Month: April 2025

Making the Most of Cost Segregation and Bonus Depreciation in 2025

If you are a real estate professional purchasing, constructing, renovating, or expanding a property, you may be able to maximize your tax deductions through a cost segregation study. With bonus depreciation set to phase out fully by 2027, you might want to consider conducting a cost segregation study sooner rather than later in order to make the most of current tax-saving opportunities.

What is a cost segregation study?

Cost segregation is a tax strategy that can be combined with bonus depreciation to maximize tax deductions for property owners. The standard depreciation period for real estate is 39 years for commercial properties and 27.5 years for residential rental properties. However, many building components depreciate at a faster rate than the building structure itself, and can therefore be written off sooner. A cost segregation study assesses various components of a building or property and categorizes them based on their depreciation periods. Building components (i.e., carpets, cabinetry, countertops, electrical components, etc.) are separated into groups of 5-year assets, 7-year assets, and 15-year assets. Segregating depreciable building components into 5, 7, and 15-year assets allows property owners to deduct more in the short-term, rather than over the course of 27.5 or 39 years.

What is bonus depreciation?

Bonus depreciation is a tax incentive that allows property owners to take an immediate deduction for investments in depreciable assets, rather than spreading deductions out over the course of several years. The Tax Cuts and Jobs Act (TCJA) of 2017 established a bonus depreciation rate of 100%, meaning 100% of the costs of qualifying property could be written off in the first year of purchase. Since 2023, the bonus depreciation rate has decreased by 20% per year until it is due to completely phase out in 2027. The bonus depreciation rate for 2025 is 40%, and the rate for 2026 will be 20%. Real estate professionals planning to invest in new property may benefit from doing so before bonus depreciation phases out in 2027. Efforts to restore 100% bonus depreciation are currently underway in Congress.

What is the benefit of a cost segregation study?

Accelerating depreciation deductions through a cost segregation study reduces the property owner’s taxable income, thus reducing tax liability and increasing cash flow. Cost segregation studies can be conducted for newly purchased or constructed properties, but can also be applied retroactively for properties previously acquired or constructed. Cost segregation studies are a valuable tax-saving tool on their own, but can lead to even more tax savings when combined with bonus depreciation.

Interested in a cost segregation study?

RBT CPAs’ experts are available to conduct a cost segregation study of your property, identifying accelerated depreciation opportunities and helping you to improve your cash flow. In addition to cost segregation studies, we also assist clients in real estate tax planning, financial reporting, budgeting and forecasting, property management accounting, Low-Income Housing Tax Credits, and other accounting services. Our team of skilled accountants possesses the expertise and industry insights needed to optimize your financial performance. Give us a call today to learn more.

Why You Need to Know the Sales and Use Tax Rules for Your State

As businesses providing services, as well as selling and purchasing tangible goods, veterinary practices must be aware of the rules surrounding sales and use taxes—but did you know that the laws for sales and use taxes vary from state to state? RBT CPAs serves veterinary practices across multiple states including New York, New Jersey, California, Virginia, Wisconsin, and Colorado, to name a few. Not only do sales and use tax regulations vary between states, but the rules also apply differently to different kinds of transactions taking place at veterinary practices. In this article, we want to highlight the importance of knowing the sales and use tax laws as they apply to veterinarians in your state specifically.

What are sales and use taxes?

Sales tax is a tax imposed on the sale of taxable goods and services. Sales taxes are charged to the end consumer, and the responsibility for collecting the sales tax belongs to the seller. Use tax is a tax imposed on the use, storage or consumption of taxable goods or services for which sales tax was not charged at the point of sale. The rate of the use tax is generally equal to the rate of the local/state sales tax. Veterinary practices are responsible for collecting and reporting sales and use taxes correctly, via state-specific sales and use tax returns.

When are sales and use taxes applied?

Depending on the state where you practice, different tax rules apply to various financial transactions. Certain services and goods are considered nontaxable, while others are taxable.

