Blog | Page 2 | Burzenski & Co

The Current Business Environment in Veterinary Medicine

Post Date:

June 17, 2020

The business of veterinary medicine has weathered pretty well during the pandemic. Most hospitals have gone to curbside medicine and extended appointment times with reduced hours. Much of what has been seen as reductions in income have been self-induced and has not been based on client demand. Hospitals should recover quickly once a sense of normality returns to the marketplace.

Telemedicine has taken a foothold and should create a change in business that allows practitioners to stay in close contact with their clients. Telemedicine is most likely a permanent tool that hospitals will use past the pandemic. Those who have not yet considered this viable option should take a look at the products that have been developed specifically for the veterinary profession, many of which integrate with the current veterinary software.

Veterinary hospitals saw their worse income decline in the month of April with drops in income in the range of 20% to 30% in New York and the Northeast mostly by a drop-in invoice volume. Hospitals have been able to maintain an increase in the average invoice by about 5% so far in 2020. Income in the first quarter was the same as in 2019 or in some cases actually greater. We do expect the second quarter of the year to be a negative growth quarter in overall economic activity that will take us halfway to a recession. The largest question for most hospitals is what will the consumer spending habitsbe once government stimulus money runs out. The good news is that even in the last recession, veterinary hospitals saw no more than a 10% to 15% drop in sales during the worst of it. Compared to many other types of businesses, veterinary medicine tends to fare well during poor economic times. Hopefully this time it will open the labor markets a bit and allow hospitals to find adequate staff which has been so difficult to do during our run on economicexpansion during the last 7 years.

Hospitals will need to find their new normal for conducting business. It looks like curbside medicine will still apply for the time being. Check on your state’s VMA webpage for requirements to open and create a safe work environment. Many have applied for the SBA PPP loans which should provide adequate funding for cash flow during the 8 weeks that hospitals can use the money for payroll costs. Hospitals should focus on maintaining payroll levels to receive full forgiveness of their loans. Beware, right now, forgiveness will mean taxability according to the IRS. Loan forgiveness will occur during July and August. We expect the process to be detailed. The forgiveness application has been released and is available on the SBA website. Congress is still considering changes to the program that will relax some of the rules. Expect to supply a lot of documentation.

Burzenski and Company, P.C is a veterinary accounting and consulting firm that specializes in working with veterinary practices assisting them with their business and financial needs. If you have the need for PPP loan assistance or are struggling with financial issues during this time and would like to hear how we may be able to assist in working with you during these unusual and different times, please feel free to contact Gary I. Glassman CPA at 203-468-8133 or gary@burzenski.com.

Posted in Wealth Management, | Leave a Comment

The New Face of Banking

Post Date:

June 3, 2020

It suddenly just got a whole lot more difficult to buy a home

Banking in a postpandemic economy image

The banking sector is the latest industry to dramatically change how it operates in response to the current economic environment. The most visible change for consumers are new requirements for taking out a mortgage.

Here are some tips for working with banks and other lending institutions in the midst of tighter lending requirements and a heightened awareness of staying healthy.

Save more for a mortgage downpayment. New requirements for taking out a mortgage are requiring borrowers to put down at least 20% and have a credit score of 700 or better. Unfortunately, the average credit score of U.S. citizens under the age of 50 is below 700. The short-term reality is that you may need to save for a bigger downpayment and actively manage your credit before getting your dream home.

Take advantage of your bank's mobile app. Social distancing is changing the way we interact in public and banking is no exception. Traditional bank tellers, drive through options, and in some cases entire branches, are being replaced with digital banking options and mobile deposits. This trend will surely accelerate in the aftermath of COVID-19. For the branches that remain open, visiting will likely be more restrictive. Smaller capacity banking spaces and appointments might be required to help banks control the flow of traffic.

Use digital payments for your purchases. While cash might still be king in the U.S. economy, consider using "germ-free" digital payments as retailers are steering customers toward electronic transactions. With businesses needing to adapt to new spending habits, innovation is going to steer towards digital payment technologies and make paying with cash more difficult in the future.

Look for lending deals. During these uncertain times, banks will be putting more effort into connecting with their customers. Bank leaders are making it a priority to personalize the banking experience with proactive marketing campaigns. Be on the lookout for special deals offered by lending institutions to help keep you as a customer.

