Child Tax Credit Reminder

Seems like many of our younger clients had children last year-  under the current tax law (2020) babies bring $2,000 child credits to your tax returns (credits reduce the bill dollar-for-dollar) and it doesnt matter what time of the year your children are born!     This is a yearly credit until your daughter or son turns 17 (then drops to $500)   Note-  the credit begins to disappear as AGI rises above $200,000 for single and head-of-household and $400,000 on joint returns.   For lower income folks part of this is ‘refundable’ along with other potential credits.    We are anticipating changes for tax year 2021 under the new Biden tax plan proposed… Stay Tuned!    Questions?

Know your payroll company!

These stories are becoming more frequent.   Clients are ultimately responsible for the tax dollars which are due, along with the reporting and filing requirements.      Its  reminder that business owners must understand and know who their vendors are – fraud can happen at various levels of an organization.      We can help connect you to qualified third parties.


Balog + Tamburri, CPAs expands to Dixie County, FL – Cross City Office Opens

Balog + Tamburri, CPAs expands to Dixie County, FL – Cross City Office Opens

New Office in Cross City, FL
New Office in Cross City, FL

The Florida practice of Balog + Tamburri, CPAs has acquired another accounting practice in Cross City, Dixie County, Florida.  The new office will practice as Balog + Hodges, CPAs.  This expansion now provides our Firm coverage from Central Florida into South Georgia and the Greater Atlanta Area.  Rick Balog, CPA, will serve as the Managing Partner for Balog + Hodges, CPAs practice which is located at 85 NE 126th St, Cross City, FL  32628.  The direct line to the office is (352) 498-0723.

Anne G. Hodges, CPA the former owner of Anne G. Hodges, CPAs will stay on board throughout the transition and will remain as a member of the professional staff as an independent contractor. Anne G. Hodges, CPAs has served the Cross City and Dixie County residents and business community since 1988, oddly, the same year what is now Balog + Tamburri, CPAs began in Jacksonville, FL.

Rick Balog says, “I am very excited about this expansion.  Dixie County, FL is located where the Suwannee River meets the Gulf of Mexico.  It is a sportsman’s paradise. In addition, the growth potential for Dixie County is tremendous.  We see nothing but upside in this area for both businesses and the vacation home industry!  Land is very affordable and access to water sports is unlimited. We are looking forward to serving and being an integral part of this community.”

Relationships and ideas don’t grow by chance – they flourish as a result of hard work and mindful nurturing. Balog + Hodges CPA’s strive to create an environment where professional relationships can prosper together. As your “Partner in Success,” our CPAs guide you toward your long-term goals, while always focusing on your short-term needs. We help you meet the challenges presented by your specialized accounting needs. Our ProfitPlus Total Back Office Support services everything from on site or remote bookkeeping services, QuickBooks Advisory services, total business and income tax planning and tax preparation, to or Virtual CFO Accounting services. We work with your “circle of experts,” including your staff, attorneys, bankers, and financial advisors. As your CPA Firm, Balog + Hodges gives you total peace of mind.

To schedule an appointment with Rick for either personal or business tax and accounting needs, please call the office at (352) 498-0723, or feel free to contact Rick directly at (904) 945-1220.  We look forward to exceeding your expectations!

2018 Year End Charity Planning

As we enter the holiday season,  please be reminded that cash and in-kind donations are deductible with specific rules up to 60% of a taxpayers AGI (up from 50%).      To claim a deduction for a cash, check or other monetary gift you must have a written confirmation from the charity.    This typically would include name of organization, date and amount of the gift.   Charities are required to provide written acknowledgement for donations over $250.   (Contributions under this amount can rely on a bank record or canceled check)   Please note any good or services received with any donation must be stated on the receipt.