Let’s take a look at some of the regulations in New York State as an example.

Non-Taxable Sales in NYS

Receipts from services related to the health care of an animal, which includes diagnosing, treating, operating, or prescribing for any animal disease, pain, injury, deformity or dental or physical condition, or the subcutaneous insertion of a microchip intended to be used to identify an animal.
Hospitalization of an animal for which no separate boarding charge is made.
Grooming and clipping if performed as a necessary part of the practice of veterinary medicine to diagnose, treat, operate, or prescribe for any animal disease, pain, injury, deformity, or physical condition.
Receipts from the sale of tangible personal property designed for use in some manner relating to domestic animals or poultry are exempt from sales tax when sold by a veterinarian.
Sales of otherwise taxable tangible personal property to certain tax-exempt purchasers such as farmers, government entities, and other organizations (provided the proper exemption certificate has been supplied).

Taxable Sales in NYS

Sales of non-veterinary services such as boarding, grooming, and clipping are subject to sales tax unless provided as a necessary part of a veterinary service.
The receipts from the sale of pet cremation and burial services are nonveterinary services and accordingly are subject to sales tax as a service to tangible personal property, whether performed by a veterinarian or another person.
Purchases by a veterinarian of tangible personal property designed for use in some manner relating to domestic animals or poultry are subject to sales tax. They may not be purchased exempt from sales tax as a purchase for resale.
- e., medical equipment & supplies, office equipment & supplies, boarding equipment & supplies, and various other costs (cleaning supplies, disinfectants, equipment repair, collars and leashes, litter, carriers, clippers, flea spray/ointment, for example)
Purchases by a veterinarian of tangible personal property not designed for use in some manner relating to domestic animals or poultry are subject to sales tax. However, if an item is to be resold, as such, it may be purchased by the veterinarian exempt from sales tax. The veterinarian should give the supplier a properly completed Form ST-120, Resale Certificate.
- e. mugs, calendars, and t-shirts that feature various breeds of cats and dogs
Sales of animals (except guide, hearing, and service dogs when the dog is sold for use by a person to compensate for impairment to the person’s sight, hearing or movement).

Why is it important to know sales and use tax laws?

Knowing and adhering to your state’s sales and use tax laws protects your practice in the case of a sales tax audit. If your practice is audited, you will be liable for any errors.

What steps can you take to ensure compliance?

Familiarize yourself with the sales and use tax laws for veterinarians in your state.
Ensure you are registered as a sales tax vendor before collecting sales tax.
Make sure your practice’s software is set up to charge sales taxes according to your state’s regulations.
Review your vendor bills as they are received. If you purchase a taxable good or service and are not charged sales tax, make sure to report it in your sales and use tax return, as subject to use tax.
File accurate and timely sales and use tax returns.
Keep detailed records of all sales and purchases for the required period(s) specified by your state. Upon request by your state’s Tax Department, records must be made available.

As you can see, the rules surrounding sales and use taxes are very particular—and vary depending on where you practice. Set your practice up for success by knowing and complying with your state’s sales tax laws. For guidance on sales and use tax regulations in your state, please don’t hesitate to reach out to RBT CPAs. Our experts are here to support all of your practice’s accounting, tax, audit, and advisory needs. Give us a call to learn more.

Small Businesses and MWBEs: Access Reduced-Interest Loans through New York’s Linked Deposit Program

Small businesses are at the heart of New York’s economy, culture, and communities. According to Empire State Development, “small businesses make up 98 percent of New York State businesses and employ 40 percent of New York’s private sector workforce.” And yet, small businesses, along with minority and women-owned businesses (MWBEs), often face limited access to capital, inhibiting their growth and ability to take on new projects. In response to these challenges, New York developed the Linked Deposit Program as a way of making low-interest loans available to small businesses and MWBEs, supporting these vital businesses and encouraging economic growth in the state.

