Did You Receive the Wrong Tax Info From the Health Insurance Marketplace?

The federal insurance marketplace healthcare.gov recently announced that approximately 800,000 taxpayers were sent incorrect information on their form 1095-A and they are urged to wait to file their taxes until the first week of March.

 

The 800,000 people who used the tax credit to lower their premium cost will be receiving an updated 1095-A shortly. Based on estimates, approximately 90-95 % have not yet filed their taxes. For those who have already filed their taxes, the Treasury Department will be providing additional information soon.

 

Form 1095-A contains important information that taxpayers need to complete their returns. This includes the premium amount for the “second lowest cost Silver plan” in the taxpayer’s area. This particular premium is said to be a benchmark used to determine the amount of premium tax credit taxpayers are eligible to receive. That information was incorrectly calculated.

 

This issue only affects 20% of taxpayers who signed up in the Marketplace and only those who signed up through Healthcare.gov. Most taxpayers will be able to check a box on their tax return to indicate they had health coverage in 2014 either through their employer, Medicare, Medicaid, veteran’s care or other qualified health coverage programs. Kevin Thompson, CPA says “we have seen only two 1095-A forms. One was correct and one, as stated here, was incorrect. It’s unfortunate that the administration has elected to make an already difficult and daunting experience for most taxpayers and make it worse.”

 

Taxpayers who are affected will be receiving a call from the Marketplace to alert them of the problem in early March and will also be sent letters and emails. Those who are concerned about their status can login to their account at healthcare.gov.

 

If a taxpayer needs to file their taxes sooner, a tool will be available to determine the correct amount. They can call the Marketplace at 1-800-318-2596 or alert their tax preparer. Thompson says “we had already decided to increase our fees by $150 for each tax return to comply with the requirements of the Affordable Care Act. I am not sure we can absorb the amended returns necessary to get this right.”

 

CMS also announced that it will provide a special enrollment period for people who learn of the tax penalty for not having health care at the time they file their taxes.

 

It’s recommended that you contact your tax preparer as soon as possible if you believe you have received incorrect information from the Marketplace. They will be able to insure you that the correct adjustments have been made.

 

Original Article

 

Contact Kevin Thompson CPA

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625 x102.

 

 

Suspended Tax Preparers Can Prepare Your Taxes According to the IRS

In a recent decision, that prevents the IRS from regulating unenrolled tax preparer, the agency has decided that even though a tax preparer has been suspended or disbarred, it cannot ban them from preparing taxes or block their PTIN. (Preparer Tax Identification Number) (http://www.irs.gov/Tax-Professionals/PTIN-Requirements-for-Tax-Return-Preparers)

 

The ruling in Loving, No 13-5061 (D.C. Cir 2/11/14) in which the District Court appeals court upheld a D.C. court’s decision and injunction which forbade the IRS “from administering regulations requiring return preparers to pass a competency test and complete annual continuing education, before obtaining or renewing PTINs.”  Both courts decided that the preparation of taxes does not, by itself, require the sanction of the IRS. Kevin Thompson CPA says “I agree with the sentiment directed by both courts. I do not like the idea that the IRS enforces the laws and also chooses who can assist taxpayers with compliance.”

 

In response, the OPR (IRS Office of Professional Responsibility) determined that even though an enrolled preparer had been disciplined and either suspended or disbarred, they still couldn’t hamper them from participating in tax preparation or disallow their PTINs which are required to provide tax returns. “On the other hand “says Thompson “it is professionally disconcerting to know that the OPR can discipline, suspend or disbar one and yet that person can continue preparing taxes. Taxpayers need do more due diligence on preparers. Maybe we need a site similar to Megan’s law where taxpayer’s can easily verify whether their tax preparer has any actions against them.”

 

Notices were sent out to those affected, but if they weren’t received, individuals can call 202-317-6897 to speak to the OPR office.  Practitioners banned by court order are not allowed to practice under the law. Certified Public Accountants that have actions against them in California can be identified here. (http://www.dca.ca.gov/cba/discipline/index.shtml#index) Of course, I was glad not to see my name included.

