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.
Another 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
Supervisor – McGowen, Hurst, Clark & Smith, P.C.
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.
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
Partner – McGowen, Hurst, Clark & Smith, P.C.
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.
- 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.
- 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.
- Reduce 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.
- 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.
- 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
Partner – McGowen, Hurst, Clark & Smith, P.C.