A Gift with a Purpose

November 28, 2016 § Leave a comment

As we are soon approaching Christmas, with Black Friday now past, we are facing the difficult task of buying for others.  I think most of us would admit that gift-giving can be a stressful part of the Christmas season.  If this applies to you, I would like to share some other meaningful ideas you might consider.

Do you struggle in deciding what someone needs for Christmas? Or does that person not really need anything? Are you wondering if those gift cards are really being spent? Maybe the best gift would be gifting on behalf of your loved ones. This can be done by donating to a charity that they are passionate about or even donating farm animals to families in need in a third-world country through The Heifer Project or World Vision.   As an example, a flock of chickens is just $20, but can provide countless meals for a family.

Instead of exchanging gifts with family members, another option would be contacting United Way or Boys & Girls Club and adopting a family or child and purchasing gifts such as food, clothing or toys, to put a smile on a child’s face and letting a family know that someone cares.

1446UG OCC UgandaAnother fun project through Samaritan’s Purse at Christmastime is the Operation Christmas Child shoeboxes that allow you to choose and pack items for kids, and they are sent off to third-world countries for underprivileged children. My family and I go to Dollar Tree together and pack our boxes each year, and we include letters to the children.  It’s very gratifying to know that these small gifts are so appreciated by the recipients.  There are many churches in the area that participate in this program, or anyone can send their own shoebox to a child in another country by going to samaritanspurse.org.

In closing, on Christmas day and other holidays, while so many activities are going on at family gatherings, look around and savor these moments. Don’t take them for granted, because life circumstances can change from one year to the next.  Be aware and mindful of those special people whose lives you treasure and value.  Take many pictures, smile and hug often, say encouraging and positive things.

Best wishes for a wonderful, joy-filled Christmas season.   And remember the reason for the season along the way, the blessing of meaningful giving.  Merry Christmas!

Sara Rolffs, CPA
sara-rolffs
Supervisor – McGowen, Hurst, Clark & Smith, P.C.
srolffs@mhcscpa.com
http://mhcscpa.com

Make Good Plans… But Stay Flexible

November 15, 2016 § Leave a comment

Last Sunday was round-up day for the calves that have been roaming the pasture on the acreage surrounding our home.  We had been preparing and planning for this day for several weeks.

A little backstory…My spouse, Katherine, and I both grew up on small farms in southern Iowa.  We loved that lifestyle and environment, and in many ways have attempted to recreate it.  We moved to an acreage south of Norwalk 24 years ago.  Since then we have added some land so that we have a pretty large area suitable for pasture including ditches and forest.

About 18 years ago my father-in-law needed some extra pasture for his livestock.  He had always maintained a small cattle herd of 16 to 20 cows.  He had bought some additional calves and was concerned his available pasture wouldn’t be enough.  We worked out a plan where he could bring 14 calves to our acreage for the summer, and our adventure was launched.

Livestock are easy to manage in the summer.  All you need is grass, a source of water, regular rain and a good fence.  Our fences were a little questionable, but everything else was in place.  We did some patching on the fences and supplemented a couple of areas with electric wire and we were good.  Livestock become much more work in the winter, so our arrangement was that the calves would arrive near the end of April and return to his farm near the end of October.

We have continued that schedule each year since then.  We usually learn something each year and have developed a pretty good process and set of plans for managing the livestock.  We know to check the fences every couple of days.  Summer windstorms regularly drop limbs or even whole trees on the fences that run through the forest.  Deer that don’t completely clear the fence will knock a wire loose or even break an old post.  We expect those potential problems, and address them quickly.

We give the calves a small bucket of corn every day.   Not because they need it – they have all the grass they really need to thrive.  The corn is a very important part of our annual plan.  First, it helps keep the calves calm around people.  They soon realize Katherine or I will bring them their daily treat of corn and will usually follow us around when we are out in the pasture.  Second, we feed them in a small corral that we build with gates each summer.  They have to get comfortable coming into that small space so that we can manage them for loading in the fall.  We have learned that incentives are better than demands when working with livestock, just the same as with people.