What is the Linked Deposit Program?

The Linked Deposit Program (LDP) is an economic development initiative under which eligible businesses can obtain commercial loans at an interest rate 2-3% lower than the prevailing rate. The reduced rate is guaranteed to borrowers for a period of four years. Lending institutions—which include commercial banks, savings banks, savings and loan associations, credit unions, Pursuit Lending, and farm credit institutions—receive a deposit of State funds at a similarly reduced interest rate. The deposit is returned to the State at the end of the four-year term of the program.

What is the purpose of the Linked Deposit Program?

By offering reduced interest rates on commercial loans, this program makes funding more accessible to the state’s small businesses and minority and women-owned businesses, who may otherwise face difficulties obtaining financing. These businesses can use the loans to invest in improved operations, research and development, market expansion, modernized technologies and equipment, renovations, facility expansions, and more.

Who is eligible for the program?

Manufacturing firms with 500 or fewer full-time, NYS-based employees.
Service businesses with 100 or fewer full-time, NYS-based employees. The business must be independently owned and operated and not dominant in its field.

What are the loan limits?

An eligible business can have outstanding LDP loans totaling up to $6 million. There is no limit on the number of loans.
The single deposit limit is $4 million. There is no minimum deposit.
Total lifetime assistance cannot exceed $6 million, including renewals and prior deposits.

How can businesses apply for a Linked Deposit loan?

Eligible businesses can apply for the program at a participating lender (a list of participating lenders can be found here) or the New York Business Development Corporation. The lender then sends the application to Empire State Development for approval. The application can be found here.

How long is the approval process?

Once submitted, an LDP application will be approved or rejected within 28 days, but the average approval time is five business days. Incomplete applications result in longer processing times. Delays are most commonly caused by the following application errors: incomplete information, no statement describing how the project will improve the business’s competitiveness, an insufficient “impede” statement (statement describing how the project would be impeded without LDP assistance), or a missing NYS-45 form.

Want to learn more?

For a complete list of eligible applicants and projects, see the Linked Deposit Program Frequently Asked Questions. The FAQ page also specifies which firms qualify for 2% interest rate subsidies and which ones qualify for 3% subsidies, along with other helpful information. For additional insights and guidance, please don’t hesitate to reach out to our experts at RBT CPAs. RBT CPAs has been providing accounting, tax, audit, and advisory services to businesses in the Hudson Valley and beyond for over 55 years. Call us today to find out how we can be Remarkably Better Together.

NSPIRE Standards: An Overview and How to Prepare

By October 1, 2025, HUD-assisted properties must implement the NSPIRE standards, a new set of standards for physical inspections of HUD properties. HUD property owners and landlords should familiarize themselves with the new standards and implement the required changes to inspection procedures prior to the October 1 compliance date.

NSPIRE Overview

The NSPIRE Standards, replacing the Uniform Physical Condition Standards (UPCS) and the Housing Quality Standards (HQS), provide a new inspection model for HUD-assisted properties. NSPIRE, standing for the National Standards for the Physical Inspection of Real Estate, aims to improve the quality of HUD housing by focusing on the health, safety, and functionality of HUD properties. To allow HUD programs sufficient time to prepare for NSPIRE implementation, the compliance date for many programs was extended from October 1, 2023 to October 1, 2025. Properties wishing to implement NSPIRE before the compliance date are encouraged to do so, but must notify HUD of their planned transition date.

NSPIRE defines three different inspectable areas of HUD properties: “unit,” “inside,” and “outside.” The “unit” refers to the interior components of a building such as bathrooms, kitchens, carbon monoxide and smoke detectors, ceilings, floors, HVAC units, and lighting. “Inside” refers to common areas within the interior of the building such as basements, community rooms, utility rooms, laundry rooms, halls, stairs, offices, and shared kitchens. Also included under the “inside” category are building systems providing electricity, water, emergency power, etc. “Outside” refers to all building systems and components located outside of the building such as grounds, fences, mailboxes, lighting, parking lots, play areas, roads, walkways, storm drainage, balconies, fire escapes, and roofs. For a complete list of inspectable components, see page 1 of the NSPIRE Standards.

