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Sullivan Interview in The Value Examiner

9/25/2018

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Sullivan Strategic's President, John P Sullivan, CPA/ABV, CVA was interviewed by Rod P. Burkert, a nationally renowned valuation expert who writes a regular article on practice management in The Value Examiner, an industry publication issued in print form by The National Association of Certified Valuators and Analysts (NACVA). The article can be found in the July/August 2018 issue or you can download the PDF below.
value_examiner_-_rod_burkert_sullivan_interview_jul-aug_2018.pdf
File Size: 111 kb
File Type: pdf
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We've Moved to our new Voorhees Office!

12/14/2016

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Winter is Coming . . . and so is Tax Season!
We are so excited to move into our new office just in time for tax season! Most of all, we are very thankful to our clients and colleagues who have fueled our growth to make this happen. Wishing you a wonderful holiday season and cheers to 2017! 
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​    PLEASE UPDATE YOUR RECORDS!
​    

    Sullivan Strategic | Certified Public Accountants
    Laurel Oak Corporate Center
    1000 Haddonfield-Berlin Road, Suite 206
    Voorhees, NJ 08043
    (856) 782-0098

Some of the Before & After Pictures . . . 

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Sun Sets on Tax Season 2016

4/18/2016

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Another season done, but this one was special. My Alma mater Villanova won the NCAA National Championship (see my article on Philly2Philly) and our firm grew leaps and bounds over 2015 in both number of clients and firm revenues. I want to thank our dedicated team (especially Cheryl, Tammi, and Rose) who successfully ensured that not a single client was forced into an extension against their will.

​Our success is only possible from the continuing referrals from our satisfied clients and our network. Our laser focus on entrepreneurs rather than large corporations has proven to be a strategy that just plain works and allows us to add true value to our clients.

I'd like to give a special shout out to our friends at ElysianFields Philadelphia @elysianflds in trusting us to work tax strategy with many of their clients.


Let the growth for our fellow #Entrepreneurs continue! Bring it! Let’s make 2016 a year to remember!

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Tonight I'm Gonna Party Like It's 1099! (Remastered for 2015)

1/15/2016

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The "most wonderful time of the year" is over. The New Year has come and gone and now what? Yep, it's a small business owner's least favorite time of the year...tax time! 

While most W-2 wage earners may not be thinking of filing taxes just yet, many of the self-employed entrepreneurs, business owners, or their accounting staff are getting ready to issue their 1099-MISC forms for 2015 payments to their unincorporated vendors (greater than $600).

If you are business owner or someone you know is, please read on for additional details and answers to commonly asked questions we receive this time of year. Check out the links below for our 1099-Reminder Memo and a W-9 Form to send to vendors.

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Are you thinking about taking a chance and not filing 1099s? Think again! The IRS has recently focused its attention on this area and has recently increased PENALTIES for non-compliance. 

Sending 1099 Forms is not voluntary, it is mandatory. If your business paid somebody (other than employees on payroll or for product purchases) the IRS and State Revenue Agencies want to know about it. To ensure you follow the law, business income tax returns (including Schedule C on Form 1040) include a question asking if 1099 Forms were filed as required with your signature, under penalty of perjury, certifying your response to be true.

Please contact our office if you need help preparing required 1099s by the February 1, 2016 deadline. We are happy to help you stay compliant. 

Please forward us the following information as soon as possible so we can meet the required February 1, 2016 filing date for distribution to those individuals and businesses:
  • Recipient Name
  • Mailing Address
  • Tax Identification Number (EIN or SSN)
  • $ Amount Paid in 2015
 
What to Do Next? 

Thoroughly review all disbursements made from January 1, 2015 through December 31, 2015, summarizing all payments to un-incorporated individuals and businesses where accumulated total is $600 or more.  You should make sure that you have the correct name, address, and employer identification or social security number.

The key here is getting a W-9 from every vendor with their Tax Identification Number (SS# or EIN#). A good policy is to request every vendor to complete and provide a W-9 before you pay them. If vendors seem hesitant to give this to you, please blame your accountant! If they still give you a problem, explain that for any contractor who does not provide you with his/her SS # (or EIN #) and/or doesn't sign a W-9 form, you must withhold 28% of their income prior to make any payment to him/her; it is mandatory. The 28% backup withholding must be remitted to the IRS.  If you do not collect and pay backup withholding from affected payees as required, you may become liable for any uncollected amount. W-9 forms must be kept for a minimum 6 years in case you get audited by the IRS and/or the department of labor. 
 
