The Biz Times Features Valuation Article

BizTimes_10-19In the Oct. 19th issue, the Biz Times features a valuation article by Steve Rozansky. It highlights the importance of valuation for business owners and people with property divisible during distribution of an estate.

Determining the worth of a business is critical to establishing fair market value of estates for gift tax or succession planning, buying and selling of businesses, family law property division, and to support various forms of litigation.

In most cases, the process begins with an in-depth exchange of information often facilitated by a comprehensive questionnaire and in person interviews. The amount of research and calculations that goes into valuations is most often driven by the desired outcome. In many cases an extensive report detailing all of the supporting research, background material, risk factors, industry comparisons and assumptions that were used to come to the value conclusion is required. In other cases, such as a business owner wanting to have an idea of what their business is worth, a shorter, more focused report can be requested.

The outcome of the valuation process is an understanding of the factors that determine worth and a qualified opinion upon which to base critical financial decisions.

Steve Rozansky has earned the Accredited in Business Valuation (ABV) credential from the American Institute of Certified Public Accountants and has provided numerous valuations for over 10 years. For more information, Steve may be reached at Mitz & Rozansky, SC, (414)352-3200 or visit

Alert! New Credit Card Processing Rules

New credit card processing rules have been established for businesses. For some time now, new credit and debit cards have been issued with embedded computer chips designed to decrease fraud. New equipment for reading either magnetic strips or embedded chips is currently available.

As of October 1st, the rules regarding retailer responsibility will change and may affect the equipment you choose to use to process credit card transactions. We urge you to contact your credit card processor and/or point-of-sale equipment representative to get a better understanding of your equipment options and how this will affect your business going forward.

Protect Your Identity and Beware Of Scam Artists Posing as IRS Agents

Protecting Your Identity
The need to protect your identity online has become increasingly important with the growing number of social networking and blogging sites available. Personality profiles and blogging about personal experiences creates a public record of your personal information.

Please protect your passwords. Use firewalls to protect your computers. There is a well known email scam from the International Monetary Fund (IMF) either claiming they need your help to get money from long lost chiefs of funds, or to confirm a power of attorney for you. Delete these emails. Do not bother to open them. Stay abreast of security breaches to minimize your risk of becoming a victim.

Identity theft is unfortunate, but does happen. There are several trust worthy web sites that have valuable information. If you should find yourself in this situation, please feel free to contact our office for guidance and also to research these sites:

Beware of Scam Artists Posing as IRS Agents
Our office has received numerous calls from clients wondering why the IRS is calling them about money they owe, or a federal lawsuit. First, the Internal Revenue Service will not call you to tell you there is a problem with your taxes or that you owe them money. The initial contact from the Internal Revenue Service is via US Postal service mail. Second, there is no federal lawsuit that the Internal Revenue Service would initiate without proper solid physical paperwork that would have been sent to you or your attorney.

Please do not confirm your social security number, bank account or date of birth with any one over the phone.

Here is the directive published by the IRS:
“Callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request.
The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never:
• Call to demand immediate payment, nor will we call about taxes owed without first having mailed you a bill.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
• Require you to use a specific payment method for your taxes, such as a prepaid debit card.
• Ask for credit or debit card numbers over the phone.
• Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:
• If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue.
• If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at
To read the complete IRS alert go to and type “scam” in the search box.”
The staff at Mitz & Rozansky is available to discuss any tax related concerns you may have. Give us a call at (414)352-3200.

New IRS Guidelines for Tax-advantaged Retirement Savings

For 2015, there are several important new IRS guidelines for tax-advantaged retirement savings. For many individuals, there are several opportunities to increase contributions but due to new restrictions, proper planning of your IRA contributions and Flexible Spending Account rollovers is essential. The changes include:

1. Higher Income Limits for IRA Contributions
The income limits for deductible contributions to IRAs have been raised and vary based on whether the taxpayer and/or his or her spouse are eligible to participate in an employer-sponsored retirement plan. The traditional IRA contribution tax deduction has been phased out for investors who have a workplace retirement plan and a modified adjusted gross income of more than $61,000 but less than $71,000 for individuals, and more than $98,000 but less than $118,000 for couples in 2015. For individuals who don’t have a workplace retirement plan but are married to someone who does, the tax deduction for an IRA contribution is phased out if the couple’s income is more than $183,000 but less than $193,000 in 2015. The maximum contribution for an IRA remains at $5,500 for people under 50, with an additional catch-up of $1,000 for those 50 and older for a total of $6,500.

