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NJ CPA Firm Magone & Company Partners with Alliott Global Alliance to Extend Domestic & International Capabilities

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Roseland NJ, July 27, 2023 — Magone & Company’s Managing Partner Nick Magone lends a global view to every client engagement. So joining forces with Alliott Global Alliance (AGA) was a natural fit for the growing NJ-based CPA firm that bears his name.

An international alliance of independent professional firms, AGA is a kinship of business leaders from around the world, giving them a platform to connect, support and learn from each other. Through the collective partnership, Magone & Company can share its expertise and gain opportunities to broaden the services the firm offers its business and individual clients.

Alliott Global Alliance was established in 1979 and currently includes 219 member organizations across six continents.

Says Magone, “By partnering with AGA, we’re gaining a team of like-minded professionals worldwide with diverse areas of tax, accounting and financial expertise. Our team is looking forward to lending our skills to our fellow members, and likewise gaining trusted resources to assist our clients both domestically and abroad.”

Headquartered in Roseland, NJ, Magone & Company has provided clients with advisory expertise and personalized service since 1992. The firm takes a collaborative approach in working with businesses, individuals and families to boost financial knowledge, help build wealth and reduce risk.  As the accounting industry evolves at a rapid pace — from tax laws to technology — Magone & Company continues to build lasting, collaborative client relationships.

To learn how our affiliation with AGA may benefit you or your organization, contact us or call (973) 301-2300.

Collecting Income from Online Payment Apps? $600 is the New Reporting Threshold

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If you use P2P (Peer-to-Peer) payment apps, such as Venmo, Square Cash or PayPal, you may be surprised early next year when you find an IRS 1099-K form in your mailbox.

Under the American Rescue Plan, a new law requires P2P providers to send you and the IRS a 1099-K if the gross amount of your business income is more than $600.

Previous guidelines required P2P providers to only send 1099-Ks when you had 200 transactions and $20,000 or more in income.

This new law decreases the income threshold by more than $19,000 and lowers the transaction threshold from 200 to one transaction! So whether you’re accepting payments for personal or business income, many more taxpayers will be receiving the 1099-K in early 2023.

How it works

If you sell items online for extra cash and earn more than $600, you’ll be getting a 1099-K. If you occasionally rent a property that you own and charge more than $600, a 1099-K will be sent to you. Or if a client asks to remit payment through PayPal, $600 or more will trigger a 1099-K.

Each year, hundreds of billions of dollars flow through third party apps like Venmo, CashApp and SnapCash. This new, tougher tax law is designed to make it harder for individuals to fail to report income on lower-cost transactions.

Suggestions for good record-keeping

Here are some ideas to keep a close eye on the tax implications of your P2P transactions:

  • Confirm the numbers. Mistakes happen, so check 1099-Ks against your payment receipt records.
  • Report the information correctly on your tax return. Include the numbers from each 1099-K you receive and ensure you report all income from all types of payments received.
  • Maintain detailed records. This can help demonstrate support for your income and deductions.

Also keep in mind the 1099-K does not account for fees, chargebacks or other costs and refunded amounts. The gross amount is unadjusted and, according to the IRS, is not to be adjusted.

What if the amount on your 1099-K is wrong?

Contact your P2P provider to request a corrected form. The name of the P2P and a phone number will be located in the upper left corner on the form.

If you are unable to get a corrected 1099-K, the IRS will allow an explanation to be attached to your tax return, along with the corrected amount of your income on the return.

Remember, if you use Venmo and several other P2P providers to accept payments, you could receive 1099-Ks from all of them, depending on which ones meet the $600 threshold.

Reach out to the experts

For more information on protecting your side hustle or small business from unexpected tax liabilities, give us a call at (973) 301-2300 to see if a tax planning session may be right for you.

Going Solar: Commercial Building Owners Could Save $1M-$7M Over the System’s Life

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If you’re like most New Jersey residential and business building owners, you’ve become accustomed to multimedia messages prodding you to switch to solar power. Maybe you haven’t acted because you think it’s too expensive. Or maybe you find the incentives confusing.

Interestingly, with some of the top incentives in the nation, New Jersey has become one of the most successful solar locations in the United States. According to SEIA, the national trade association for the US Solar Industry, New Jersey ranks seventh in the nation for cumulative solar electric capacity installed through Q3 2020.

This boom has been fueled by a federal tax credit, thriving state incentives and the decreasing cost of installing solar in comparison to the utility costs NJ building owners are used to.

This is especially true for building owners with large flat roofs and high electricity usage on site.  Aside from the obvious environmental benefits of solar power (reduced air pollution, decreased water usage, better control of climate change), these recent incentives make an investment in solar something that New Jersey building owners might want to consider.