Things to Consider

  • Gift fund contributions must be established and funded in 2018 to qualify as a gift.   (payments to charity can be made anytime)
  • The large increase in standard deductions for 2018 may cause your charitable giving to be not deductible.   Consider bunching these in 2018 or 2019 to maximize your tax benefit
  • Evaluate the tax impact of gifting long-term appreciated stock vs cash
  • If you are over 70 1/2 consider a qualified charitable distribution (QCD) from your IRA up to $100,000
  • Charitable Gifts charged on your credit cards but not paid until 2019 are fully deductible
  • Make gifts to individuals this holiday season.   Each taxpayer can gift $15,000 this year ($30,000 if married) to any individual with no paperwork required

Qualified Charitable Distribution

Corporations and Pass-Through Entities:  Entity Selection: Fifth in a Series

Corporations and Pass-Through Entities: Entity Selection: Fifth in a Series

The current tax reform has made business entity selection for new and existing businesses quite complicated for C corporations, and other pass-through businesses (think K1’s and Schedule C)  There are tremendous factors based on your industry, size and structure of your organization.

C Corps which have been out of vogue in recent years to most businesses (and CPA entity choice) have gotten some new light,   the new tax law reduces the maximum tax rate from 35% to now 21% flat.    Remember that “distributions” in these entities are dividends, with a maximum tax of 23.8%, so hovering around 40% with the double tax.

Pass-Through Entities (S Corps and Partnerships) which now include Schedule C sole proprietors receive a new 20% deduction off qualified activity income, substantially reducing tax marginal levels near 31-32%.

Under prior law, most businesses benefited from the pass-through entity as it resulted in a lower tax rate.  However, under the new code, special analysis must be conducted as major deductions have been eliminated or capped under the new individual code for 2018 going forward

The deduction for “qualified business income” appears to be straight forward at 20% of the income earned, however there are phase-outs, and how this is calculated based on your income and industry.

We often quote that simplicity can be expensive.    It might be time to change your entity structure or break your business into new entities.

Pass-Through Entities

2018 Tax Cuts-   Personal Exemptions and Child Credits-   4th In a Series

2018 Tax Cuts- Personal Exemptions and Child Credits- 4th In a Series

One of the big changes under the new code and candidly not spoken about in the press as much as the change in the “standard deduction” is the elimination of all personal exemptions under the new code.    This has a potential substantial impact on larger, middle class families.    These are worth $4,050 in 2017 per exemption and might offset the doubling of the standard deduction.

The child credit will now be $2,000 per qualifying child and up to $1,400 will be refundable – there are substantially higher thresholds for eligibility- good news for the middle and upper class.   These amounts are now $400,000 ($200,000 single) up from $110,000 ($75,000) under 2017 law.      This impacts children under age 17

The Act also provides a $500 nonrefundable credit for qualifying dependents other than children, and  the dependent care credit, adoption credit and the ability to exclude up to $5,000 of gross income annually for employer-provided dependent care remains on the tax code books for 2018

We move to business matters in our next blog.   We will start with an overview on business tax rates and important changes
Personal Exemptions

2018 Tax Cuts- Third in a Series: You Itemize and File Schedule A

The substantial increase in the standard deduction for 2018, as previously posted, means that a larger number of taxpayers will now take the standard deduction in lieu of itemizing.    Factoring in the limit on state and local property taxes and new reduced mortgage interest limits, lets see what else could cause an increase in standard deduction usage for 2018 and beyond.

Casualty and Theft Losses 

No longer deductible unless they are related to a loss in a federally declared disaster area.  (such as major storms such as hurricanes, wildfires and floods)

Medical Expenses

One of the few items that affects 2017 returns and for 2018 only,  the threshold is reduced to 7.5% of AGI – for taxpayers planning surgery and can bunch these expenses its time to consider this before this reverts to 10% of AGI effective 2019 tax year

State and Local Taxes

These taxes are now capped at $10,000.   Same regardless if you are single or married.  (substantial reduction to many taxpayers)

Miscellaneous Deductions

Completely eliminated under the code.   This includes all reimbursed business expenses (meals, mileage etc), tax prep, fees, investment management fees.   Sales people with substantial business miles need to factor this change immediately in their compensation packages

Employees and business owners heed:   The ability to deduct business meals and entertainment has now been eliminated starting this year as this was previously 50% deductible.

Child Tax Credits/Personal Exemptions will be our next blog topic.

2018 Tax Cuts and Jobs Act- Individual and Business Tax Forum Series- “You’re Buying (or Selling) a Home

For taxpayers with existing mortgages you can currently deduct mortgage interest of up to 1,000,000 (500,000 married separate) of incurred debt.    Under the new Code, mortgages taken out between December 15,2017 and December 31, 2025  are now only eligible for an interest deduction on their mortgage of up to $750,000 ($375,000 married separate).   Note:  If you have a binding contract signed before December 15, 2017 and close on the home no later than April 1, 2018 the old rules apply to you.