2. Higher Roth IRA Contributions Income Limits
For 2015, the income limits for Roth IRA contributions will increase in 2015 by $2,000. The new limits are $116,000 or more but less than $131,000 for individuals, and $183,000 or more but less than $193,000 for married couples.

You can have both a traditional and Roth IRA, but you can only contribute a maximum of $5,500 (or $6,500 if you’re 50 or older) across both accounts each year.

Please note: Based on the Roth IRA income limitations, if a taxpayer is not sure whether he/she will qualify due to higher income, they should wait until 2015 is over and their income tax return has been prepared to make the contribution. If they make the contribution in 2015 and then find out their income precludes them from making the contribution, they will be subject to a penalty tax.

We will gladly guide you through this decision process by consulting with you, including making a tax projection, during the year tax year. Please contact us to set up an appointment.

3. Higher Contribution Limits for Employer Plans
Contributions to taxpayer’s 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan in 2015 will increase to $18,000. There is also a $6,000 increase in the catch-up contribution limit in 2015 for a total contribution limit of $24,000 for employees age 50 and older.

4. IRA Rollovers Limitations
Beginning on Jan.1, 2015, there is essentially a limit on what has been typically called an ‘indirect rollover’—where an IRA owner takes a distribution of all or part of the account and moves it into a new IRA. Investors are limited to one rollover from one IRA to another in any 12-month period. A second IRA-to-IRA rollover in a single year could result in income tax becoming due on the rollover plus a 10% early withdrawal penalty, and a 6% per year excess contributions tax, as long as that rollover remains in the IRA.

There is, however, no limit on trustee-to-trustee transfers between IRAs or conversions from traditional to Roth IRAs in the same year. This direct rollover transfer method allows you move IRA funds between accounts without taking control of the money, similar to how you would roll a 401(k) into an IRA.

5. Changes in Health Expense Accounts
Health Flexible Spending Accounts (FSAs) are used to save pre-tax dollars to pay for healthcare expenses. They must be used within a plan year. If you want to set up a Health Savings Account (HSA) for 2015, it may actually be better not to carry forward unused FSA amounts (up to $500), even if it means that you will lose them.

Previously, you have been allowed to roll over $500 from an FSA into the next plan year. However, there is a change for 2015 that may restrict the benefit for those who are considering contributing to a HSA. If you had a balance in your FSA at the end of 2014 and you decide to carry over $500 of it into 2015, you will be ineligible to participate in an HSA in 2015. This restriction does not apply to FSAs for specific uses, such as dependent care or dental expenses. You should plan ahead and balance the benefit of each option.
The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550, up $50 from the amount for 2014.

Key Takeaways
* The maximum amount you will be able to contribute to your 401(k) plan, starting in 2015 has increased to $18,000.

*  ‘Indirect’ IRA rollovers are limited to one every 12 months starting in 2015. However, you can still do unlimited IRA ‘direct’ rollovers between trustees.

* If you are planning to set up an HSA in 2015, consider forfeiting the unused portion of your 2014 FSA if it precludes your HSA eligibility.

If you have any questions on these new IRS guidelines, please contact Mitz and Rozansky, SC at 414-352-3200.

New 2014 Tax Planning Guide

'14-'15TaxPlannerWith significant tax-related provisions of the Affordable Care Act (ACA) now affecting many taxpayers — not to mention continued uncertainty about tax reform — tax planning is more complicated yet more important than ever. To save the most, you need to understand how recent tax legislation affects you and how we can assist you in taking advantage of every tax break you’re entitled to.

As we move into tax preparation season, we hope you find our complimentary Tax Planning Guide helpful in understanding recent tax-related legislation and identifying steps you can take to reduce your personal and business tax liability.
To download a copy of the Tax Planning Guide click here.

As you look through the guide, please note the strategies and tax law provisions that apply to your situation or that you would like to know more about. Then call us at (414)352-3200 with any questions you may have about these or other tax matters.

As our client, you know that our professionals are thoroughly familiar with the latest tax laws and tax-reduction strategies, and are eager to help you take full advantage of them. So please contact us today at (414)352-3200 or at to schedule a time to talk about ways to lighten your tax burden and better achieve your financial objectives.

Enhancements in Wisconsin’s Tomorrow’s Scholar 529 Plans

For 2014, there are been some very beneficial tax code enhancements to Wisconsin’s  Tomorrow’s Scholar 529 College Savings Plan which is sponsored by the State of Wisconsin.