 

Original Article

 

Contact Kevin Thompson CPA

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625 x102.

Turbo Tax Filings Stopped in Minnesota

Due to potentially fraudulent activity that was found on tax returns filed with Turbo Tax in Minnesota, the Minnesota Department of Revenue has stopped accepting tax returns submitted using Turbo Tax software. Intuit, the company that produces Turbo Tax, had temporarily suspended transmission of taxes in all states but has recently resumed doing so, except in Minnesota. Kevin Thompson, CPA says “in the current environment, anything that looks like fraud will be treated like fraud. In this case, it appears that there is some software glitch that Intuit will need to fix.”

 

The Department of Revenue says there is not a security breach and that taxpayer data is safe. There is technology in place to safeguard private info submitted by taxpayers.  The issue lies with the Turbo Tax software itself. When a user logs into the software it appears as if their tax return has already been filed. Thompson says “one of the greatest breaches of identity theft with the IRS is people filing tax returns early using information (usually fraudulent) for taxpayers other than themselves. These returns always result in refunds and the filer takes the money and runs. Since that practice is so prevalent, it is necessary for the taxing authorities to implement procedures to identify fraudulent returns. Personally, I laud the State of Minnesota for this action and hope that both they and Intuit can get it right.”

 

The Department is working with Intuit and will be providing updates. Any taxpayer affected can call 1-800-944-8596 for personal assistance.

 

This is the second time that Minnesota, in particular, has experienced issues with Intuit software. A similar warning was issued in 2012.  The Department of Revenue, at that time, issued a warning that the accuracy of returns filed with Turbo Tax may be inaccurate or delay refund checks and suggested that taxpayers use other software programs instead. “The challenge in 2012 was a different one,“ says Thompson. “In that instance, Minnesota just found too many errors with returns processed using Turbo Tax.” Tax compliance is complicated and should not be taken lightly. Most taxpayers want to comply and want to be efficient with their resources. “I think American taxpayers should give a second thought to compliance using over the counter software solutions,” says Thompson.

 

Turbo Tax has received negative press ever since it made changes to its software in January by removing interview pieces from Schedule C, Schedule D and Schedule E.  It announced it would provide updates and reverse those changes.

 

Original Article

 

Don’t experience tax software glitches and inaccuracies.  Contact your tax preparer instead.

 

Contact Kevin Thompson CPA

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625 x102.

 

One-Per-Year Limit on IRA Rollover Rules Made Clearer to Taxpayers by the IRS

The IRS is making an effort to clarify the one-per-year limit on IRA’s imposed in 2014 for taxpayers. In 2014 the U.S. Tax Court put a limit on making more than one tax-free rollover for individuals in a one year period even if a person has different IRA’s.  Starting in 2015, individual IRA’s may be considered to be combined and treated as if they were one

 

As of Jan 1, 2015, a distribution from an IRA received during 2014 that was rolled over to another IRA, will have no impact on distributions and rollovers that happen in 2015 that involve any other IRAs owned by the same person. The IRA will have a fresh start and can be applied to the one-per-year rollover limit to multiple IRAs. Kevin Thompson, CPA says “it must be noted that these regulations only impact the non-trusteed rollovers.”

 

IRA distribution rules have a clause that allows for a distribution to be returned or rolled over within 60 days. These are the rollovers that are being regulated. The challenge for the host financial institution is they do not know what you did with the money so they most always report it as a distribution. Then, you go to your preparer and say  No, I rolled this over.” And, then, in the CP 2000 process of electronically matching information, the service receives conflicting information and assumes that the taxpayer is incorrect. Especially if the taxpayer will owe additional money.