Crossing out Plan A and writing Plan B on a blackboard.We have realized over the years that these young calves are a lot like teenagers.  They are always hungry, a little curious, like to have fun, mostly well-intentioned, and occasionally unpredictable.  They chose Sunday to be unpredictable.

My father-in-law’s farm is about 100 miles away.  My brother-in-law, Dan, has taken over the farming business in recent years.  He had left early and arrived on schedule about 9 am with his truck, trailer and a helper.  I drove the gator out to the pasture to find the calves and lead them into the corral with a bucket of corn – a ritual we had performed almost daily over the prior weeks.

That morning the calves had no interest what-so-ever in following me back to the corral and there was nothing I could do to persuade them otherwise.  They were not going to cooperate with my plan.  They wanted to go get a drink and eat grass that morning.

Dan didn’t want to make a second trip with his equipment.  He needed to be home for a commitment that afternoon.  He also needed the trailer in a couple of days for moving other cattle.  Circumstances weren’t looking too good for his plans either.

We finally agreed on a new plan.  Dan and his helper would take my car home.  I would try later that afternoon to lead the calves into the corral, then Katherine & I along with help from a couple of neighbors would get them loaded.

At 3:30 in the afternoon the calves performed exactly as I had hoped.  They followed me to the corral and went in to eat the corn.  They stayed calm while we backed up the trailer and cooperated in getting loaded.  The bonus of the whole process was I got to drive the Ford Super Duty diesel pickup pulling the 40 foot goose-neck trailer south to Dan’s farm.  As any current (or former) farm kid knows, using the big equipment is the best part.

Over the years I have learned it is necessary to make good plans in order to be successful and accomplish your goals.  But I have also learned, no matter whether you are dealing with customers, employees, teenagers…..or even calves, others may have different plans.  I truly believe as long as you are willing to adapt to circumstances and stay flexible, you can still be successful!

John Schmidt, CPA
John Schmidt
Partner – McGowen, Hurst, Clark & Smith, P.C.
jschmidt@mhcscpa.com
http://mhcscpa.com

Tax Planning is Key

November 7, 2016 § Leave a comment

It’s that time again!   No, I’m not talking about “Trick or Treating” since sadly that time has come and gone!  It is time to do your tax planning.  Why, you may ask?   Well, here are some of the reasons I recommend tax planning to my clients.

  1. Eliminate the surprises. Some surprises are great, but discovering that you owe hundreds or even thousands of dollars by April 15th would not be one of them for most of us.   By knowing that you owe taxes in November or December,  you can eliminate the shock and allow time to make needed adjustments –  which leads us to #2.
  2. Have time to make changes. By doing the projection, you will have time to make changes.  For instance, if you have a business you may be able to purchase that piece of needed equipment or extend a bonus payment to a valued employee or yourself!  If you are an individual who receives a W-2, you may want to adjust your withholding, decreasing the amount you will owe at the end of the year,  and reducing  any penalty for underpayment of your taxes  – which takes us to #3.
  3. Calculating taxReduce or eliminate penalties. If you owe money for your taxes, the next question I would ask is will you be subject to an underpayment penalty for not paying your taxes during 2016 or can you wait until April 18, 2017 (delayed date due to observance of Emancipation Day) to pay the balance owed?    If you owe over $1,000, there are two exceptions that will keep you from owing a penalty.   1) You have paid in 90% of the tax you owed for the current year, or 2) you paid  in 100% of your prior year’s tax liability (110% if your adjusted gross income was over $150,000 last year).  If you meet either of these exceptions, you are not subject to an underpayment penalty and you can postpone payment in the amount owed until  April 18, 2017.    As you can see, the first exception requires that you estimate your tax liability during the current year paying in at least 90% of what is owed.  This estimate can be tricky, so most people I know take advantage of the second exception by paying what is called a “safe harbor” estimate.  This estimate is based on the prior year tax liability which is a known amount and can be easily and exactly calculated.
  4. Assists with preparation. Another reason to do this projection is that it allows you to be prepared so that when it is time to file your 2016 tax return, you have already accumulated much of the needed information such as charitable deductions and other tax documents.    Also, by preparing a projection, you can visit with your tax accountant and obtain more information and knowledge on what is important for your specific tax situation.     Then you will be ready to get your taxes done early when your accountant is fresh and eager to get started.
  5. Control of your money. Finally, it allows you to make the best use of the time value of your money.  If you have overpaid substantially, you may want to skip your 4th quarter estimate or adjust your withholding down allowing you to get back that extra tax in December instead of waiting until February or March for a refund.    If you owe money, it affords you the opportunity to decide when to pay the additional amount to keep penalties down,  while maintaining  your funds until needed.  Obviously with  interest rates so low, this is not a big deal but it still can put some money in your pocket.

