This Tax season is getting started with the annual goat rodeo of collecting and reviewing client data. You have probably already mailed, emailed, called, and reminded your clients that “it’s that time again.” Well, so that you won’t sound like a dentist (as in, “this won’t hurt too much”), make this a more cheerful experience by asking your clients about their activities that may qualify for tax credits (click here for the Alpharesults Tax Credit Summary).
You have probably heard your clients say they don’t want any more projects because they are too busy. We see many businesses where the equity owners want the tax credits, but their administrative team has other priorities (and there is nothing in it for them personally). Here are a few points that could help when you talk with your clients:
We recently helped a 16-employee physician practice get a credit of over $17,000 for their new EMR software. The practice manger said she spent about 1 hour over the entire duration of the project. Her value added was over $17,000. How many projects can provide hard ROI of $17,000/hour net-after-tax cost savings to a business?
Your clients need your help to see the bigger picture of tax credit benefits and to understand that priorities may need to be temporarily changed.
2008 and 2010 are almost gone for amending tax returns for the Retraining and Job tax credits.
Year-end planning for your clients (and prospective clients) is a great time to discuss these prior year opportunities.
You will want to include a review of the following for 2008 and 2010:
This is a quick way to strengthen your business advisory role with your clients. If you find tax credit potential $$, your client will thank you for the nice $$ check they receive from DOR!
Beginning on January 1, 2012 the new HIPAA 5010 electronic transaction standards will affect almost every aspect of a physician practice’s reimbursement and revenue stream (click here). This may require software upgrades, workflow changes and employee training. Employee training on the 5010 regulations does not count for the Retraining Tax Credit since it involves regulations. However, employee training on the new/upgraded software and workflow changes may count for the Retraining Tax Credit. Talk with your clients about their preparation for HIPAA 5010 and let them know that a tax credit could help out.
I recently spoke with Guy Griswold, President of Blue Ridge Strategies, a Georgia-based public affairs firm (check them out here). We are working with his firm on legislative areas that impact tax credits, and he gave me a great synopsis of the GCI and progress to date:
Governor Deal chartered the Georgia Competitiveness Initiative (GCI) as a joint effort of the Georgia Department of Economic Development and the Georgia Chamber of Commerce.
GCI’s mission is to bring state and local governments and the business community together to develop a long-term strategy for economic development and business prosperity for our state.
GCI has completed its circuit of 12 listening sessions across the state, with its last meeting held on August 31st in West Point.
We have worked throughout the process to ensure preservation of Retraining and Jobs Tax Credits, and we will continue to promote the benefits that these credits have brought Georgia companies.
The Carl Vinson Institute of Government (part of UGA) is compiling all of the input and feedback from the 12 listening sessions for use by the Initiative Committee members as they begin developing their recommendations, which are expected to be released by the beginning of 2012 in concert with the start of Georgia’s legislative session.
If you have specific examples of how tax credits have helped your business or the business of your clients grow, we would like to include those in our discussions with committee members.
Thanks, Guy!
| The federal Meaningful Use incentive is a carrot and stick approach: play now & get paid now (carrot) – OR – don’t play and get paid less (stick).
Healthcare providers (or Eligible Professionals to use Meaningful Use terminology) can receive a maximum of $44,000 for Medicare or $63,750 for Medicaid over a 5 year period. This incentive is in addition to other incentives such as PQRS and e-Prescribe. The federal agency CMS has a good summary (click here). If your client wants to participate in Meaningful Use, this is a great time to do long range planning with the practice and equity owners to discuss tax planning, financial impact, operating agreements, employment contracts and other related items. |
If your healthcare clients are interested in pursuing the new Federal Meaningful Use incentives, they have to be running on a Certified EHR System. And they have to be careful — it is a specific vendor’s application version that is certified. For example, Greenway Medical Technologies’ PrimeSuite application must be on version 2011. Some vendors have multiple applications and multiple versions (click here for a listing).
To get their first (Stage 1) $$ payment, the certified EHR software version has to be installed, workflows changed, employees trained (NOTE: retraining tax credit potential) and the software utilized by the physicians for at least 90 consecutive days. Helping your clients focus on these incentive $$ will strengths your relationships with them.
Here is the rule for 2009, 2010 and 2011: your clients can only amend up to one year after the return was due or extended.
Suggestions:
Now that tax season is here, the fun begins. Clients are probably dumping their tax documents (electronically and physically) at your office and asking when their tax returns will be completed. As you dig through all of the details, you discover some changes the client forgot to mention that will impact their taxes.
We had a similar situation recently. The client’s tax structure changed – they converted from a C corporation to an ESOP (100% S corporation), so they no longer pay income taxes. The client didn’t tell us about this change. Meanwhile, the client spent time and resources to collect their state tax credit documentation. As usual, we helped them get the tax credit certification and delivered it to their CPA. The CPA didn’t know what was going on since he had already talked with the client about the change. The client forgot that paying no taxes meant that they could not use tax credits.
If your clients have utilized tax credits in the past, you need to help them understand (and beg for no surprises!) their potential to utilize the tax credits in the future. Major changes in tax (such as tax structure, future NOLs, equity ownership and other items) can have a major impact on the ability to use tax credits (and save your client time and resources).
We are seeing many clients doing small things with employee retraining, such as upgrading their software, adding modules, or modifying their existing software.
Examples include bar coding added to warehouse software, document imaging added for paperless contracts, and electronic prescriptions (ePrescribe) added to patient management systems.
As your clients come out of the recession, look out for those small changes that can add up to sizable tax credits.
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