Posted in General Information, Taxes, | Leave a Comment

Upcoming Live Webinars with Gary Glassman

Post Date:

May 16, 2020

Gary has two upcoming webinar talks, one with the CVMA on May 26 from 7:00 – 8:00 PM, and another, a live national webinar via Zoom with AmeriVet on June 11 beginning at 7:00PM on the topic: Planning for the Transition: The How, Why, and When of Selling your Practice.

I have attached the PDF for the June 11 meeting. Several of our clients have already emailed me that they plan to attend. There is no cost. Registration is required either in advance or at the time of the webinar. If you would like to attend to see Gary in action and learn about the veterinary industry and practice transition, please sign up. There is a clickable registration link in the attached PDF.

Here is the information about the May 26 webinar. Registration is also required.:

Join CVMA for a Business Support Town Hall

May 26, 2020, 7:00 – 8:00 pm EST

CVMA will present a short panel discussion, followed by Q & A, by three local business experts who can offer tips on managing your practice in 2020, including insurance, accounting and credit card processing information and strategies. Our presenters will be:

Topic: Working in this COVID-19 world. How are practices faring financially and what innovations are practices using to keep up with business.

Gary Glassman, CPA, Burzenski & Co, PC. gary@burzenski.com

Topic: Business Insurance Considerations in the Age of COVID-19

Scott Prestileo, CIC, President, Burgess Insurance. scott@tmburgessins.com

Topic: Controlling Electronic Payment Fees Once and for All

Jerry Wistrom, Senior Sales Executive, Integrity Merchant Solutions. jwistrom@integritymerchantsolutions.com

Here is Zoom info for the CVMA Town Hall. Registration is required.

https://us02web.zoom.us/meeting/register/tZcufu6srT8jGND7FkBEH6mkZHvKSY7mMxTL

After registering, you will receive a confirmation email containing information about joining the meeting.

Posted in General Information, Practice Management, | Leave a Comment

Key Coronavirus Tax Changes

Post Date:

April 12, 2020

Every taxpayer should know…

In addition to filing delays and stimulus payments, the IRS is implementing many changes in response to the coronavirus pandemic. Here are some of the major topics that could affect you, your veterinary practice and your family.

Early distribution penalty waived

The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New provisions allow tax liabilities on these distributions to be paid over a three-year period. The new rules also allow individuals to return these distributions to the retirement account over a three-year period and not be subject to annual contribution limits.

Action: This could be a great way to handle emergency payments until you receive a stimulus check, unemployment benefits, or a pending small business loan.

Required minimum distributions (RMD’s) waived for 2020

Required minimum distribution’s RMD’s in the year 2020 for various retirement plans is suspended. The corresponding 50% penalty associated with not taking an RMD is also suspended in 2020.

Action: Taking a distribution when the market takes a tumble can hurt retirement income for many years. This change allows you to wait to let the value in your retirement account rebound before you withdraw funds.

IRS installment agreement suspension

The IRA announced suspension of payments of all amount due from April 1 through July 15, 2020 and will not be in default on any IRS installation agreement during this period. Interest will continue to accrue on the installation agreements.

Action: Being on the bad side of the IRS is never fun. If you currently have an IRS installment agreement, look to take advantage of this delay.

Offers in compromise

The IRS will allow you until July 15, 2020 to provide additional requested information for any pending offers-in-compromise (OIC) and will not close out the OIC during this time without your consent. The IRS is also suspending any payments due under an OIC until July 15, 2020.

Endorse enforcement activity suspended? Not so fast…

The filing and enforcement of liens and levies will generally be suspended. However, IRS Revenue Officials will continue to pursue high income non-filers and initiate other actions when warranted.

No new audits

The IRS will not initiate new audits during this time, but will act to protect the statute of limitations.

Much is happening during this unique time in our country’s history. Rest assured, as changes are made you will be informed. In the meantime, please keep yourself your family and your veterinary staff safe.

Posted in General Information, Taxes, | Leave a Comment

The IRS Data Theft Problem

Post Date:

March 6, 2020

Here's how to minimize your risk

What better place for online thieves to target than a database that contains 300 million+ Social Security numbers and a treasure trove of financial information?

The IRS has 52 Internet applications to help U.S. citizens comply with their tax obligations. But these online portals, which collect, process and store large amounts of personal information and tax data, are also a potential gateway for online criminals and identity thieves.