So take a moment and consider if any of these reasons make sense to you.   If they do, give your tax accountant a call and see what he/she suggests.   Remember tax planning is key and can open the door to help limit your tax liability.

Kathi Koenig, CPA
Kathi Koenig
Partner – McGowen, Hurst, Clark & Smith, P.C.
kkoenig@mhcscpa.com
http://mhcscpa.com

Audit Memories

October 28, 2016 § Leave a comment

Each night before bed, I go to the pantry, dig out a small piece of wrapped candy, and place it in my two-year-old daughter’s shoe.  I usually wake her at 6 am; she is not a morning person so she usually wakes up on the wrong side of the crib.  My mom recently told my daughter a story about how when she was a little girl, St. Nicholas would visit her house and leave a little toy or candy in her shoe during the holiday season.  Each morning my daughter pulls the little candy from her shoe and laughs a big belly laugh and says “tell me the story about grandma and St. Nicholas again, mom.”

good-memoriesShe loves to hear stories from the past.  Her favorites include me stepping on a huge rusty nail and getting a foot infection so bad I was in a wheelchair for a month, my brother knocking down a wasps’ nest and getting stung over one hundred times, and a deer jumping through the passenger side of my dad’s truck as it traveled down the highway.  These situations were a far cry from entertaining at the time, but she soaks them up with a smile on her face and says “another story, mom.”

Recalling the past got me thinking about some of my fondest work memories traveling to small towns in Iowa.   I’ve spent eleven of my last fourteen working years auditing so I have many stories buried deep in my memory – some good and some not good!  I thought I would share some of my fondest memories; who knew auditing was so adventurous!

  • Staying in motels.  Don’t know the differences between a motel and a hotel?  Neither did I until I stayed in a motel for three weeks straight.  A motel has entrances from the outside.  My motel had only seven rooms total – five of which were taken up by auditors.  I was there in November, which is a big hunting month.  The two rooms not occupied by auditors at the motel were taken up by hunters with their dogs.  These dogs barked at random times during the night and were allowed into the motel, but not on the beds as dictated by a large sign in each room that stated “Please keep hunting dogs off bed.”
  • Taking advantage of all-you-can eat lunch buffets while on out-of-town engagements.  Buffets are quick and cheap so they are always a top pick for lunch.  While I did not partake in any contests, several “how much can you eat” contests amongst members of the audit team were conducted under my watchful eye.  The record, if you are curious, was seventeen pieces of pizza.
  • Auditor to the rescue.  Yes, another memory that involves eating.  The audit team was at a local lunch spot in small-town Iowa  (a deli combined with a pharmacy).  While our audit team was chowing down on egg salad sandwiches, a woman next to us began to choke.  Our team’s staff auditor, a 7 foot former college basketball player, rushed to the rescue and performed the Heimlich maneuver on this tiny lady.  Needless to say, there were some extra beverages consumed that night to celebrate the unlikely hero.
  • Watch out for that cow.  Driving up to a client located in a rural area one foggy Monday morning, the audit team vehicle came over the top of a hill to find a large black steer standing in the middle of the road.  Audit bags and computers went flying around the car as we screeched to a halt just before the car got a taste of hamburger for breakfast.

I had more fun traveling to small towns than I thought possible.  Some of the friendships I formed with the other audit team members are still present today – more than ten years later.   Sometimes there are situations, both in home life and in work life, that at the time may seem less than glamorous or downright unpleasant.  However, these are the situations that will stick with us and, perhaps, build a little character as well…..and if nothing else, make excellent stories!