Specifically those changes provide for:
• A reduction from Wisconsin taxable income of up to $3,050 of annual contributions for each beneficiary account (adjusted annually for inflation). This income reduction is available to anyone who makes contributions during the tax year, regardless of whether they are the account owner or their relationship to the beneficiary

• Contributions may be made for the tax year up to April 15th of the following year and contributions that exceed the maximum reduction amount for a tax year may be carried forward to reduce future taxable income

• The account balance is excluded from calculation of state funded financial aid awards and is protected from claims by creditors

• In addition, the $25 Annual Maintenance Fee is waived.

If you have a student enrolled in the Tomorrow’s Scholar Plan or have interest in enrolling a student, please contact us at 414-352-3200 to discuss the program in detail to ensure you take full advantage of its benefits.

Time for an Income Tax Check-up


The 2013 tax year is complete and we are now off and running into 2014 which means it’s time to get moving on your 2013 tax returns AND to have a 2014 “tax check-up”. Many tax payers wait until year-end to deal with tax planning. That can be a costly mistake. We highly recommend meeting now to discuss how recent tax law changes will affect your personal financial matters in 2014.


Combining submission of your 2013 documentation with a 2014 planning session is an economical and timely approach to ensuring you take advantage of all deductions you are entitled to and that you only pay the taxes that you are required to pay in both 2013 and 2014.

Here are some of the significant 2014 changes you may be affected by:

1.       Higher income taxpayers are going to pay more. The Bush-era tax cuts have expired. The top tax rate for taxpayers is now 39.6% for $400,000 for individual taxpayers and $450,000 for married couples filing jointly.

2.       All wages are subject to Medicare tax which is already the case but now taxpayers who make over $200,000 ($250,000 for married taxpayers) will be subject to the Medicare surtax. For those taxpayers, a Medicare surtax will be added onto your wages, compensation, or self-employment income over that amount at a rate of .9%.

3.       If you have both net investment income and modified adjusted gross income (MAGI) of at least $200,000 for an individual taxpayer and $250,000 for taxpayers filing as married you may be subject to the Net Investment Income Tax (NIIT). Net investment income includes items like interest, dividends, capital gains, rental and royalty income, and certain income from businesses. It doesn’t include wages, unemployment compensation, operating income from a non-passive business, Social Security Benefits, alimony, tax-exempt interest, self-employment income, and distributions from certain Qualified Plans.

4.       The limitation for itemized deductions – the Pease limitations, named after former Rep. Don Pease (D-OH) – claimed on individual returns for tax year 2014 will begin with incomes of $254,200 or more ($305,050 for married couples filing jointly). The limitations were brought back in 2013 at the original thresholds, indexed for inflation. The limitation reduces itemized deductions by 3% of the amount by which your adjusted gross income (AGI) exceeds those thresholds, up to a maximum reduction of 80%. That’s a complicated way of saying that your deductions are limited as your income increases.

5.       Kind of a “tag along” provision is the personal exemption phase-out (PEP). Phase-outs for PEP in 2014 begin with AGI of $254,200 for individuals and $305,050 for married couples filing jointly; the personal exemptions phase out completely at $376,700 for individual taxpayers ($427,550 for married couples filing jointly).

6.       Taxpayers who are affected by the Affordable Care Act could also have a tax impact in 2014. If you do not have health insurance in 2014 – and you don’t otherwise meet certain exemptions – you’re going to be subject to a “shared responsibility payment.” Whether you call it a tax, a fee or a penalty, if you don’t have health insurance coverage and don’t otherwise meet certain provisions, you’ll be responsible for either 1% of your taxable income or a flat fee of $95 per uninsured adult and $47.50 per child (up to $285 for a family), whichever amount is higher. The penalty is due when you file your 2014 tax return in April 2015. The flat fee increases to $325 in 2015 and $695 in 2016.

7.       In 2014, business owners will feel the loss of the Section 179 expense deduction. The deduction allowed small and mid-size business owners to immediately deduct an amount used to obtain qualifying equipment rather than spread the deduction over time according to a depreciation schedule. Up until this year, business owners could deduct up to a $500,000 of qualifying assets. In 2014, the limit drops to all the way to $25,000.

The best time to start your planning for 2014 is right now even before we’ve finalized your 2013 return. Our staff is ready to do an in-depth 2014 tax plan customized specifically for you. Don’t hesitate, please contact us at (414)352-3200 to set up a time to discuss your plan.