 

And this creates yet another nightmare for the taxpayer. As we raised in an earlier blog post, the IRS is 3-4 months behind in responding to correspondence. The CP 2000 correspondence indicates that the taxpayer reported the rollover incorrectly and calculates a tax due. The IRS writes that they have 30 days to agree or provide evidence to the contrary. We provide the evidence BUT the IRS takes 3-4 months to process and reply. Meanwhile, the collections arm starts looking for the payment in 30 days. And anyone who has been caught in this knows what a nightmare that can be. “It is so frustrating” says Thompson, “to know that you are right, to know that you have provided the evidence to the IRS and yet, collections is pinging you for the money. This requires more patience than most people have, including me.”

 

IRA distributions that are eligible and received on or after Jan 1, 2015 and properly rolled over to another IRA will be tax free. However, any other distributions that are received within a year after the first distribution will not be tax free.

 

Not subject to one-per year limits are Roth conversions, rollovers between qualified plans and IRAs and trustee-to-trustee transfers.

 

IRA owners who are requesting a distribution for rollover are encouraged to take the option of a trustee-to-trustee transfer from one IRA to another IRA. This can be done by transferring amounts directly from one IRA to another and by providing the IRA owner with a check made payable to the trustee receiving the IRA.

 

Original Article

 

Contact Kevin Thompson CPA

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625 x102.

 

 

 

Ridiculous Tax Deductions for 2015

When it comes to deductions on your tax return, Kevin Thompson, CPA says “here are a few no no’s you may not want to think twice about before you claim:”

 

  1. Your family dog or unborn child as dependents
    • Thompson says “I know my wife spends more on that dog than she does me. I feel like I need some tax relief. But for now, the IRS disagrees.”
  2. The full cost of your child’s wedding.
    • Thompson says “a case can be made for some portion of the wedding being a business expense. But this falls into the category of pigs get fat and hogs get slaughtered.”
  3. Your speeding tickets
    • “My recommendation here” says Thompson, “just slow down and smell the coffee.”
  4. The car the police impounded as a charitable deduction
    • “This is an interesting one,” says Thompson. “I think if the charity claims it from the impound lot that you could argue that there was charitable intent.”
  5. Your hobby expenses such as your prize horses, or vintage Legos.
    • Thompson says “Tax court is littered with these cases. Stop being a hog.”
  6. Haircuts, plastic surgery, massages and beauty salon expenses
    • “Of these 4” says Thompson, “Massages are the only one I can reasonably argue.”
  7. The loss on the sale of your house.
    • Thompson says “The loss on the sale of your primary residence is NEVER deductible. But the unfair side of this law is IF you gain more than $250,000 ($500,000 Married filing joint), it is taxable. I think that should go both ways. I think we should be able to have a carryover of losses on the sale of personal residences to offset future gains.”
  8. The cost of groceries, or mortgage payment as a home office expense.
    • “Again, I think this is all about how it was presented on the return. If I run my business from my home including entertaining my customers, I believe a case can be made for some share of the costs of entertaining, including the Prime Rib and Pinot, would be reasonably deductible.”
  9. Your yacht as your floating office.
    • Thompson says “I had to represent a client in this circumstance years ago. We prevailed but in a much more limited style than we argued.”
  10. Hunting trips where you talk about your boss.
    • “I think this depends on what you are hunting. If you were hunting for your boss, although illegal in most states except Texas, one might argue the case.”

 

In closing, Thompson says “Obviously, I poked a bit of fun at both the code and taxpayers here in this post. It’s better to discuss what you can and cannot deduct on your tax return with your tax accountant/preparer BEFORE you put it on the return.”

Original article

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625 x102.

Why Trying to Talk to a Human at the IRS May Drive You Mad

We all know that outstanding customer service at most government agencies is rare, and the IRS is no exception.  Attempting to talk to a human on the phone is almost laughable. Considering that our country has a huge deficit, you’d think the IRS would do everything possible to encourage people to pay what they owe.

