The CPA Desk

A Thought Leader Production by PKFTexas

March Events in Houston

Our friends and clients look to us, as accountants and business advisors, to formulate ideas and facilitate solutions for your business. With this in mind, we are supporting several upcoming events we think may be of interest to you.   
  • Client Exclusive Mindshop Roundtable Advantage
  • Turnaround Management Association March Breakfast
  • American Marketing Association Marketer of the Year
  • Houston IMA March Luncheon
  • Search Luncheon
  • Decision Strategies Oilfield Breakfast Forum
  • Houston IMA Career Fair
  • Houston Business Journal Mentor Monday
  • University of Houston Energy Symposium Series
If you have questions about any event details or registration information, the organization-specific contacts are below. We hope to see you at any or all of these events!

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Make sure you have proper substantiation for your 2014 donations

If you don’t meet IRS substantiation requirements, your charitable deductions could be denied. To comply, generally you must obtain a contemporaneous written acknowledgment from the charity stating the amount of the donation, whether you received any goods or services in consideration for the donation, and the value of any such goods or services.

If you haven’t yet received substantiation for all of your 2014 donations, you may still have time to obtain it: “Contemporaneous” means the earlier of 1) the date you file your tax return, or 2) the extended due date of your return. So as long as you haven’t filed your 2014 return, you can contact the charity and request a written acknowledgement — you’ll just need to wait to file your return until you receive it. (But don’t miss your filing deadline; consider filing for an extension if needed.)

Be aware that certain types of donations are subject to additional substantiation requirements. To learn what requirements apply to your donations, please contact us.

Where does Radical Impact Start in a Company?

Karen: This is PKF Texas Entrepreneur’s Playbook, I’m Karen Love, Host and co-founder and today I’m with Andy Ray, a Principle in our Entrepreneur Advisory Services team. Welcome back to the Playbook Andy.

Andy: Thank you.

Karen: I’m so glad that you’re here because I hear a lot – you talk about impact but not only impact, radical impact.

Andy: That’s right.

Karen: What is that?

Andy: Radical impact is creating sustainable results that matter to a business and that is primarily accomplished in mid-market companies through middle managers. It’s a great time to be a middle manager in mid-markets because the field is wide open for impact creation, especially radical impact creation.

Karen: Wow, now I’m impressed. What I want to know is how do you help middle managers create that radical impact?

Andy: Well the first thing you have to do is you have to help them create time because they’re so busy working in their business that they don’t have a lot of time to work on their business.

Karen: I can use that time.

Andy: So you’ve got to be really cognizant of the time that you’re working on radical impact. And the main two things – the main two skills that they need to learn and that we help them develop is developing good strategic tools so that you decide what to work on; that’s where all the impact’s going to come from in that decision right there. And then the second piece is execution skills; how you actually deliver that result that matters and sustain it because without sustainability it’s not radical impact.

Karen: Well that’s impressive and I’m ready to execute right now. So thank you for being with us and explaining it and I look forward to having you back.

Andy: Thank you.

Karen: This has been another thought leader production brought to you by PKF Texas Entrepreneur’s Playbook so tune in next week for another chapter.

Should you forgo a personal exemption so your child can take the American Opportunity credit?

If you have a child in college, you may not qualify for the American Opportunity credit on your 2014 income tax return because your income is too high (modified adjusted gross income phaseout range of $80,000–$90,000; $160,000–$180,000 for joint filers), but your child might. The maximum credit, per student, is $2,500 per year for the first four years of postsecondary education.

There’s one potential downside: If your dependent child claims the credit, you must forgo your dependency exemption for him or her — and the child can’t take the exemption.

But because of the exemption phaseout, you might lose the benefit of your exemption anyway. The 2014 adjusted gross income thresholds for the exemption phaseout are $254,200 (singles), $279,650 (heads of households), $305,050 (married filing jointly) and $152,525 (married filing separately).