What makes solar a good investment in New Jersey?

  • Thriving state incentive – The current program in place is the TREC (transition renewable energy certificates) program, paying $152 per MWh of solar produced for 15 years.
  • Energy savings – New Jersey has high utility rates above the national average. New Jersey has a “Net-Metering Program” where you get a full retail rate credit for the amount of electricity you send back into the grid with your solar array.
  • Federal tax credit – Currently you can get a 26% federal tax credit for the total cost of installing solar.

How much can I save?

  • Capital purchase – For commercial building owners with large flat roofs, we are seeing payback periods on a solar project between 2-4 years and can save $1,000,000-$7,000,000 over the life of the system. We have seen IRR between 10-20 percent for many of our customers.
  • Power Purchase Agreement (PPA) rate – For commercial building owners with large flat roofs, you can see PPA rates from 1-4 cents/kWh vs the 9-12 cents/kWh you are currently paying the utility. This can translate into $1,000,000-$4,000,000 in savings over the life of the system.

The size of the system, and ultimately the annual returns of a solar array, are highly dependent on how much space you have on your rooftop, parking lot and/or property, what you currently pay the utility, and how much electricity you use on an annual basis.

Right now, the returns are so lucrative,  if you need a roof replacement and/or repairs, these costs can be paid for and/or financed into the solar project.

So the time just might be right to invest in solar. It’s not as expensive as you may have thought (in fact, it’s likely to be a huge money saver). And the proper partner, such as Pfister Energy, can simplify the once-confusing incentives that make going solar an attractive alternative.

At no cost to you, Pfister Energy can help analyze your property by designing an array, analyzing your utility bill, and presenting you with a financial analysis on how much solar can save you over the next 15-25 years.

Sean Quin is Vice President, Strategy & Business Development for Pfister Energy, Inc. Founded in 2005, Pfister Energy is an industry leader in solar project development, construction and operations.  Pfister Energy has more than 225MW of solar electric power installed in the U.S.

Business Operations, 2020 Edition: Connecting in a COVID World

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The year 2020 has brought much confusion and turmoil as a result of the COVID-19 global pandemic. As the world went into lockdown, many businesses were forced to close in an effort to decrease the spread of the virus. Unfortunately, many local businesses had to shut down due to financial issues, while others were faced with a new challenge of how to maintain operations in the new age of social distancing.

Large companies such as Google, American Express, Microsoft and Airbnb extended work from home policies indefinitely, with Google extending its policy into 2021. However, not all businesses have the luxury or resources to follow suit.

Fortunately, companies can take advantage of some opportunities despite the current global climate. Below, we will focus on the importance of technology and a change in mindset, which could help businesses continue to grow as if the pandemic never happened.

Technology: An investment, not an expense
Technology is extremely prevalent in the modern workplace. Every day we converse with clients via phone calls and email. Some companies, however, still value their face-to-face communication with clients. Did you know that there are more avenues of technology that can keep people connected?  COVID-19 has given birth to a different means of communication. Since the pandemic, there has been a drastic increase in demand for video calls via platforms such as Zoom, Microsoft Teams and Skype.

Utilizing video calls can help companies maintain relationships with clients as well as build new ones. This is more than a simple telephone call; the use of the video function allows for more meaningful communication because you can read the body language of the client.

At Magone & Company, we’ve made it a point to engage in video calls for almost all our client meetings and are seeing great results. Clients are more willing to help us in performing our procedures since we’ve made an extra effort to be present in their business, even from behind a screen.

Gone is the time of technology being an expense; it is an investment in the business and relationships that cannot be overlooked.

Turning pandemic challenges into business opportunities
Look for opportunities in your organization to change delivery processes or business development strategies using technology. It’s one thing to have the technology, but now you must use it. Some companies may not feel comfortable with the use of video conferencing due to a lack of knowledge, or maybe they just do not feel it will have a positive effect on business.

In contrast, a transition to a more remote based work setting can have significant positive outcomes, such as reduced rental expenses or building operating costs. Reimagine your facility needs as well as your hiring needs. What skill sets are required? Geography may no longer be an impediment to hiring the perfect candidate, though you still need to be cognizant of the state tax effect of such a decision.

For Magone & Company, we’re winning new work outside of our geographic region despite having no offices remotely close to the client location. Our consistent use of video calls allows our employees to build positive relationships and also produce efficient communication to discuss our engagement progress, without ever stepping foot in the office. What was unimaginable in January or February of 2020 is now standard operating procedure — and it’s paying significant dividends.

Embrace the transformation
The year 2020 has taught us that life can change instantaneously. One of the key components to a running a successful business is being open to change. COVID-19 brought more change than most would have hoped for, however this did not stop businesses from assessing new avenues of success.

