The Collaborative – Tax Incentives

Michelle Bertram 

We’ve been talking a lot about taxes the fast few weeks and how it affects individuals, business owners.  I wanted to bring on another specialist today, Clark Stover. Clark is going to talk a little bit about some specialized tax incentives for businesses. So first Clark, why don’t you just tell me a little bit about yourself and the company as you represent?

Clark Stover

Okay. Yeah, absolutely Michelle. So, my name is Clark Stover. I’m the national director of specialized tax services for Growth Management Group (GMG/Stryde) The company got started in 2004, we started out specializing and still continue to specialize in specialized tax services. We do some expense reduction services, credit card audits, and things of that nature. Those are not tax-related, but it’s a good compliment for the other services that we look at, but really we’re a tax specialized consultant agency looking to help and work with your current CPAs. 

Michelle Bertram 

I think you just made an important point, you’re not replacing CPAs. It seems like people think CPAs, their CPA should know everything, but the tax code is so complex and so deep that it’s really impossible for any CPA to know it all themselves. Right?

Clark Stover

That’s exactly it. Think of the medical field, you have a general doctor, but there are also many specializations in the medical field. That’s what we do. We kind of supplement and support CPAs and the services that they bring to the client.

Michelle Bertram 

We have a lot of CPS that we’ve worked with as you know who use your services to help their clients. There is one of the specialized tax services that I think comes up a lot right now. It is for people who own commercial property. Do you want to explain a little bit about that and how that works?

Clark Stover

Right. So cost segregation is really a strategy that’s been around for years. I’m talking it’s developed over the last 40 years, 45 years, we’ve been doing it for 15 of those 45. Basically, it’s a specialized service where you reclassify assets of a commercial property to a shorter life. Most of the assets within a building can move into shorter life, thus giving a bigger bang now in depreciation for the ownership of the property, as opposed to over 39 years. You’re getting that savings now.

Michelle Bertram 

So by getting the tax savings, now you’re advancing the depreciation, Now, there are some simple ways you can do it, but when you do a full cost seg study in involves an engineering-based study, correct?

Clark Stover

Yeah. And that’s what we bring our clients and to our CPAs, a specialized engineering-based service. Getting all of it and reclassifying as much as you can into the correct buckets and correct asset life to really get that benefit and use it to offset current taxes. It’s a great strategy.

Michelle Bertram 

Especially right now when everyone is getting tax bills I mean, I don’t know about you, but I don’t think any of us love paying taxes.

Clark Stover

Absolutely. It is. Deadlines are here, but it’s also a great time in the tax environment. If there are favorable conditions that really allow you to apply it, bonus depreciation being one of them. This is one that can kind of fit in with that bonus depreciation strategy. Because again, you’re reclassifying the assets when you do that, you’re always taking them to that bonus depreciation area, which is less than 20 years. So when we do that automatically, some of this can qualify for a bonus also.

Michelle Bertram 

That makes sense. One of the things I really like about your team is you have then a nice software. You’ve done so many of them that you’re really great at estimating the benefits. I know you estimated them conservatively, but it gives the client and their CPA a lot of info before they’re actually paying you anything. So they’re going to what their savings first.

Clark Stover

Yeah, absolutely. And we’re all about working with the CPA and the client. You have got to know if there’s a fit tax-wise, there’s got to be the utilization. So we identify the estimate and work with the accountant to make sure that this is something that can be usable in this particular taxpayer situation.

Michelle Bertram 

Right. I love that you do that before you charge the client something for it. And so when you basically your fee is, in a sense, a percentage of the tax savings, but they’re not paying that until they’re going to see the savings.

Clark Stover

Correct. Yeah. They wouldn’t pay that to identify savings, they will have an estimate of the project first. The percentage that you had talked about is given to the client early in the process, an idea of what the fees going to be in relation to the savings. It’s not tied directly to the savings, as far as a percentage, it’s based on the scope, the type of building it is the number of stories, that sort of thing. So it’s all project-based and that’s regulated by the IRS and the accountants understand that. We don’t charge a percentage, but what we tell the client is that typically the fee is somewhere in the neighborhood of 10% of the benefit. There’s a lot of variables within that, we’ll come up with an exact fee, once we do the estimate and talk to the accountant.

Michelle Bertram 

I liked that. It’s nice. Clients are going to see the savings before they make any payment.