Prior to the new Code,  interest on Home Equity loans of up to $100,000 has been fully deductible.     The new rules have eliminated this deduction on all HELOC loans,  including existing loans already in place.

The impact on home sales is unclear at this point,  we anticipate that the potential decline in pricing in urban areas could be offset by the reduction of sellers who keep their homes to avoid the new rules

The tax free sale of primary homes is a great benefit in the current code, married couples can exclude up to $500,000 ($250,000 single) from their income taxes as long as the home is their residence for at least two of the last five years.    There was much debate about changing this to five of the last eight years but this was not passed.   This benefit remains in place.

Next blog will talk about the impact on itemized deductions overall on your form Schedule A

2018 Tax Cuts and Jobs Act-   Individual and Business Tax Forum Series-  “You Own a Home”

2018 Tax Cuts and Jobs Act- Individual and Business Tax Forum Series- “You Own a Home”

The new tax law that President Donald Trump signed into law late December 2017 will have massive, sweeping impacts on both the individual and business taxpayer.     We are beginning to digest the new code.    The changes involve so many parts of the code that the tax affect for each taxpayer has the potential to be profoundly different based on children, types of income, local taxes and more.       We will highlight highly impact areas over a series of blog posts to help explain specifics to our clients and readers.

You Own a Home

If you live in a high-tax area you will be especially affected by a new $10,000 limit on local and state taxes you can deduct on your Schedule A.

For our clients in FL, unless you are in a very expensive area you potentially will not feel any pain in this area, but our Atlanta clients in high-taxed areas of Decatur, along with large homes in Fulton County plus 6% GA state income taxes will feel the pinch.

This blog is about currently owning a home, so your current primary mortgage interest deductions won’t be affected, but if you are considering a move, that will be changes that you need to consider (another blog).    Note that fewer people will itemize, though since the new standard deduction has been increased substantially.

Taxpayers that are single (and married separately) will see this rise from $6,350 to $12,000,  head of household jumps from 9,350 to 18,000, and married filing jointly folks go from $12,700 to now $24,000.

Homeowners, starting with tax year 2018, will also lose their ability to deduct the interest on home-equity loans .

Our next blog will talk about the changes in buying and selling a home and the impact on new mortgages and holding periods on sales of your primary residence

The New Role of Today’s CFO: We’re way past numbers now!

The New Role of Today’s CFO: We’re way past numbers now!

By Richard T. Balog, CPA\CFF, CIA, CGFM, DACFE, and Rob Tamburri, CPA\PFS

April 22, 2017

The CFO is the financial “partner in strategy,” along with the CEO, COO, CIO and other Senior Managers. Today’s CFO needs the ability to not only manage the financial accounting and reporting aspects of the organization, but to also focus on the multiple and often conflicting roles. Today’s CFO needs skills far different from those of a typical CPA or Corporate Controller. Today’s CFO needs to be both a strategic and tactical thinker. Their basic communication skills need to be far beyond the financial aspects of the company. Today’s CFOs have the responsibility of sharpening and further-developing their “people skills” as well as their management skills to effectively work with your CEO, line executives, shareholders, Boards of Directors, regulatory agencies, employees and the financial community; what some folks define as their “Emotional Intelligence (EI).

Emotional intelligence (EI) refers to the ability to perceive, control, and evaluate emotions. Some psychologists suggest that emotional intelligence can be learned and strengthened, while others claim it is an inborn characteristic. Peter Salovey is the 23rd president of Yale University, and the Chris Argyris Professor of Psychology. John D. Mayer is a psychologist at the University of New Hampshire. These gentlemen coined the term ‘Emotional Intelligence’ in 1990 describing it as a form of social intelligence that involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them, and to use this information to guide one’s thinking and action.

Salovey and Mayer also initiated a research program intended to develop valid measures of emotional intelligence and to explore its significance. There is little doubt that our emotions have a direct impact on our behaviors. As such our emptions can influence people positively and negatively. The ability to manage our emotions and the emptions of others especially has become a key attribute of today’s CFO. This is especially true in times of high workplace pressure, like year-end close!