Wendy Moran, CPA
wendy-moran
Assurance Director – McGowen, Hurst, Clark & Smith, P.C.
wmoran@mhcscpa.com
http://mhcscpa.com

Research and Development – Is Your Company Compliant and Taking Advantage of the R&D Tax Credit?

October 4, 2016 § Leave a comment

Many companies are unaware that the tax code offers a generous Research and Development Credit for which they may qualify. Even those that are aware often fail to capture the full extent of R&D tax credits to which they are entitled. The R&D credit was made permanent in 2015 and will be allowed to offset AMT for 2016 and beyond.

Qualifying R&D activities take place in many industries in which research is thought of not so much as a separate function, but rather as part of the product and process improvement work that goes on every day.  Any company that develops, designs, or improves products, processes, techniques, formulas, inventions, or software may be eligible for the credit.

Production processes that may be eligible for R&D tax incentives include the following:

  • rdDesigning and developing cost-effective and innovative operational processes
  • Integrating new materials to improve product performance and manufacturing processes
  • Determining tooling requirements and optimal placement of equipment
  • Evaluating and determining the most efficient flow of material
  • Designing and evaluating process alternatives
  • Designing, constructing, and testing product prototypes
  • Developing processes that would meet increasing regulatory requirements
  • Reducing labor costs
  • Alternative material testing
  • Achieving compliance with changing emissions laws and regulations
  • Streamlining manufacturing processes through automation
  • Increasing manufacturing capabilities and production capacities
  • Developing & Implementing new / improved safety enhancements
  • Developing new applications
  • Improving product quality
  • Implementing new production standards and quality assurance processes
  • Improving yields
  • Reducing manufacturing times
  • Optimizing manufacturing processes
  • Increasing operating and economic efficiencies

As you can see, there are many ways to qualify for the R&D Tax Credit.  Industries that historically have benefited from the credit in the past are listed below:

  • Manufacturing
  • Information/Software
  • Professional Services – Architects, Engineers, etc.
  • Scientific
  • Construction

In addition, the State of Iowa offers an R&D Tax Credit to any company that claims a federal credit.  If your company is in the industries above or working to improve processes, you may be eligible for the R&D Tax Credit.  Contact MHC&S to discuss the credit further and the benefits the credit may offer you!

Nick Finkenauer, CPA
nick-finkenauer
Senior Manager – McGowen, Hurst, Clark & Smith, P.C.
nfinkenauer@mhcscpa.com
http://mhcscpa.com

 

 

 

 

Wellness in the Workplace

September 26, 2016 § Leave a comment

Image result for 5k runOur firm recently put together a wellness committee.  As members of the wellness committee, we are tasked with exploring and finding ways to encourage fellow team members to choose a healthy lifestyle.  We currently offer reduced membership prices to the YMCA (or gym of your choice if you don’t live by a YMCA) and bring in healthy snacks twice a week during busy season.  Some of the ideas we have come up with is to offer a health screening through our partnership with the YMCA, offering rewards for participating in running/walking events, assisting employees with purchasing a fitness tracker, or bring in outside individuals to do presentations on healthy lifestyles and ergonomics.  Does your company have a firm wellness plan?  What types of benefits does your company offer?  We would love to hear your thoughts.

As we primarily sit in our desk chairs for the majority of the day, which we know can cause health problems, I leave you with ten exercises that you can perform at your desk.