The standards use the terms “life-threatening,” “severe,” “moderate,” and “low” to describe the risk level of deficiencies identified during inspection. NSPIRE specifies the deficiency criteria, health and safety determination, rationale, and correction timeframes for each inspectable component. Life-threatening deficiencies must be addressed within 24 hours, while all other deficiencies must be corrected within 30 days (or a reasonable longer period determined by the PHA).

NSPIRE introduces several new protocols and requirements for property inspections. These include: new requirements for smoke and carbon monoxide alarms, new inspection processes and repair timeframes for infestations, new repair guidelines and timeframes for handrails and guardrails, and new processes and equipment for detecting mold-like substances.

How to Prepare for NSPIRE

According to HUD’s website and the NSPIRE Toolkit Cheat Sheet, landlords and owners of HUD properties can prepare for the upcoming compliance date in the following ways:

Carefully review the NSPIRE Standards (HUD provides this guide for reading the standards).
Refer to HUD’s notice on NSPIRE administrative procedures for details on inspection timeframes, preparation, and protocols.
Review the “Preparing for an NSPIRE Inspection” guide for landlords.
Train staff on new protocols and requirements.
Ensure that property profiles and contact information are correct (more details can be found on page 7 of HUD’s notice under “Property Verification and Document Collection”).
Perform regular preventative maintenance to identify and correct potential issues and hazards.
Consider resident feedback and respond promptly to resident concerns.
Utilize HUD’s NSPIRE Toolkit for additional resources, guidance, and training videos.

While you’re busy preparing for the upcoming NSPIRE compliance date, please know that RBT CPAs is here to support all of your accounting, tax, audit, and advisory needs. Reach out to us today and find out how we can be Remarkably Better Together.

Are You Making the Most of Direct-to-Consumer Opportunities?

In today’s world, nearly anything can be delivered directly to our front doorsteps. With a few clicks of a button, groceries, household items, furniture, prescriptions, and electronics are shipped straight to customers via e-commerce platforms. Beginning in 2020, COVID-19 lockdowns gave rise to huge surges in online ordering and delivery services, as people searched for ways to stock their homes without needing to travel beyond their front doors. As consumer demand has increased, alcoholic beverage companies have also jumped on the direct-to-consumer opportunity. In 2024—thanks largely to the advocacy of organizations like the NYS Distillers Guild—legislation allowing New York’s spirits, mead, and cider manufacturers to ship products directly to customers was passed, significantly expanding opportunities and markets for the state’s craft beverage producers.

Let’s explore some of the details of direct-to-consumer (DTC) shipping for alcoholic beverage producers in New York, as well as some of the regulations producers must follow when engaging in DTC sales.

Background of DTC Shipping in New York

Though New York wineries have been allowed to partake in DTC sales for several years now, the opportunity was not available to other alcoholic beverage manufacturers prior to COVID-19. As a way of supporting craft beverage producers during the pandemic lockdowns, New York temporarily expanded direct-to-consumer shipping privileges to the cider, mead, and spirits industries. In November 2024, New York enacted legislation permanently allowing these producers to ship products to consumers in New York State. As of November, New York manufacturers can ship “up to 36 cases (no more than 9 liters per case) of wine, distilled spirits, cider, mead, and braggot per year directly to a New York resident for personal use” (New York State Liquor Authority).

Benefits of the DTC Model

Since the pandemic, direct-to-consumer models have continued to grow in popularity as more and more people seek convenience through online ordering. Many people today would rather order alcohol directly to their doors than make a stop at the liquor store. As such, the demand for DTC alcohol has increased significantly. This creates the potential for growth for many of New York’s alcoholic beverage manufacturers. One of the main benefits of direct-to-consumer (DTC) shipping is the ability to bypass retail distribution models. By skipping the middleman and selling directly to customers online, producers can reach a wider range of audiences and expand profits through new revenue streams.