 

Unfortunately, in most cases, tax payers are given the run around, end up on hold on the phone, or made to cut through thick bureaucratic red tape.  Most become dazed and confused looking at the plethora of forms and rules they have to abide by. All they want is to have someone tell them what to do in a way that they’ll understand. Kevin Thompson CPA says “I don’t believe for one moment that this is the way it is supposed to be. Unfortunately it’s a reality. And that reality is that the solution for taxpayers is a costly one. You have to engage people like me that do this for a living. It’s my profession.”

 

Some people have heard that it will not answer questions from taxpayers from April 16 through the following January on the phone.

 

You can walk into an IRS office, but they suggest that you make an appointment.  That means you have to get through on the phone. Some people never make it past the switchboard and there’s no option to leave a message. The IRS voice recording may give you a garbled email address if you’re lucky enough to figure out what it is.

 

If you use the email address, you may be asked to provide additional information and they may not get back to you in weeks.

 

That leaves the IRS website which is equally frustrating. One woman clicked a link for the IRS website “interactive tax assistant.” This allows you to chat with a supposed “human.”  The chat assistant suggested she phone the IRS.  As you can imagine, this led nowhere.

 

IRS spokesman, Raphael Tulino, suggests you simply walk into an IRS office and be prepared for a very long wait. (Probably about 3 hours)  “Bring a good book.”  He’s assuming that taxpayers don’t have anything better to do. Kevin Thompson, CPA says “sitting in the lobby at an IRS office is an interesting study in human interaction. I think someday I might just write a book on this very subject. But for now, I wouldn’t recommend this to anyone. Except an old partner of mine, but that’s a story for another day. This painful experience will result in you losing 3 hours that you will never get back.”

 

To make matters worse; Congress is bent on crippling the IRS with budget cuts.  That means less customer service than the already sorry customer service it now provides. “I have said it before in previous posts; the IRS is seriously outmanned in this battle. As frustrating as it is on the outside looking in, imagine the inside looking out. It cannot be anything that resembles fun.” However, is now the time for the IRS to begin looking at outsourcing some of what they do? I think there are multiple opportunities for the service to use the private sector including collections, conflict resolution and the ever-present offer in compromise (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Struggling-with-Paying-Your-Taxes-Let-IRS-Help-You-Get-a-Fresh-Start) program.

 

If more people complain, perhaps the IRS will make it easier for taxpayers to communicate, but it isn’t likely due to the situation in Congress. Most people want to pay their fair share. Thompson says “I want my clients and all taxpayers to pay their share … but not one penny more.”

 

To avoid suffering from a migraine while trying to talk to a human at the IRS, and not tear out all your hair, contact your friendly tax adviser for advice.

 

Kevin Thompson, CPA kevin@kevinthompsoncpa.com or call him @ (310) 450-4625 x102.

 

Get Ready for Delayed Refunds and Waits from the IRS

The IRS is predicting that taxpayers will see a reduction in services resulting from recent budget cuts. This will mean delayed refunds and reduced correspondence with IRS customer service. According to Commissioner Koskinen, the IRS has no choice but to do with less.

 

Kevin Thompson CPA says “Taxpayers will be impacted in several ways:”

 

There will be more opportunities for identity theft. Delays in protective actions will give scammers, posing as IRS representatives and other criminals a better chance of stealing identities. Scammers have become much bolder in recent years and change their methods of cheating taxpayers frequently. “The Service has an extraordinary effort in identifying and processing identity theft. And it becomes really difficult to represent taxpayers that have reported identity theft because the IRS is unsure of just how deep the theft goes. I have had to represent identity theft and had my Power of Attorney (http://www.irs.gov/pub/irs-pdf/f2848.pdf) rejected until the taxpayer got on the phone and cleared the path for the agent to discuss this with me.” Thompson says “we are only beginning to peel back the layers of the onion of identity theft. The depth, breadth and width of just how far criminals will go to obtain that information is frightening.”

 

Delays in refunds. Taxpayers who file their returns by mail will have to wait a week longer than normal to receive their refunds. The commissioner refused to say whether or not e-filers would be effected so delays for those who file electronically are unknown. “Hey America, get your Billions back, will just have to wait. Sorry H&R Block.”

