Concierge CPA June 2018

June 2018

8221 Brecksville Rd, STE 205 Brecksville, OH 44141

[email protected]

(440) 340-1030

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Would You Invest 3 Minutes of Your Time to Find Out …?

A few months ago, Borbala and I drove to Washington, D.C., to attend a conference about online marketing. The title of the event was “The Art of Lead Generation,” and the focus was on Facebook advertising. Currently, we are not as active online as we would like to be, so attending a conference on this topic seemed like a good idea. The event was well-organized, and what I liked most was that it was more of a hands-on learning experience, as opposed to just listening to a boring lecture. I’ve attended way too many lecture-style events, and it was refreshing to experience something more interesting. One phrase I always hear at these events is that I should avoid the “this won’t work for me” attitude. According to Borbala, I tend to be a bit pessimistic at times, and even though I disagree with this assessment, I attended this event with an open mind. Overall, I had a positive experience. I came away with new knowledge, made some new connections, and even had time to check out some of the new restaurants in D.C. Then came the important part of the trip: the drive back home. I prefer to drive because this way I get a chunk of uninterrupted time to digest all the new information I had learned. Yes, it is important to invest “3 minutes of our time” into learning about new ideas and new opportunities to grow our business. Our job is to discover as many opportunities as possible, but at the end of the day, we have to decide which of these opportunities we turn into reality. The long drive home gave us a chance to talk about the harder questions, like what do we have to give up to implement this new idea? What else is on our agenda? What takes priority? Will the operations of our business be negatively affected by the changes?

Unfortunately, I’ve seen thriving businesses go into bankruptcy because of the implementation of great ideas. For example, we’ve worked with a business owner who spent a lot of money on marketing, which resulted in new clients coming in. The quality of service was also excellent, but the operations became so inefficient that they had to file for bankruptcy before starting all over again.

How can a great idea ruin an entire company? This can happen when people fail to consider the following questions:

• How do the different pieces fit together?

• Do the different projects work toward one goal, or against each other?

• Are the various aspects of the business aligned and in harmony?

New marketing tactics and business growth opportunities might be valuable when evaluated separately. It might work for somebody at some point in time, BUT it is your responsibility as a business owner to make sure that the ideas you choose to execute work together toward your overall plan and vision for your business. If you are struggling with conflicting projects or deciding what should take priority in your business, schedule an in-person VIP Day, when we dive deep into where and why you are stuck and help you overcome the obstacles that hold you back. –Laszlo Szilagyi, CPA

1 (440) 340-1030

BORBALA’S SCHEDULE

Register at BeyondTheNumbers.Club Thursdays at 2 p.m. EDT: • July 12 • July 26 Client Advising and Coaching Days • July 5 • July 11 • July 18 Schedule at Borbala.AcuityScheduling.com Weekly Live Roundtable Calls • June 28 • July 5 • June 13 • June 19 • June 27

SEMINARS AND EVENTS June 21-24: Renegade CPA Superconference, Atlanta, GA June 28: Presentation at WBC’s Think Tank Thursday, Cleveland, OH July 12: EOA meeting and accountability group, Independence, OH July 17: GKIC Cleveland/Akron Elite Mastermind with Dan Cricks August 9: EOA learning day and accountability group, Independence, OH August 14: GKIC Cleveland/Akron Elite Mastermind with Dan Cricks August 21: Presentation at WBC’s Think Tank Tuesday, Cleveland, OH

Prospective client inquiries: [email protected]

ERIKA & ZSOLT MOLNAR

CLIENTS OF THE MONTH:

This month I have the privilege of introducing you to Erika and Zsolt Molnar. In the spirit of full disclosure, I have to mention that Erika is my sister, so my introduction might be somewhat biased. Erika just graduated cum laude from Cleveland-Marshall College of Law at age 41. Both Borbala and I are very proud of her achievements, which inspire us all. If I had to describe Erika in one word, I would definitely go with “determined.” Her journey before law school required just as much resolution. Despite having to battle with cancer at age 21, she completed her undergraduate studies back in Europe. What inspired Erika to go to law school? After moving to the U.S., she finished a postgraduate paralegal program, and immediately thereafter started working for a civil litigation firm. Gaining hands-on experience in the legal industry and working with excellent attorneys motivated Erika to go back to school and get a law degree. Her favorite part of law school: a summer externship at the Eighth District Court of Appeals. Erika loved observing the oral arguments presented by the parties and the possibility to discuss the merits of a case with the judge she was working for. This was a tremendous opportunity to learn.

Erika’s husband, Zsolt, an engineer by training, has always been very entrepreneurial. Right after college, he ran a multinational lumber business and embraced

the responsibilities of managing 30-plus employees. After moving to the U.S., Zsolt started a construction business and worked on restoring andmaintaining historic slate roofs. After an unfortunate work accident, he had to find a less physically demanding field; therefore, he started to develop andmaintain websites. In his spare time, Zsolt volunteers to host the Hungarian community radio, which airs every Sunday afternoon from the campuses of John Carroll University. Being a person whomakes things happen, Zsolt co-founded a nonprofit organization called Hungarian Media Foundation that quickly grew its influence within the entire Hungarian community in North America by becoming a hub for other community organizations. Even though this position demands long hours and a lot of travel, Zsolt enjoys bringing the community together. To recognize his positive influence on the community and his tremendous volunteer work, Zsolt was recently presented with the Hungarian Gold Cross of Merit, the highest civil award granted by the president of Hungary.