Another potential benefit of the DTC model is the opportunity to form deeper connections with customers and create personalized customer experiences. E-commerce platforms allow for increased customer engagement and also enable sellers to collect valuable data. This data can then be used to create customized shopping experiences for buyers, tailored to their individual needs and preferences. Customer data can also offer insights into consumer trends and behaviors, information that can help guide business decisions.

Regulations and Requirements

It’s important that manufacturers of alcoholic beverages are aware of the legal requirements surrounding direct-to-consumer shipping in New York State. For a complete list of requirements, see the New York State Liquor Authority website. Some of the requirements for manufacturers shipping alcoholic beverages in New York State include:

Manufacturers must require buyers to provide proof they are at least 21, and that the alcohol is for personal use (not resale).
Shipping containers used to deliver alcohol must be conspicuously labeled using specific text provided by the NYS Liquor Authority (found here).
Manufacturers must maintain records of all DTC shipments for a minimum of three years and produce them upon request of the Liquor Authority or the NYS Department of Taxation and Finance.
Manufacturers must permit the SLA or DTF to perform audits upon request.

New York manufacturers with the following licenses are permitted to engage in direct-to-consumer sales without needing to apply for a separate license or permit: cider producers, farm cideries, micro-distilleries, micro-rectifiers, farm distilleries, fruit brandy producers, mead producers, farm meaderies, farm wineries, micro-farm wineries, and wineries.

How We Can Help

The direct-to-consumer model presents significant opportunities for growth for New York’s craft beverage industry. While you take advantage of the DTC opportunities available in our state, please know that RBT CPAs is here to support all of your accounting, tax, audit, and advisory needs. Give us a call today to find out how we can be Remarkably Better Together.

Implementing GASB 101’s Guidance on Compensated Absences: What School Districts Need to Know

As government entities, school districts are required to implement GASB 101’s updated guidelines for the treatment of compensated absences for employees of state and local governments.

What is GASB 101?

The Governmental Accounting Standards Board (GASB) Statement No. 101 (GASB 101) updates the guidelines for state and local governments regarding paid employee leave, or “compensated absences.” Replacing GASB Statement No. 16, GASB 101 modifies the procedures for the recognition and measurement of compensated absences. The requirements of GASB 101 are effective for fiscal years beginning after December 15, 2023. All governmental entities with fiscal year-ends of December 31, 2024, or later must implement the new guidance.

A compensated absence is leave for which employees receive compensation in the form of cash payments for time off, cash payments for unused leave if terminated, or a non-cash settlement. Examples of compensated absences include paid time off, sick leave, holidays, parental leave, military leave, jury duty, bereavement, sabbatical, and floating holidays.

When Are Liabilities Recognized?

Liabilities for compensated absences must be recognized in the following cases: for unused leave and leave that has been used but not yet compensated.

Unused leave (unused leave must meet the following criteria to be recognized as a liability):
1. The employee has performed the services required to earn the leave
2. The leave accumulates (carries forward into future pay periods)
3. The leave is more likely than not to be used for time off, or otherwise paid in cash or settled through non-cash means
Leave that has been used but not yet compensated (that is, paid in cash or settled through non-cash means)

As is the case under GASB 16, salary-related payments—including the employer’s share of payroll-related taxes (FICA, Medicare), defined pension contributions, and other post-employment benefit plans—should also be part of the compensated absence liability calculation.

Note: Liabilities for certain types of compensated absences that are sporadic in nature, such as parental leave, military leave, and jury duty leave, should not be recognized until the leave commences.

How is Liability Measured?