 

Correspondence will be slowed down.  There will be fewer employees at the agency to answer mail sent in by taxpayers with questions or requests. “Now this is a HUGE problem” says Thompson. During a recent examination (in which we prevailed 100%, I might add!!), The IRS examiner informed me that correspondence is running 12-16 weeks for a reply. That’s 3-4 months yet collections is working on a 30 day notice. “We regularly have to help the IRS with its own internal communication too. It is daunting when a taxpayer receives continuing correspondence on a matter that we have already addressed. We regularly contact the IRS 2-3 times on the same matter just to stop the harassment of taxpayers.”

 

Less claims will be resolved. Taxpayers who are legitimately attempting to correct mistakes or claim hardships regarding their returns will have less of a chance of resolving their issues with the Taxpayer Advocate Service (TAS).

 

Calls will go unanswered. There will be even lower levels of telephone service than before which was not good to begin with. Callers will face extended wait times. Thompson says “we budget one hour for each inquiry just for waiting on the phone. This extra cost is borne by the taxpayer but with these constraints there is nothing else we can do.”

 

Agency shutdowns. Temporary shutdowns are on the horizon even though the Commissioner had wavered on saying yes to furloughs. He has said that the agency is planning at least one shutdown in the fiscal year although definite dates have not been announced. “The challenge with shutdowns” says Kevin Thompson CPA “is not only the days that the agency shuts down but it’s the starting and stopping on the cases in the system. We had a case last year that was referred to the TAS (http://www.irs.gov/Advocate) because it was halted during one of the multitude of shutdowns and each time reassigned to a new desk. I kept telling the taxpayer you don’t owe this money but after a while they question your direction just because they keep getting conflicting direction from the IRS.”

 

Fewer taxpayer audits will be closed. Due to a reduction in staffing, the IRS will be unable to close many pending audits in 2015. This will also affect collections case closures. Although this will be happy news to those who are under the audit gun, it will be bad news for the Treasury. Thompson says “depending on the circumstances, the delays might be a good thing. I have found when a case lingers that it can often result in improved results for the taxpayer. It definitely tests your patience but most often works out.”

 

Reductions that will undermine the ability of the IRS to do its job more efficiently are not disastrous but will certainly make it much more inconvenient and frustrating for both taxpayers and tax preparers. 2015 may be the worst tax season ever. Get ready for it. “Listen to me, the bottom line, the silver lining if you will, here is the IRS will have to examine less returns. That’s music to my ears.”

 

Do you want to avoid many of the headaches of dealing with IRS issues this tax season?

 

Contact Kevin Thompson CPA

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625 x102.

 

Baby Boomers and Retirement Plans – Possible Solutions

Now that Baby Boomers are getting older, those in defined contribution plans such as (401 (k) and 403 (b), are finding that they aren’t sufficient to provide income for the duration of the retiree’s life. Although 403 (b) plan annuities are better, the problem still may exist.

 

Although plan sponsors have focused on the need to save for retirement, but have been lax in preparing Baby Boomers to address needs after retirement commences.  Plan sponsors are not required to provide post retirement help, however, when they do, they face fiduciary responsibility.

 

Some of the risks Baby Boomers risk in retirement are:

 

Because they are living longer, retirement savings need to last until end of life. From 2000 – 2014, the life expectancy of a 65 year old has increase by 3 years.  There is a great probability that at least one spouse will live to be 95 or more. Kevin Thompson says “I have come to appreciate that if you allow it, Western Medicine will extend the duration of your life. And, if you let them in, the Western Medicine Practitioners (Your Doctors) will extend the QUALITY of that life.”

 

There are market challenges that could affect their retirement income. If a serious downturn were to occur, either right before or after retirement, the retiree may be forced to use up investment income to pay expenses and has less of a chance to recoup.