  1. Shoulder Shrugs – Raise shoulder towards your ears, hold and then relax downward to a normal position.
  2. Neck Tilts – Keep shoulders relaxed and arms down by your side. Tilt head sideways to one side, hold for fives seconds and switch to the other side.
  3. Neck Stretch – Gently tilt your head forward, keeping shoulders relaxed and downward. Hold for give seconds.
  4. Wrist/Forearm Stretch – Please your hands palm to palm and rotate palms around until they face downward keeping elbows even. Hold for five to eight seconds and then rotate up.
  5. Hand/Finger Stretch – Separate and straighten fingers, hold for ten seconds. Bend fingers at your knuckle and hold for ten seconds, then separate and straighten your fingers again.
  6. Hand Shakes – Shake out both hands for eight to ten seconds.
  7. Wrist Flexor Stretch – While seated, extend your right arm forward at shoulder height. Keeping your elbow straight, grasp your right hand with your left and slowly bend your wrist backward until you feel a stretch along the bottom of your forearm.  Hold for fifteen seconds.  Then bend wrist downward until a stretch is felt on the top of the arm, and hold for fifteen second.  Switch arms and repeat.
  8. Back Stretch – Lean forward in your chair, keep your head down and neck relaxed. Hold for ten to twenty seconds and then use your hands to push yourself back up.
  9. Upper Body Stretch – Interlace fingers, turn palms upward and straighten arms above head. Elongate arms to stretch through upper sides of your rib cage.  Hold for ten to fifteen seconds.
  10. Hamstring Stretch – Sitting, hold onto your upper left leg just above and behind the knee. Gently pull bent knee toward chest.  Hold for fifteen to twenty seconds and then repeat on the right leg.

Nicole Loux, CPA
Nicole Loux
Manager – McGowen, Hurst, Clark & Smith, P.C.
nloux@mhcscpa.com
http://mhcscpa.com

What About Bob?

September 13, 2016 § Leave a comment

What About Bob?

Change in Leadership at MHC&S

Bob McGowen Passes the Managing Partner Baton but Remains on as a Partner

thank-you-bobBob McGowen, who has been our Managing Partner for the past 23 years and affiliated with the McGowen, Hurst, Clark & Smith, P.C. firm  for the past 46 years, has passed  the Managing Partner baton to Co-Managing Partners Dave Farnsworth and Dan Schwarz.  Bob will continue to remain as a partner in the firm, servicing clients and helping our firm grow.  Needless to say, we have all benefited from having Bob as our role model and leader.  Following are some of the thoughts we team members shared regarding Bob and the impact that he has had in our lives. We invite you to read our comments:

“Bob has taught me to have  compassion for people.  Whether it is clients, team members or just people you encounter during your day, having a positive attitude and compassion towards people is key in building relationships.”

“Bob is one of the hardest working men I’ve known, yet he always has a positive attitude, time to help someone or pass on an encouraging word.  He has been the quintessential partner, always involved in whatever the Firm is doing, whether it be a softball game, fundraiser or just a fun activity at work.  I thank him for all he has done for McGowen, Hurst, Clark & Smith and hope he will enjoy some time now for himself.”

“Bob has been a great example of demonstrating the impact that a positive attitude can have on creating a positive culture.  Bob is always willing to offer advice, provide assistance or catch up on one’s personal life in a warm and friendly manner.  He clearly is a reason that MHC&S is a top place to work.”

“It is no secret among Bob’s partners, employees, clients, and colleagues the commitment and level of dedication he has to the profession and to each of these groups of people.  This is evidenced by the (almost legendary status) number of hours he works on an annual basis to make sure everyone’s needs are met.”

“The life lesson I learned from Bob is this – no matter how busy he is, or the number of simultaneous things he has going on at a particular time on any given day, he never gives anyone the impression that he is too busy to help them.  Bob is one of the most generous people with his time that you will ever meet.  He truly cares for each and every person that he know, and shows it every day by his actions.”

“Three life lessons have been learned from Bob all because he empties the dishwasher each morning:  1. Be humble, regardless of your position.  2.  Be positive, no matter how trivial a task may seem.  3.  Be consistent, as it indicates loyalty.”

“The thing that has always amazed me the most about Bob is that he always makes the time to talk to others. No matter how swamped Bob is or how many different things he is juggling, I know that I can walk into Bob’s office at any time and that I will receive his full attention. Not only does he never turn anyone away because he is “too busy”, he is always happy to help and never makes me feel “rushed”. Bob truly cares about employees, his clients and the firm.”

