businesses need cash to operate. Every successful business keeps a close eye on cash flow for this reason. There are many tax-saving advantages for those who own or have improved commercial properties through tax law. If you own or lease commercial or income producing property and you are not taking advantage of all that US Tax Code has to offer, you are actually diminishing cash flow.

Let’s look at how your business can easily increase its cash flow by using the cost segregation method of depreciating your building.

Cost segregation is a way for commercial property owners to accelerate their building’s depreciation, saving significantly on income taxes. Within the first five years of building ownership, an owner can save up to $100,000 for every $1 million in building costs. To maximize cash flow, an owner or lessee who has paid for improvements can have a cost segregation study performed.

At CSSI, we perform an engineering-based study to ensure you comply with US Tax Code rules and regulations. Our team of specialists will segregate parts of your building that are deemed non-structural. Non-structural items include carpeting, flooring, cabinets, specialty lighting and electrical, etc. These and other non-structural items are placed in accelerated tax lives. After the analysis, your CPA will adjust your depreciation schedule from the conventional 27.5-/39-year schedule to a 5-, 7-, 15-, and 27.5-/39-year schedule.
A cost segregation study reduces your taxable income and results in lower taxes paid. Using this cash surplus to reinvest in your business or pay down debt is a great way of maximizing the time value of money.

At CSSI, our tax experts will help your business generate more cash flow through an engineering-based study. In some cases, the calculations from our study can be necessary to realize benefits from the 2014 Repair Regulations and the 2017 TCJA. Contact us today, and we can provide you with a no-cost preliminary analysis, and we can facilitate a discussion with you and your CPA or tax professional.

Contact me directly at 770-224-8504, or schedule a conversation with me by clicking here, to see how much you can add to your cash flow this year. There is, as always, no cost or obligation.

It’s Your Money . . . Keep More of It!

The Cost Segregation Estate Planning Strategy

12 Oct

estate-planning

If someone dies owning commercial or rental residential real estate, a highly effective tool for reducing the tax burden on the estate might be a cost segregation study.

When a property owner dies. their heirs receive a step up in tax basis to the current fair market value of the property.  Any recapture that the decedent would have been required to pay upon the sale of the property is forgiven.  Using an engineering-based cost segregation study to accelerate the depreciation on the  pre-stepped up cost basis provides a windfall of immediate tax deductions that are never recaptured on the sale.  The estate must, however, act very quickly to take advantage of this benefit.  The study must be conducted and implemented before the due date of the decedent’s final income tax return.

Commercial buildings are normally depreciated over a 39 year period, and residential property is depreciated over a 27.5 year period, straight line.  An engineering based cost segregation study uses accounting and engineering principles to identify non-structural building components that can be depreciated over a much shorter time period (5,7 or 15 years)

The studies do not generally increase the amount of deductions over the life of the property.  By accelerating the depreciation, they generate net-present-value savings.

When this type of study is used in an estate-planning context, a cost segregation study can substantially reduce or eliminate taxes owed on the decedent’s final federal income tax return.  It also avoids a potential disadvantage, namely recapture.

Timing is everything

It is not necessary to perform the cost segregation study before a building owner’s death, but it is vital to complete and implement it before the decedent’s final tax return is filed.  If the deadline is missed, the opportunity is lost, as the benefits of a study cannot generally be claimed on an amended return.

To preserve and maximize the benefits of this strategy, it is vital to identify the opportunity early and to work with a reputable, experienced cost segregation firm that has the experience in implementing this type of strategy.

CSSI – Cost Segregation Services Inc. is the premier cost segregation company in the US.  With over 20,000 studies performed and not one IRS audit caused by our studies, we can help you in all ways to maximize the benefits of an engineering-based cost segregation study.

Contact me today for further information.

The Secret Sauce to Success in Property Management

19 Sep

Source: TSI

property management

The property market will continue to be volatile in 2019.

The ups and downs of the real estate market could make anyone shudder. Technology has added an interesting influx to the mix, and in both residential and commercial real estate, software has proven to be a big disruptor. Despite the swirling chaos in most markets around the country, there are a number of trends that savvy real estate agents, property management, and homeowners’ association management companies will be able to look toward to improve their business. This article will take a look at a few of them.

Property Management Trends 2018/2019

For investors just looking to get into the property management game, we have a few strategic tips that should govern your expansion into the marketplace.

The first trend is that overall market volatility will continue. In large markets, there is an overwhelming need both for new housing and affordable units. This is always a risky venture, but particularly in light of consumer trends that show consumer debt is expected to increase to $4 trillion in the United States by the end of this year. A corresponding increase in defaults should also be expected. This elevates risk for property management firms.

The second trend to mention is that investors, particularly new entrants into the real estate market, should set clear investment goals with a measurable ROI. This is particularly important in light of increasing market volatility and predicted consumer debt. If 2019 brings higher loan defaults on everything from student loans to housing debt, this will put increasing pressure on investors’ cash flow. Setting long-term investment goals that include a specific market rate of return will be important for anyone capitalizing on the real estate industry in the future. This includes mapping out accounts receivables and a clear process for handling past due collections.