While the IRS’s electronic authentication security controls have improved, the Treasury Inspector General recently said that the IRS’s internet applications are not yet compliant with the National Institute of Standards and Technology guidelines.

Here’s what you can do to protect your tax-related identity and information while the IRS tries to improve its security controls:

Use the IRS’s Internet applications judiciously. Think you need to use one of the IRS’s online applications? Consider requesting or obtaining certain information via the U.S. Postal service. Simply decide if you’re willing to take a risk using an application that isn’t compliant with the National Institute of Standards and Technology.
Get an IP PIN. An Identity Protection PIN (IP PIN) is a six-digit number that helps prevent filing fraudulent federal income tax returns. If you are a confirmed victim of identity theft, the IRS will mail you an IP PIN after the fraudulent tax issue has been identified. If you are not the victim of tax-related identity theft, you can voluntarily ask the IRS to issue you an IP PIN if you live in certain states. Additional states will be added until the IP PIN program is available nationwide.
Review your credit report once a year. Check your credit report for any unauthorized activity or errors. This periodic review can often be the earliest warning that your private information is compromised.

Posted in General Information, Taxes, | Leave a Comment

Tip for Selling Your Veterinary Practice

Post Date:

January 20, 2020

When contemplating the sale of a veterinary practice, Gary Glassman, CPA, veterinary accountant and

partner, Burzenski & Company says, “If it’s time to sell the practice and you are committed to the process,

don’t stand on ceremony about dictating about how much or how often you will be working in the practice.

There is always a time period of transition that is necessary where sellers should commit to assisting with

the transition of the client base but at some point, sellers have to let go. Make sure you negotiate what

your working arrangements will be once the practice is sold. Be flexible. If you have a desire to continue

to work, hopefully, you can work out a convenient schedule that meets the needs of both the buyer and

seller. If you do continue to work, remember, you gave up control the day you sold and most likely will

have no further management duties or functions.

Call Gary at 203-468-8133 to find out how we can help your veterinary practice.

Posted in General Information, Practice Management, | Leave a Comment

How to Sell Your Veterinary Practice

Post Date:

January 2, 2020

According to veterinary accountant, Gary I. Glassman, CPA, partner, Burzenski & Company, PC, there are two basic ways veterinary practices get sold:

A sale of assets and
Sale of stock Sale ofStock (Corporations)

Usually seen in the sale or purchase of partial interests
Usually sold or purchased at a lower amount than through an asset sale/purchase Sale of Assets

Assets usually sold are selective. Usually:

Accounts Receivable
Inventory
Fixed assets
Goodwill
Some of the sale price is also usually allocated to a covenant not to compete.

Owners can sell practices by requiring to be paid the entire sales price with third-party financing (i.e. bank, medical finance company) or holding an installment note. Third-party lenders will look to cash flow to support their debt. When practice owners accept the position of holding debt, they should always require a good down payment (20% of purchase price) and expect a reasonable rate of interest.

The bottom line to any good sale is that the price paid is based upon the practice’s optimum performance. Spend the time and energy to ensure you give your own practice the financial checkup you would provide your client if it were veterinary care. It takes a minimum of two years optimum financial performance to ensure the highest calculated value.

Posted in General Information, Practice Management, | Leave a Comment

Last Minute Tax Law Changes What everyone needs to know

Post Date:

December 27, 2019

On Friday December 20th a new 1,770 page bill was signed into law. Deep within the pages of the bill are a number of retroactive tax law changes to current and expired tax laws. These new law extenders are in place for both 2019 and 2020. Here is what you need to know:

2019 Tax Law Changes

The tuition and fees deduction is available. The above the line deduction for up to $4,000 in qualified tuition and fees that expired is now available once again. You will need to evaluate this tax break versus others like the American Opportunity Credit and the Lifetime Learning Credit.
Mortgage Insurance Premiums as an itemized deduction. If your mortgage bank requires insurance on your loan and the loan qualifies, you may once again deduct this premium as an itemized deduction.
Medical expense deduction threshold stays at 7.5%. Prior rules had the threshold set at 10%. To deduct qualified expenses, your costs need to exceed this amount of your adjusted gross income.
Mortgage forgiveness is not income. If a bank forgives mortgage indebtedness, it is typically income to you. Now qualified principal residence indebtedness that is forgiven may be excluded from income with the reactivation of this tax law.
Disaster area filing extensions. In addition to allowing taxpayers to take penalty-free money out of retirement accounts for 2018 and 2019 in federally declared disaster areas, the new rules create an automatic 60-day filing extension for future declared disaster areas. In the past, the IRS issued these filing extensions on a case-by-case basis.