“There isn’t a specific life lesson I’ve learned from Bob, but there is a saying that I think Bob is the perfect example of, “A smile on your face and a song in your heart”. This was a previous employer’s motto that has stuck with me over the years. Bob, no matter what, always has a smile on his face and from his actions it is obvious he has a song in his heart. He is a wonderful person and it is an honor to be able to work with him and be inspired by his personality and management of MHCS.”

“I have had the opportunity and pleasure of working with Bob for more than 30 years.  Over those years he has helped me as a mentor, trainer, coach, and partner.  I have never known anyone else to always be as positive and upbeat as Bob.  He always sees the best in any situation, and in each person he comes in contact with.”

“Bob is always quick to greet everyone with a smile and a positive comment.  While Bob puts in more hours at work than seems to be physically possible, he has always found time to join in many other activities as well.  He has participated in softball leagues, volleyball leagues, kickball tournaments, happy hour get-togethers, weddings and funerals involving many team members and clients.  Somehow he has always made time for others.”

“Over the last 20+ years that Bob has been our Managing Partner, the Firm has almost tripled in size, and grown substantially in reputation and stature in the Des Moines Metro area.  Nicely done, Bob!   Thank you for all you do.”

“Bob is a true leader in the sense that he models the way.  People follow and work hard for him because they want to, not because they have to.  He doesn’t ask anyone to do things that he himself wouldn’t do and he tackles every task with a positive and humble attitude.  His humility in leadership affects his relationships with not only firm members but clients as well.  He is always willing to put others before himself and I think that is a big part of his success in maintaining his clients for such a long time. They know that he truly cares about them just as firm members know that Bob cares about them as well.”

“Bob is the most genuine and hardworking person I have ever met and am so fortunate to be part of his MHC&S family.  On a daily basis, Bob lives and breathes the values of sincerity, kindness, integrity and dedication to others.  Bob is an inspiration to whomever has the joy of knowing him and is a testament to the importance of kindness and honesty.”

“When you tell people you work at McGowen, Hurst, Clark & Smith, you feel a sense of pride, especially when you say that Bob McGowen is your boss.”

“Bob has been a great teacher and leader.  A couple of leadership traits I learned from Bob are:

  1. The ability to listen. Bob always takes the time to truly listen and then helps you find a solution.
  2. A good leader stretches their people, possibly giving them more than they think they can handle, but letting them learn and grow through their experience.

Thank you, Bob, for your great leadership and giving us the opportunity to stretch and grow.”

 

“I have read many times that the tone of a business/firm is started at the top and filters down to the others.   This can be seen clearly at our firm when you look at the actions of Bob.  Here are a few of the values that Bob has lived through his actions.

  1. Respect and compassion for each other.  Bob is respectful of each of us.  He is one of the first to congratulate a firm member on accomplishments, to be present at special occasions such as the 40 under 40, CPA recognition dinners (from the old days) or the ISCPA recognition events. He always can be seen at weddings, funerals, and other special events on a personal level.
  2. No job is beneath any of us. It is not unusual to see Bob making coffee, cleaning something up in the kitchen, removing a spot from the carpet or scrubbing the entry way to the building.
  3. Supporting the community and having fun.   You can catch Bob playing baseball, bowling for Big Brothers/Big Sisters, pulling a plane for Special Olympics and along the way, making others laugh with his shenanigans.”

“What I like best about working with Bob is that you always know what kind of mood he will be in.  He never has a bad day and always greets you with a huge smile.”

“Although Bob is no longer working in the role of Managing Partner, his life lessons will continue to teach the team members at MHC&S.  I am just glad we still get to see him every day as he continues on as partner.”

“Bob McGowen leads by example, is passionate about client services and firm members. Bob regards clients and firm members as friends and has remarked, “You work harder for your friends.”  He exemplifies MHC&S firm core values of integrity, excellence, respect teamwork, family and fun.  Bob is an all-around nice guy.”

 

While the list and comments go on and on, we all want to say how much we appreciate everything that Bob has done for the firm and for we team members.  You are an amazing role model in both business and life.  Thank you for the many contributions you have made at McGowen, Hurst, Clark & Smith.  We are all very proud and privileged to work with you.

Signed,
Your MHC&S Team Members