 

They may not be sure of how much they can withdraw in order to make sure they have enough left for life.  Many experts recommend that a 65 year old retiree withdraw no more than 4 % per year (adjusted for inflation) in order to have a 90% chance of their money lasting for 30 years.

 

Their mental state may decline as they get older. A person 85 or older is often not capable of making smart financial decisions on their own.

 

Possible Solutions

 

Traditional annuities have a fixed monthly payment that is guaranteed for the life of the retiree and spouse. With an annuity, the retiree pays some or all of his account balance to the insurance company and they in turn pay the retiree for life.  There are no market fluctuations and they know how much they will take in each month and for how long.

 

GWB’s (Guaranteed withdrawal benefits) also guarantee income for life under certain conditions.  The retiree invests all or part of his account in a managed fund. (Usually a target date or balanced fund)  The GWB has two parts.  An Equity factor in which the account grows with contributions and investment gains, and the protection factor.  As long as the retiree’s withdrawals do not exceed a certain percentage of the highest account balance, the insurance company pays at the same rate if the investments are consumed.  The retiree may take larger withdrawals from investments to pay expenses if needed, although this reduces later payments. Thompson goes on to say “there are many annuities that exist that can provide fixed monthly payments just like old school pensions did for our parents.”

 

Fiduciary Concern

 

Sometimes the fiduciary concerns of considering the retiree’s needs and recommending products to meet those needs are overwhelming. Because of this the Department of Labor has created a regulatory safe harbor.

 

The regulation stipulates that a fiduciary must be able to conclude that at the time the selection of the product is made, the insurance company is capable of making all future payments. This requires monitoring.  Cost of the product is also considered but mostly the financial integrity of the provider.

 

Taking into consideration the risks that Baby Boomers face and the need for in-plan solutions, fiduciaries must consider offering products that are guaranteed lifetime income and do so in an informed manner. Thompson adds “be open to the power of annuities. When appropriately inserted into your plan, they can be o’ so powerful.”

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625.

Are You Setting Yourself Up as a Startup Failure?

In recent years it’s become a sort of badge of honor to declare oneself a failure as a startup. Popular Silicon Valley “failures” believe that since the opportunity to fail is so available there’s no reason to do research as its more trial by error.

 

Taking big risks is much cooler than playing it safe.

 

The backlash of failing is much lower than it was in the past.  Also many startup business owners don’t have an understanding of what doing research actually is.  They use buzz words such as rapid prototyping, lean startup, minimal viable product and other “excuses” to avoid doing in depth research.

 

Risk taking is fine for entrepreneurs personally, but for business organizations it involves financial, cultural and opportunity costs that affect the entire team.

 

Venture capitalists (VC’s) promote this theory as well because higher risk gives them bigger gain.  They are less concerned about individual investment success and more concerned that a percentage of the companies in their portfolio nets them a high return.  Kevin Thompson, CPA, a Partner in Atlas Global Partners says “there is so much money being invested in these startup ventures. We visited a VC firm here in Santa Monica and the lead partner said “we are looking for the next multi-billion dollar deal.” My reply, “send me all your multi-million dollar deals.”

 

An exit or liquidity outcome is fine with them even if the company itself disappears.  Actually running the business itself is completely different from investing.  Therefore doing research makes a huge difference. “VC want in and out and an exponential return on their investment” says Thompson. I try and stress building a sustainable company. For every billion dollar deal there are hundreds of million dollar deals that go unnoticed but are operated by smart entrepreneurs.”

 

Entrepreneurs can have a skewed view of what research is.  Some VC believe it has nothing to do with what their customers want or how they feel. It’s also not a science.  Research is a tool. Smart entrepreneurs know that is does come down to what the market demands are and the ability to sell and get paid.

 

Research doesn’t need to be gathered to appear in a journal and it doesn’t have to be formal.  It simply needs to be useful and requires critical thinking skills.

 

Business owners should rid themselves of the word “like” when doing research. It doesn’t usually lead to the end result. There’s a difference between what is known as “declared preference” (what focus groups do) and “revealed preference” which is reality.