If your exemption is fully phased out, there likely is no downside to your child taking the credit. If your exemption isn’t fully phased out, compare the tax savings your child would receive from the credit with the savings you’d receive from the exemption to determine which break will provide the greater overall savings for your family.

We can help you run the numbers and can provide more information about qualifying for the American Opportunity credit.

Family Office Review Awards and Conference Wrap-Up

On January 29th, Houston hosted the 2015 FOR Awards Gala and Conference. Family Office Review (FOR), led by founder/CEO Steffi Claiden, seeks to address the unique needs and challenges of family firms and those who work with them. Previously held in Chicago, this year’s event had a great slate of speakers and panels, including a keynote from Charlotte Beyer, founder of the Institute for Private Investors (IPI).

Several Houstonians were recognized with 2015 FOR Awards. Congratulations to each of them!

Private Client Law Firm – Crady, Jewett & McCulley, represented by Jay Houren

Private Client Law Firm – Crady, Jewett & McCulley, represented by Jay Houren

Family Office Executive of the Year – Dan Crumrine, Fayez Sarofim & Co.

Family Office Executive of the Year – Dan Crumrine, Fayez Sarofim & Co.

Sentinel Trust

Trust Company – Sentinel Trust, represented by Anthony DeToto

Kyle Wright Commune LP

Community Service – Kyle Wright, Commune LP



















As the Chair of the Houston Organizing Committee, I would like to offer a “Texas-sized” Thank You to each of our Houston and Texas-based Founding Sponsors:

Kanaly Trust
Fayez Sarofim & Co.
Meritage Capital
PKF Texas

Without their financial support, we could not have achieved such a successful inaugural Houston event. It was also just announced that next year’s FOR Awards and Conference will again be in Houston. Watch this space for the exact dates and more details as we get closer to the event.

Family Office Review Visits Houston

Russ: This is PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host and I’m here with Steffi Claiden, founder and CEO of the Family Office Review; Steffi, welcome to the Playbook.

Steffi: Thank you very much Russ.

Russ: You bet, and also Del Walker, Tax Director and Practice Leader at PKF Texas; Del, welcome to the Playbook.

Del: Thank you Russ, glad to be here.

Russ: Okay, Steffi let’s start with you, tell us what is Family Office Review?

Steffi: Okay, well Russ it is an online publication that I founded four years ago after I worked as a strategy consultant and ran another publication in the family office and wealth management space. I did not see what I thought was enough good content aimed directly at the wealth holders – the families – so I started Family Office Review and we have opened up into other avenues of more than just the publication. We started the following year the Family Office Review Awards North America which are created to honor the family offices and wealth advisors serving them. We’ve also, in the past year, started the Family Office Capital Network which talks about direct investments and we now have a women’s group called Family Office Women International because I’m always connecting great women. I live in London, although I’m born and raised in the United States,  I’ve lived there and I’m a dual citizen now so I go around and meet a lot of great ladies and I’m connecting them. So we’re very busy and having a lot of fun doing it.

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The “manufacturers’ deduction”: It’s not just for manufacturers

The manufacturers’ deduction, also called the “Section 199” or “domestic production activities” deduction, is 9% of the lesser of qualified production activities income or taxable income. The deduction is also limited to 50% of W-2 wages paid by the taxpayer that are allocatable to domestic production gross receipts.

Yes, the deduction is available to traditional manufacturers. But businesses engaged in activities such as construction, engineering, architecture, computer software production and agricultural processing also may be eligible.

The deduction isn’t allowed in determining net self-employment earnings and generally can’t reduce net income below zero. But it can be used against the alternative minimum tax.

Contact us to learn whether this potentially powerful deduction could reduce your business’s tax liability when you file your 2014 return.

Energy Market Fluctuations Impact Houston

Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Scott Soles, a director in the PKF Texas Energy Practice. Scott, welcome to the Playbook.