Restaurants suffered greatly from the imposed lockdowns, which caused owners to develop solutions to help mitigate the risk of closing. As a response, many establishments experimented with outdoor dining and curbside pick-up as a means to generated revenue flow. Others have gotten even more creative. According to an article from the Journal of Accountancy, one particular restaurant owner considered transforming a section of his establishment into a market for customers to buy food.

The same can be accomplished with your business with the right mentality. At Magone & Company, we saw an opportunity to establish a more prominent advisory practice in which we help our clients be better prepared to operate. This proactive, rather than reactive, approach has helped our clients to establish more efficient and effective business strategies. How can you reimagine your business to take advantage of possible opportunities?

Yes, this year has been rough and challenging; however, as outlined above, there is no need to panic. There are ways that businesses can restructure, recalibrate and execute successful business tactics. We have seen positive outcomes to continue to help our clients grow.

 

 

 

Buying vs. Leasing: Getting the Best Deal on your Business Equipment

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To lease or not to lease? This is an issue many business owners often face. If your firm is weighing the pros and cons of leasing versus buying, here are some things to keep in mind.

Cost
Evaluating costs is more complicated than comparing the price of leasing a piece of equipment versus its purchase price. Consider the following:

  • How soon will the equipment need to be upgraded or replaced? Highly technical or specialized equipment becomes obsolete quickly and may be a good candidate for leasing.
  • How will you arrange for service and repair? Leasing arrangements often include maintenance of the equipment. If you’re thinking of buying, research the equipment’s repair history as well as the cost and availability of reliable service.
  • How long will you need the equipment? If your use will be short-term, then leasing may be the better option.

Cash
If you’ve been leasing your equipment, then your costs have been predictable. Purchasing equipment can substantially alter your cash flow and affect your business’ finances:

  • Can you save money by buying or leasing equipment? If — and when — cash savings will be realized is an important factor for you to weigh.
  • Do you have the cash available to purchase the equipment? If you use cash for a down payment, you may have less cash for operating and other business expenses.
  • How will financing your equipment purchases affect your ability to get credit for other things? If you anticipate having future credit needs, you may want to avoid adding equipment loans to your current debt load.

If you’re weighing leasing versus buying, give us a call at (973) 301-2300. We can help you look at how the various options will play out.

The future of cybercrime — and what it could mean for your business

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By 2024, the cost of data breeches will reach an estimated $5 trillion. A huge reason for the hefty price tag is a 70% rise in cybercrime. Cybercrime is among the world’s fastest growing criminal offenses, and it shows no signs of slowing down.

Today’s cybercrimes can present themselves in various forms — from malware and phishing to denial-of-service (DoS) attacks. Here in NJ, ransomware attacks have crippled the state’s largest hospital system, an Essex County public school district and even a respected regional theater company.

Over the next 20 years, experts say cybercrime will evolve into one of greatest challenges faced by humanity, using increasingly sophisticated means to put your livelihood and your business at risk.

Here’s a glimpse at what the future of cybercrime may entail:

Email threats will be more advanced. Remember the Yahoo data breach of 2013 that affected over one billion email accounts? Email is no stranger to phishing techniques. But as hackers develop more crafty ways to steal information, it’s critical that you educate your front-line employees on what to watch out for.

Social engineering crimes will skyrocket. Carefully planned attacks via social media channels will continue to target users with “friendly” tactics, like posing as a friend, relative or fellow employee. These types of phishing schemes aim to gain access to passwords and other sensitive information that can bring your business to its knees.

Cryptocurrencies will become more commonplace. Cybercriminals will have more inventive means to mine your digital currency. And once the information tied to a digital coin is hijacked, the information can easily be released and multiplied in the marketplace.

Too much connectivity will create a playground for hackers. We’re not far off from a world where every product will be embedded with a computer or a sensor, wirelessly monitoring and controlling everything you own — from lights and appliances to routers. In the future, businesses will only have more of these types of equipment and devices synched, opening the door to advanced attacks and threats.

Putting cybercrime safeguards in place
As more businesses expand the use of AI-enabled and cloud-based technology solutions, the risk of becoming victimized grows. It’s up to your business to implement smarter cybersecurity procedures to prevent these occurrences or stop them in their tracks, including:

  • Developing in-depth knowledge of your risk factors, so you know exactly what you need to protect.
  • Carrying out periodic risk assessments, as risk management is a key factor in keeping key business insights protected.
  • Requiring employees to use two-factor identifications to access company accounts.
  • Investing in regular audits performed by cybersecurity consultants who are experts at data protection.

Take a step back and rethink your strategy beyond the solutions of today, and prepare your business for what the future may bring.