Erika, we wish you best of luck on the bar exam in July! I have no doubts you’ll conquer this challenge.

– Laszlo Szilagyi, CPA

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She Did It! Last month, on May 19, 29 million Americans woke up to take a break from school shootings, Russian collusion, and partisan gridlock to watch a California woman achieve a rare fantasy. The woman in question watched the sun rise as plain old Meghan Markle. But by the time it had set, she had become Her Royal Highness Meghan, Duchess of Sussex. Lots of Americans grow up wanting to become a princess. Some of them spend years acting like it’s already true. But, throwing aside concepts like social mobility and “intergenerational earnings elasticity,” once an American girl picks her parents, it’s pretty much game over. Now Meghan’s parents can debate whether they lost a daughter or gained a son. And the royal wedding fans at the IRS can debate whether they lost a taxpayer — or gained a whole new source of revenue! Markle will become a British citizen, which won’t put anything in the IRS’ pockets. The real issue is whether she keeps her U.S. citizenship, too. If so, she’ll be subject to U.S. tax on her worldwide income, including anything she reports with Prince Harry. And if she keeps more than $300,000 in assets abroad, she’ll have to file Form 8938 reporting them. That may not sit well with the Queen, who recently saw some Cayman Islands holdings owned by her Duchy of Lancaster estate revealed in the 2017 “Paradise papers” leak. Last year’s Tax Cuts and Jobs Act could make things even harder for the new princess. The new law caps deductions for state and local income and property taxes at $10,000 per year. That could make keeping a pied-a-terre back home a bit pricier. Fortunately, she can still take a foreign tax credit for taxes paid outside of the U.S. Father’s Day Chili LimeChickenWings

If Her Royal Highness chooses instead to give up her U.S. citizenship, she’ll have to fill out some paperwork, take an Oath of Renunciation, and pay a $2,350 expatriation fee. It’s easy enough that 6,800 people did it in 2017, mostly to quit paying U.S. taxes. The IRS helpfully publishes a list ratting them out by name every quarter. But there’s a catch, and it’s a big one. If the princess’s net worth is over $2 million (which it probably is), or her annual tax for the five years before she leaves was more than $162,000 (which it probably was), she’ll owe tax on any appreciated assets she owns, calculated as if she had sold them on the day she leaves. There’s a $680,000 exemption … but the whole thing still sounds like a royal headache! Prince Harry may be off the market, but if you’re still hoping to marry royalty, don’t give up hope! Vanity Fair magazine just introduced the 12 most eligible royals in a post-Harry world. Just remember to call us before you walk down the aisle. And remember, we’re here for the rest of your court, too!

-Borbala Banto, CPA

INGREDIENTS •

• • •

1 lime, halved

4 pounds chicken wings 1 stick unsalted butter, softened 1 1/4 tablespoons Thai red curry paste

Extra-virgin olive oil Kosher salt and freshly ground black pepper Chopped cilantro for garnish

•

•

•

• •

1/4 cup honey

1/4 cup soy sauce

INSTRUCTIONS 1. Heat oven to 425 F. 2. Rinse wings under cold water and pat dry. Season liberally with salt and pepper, and drizzle with olive oil. Roast on a baking sheet for 25 minutes or until skin becomes crisp and brown. 3. Blend butter, red curry paste, honey, and soy sauce in a large mixing bowl. 4. Toss wings in butter mixture. Squeeze lime juice on top, transfer to serving plate, and garnish with cilantro.

3 (440) 340-1030

8221 Brecksville Rd, STE 205 Brecksville, OH 44141

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

(440) 340-1030

INSIDE Would You Invest 3 Minutes of Your Time to Find Out …? Page 1 Borbala’s Schedule Page 2 Clients of the Month: Erika & Zsolt Molnar Page 2 She Did It! Page 3 Try This Recipe for Father’s Day! Page 3 Are You Eligible for the New Deduction Created by the Recent Tax Act? Page 4

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ARE YOU ELIGIBLE FOR THE NEW DEDUCTION CREATED BY THE RECENT TAX ACT?

The recent Tax Act creates a new deduction on pass-through income. It should provide a substantial tax benefit to individuals with “qualified business income” from a partnership, S-corporation, LLC, or sole proprietorship. It is also one of the more complicated provisions in the new law. The deduction is 20 percent of your “qualified business income (QBI).” Employee wages do not qualify, and neither do reasonable compensation received from an S-corporation or a guaranteed payment received from a partnership. If your taxable income is below $157,500 ($315,000 for joint filers), you can be in any type of business and you’re eligible for the deduction.

If your taxable income is above this level and you are in a “specified service” trade, your deduction is phased out. We’re talking about trades involving the performance of services in the fields of health, law, consulting, athletics, or financial services. Once taxable income is above $207,500 ($415,000 for joint filers), NO deduction is allowed for income from specified service businesses. For the rest of the taxpayers with taxable income more than the above thresholds, a limitation on the amount of the deduction is phased in based on either on wages paid or wages paid plus a capital element. Calculating QBI will be the most complicated in these cases.

Obviously, the complexities surrounding this substantial new deduction can be formidable, especially if you are in a specified service business or if your taxable income exceeds the thresholds discussed above. Please reach out to Borbala and Laz with any questions regarding how the new deduction might benefit you.

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