Scott: Thank you. Good to be here.

Russ: You bet. I bet at Energy Practice these days you’re getting maybe more calls than normal and focus maybe on help.

Scott: Well, I’m not getting more calls. I have a lot of communication with my clients, and I think the other directors do as well. It’s just that the conversations are different. Topics that come up are a little bit different. There is a little bit more concern out there about the marketplace today, for sure.

Russ: Okay. Well, I can certainly relate to the concern because, my goodness, when oil was selling for $80.00, $90.00, $100.00 a barrel it was probably fun and profitable, but now down around $50.00, plus or minus. There could be some people that are clearly underwater. What can you help them with if that’s the case?

Scott: Well, what I tell my clients, and they all laugh at this, but this is kind of my way of putting it is, we just take them to the leather couch or we keep them from jumping off a bridge. We have a logical business conversation about many of the things that are going on in the market. Some are real; some are imagined. And we try to get to the bottom of what is really happening with their business and what’s going on in the world for them.

Russ: Okay, so it’s kind of a holistic view of how their business operates.

Scott: Entirely holistic. It has to be.

Russ: Okay. And you’re looking for, and there sometimes you can find areas, that you could cut cost. Is that right?

Scott: We always find areas. Even in good times.

Russ: Okay, cool. Well, Scott, I really appreciate you being here with us today.

Scott: Yeah. Thanks for having me.

Russ: You bet. All right. This has been another Thought Leader production, brought to you by PKF Texas Entrepreneur’s Playbook. Tune in next week for another chapter.

Be sure to deduct all of the mileage you’re entitled to

You probably know that miles driven for business purposes can be deductible. But did you know that you might also be able to deduct miles driven for other purposes? The rates vary depending on the purpose and the year:

  • Business: 56 cents (2014), 57.5 cents (2015)
  • Medical: 23.5 cents (2014), 23 cents (2015)
  • Moving: 23.5 cents (2014), 23 cents (2015)
  • Charitable: 14 cents (2014 and 2015)

The rules surrounding the various mileage deductions are complex, however. Some are subject to floors and some require you to meet specific tests in order to qualify. There are also substantiation requirements, which include tracking miles driven. And, in some cases, you might be better off deducting actual expenses rather than using the mileage rates.

So contact us to help ensure you deduct all the mileage you’re entitled to on your 2014 tax return — but not more. (You don’t want to risk back taxes and penalties later.) And if you drove potentially eligible miles in 2014 but can’t deduct them because you didn’t track them, then start tracking your miles now so you can potentially take advantage of the deduction when you file your 2015 return next year.

King For a Day Exercise

Andy: This is Andy Ray and this is another Tool Time update brought to you by your friends at PKF Texas and the Entrepreneurs Playbook. Today I’m going to cover a tool we call an exercise we call King for a Day. This is an exercise to get you reengaged with your curiosity in your business. As our day to day business kind of runs our lives we kind of forget about that thing that got us there to begin with. Which is to ask questions and to inquire. This is a very simple exercise. Take a sheet of paper. Put on the top of the paper this statement, “We could _______, if we _______.”

And what you’re going to do is start with your team and work your way outside your team into other departments and the whole business and fill in this statement, “We could ______, if we ______.”

So for example if you’re a purchasing manager in a company one of your first statements might be, “We could cut costs if we bid out our commodities more often.” That’s a very simple kind of statement. It’s very collaborative, it’s very visionary, it’s also very execution oriented. So this is a very simple way to get your curiosity reengaged. Spend 15 minutes per day for a week on this. Start with your team and work your way out.

You’re the king you can look at anything you want. And don’t be practical. You’re going for volume here. You’ll probably have about 50 or 60 statements that “We could ____, if we ______.” at the end of this and then you’ll go in with your teams and start prioritizing improvement projects. This has been a Tool Time update brought to you by PKF Texas and the Entrepreneurs Playbook.