 

Focus groups are more theatre than substance.  They don’t reveal how real people behave in ordinary circumstances.

 

Research needs to be focused on what people actually do rather than what they wish they could do. Some people feel this limits their creativity and so they avoid doing the research. To simply have someone tick a box doesn’t cut it.

 

Real research is basically a set of activities to help businesses gather enough information to help them achieve their goal.  It can be simple or complex depending on a company’s needs.

 

It’s important to be brutally honest and realistic about what you know already.  Identify the most critical assumptions and then figure out how to validate them. An example of this would be delivering the kind of service that the company envisions.  Look at potential problems and find solutions that work.

 

Instead of building a prototype of quickly setting up a company that will learn as they go, many not be as financially sound as doing the research ahead of time.

 

A good rule of thumb is to find people who are the type that you would expect to have a problem, watch how they actually behave, ask what causes them to behave that way, and find out how that person is attempting to solve the problem currently.  Asking these types of questions give a company a basis to solve that problem realistically and into a habit driven and mundane world that may not be as innovative but is real.

 

Mailbox CEO Gentry Underwood, when asked about how customer’s pain points affected their use of email responded that mobile devices changed the way people used email and that platform changes needed to be made to reflect that.  Mailbox was able to appeal to users where other apps had failed because they did their research and were able to understand the problem in order to find a solution.

 

MailChimp is another example of a company that uses research and came up with a humane and transparent marketing plan because of it.

 

Research usually gets a bad rap because of fear. These fears include wasting time, being a follower, losing control, and having to share credit.

 

The human race is not always rational, but when it comes to making business decisions, research helps us understand human behavior and gives us a better chance of succeeding.  All businesses need to ask questions that will lead to insights that create results.

 

Original Article

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625.

 

 

 

230,000 Jobs Added to the Private Sector in October 2014

According to payroll company ADP, a giant in the industry, jobs in the private sector have increased by 230,000 from September to October 2014.

 

102,000 jobs were added to small businesses according to the ADP National Employment Report with 53,000 in companies with 20-49 employees, midsized businesses with 50-499 employees added 122,000 and large businesses with 500-999 employees adding 14,000 jobs. Kevin Thompson, CPA says “anyone who knows me will agree that I have been saying for ten years that this economy will grow on the backs of Small Business owners. In our seminar series “How to Start and How to Run Profitable Small businesses” we show how the US Economy has made the switch from large employer to small employer based. This is just further evidence.”

 

Companies with more than 1,000 employees or more decreased jobs by 8,000. Large companies use outside consultants and small companies to perform so many of the tasks that used to be done internally. Thompson says “these large companies know that the work can be done so much more efficiently by smaller, more agile providers.”

 

ADP President and CEO Carlos Rodriquez issued a statement saying, “The employment rate is improving due to smaller or midsized companies. October’s job growth is the highest since June and the second highest gain of 2014”

 

The most jobs were added in the service sector with 181,000 added in October.  Goods-producing added 181,000 jobs.

 

Jobs in professional and business including accountants, tax preparers, etc., added 53,000 jobs in October 2014. Financial services added 4,000. Trade, transportation, and utilities added 47,000.  Manufacturing – 15,000, construction, 28,000, franchise jobs 16,970, restaurants, 13,000.

 

Mark Zandi, chief economist at Moody’s Analytics said, “The job market is steadily picking up pace. Job growth is strong and broad-based across industries and company sizes.  At this pace of job growth unemployment and underemployment is quickly declining. The job market will soon be tight enough to support a meaningful acceleration in wage growth.”

 

The U.S. Bureau of Labor Statistics reports that employers in both private and public sectors added 214,000 jobs last month.  This fact is sending the unemployment rate down to 1/10% to 5.8% which is the lowest it’s been since July 2008.  Job gains for Aug and Sept have been revised by a combined 31,000 jobs by the BLS.

 

kevin@kevinthompsoncpa.com  or call him @ (310) 450-4625.