Predictive analytics will play a part in the future of buying and selling properties.

The third trend is, of course, technology. Not only will technology continue to impact real estate marketing, it will change how we collect fees, negotiate, and communicate with our patrons. The Close suggests some tech-centric trends that we’ll see as we near the end of 2018 and move into 2019:

  • Online platforms like Zillow will leverage new and existing relationships with real estate agents, property managers, and investors.
  • Mobile-first will be the new strategy for just about everyone in every market niche – not just real estate. It seems new strategies for bill payment, property maintenance requests, and past due collections, are all moving to the smartphone, which is exactly where our customers now live. When you realize that a millennial checks their smartphone an average of 150 times a day, you’ll start to understand why new real estate strategies tied to these devices will impact every area of your business in the future. Enabling smartphone payments as part of your rent and past-due collections process is a necessity for the future.
  • Big data will impact all areas of our lives. We already use big data algorithms for lead generation, appraisal, and investment purchasing decisions. But what about big data to determine the ability and likelihood of a past-due debtor to bring their account current? Predictive analytics will likely worm its way into the real estate market in new and interesting ways in 2019.

In 2019, digital trends will continue to impact the property market in the United States. The secret sauce to success will continue to be developing new strategies to capitalize on these trends to achieve market success.

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Wanting to maximize your recoveries on past due rent or fees? TSI has made extensive investments in our information security, compliance controls, and data analytics to make sure we stay ahead of the curve and provide the best possible solutions for our clients. CollectX, our proprietary data analytics platform, is a great example of our investments. This unique tool tells us how likely a consumer is to pay off a debt and what it will take to get them to pay it, which in turn, provides our clients with more recovered revenue, faster, and at a lower overall cost.

Contact me today at 888-780-1333 to see how we can improve your business bottom line.

4 Tax Tips For Commercial Building Owners

13 Sep

Recently, the regulations for commercial property owners were overhauled in one of the most dramatic changes to the tax law in years.  The Tangible Property Regulations in conjunction with the Tax Cuts and Jobs Act have major economic benefits for building owners as well as some serious compliance issues.

tax-time_1

Properly applying these new U.S. tax code standards can help you capture economic opportunities to the tune of millions in tax savings that flow from your business to your personal taxes.

I would be happy to work with you and your tax professional to make sure you are taking the greatest advantage of these new tax laws.  CSSI, a company that I represent, can be your calculation experts for the following

  1. COST SEGREGATION – The U.S. tax cost method of identifying and classifying building components that allow you to accelerate depreciation and generate additional cash flow. An engineering-based cost segregation study is the basis for allowing you to capture many of the tax saving opportunities below and it helps you maintain U.S. tax code compliance moving forward with these regulations.
  2. BUILDING SYSTEMS VALUATION – An engineering-based study that will identify building systems and structural components.  Going forward every expenditure cannot be expensed.  The new regulations give very specific instructions on whether expenditures should be capitalized as an “improvement” or expensed as a repair.  We will provide the calculations that your tax professional will need to make these important decisions.
  3. CAPITAL TO EXPENSE “REVERSAL” OPPORTUNITY – Building owners may now expense previously capitalized costs and expense them in the current year by applying the new regulations to prior years.  For example, we helped a client receive $1.1 Million in tax savings on one of his properties through this method.
  4. PARTIAL ASSET DISPOSITION (PAD) – Renovate in the current tax year?  Thinking of an LED lighting upgrade?  A PAD allows you to write down the basis of what you removed and the costs for the removal and disposal of those items.  You can receive a tax deduction in the current year but it is a “use it or lose it” opportunity.  Fail to capture it in the current tax year and you lose the ability to write it down.  Both capital to expense reversals and PADs yield a permanent tax savings at the time of the sale by reducing recapture costs.

Let me provide you and your tax professional a no-cost, no-bligation analysis of the benefits you may receive and the cost for this type of study for your property.

Return the following information, and I will prepare your analysis immediately.

 

The Problem With Payment Plans

25 May

Medical and dental practices can increase their plan acceptance by offering payment plans to patients who cannot afford to pay the entire amount at once, but payment plans present numerous inherent problems.

Here is a solution.

 

Contact me at 888-780-1333 to learn more about this and other ways to increase your cash flow and bottom line for your business or practice.

Click Here to view other “Cash Flow Minute” videos and subscribe to my blog to receive all of the “Tips and Tricks” that I share about your cash flow.

Podcast For Business – Are You Getting Paid?

15 May

Are You Getting Paid with David Wiener – Podcast For Business

The serious problem businesses have with collections is real. And it’s not going to get better any time soon. Today’s talk with David will shed some light into the world of collections and offer some real solutions to businesses who are struggling with receiving payment for services rendered.  Listen to this important podcast by clicking here.

Contacts:
David Wiener
Phone: 770-224-8504
Website: http://cashflowstrategies.us
Twitter: https://www.twitter.com/mr_cash_flow
LinkedIn: https://www.linkedin.com/in/cashflowstrategies

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