Summary - Should or Should Not 1099-MISC Forms be Filed?
A business or trade must file Form 1099-MISC (Miscellaneous Income) for each of its payees that received:
  1. At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest;
  2. At least $600 in rents, services (including parts and materials), prizes, awards, other income payments, medical and health care payments, or generally, cash paid from a principal contract to an individual, partnership, or estate;
  3. Gross proceeds paid to any attorney.
  4. Accrued wages and vacation paid to a deceased employee's estate or beneficiary,
  5. Fees paid to corporate directors,
  6. Direct sales of $5,000 or more of consumer products for resale anywhere other than a permanent retail establishment.
Some payments are not required to be reported on Form 1099-MISC, although they may be taxable to the payee. Examples of payments for which a Form 1099-MISC is not required include:
  1. Payments made to a corporation (i.e. a C-corporation or an S-corporation), although there are exceptions (e.g. a law-firm must receive a 1099-MISC even if it is structured as a Corporation);
  2. Payments for merchandise, telegrams, telephone, freight, storage, and similar payments;
  3. Payments of rent to real estate agents;
  4. Wages paid to employees, including differential wage payments made while an employee is on active duty in the Armed Forces;
  5. Payments to a tax-exempt organization, the United States, a state, the District of Columbia, a U.S. possession, or a foreign government;
  6. Payments made via credit card, debit card and other 3rd party payment networks (e.g. PayPal)

Due Dates (2015 Tax Year)
  • February 1, 2016 - Furnish Copy B of the 1099-MISC form to the recipient. (Due date is extended to February 16, 2016 if you are reporting payments in boxes 8 or 14.)
  • February 29, 2016 - File Copy A of the 1099-MISC form (and Form 1096) with the IRS. If you file electronically, the due date is March 31, 2016. To file electronically, you must have software that generates a file according to the specifications in Pub. 1220. The IRS does not provide a fill-in form option.
  • New Jersey and Pennsylvania also require 1099s by then also. If you are unable to get 1099s out in time, an automatic 30-day extension is available by filing Form 8809.

Penalties

If you fail to file a correct 1099 information return by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if you fail to file timely, you fail to include all information required to be shown on a 1099 return, or you include incorrect information on a return. The 1099 penalty also applies if you file on paper when you were required to file 1099s electronically, you report an incorrect TIN (Tax Identification Number), you fail to report a TIN, or you fail to file paper 1099 forms that are machine readable. The penalties were increased this past year.
 The amount of the penalty is based on when you file the correct information return. The penalty is:
  •  $50 per information return if you correctly file within 30 days (by March 30 if the due date is February 29); maximum penalty $500,000 per year ($175,000 for small businesses).
  • $100 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $1,500,000 per year ($500,000 for small businesses).
  • $250 per information return if you file after August 1 or you do not file required information returns; maximum penalty $3,000,000 per year ($1,500,000 for small businesses).
You are a small business if your average annual gross receipts for the 3 most recent tax years (or for the period you were in existence, if shorter) ending before the calendar year in which the information returns were due are $5 million or less.
 
Common Areas of Confusion
  1. Limited Liabilities Companies (LLCs) are not Corporations, and thus not subject to the 'exception' above for Corporations.
  2. The IRS requires you to exclude from Form 1099-MISC any payments you made by credit card, debit card, gift card, or third-party payment network such as PayPal.(These payments are being reported by the card issuers and third-party payment networks on Form 1099-K.) This relatively new rule started with the 2011 tax filing season.
  3. You are required to issue a 1099 to your landlord for rent. The exception is if you are making payments to a real estate agent or a Corporation.
  4. Payments to any attorneys (even if a Corporation) for legal fees that amount to $600 or more should be reported in box 7 of form 1099-MISC.  Report in box 14 of that form payments or gross proceeds paid to an attorney, such as in a settlement agreement, unless the attorney's fees are reportable by you in box 7.  