For some people, the ability to manage emotions may come naturally, but for others, not so much. However, since the CFO needs to effect change through others, it has become a critical skill set in today’s “politically correct” culture. It is something of which every CFO needs to be aware and develop.

Many “Big Box” seminar companies offer programs that promise to teach you how to “manage your emotion in the workplace”, but as the old adage goes, you can lead a horse to water….The Virtual CFO Practice at Balog + Tamburri is built on our professionals’ ability to separate their emotions from the client’s own situation. The following are some of the key attribute to our successful approach:

  1. Understand the Business: The effective CFO understands that the company does not revolve around finance! The key to any effective business is the proper combination of optimum use of corporate resources allocation and competing resources. CFOs need to fully understand the business in order to properly allocate corporate resources to effectively manage the competing demand for those finite resources. While the CFO typically moves through the “numbers side” of the business, to be effective the CFO needs to “think outside of the box”; the traditional comfort zone of financials; and actually TALK to people! They need to see the company from the eyes of Marketing, HR, IT Production and other disciplines that “don’t speak debit!” They need to actually talk with their peer group, face to face, and learn how others see the “optimum use of resources.”  They need to realize that not everyone manages in terms of financial results.  Plant managers don’t speak “debit,” they speak pounds, and gallons. They need to realize that Variance Reports don’t have to be in dollars and cents.
  1. Think Like a Salesman: This may sound like blasphemy, but it is critical! Today’s effective CFOs must be strong and effective verbal and written communicators. They must be able to give a plant tour as effectively as the Plant Manager. Internal reports need to be understandable by everyone! Be honest and accurate with the facts but also provide insight into the numbers that you have learned to make them understandable. Know the company’s marketing pitch. Be able to talk to customers as well as the external auditors. Be a true leader.
  1. Understand what drives the business: Businesses do not live in a vacuum. Talk to folks to understand the activities and events that cause the numbers to change. During a recent profitability enhancement engagement, a line factory worker asked if someone “could lose their job as a result of the changes?” when I responded “It could happen,” the worker responded by saying “Oh yea?? Well Joe smoked dope on th roof during second shift; and Paula…”  He went on to identify some twenty key issues no one knew about because nobody bothered to ask him. . Today’s effective CFO knows every aspect of the business and what drives each. Look at outside drivers as well. What is happening in the world, local events and the such all impact the business. When was the last time your accountant’s asked a line manager what information he or she needed to get their bonus? It is the non-finance questions that are not being asked: Not “What are we going to spend?” but ask “Why are we going to spend it?” “How will the investment make us more competitive?” When CFOs interact company-wide at a strategic level, they will be able to provide the necessary information that actually adds recurring value, and strengthens the relationship between the company and its decision-makers.
  1. Change the language of your internal reporting: As stated previously, not everyone speaks debit. Get over yourself. You may be comfortable with debits, most others are not. Ask your users what are the decisions they have to make that are difficult or scary. Typically the root cause of poor decision-making is the absence of competent information. Allow the users to develop the internal reporting format and language. Get the right input and the output will be truly value-added.
  1. Listen to others: The secret to any successful leader is the strength of the team of key advisers, and the leader’s willingness to LISTEN to them. Get input from non-financial professionals. Use the diversity of other perspectives to the company’s benefit. Maximize the mutual benefit of the CFO Advisory Team. Don’t just talk numbers. Capitalize on each other’s knowledge, experience and expertise. A good tem has worker bees as well as key executives. Each has a very unique perspective. And above all, get over yourself.  I refer to myself as a “lowly CPA.”  Every effective business is a result of a great team that successfully completed a very complex jigsaw puzzle. No effective CFO ever solved the puzzle alone.

We have been very successful in effecting meaningful change in our clients’ profitability through the use of these skills. Our robust practice has grown and our clients are able to spend more time enjoying the fruits of their business. We believe that our approach to service as our clients’ Virtual CFO has made the difference in their businesses success. Our Firm offers a to-day program entitled The CFO Workshop: Vision, Skills and Focus for the New CFO, that provides training for today’s newly appointed CFO or those veterans who would like to see their role in a new and different light.


For more information contact Rick Balog, Managing Partner, at, or call me directly at 904-945-1220.