Other developments to come

Many other changes are in the bill. These impact retirement accounts and numerous other areas of the tax code for future years. For instance, changes include: eliminating the contribution age limit when funding traditional IRAs, moving the required minimum distribution from age 70½ to 72, penalty-free withdrawals from retirement accounts for new births and adoptions plus much more.

Posted in General Information, Taxes, | Leave a Comment

Last-Minute Tax-Savings Ideas

Post Date:

November 25, 2019

Here are five tax saving ideas that can be used by most taxpayers. But act soon, there's not much time left until our tax year comes to an end.

1 Make late-year charitable donations. Consider making donations with appreciated stock you have owned over one year. You can typically receive the higher value donation without paying capital gain taxes. Also, consider non-cash donations of items in good or better condition. But pay attention to your total deductions. With higher standard deductions, you should use your charitable giving to ensure you can maximize your tax savings. This may mean making next year's donations this year!

2 Make contributions to your qualified retirement plans. Remember there is still time to make contributions to traditional IRAs, SEP IRAs and 401(k) accounts to reduce your taxable income this year. While you're at it, take a look at next year's limits and plan to increase your contributions to make next year's tax obligation even better than this years.

3 Take distributions from your retirement accounts. If you are over 70 1/2 years old you will need to take required minimum distributions. The penalty for not taking minimum distributions is 50%. But if you are over 59 years old you should also be taking distributions from tax-deferred accounts in the most tax-efficient way possible. This may mean taking some money out, even it you do not quite need it now.

4 Take any final investment gains and losses. Capital losses can be used to net against your capital gains. You can also take up to $3,000 of capital losses in excess of capital gains each year and use it to lower your ordinary income.

5 Consider making any final gifts to dependents. You may provide gifts of up to $15,000 per year per person. Remember all gifts given (birthday, holiday and cash) count towards this total. This can provide a future source of possible investment income for your kids. While the "kiddie tax" may ultimately come into play, this can be avoided by using the gifts to fund a 529 college savings account.

With the new tax rules in place beginning in 2018, tax planning is more important than ever. You still have time to lower your tax bill, but the clock is ticking.

Published: 11/15/2019

Posted in General Information, | Leave a Comment

Understanding Tax Terms: Health Savings Accounts (HSA)

Post Date:

October 6, 2019

If Benjamin Franklin were alive today, his famous quote “Nothing is certain, except death and taxes.” might include a third item — paying medical expenses. Medical expenses, in one form or another, are unavoidable. Fortunately a health savings account (HSA) is a great way to cut your spending on medical expenses.

A major tax break

If you have a high deductible health insurance plan (deductible of at least $1,350 for an individual or $2,700 for a family), you can add an HSA to pay for medical expenses with pre-tax income. Contributions to an HSA can be made via payroll deduction or directly to the account and deducted as an adjustment on your tax return. This approach effectively reduces your medical bills by as much as 37 percent!

Tips to maximize your HSA

Once your HSA is established, here are three simple ideas you can use to take full advantage of this great tax-savings vehicle:

Maximize your HSA contributions every year.Set an annual goal to contribute the full amount allowable by the IRS into your HSA. Unlike other funds, HSA contributions do not have to be spent each year. Unused balances can remain in the account, giving you a great way to build up a nice emergency fund over the years. The 2019 total contribution limits are $3,500 for single taxpayers and $7,000 for a family (add $1,000 if you are 55 or older). You have until April 15 of the next year to make contributions, but when figuring out how much to contribute, remember to include contributions by your employer in your total.
Pay for all medical expenses with your HSA. Typically you can pay for medical expenses directly from your HSA account via a debit card. If not, track all payments you make for medical expenses and take matching distributions from your HSA. If you don’t have enough in your HSA to cover an expense, make a contribution to your HSA first and then pay the bill. Keep ALL your medical bills and receipts to prove that the distributions are for qualified medical expenses.
Prioritize HSA contributions.HSA contributions are tax-deductible and distributions are tax-free (for qualified medical expenses). Traditional IRA distributions, on the other hand, are taxable.

Knowing you will always have medical expenses, prioritize your HSA contributions to take advantage of its additional tax benefits.

Posted in General Information, | Leave a Comment