Since this information is presented in a generalized fashion, it is not meant to replace professional advice specific to your individual situation. Imparting this information does not constitute a client-accountant relationship. As such, the reader should evaluate and bear all risks associated with the use of any comments, including any reliance on the accuracy, completeness, or usefulness of such content.


1099 Reminder Memo (2015 Tax Year)
File Size: 132 kb
File Type: pdf
Download File

Form W-9
File Size: 119 kb
File Type: pdf
Download File

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Tax Rules for Giving

11/26/2015

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As we gather with our families today to eat, drink, and watch football, tax strategies may be the last thing on your mind! So on this special holiday, we thought it would be nice to discuss how "giving" will allow you to help those less fortunate and lower your tax bill at the same time. Please keep in mind the following tax rules to maximize your tax deduction.
 
Timing your deduction. To receive a deduction for 2015, your charitable contribution must be paid to a qualified charity by December 31, 2015. You still qualify for the deduction if you charge it on a credit card by 12/31, even if you do not pay the credit card bill until 2016. 
 
Qualified Charity. Is your charity qualified? Make sure you ask your favorite charitable organization about its tax-exempt status. You can also visit IRS.gov for a list of qualified organizations. Unfortunately, giving cash directly to the homeless or friends and family that have fallen on dark days does not count.
 
Documentation.  You must document all charitable contributions using cash or check. Acceptable documentation includes a cancelled check, credit card statement, payroll deduction record, or a written acknowledgement from the charity. If your contribution is $250 or more, you must obtain a written acknowledgement from the charitable organization.
 
Limitation for Benefits Received.  If you receive a benefit such as merchandise, tickets to an event or a dinner, you can only deduct the amount that your cash donation exceeds the fair market value of the benefit received.
 
Non-Cash Contributions. Property donated is usually valued at the fair market value of the property, which is generally defined by the IRS as the price at which the property would change hands between a willing buyer and a willing seller. If your deduction is greater than $500, you must complete Form 8283 and show how the property was acquired, the date of acquisition, and the adjusted basis of the property. For deductions more than $5,000, most contributions will require a written appraisal by a qualified appraiser or valuation analyst. 
 
Donating Your Time or Services. Using your time and skills to help charitable organizations is an honorable thing to do, however, you cannot receive a deduction for the value of your personal time or services. However, you are able to deduct any out-of-pocket expenses that directly benefit the charity such as supplies and travel costs (mileage rate of 14 cents per mile).
 
Gifting. Giving a gift to family members can be a great strategy for estate tax planning, but it has nothing to do with charitable deductions for your income tax returns. Current rules allow you to give up to $14,000 a year to as many people as you choose ($28,000 if you and your spouse both make gifts) to help reduce your federal gift and estate taxes.
 
We know that the rules related to charitable giving can be cumbersome. The list above only provides general guidance on substantiating a limited number of deduction types. If you are unsure as to whether or not the information you possess is sufficient to substantiate a deduction, please work with a reputable and experienced financial advisor or Certified Public Accountant. We at Sullivan Strategic are always happy to help!
 
Wishing you and your family a Happy Thanksgiving and upcoming holiday season!
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Pictures and Videos from SmartCEO Awards

6/19/2015

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Check out a familiar face at 0:17 and 3:23.

"We are Numbers People" - Skip ahead to 0:16

Check out John's Winner Profile at SmartCEOs official website.
Check out the official Press Release for the SmartCEO event.
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Winner in SmartCEO's 2015 Philadelphia CPA & ESQ Awards

6/11/2015

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John P Sullivan was among the top accountants and attorneys in the Philadelphia region recognized in SmartCEO's CPA & ESQ Awards 


Philadelphia publisher, SmartCEO, awarded John P Sullivan the CPA Industry Practice Award at its prestigious 2015 CPA & ESQ Awards. Sullivan, and the other highly respected finalists, represents the best and brightest in the region - the impact players that any CEO can count on to help them grow their business.

An independent committee of local business leaders choose the CPA & ESQ winners based on the quality of nomination submitted and the finalist's interview video. Sullivan 
and the other top professionals are profiled in the May/June issue of SmartCEO magazine and were celebrated at a gala event and awards ceremony on Thursday, June 11, 2015 at the Ballroom at the Ben.  





Watch John's shocked reaction when he was called to accept his award as one of the winners!