Clark Stover

Right. We want to be transparent and show them everything that’s going to happen and what the fee could be so we don’t waste their time in collecting data and documents and such.

Michelle Bertram 

Yeah. So if you own commercial property,  or you know somebody who does, you can click the link below, it’s a really fast way to estimate the savings and then start the process and talking to the specialist.

Clark Stover

Right. Absolutely.

Michelle Bertram

Now kind of pivoting, besides owning property, there are a couple of other incentives that you have that are based on either having or hiring employees. Do you want to talk a little bit about those, the ones that you see the most? 

Clark Stover

Yeah. So,  we have a platform, a hiring platform. It was set up before everything that’s happened in the last eight months. It was for the workers opportunity tax credit (WOTC) which is an ongoing tax credit that this platform is built around. It’s real-time reporting. We do the administrative work and the, and the certification with the state. But that platform also works with some of the now recently developed COVID type tax credits for hiring or retaining employees. So,  the workers opportunity tax credit, which kind of looks forward, hiring, and then the ERC tax credit, which is a retention credit for employees you kept the client kept during the pandemic. These are tax credits based on payroll. So there’s a lot of strategies at work on this platform. Another one is the disaster ERC, which has to do with employees that you had during the 2018/19 disasters, it’s a little bit different in how it’s calculated, but the platform really looks at all of those incentives and credits that are available to the employer.

Michelle Bertram

I know that right now if you’ve done the PPP loan, you can’t get the COVID ERC. There’s a lot of stuff going on that could change that, we’ll keep you posted on if that does change. The cool thing is if they’re in your software and it does change or anything else comes up, the software will identify that and alert them.

Clark Stover

Yes. That’s exactly it. So the platform itself is it’s a subscription-based platform. It’s based on the number of hires or the size, to a degree. So we’ll look at that and we’ll go through it How many people are you hiring? How many people did you retain? Let’s get the platform in place and then you can use it to for all of those services to see which one best fits. And if all of them can fit or dovetail together, you’ve got some substantial savings based on just employees.

Michelle Bertram 

I know disaster ERC credits in Wisconsin from 2018, 19 when we had some flooding in certain counties, Dane County, Sauk County, and some others. So they could still go back and get those credits through this system. Correct?

Clark Stover

Yeah. The disaster is kind of a backward-looking service. The ERC is kind of a current because you retained employees during the current time and then the WOTC, the workers opportunity tax credit, the one that’s been around for a little bit longer is a forward going service for new hires.

Michelle Bertram

Right. So really if you have, or you’re hiring employees, it’s a great thing. I know that if you’re hiring under nine employees. it starts at $19 a month. The subscription isn’t to make you guys rich, it’s just to get people to it, to have the system be able to start utilizing it.

Clark Stover

Exactly. 

Michelle Bertram

So, and you can find out that link to below. And the cool thing is on there, again, you can put in the number of employees you might hire, or how many you have and estimate savings instantly.

Clark Stover

Yes. The WOTC credits start at about 2,400, they go up to 9,600 per employee, depending on the category. The ERC is a little different, you can use it to offset payroll taxes, that is a maximum of $5,000 per employee credit. So, you know, it’s substantial.

Michelle Bertram 

If you have, or hire employees, just the numbers on the platform and let your team do the work. These are some specialized things that there’s a lot of leg work involved, and that’s where you have to have the team of specialists behind it. Your CPA, as great as they are, cannot do all this for everybody, that’s why they’re bringing in your team behind them to help with all these specialized credits.

Clark Stover

Exactly. 

Michelle Bertram 

If you’re watching this video, you probably might have a CPA that already sent it to you. We have a great group of CPAs in The Collaborative who use Clark and his team as part of their advanced tax planning team. And if you just kind of happened on this video, your CPA could be great and doing a lot, but there’s a lot of specialized things that they just can’t do without the support of a team. And so that’s why we have Clark and the team from GMG/Stryde here.

Clark Stover

That’s exactly what our strategy is, to work with CPAs, to help their clients. 

Michelle Bertram

To be able to do better for the clients, for all of you listening. The Collaborative, what we’re doing is trying to make sure we’re pulling in the specialist so that you, the business owner, get the best and the top-notch, service, and education. If there are any questions, just make sure you let us know! And make sure you click those links to estimate your benefits for commercial property or for hiring or hiring employees. Thanks for joining us today.

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