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Finalist in SmartCEO's 2015 Philadelphia CPA & ESQ Awards

5/7/2015

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SmartCEO's CPA & ESQ Awards - The Advisors You Should Know
John P Sullivan, CPA/ABV, CVA has been named a Finalist in SmartCEO's 2015 Philadelphia CPA & ESQ Awards! The CPA & ESQ Awards program honors the region’s most enterprising accountants and attorneys for their leadership, accomplishment, innovation and success. An independent committee of local business leaders chooses the CPA & ESQ finalists based on the quality of nominations submitted. Awards will be presented to accountants and attorneys that have made an outstanding impact on their clients’ businesses at the aw. The CPA & ESQ finalists are celebrated at an awards reception on June 11, 2015 at Union Trust in Philadelphia where the winners are announced live. 

John and the other finalists are profiled in the May/June issue of SmartCEO magazine. Click here to read.

Congratulations and best of luck to the other finalists! Click here to see the full list of finalists.
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IRS...Will You Be My Valentine? 

2/15/2015

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IRSHappy Valentine's Day IRS!
One could argue who gave me a better Valentine's Day present - my wife, kids, or the IRS. It may have been Friday the 13th, but it felt like love when the IRS finally succumbed to the repeated pressures from taxpayer and preparer advocate groups such as the AICPA to formally offer relief to certain small business taxpayers from filing Form 3115, Application for Change in Accounting Method, this year. If you haven't followed the news lately, the 2014 tax filing season is slated to be a nightmare due to the impact of the Affordable Care Act (“ACA” or "Obamacare") and IRS Final Regulations regarding Deduction and Capitalization of Expenditures Related to Tangible Property (the “Repair Regs”). If you think this doesn't apply to you, think again. If you own a rental property or small business, these Repair Regs apply to you. As such, prior Rev. Proc. 2015-20 issued on February 13, 2015, the IRS pretty much expected you to file the complex Form 3115. If you have a reputable CPA, they would know this and likely pass the increase in time to prepare this complex form onto you. So Happy Valentine's Day to all of my "small business" clients, you are off the hook! The new simplified procedure is generally available to small businesses, including sole proprietors, with assets totaling less than $10 million or average annual gross receipts totaling $10 million or less. Now before you celebrate too much, make sure your Capitalization Policy is in place and you are compliant with the Repair Regs. We hope you had a nice Valentine’s weekend!

Follow John on Twitter @johnsullivancpa
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Please take a look at the memo we've put together on the Repair Regs:


deducting_and_capitalizing_expenses_(repair_regs_update).pdf
File Size: 1512 kb
File Type: pdf
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Gonna Party Like It's 1099!

1/29/2015

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1099Do you have W-9s from your vendors?
The "most wonderful time of the year" is over. The New Year has come and gone and now what? Yep, it's a small business owner's least favorite time of the year...tax time! While most W-2 wage earners are enjoying the "work from home" snow days of January, many of the self-employed entrepreneurs, business owners, or their accounting staff are scrambling in the last weeks of January to get out their 1099-MISC forms to their independent contractors for work performed (greater than $600) in 2014. 

I like to think of the 1099 filing season as kind of like "Spring Training" to the "Busy Season" that lies ahead for most of my CPA peers. Despite having a month to prepare the 1099 forms, most of us will wait until the last days before the deadline to get these forms out. Procrastination is human nature. Remember cramming for finals, last minute term papers? No matter how much one can prepare, most of us will wait until the last minute to get these done. Well, the deadline is a few days later in 2015 due to the weekend. You are required to send the 1099-MISC to recipients by Monday 2/2/15 (normally Jan 31). The IRS will need their copy a month later, but if you e-file, you get another month (3/31). 


Please take a look at the memo we've put together for 1099 FAQs and other tips: 1099 Reminder Memo


Follow John on Twitter @johnsullivancpa
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This is our first of many blog posts... be sure to share if you like! 

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    Author
    John P. Sullivan

    CPA, Entrepreneur, Valuation Analyst, Chief Financial Officer, Fortune 500 Analyst, Big 4 Auditor, and Villanova Magna cum Laude Grad

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Laurel Oak Corporate Center
1000 Haddonfield-Berlin Road, Suite 206
Voorhees, NJ 08043

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