For unused leave: To measure liability for unused leave, use the employee’s pay rate as of the date of the financial statements, unless a compensated absence arrangement calls for a different pay rate at the time of payment (for example, sick pay based on 50% of the employee’s pay rate).
For leave that has been used but not yet paid or settled: To measure liability for leave that has been used but not yet paid or settled, use the amount of the cash payment or non-cash settlement to be made.

What Has Changed from Previous Guidance?

The most significant change brought about by GASB 101 is the application of the “more likely than not” condition when calculating the unused leave liability. This lower threshold will likely result in a higher compensated absence liability than under the previous “probable” threshold.
Under the new guidance, liability for sick leave should now be calculated the same way as all other compensated absences.
GASB 101 updates the previous requirement (established by GASB 16) to disclose gross increases and decreases in liability for compensated absences. School districts can now choose to disclose only the net change in the liability, but they must identify this figure as the net change.
In addition, under the new statement, school districts are no longer required to disclose which funds have been used to liquidate the liability for compensated absences.

What Actions Do School Districts Need to Take?

School districts should review their current compensated absences policy and make adjustments in line with GASB Statement No. 101.
School districts should also review employee contracts and assess whether a change needs to be made to the compensated absence calculation.
School districts will need to assess leave usage by asking key questions (the answers to these questions will depend largely on employee contracts):
1. What is the likelihood that the leave will be used?
2. What is the likelihood that the leave will be paid out upon termination, death, or retirement?
3. At what rate will the leave be used or paid out?

Additional Resources

For more details on GASB 101, visit the GASB pronouncements page. For advice or assistance with your GASB 101 implementation, please don’t hesitate to reach out to us at RBT CPAs. Our experts are happy to answer your questions and help you navigate the latest GASB requirements.

New York’s Expanded Efforts to Strengthen Local Government Cybersecurity

Over the last several years, New York State has significantly expanded cybersecurity measures in response to the ever-growing threat of cyberattacks against local governments. Cyberattacks have led to data breaches, ransomware threats, crippling disruptions, and major financial losses for targeted government entities. New York State Comptroller Thomas DiNapoli stated the following in 2023: “Cyberattacks are a serious threat to New York’s critical infrastructure, economy and our everyday lives. Data breaches at companies and institutions that collect large amounts of personal information expose New Yorkers to potential invasions of privacy, identity theft and fraud. Also troubling is the rise in ransomware attacks that can shut down systems we rely on for water, power, health care and other necessities. Safeguarding our state from cyberattacks requires sustained investment, coordination, and vigilance.”

Cyberattacks continue to threaten New York’s infrastructure in 2025, leading the State to implement additional protective measures. Governor Hochul’s 2025 State of the State address, delivered in January, laid out expanded initiatives to bolster cybersecurity efforts in local government entities. Among these initiatives are the mandated reporting of cyber incidents, mandatory cybersecurity awareness training for local government employees, and additional investments in the Office of Information Technology Services to improve cyber defense tools.

Mandated Reporting of Cyber Incidents

In the State of the State address, Governor Hochul announced plans for legislation requiring municipalities to report all cybersecurity incidents and ransom payment demands to the division of homeland security and emergency services. The details and status of the proposed legislation can be found here: Assembly Bill A6769. Local governments are not currently required to report such incidents to the State, leading to a gap in cybersecurity defenses. The new reporting requirements would allow the State to build a comprehensive picture of cyber threats, enabling more effective planning and responses to such risks.

Mandatory Cybersecurity Training for Government Employees

Currently, cybersecurity training is only available to executive branch employees in New York State. The governor has proposed extending mandatory cybersecurity awareness training to local governments as well. This annual training would be provided online, free of cost, to ensure equal access to local government employees across the state.

Investments in the Office of Information Technology Services

Additional investments in New York’s Office of Information Technology Services (ITS) have also been proposed as a means to continue strengthening state and local government networks against cybercrimes. The Office of Information Technology Services works to improve the resilience of government networks using advanced cyber tools.

Importance of Cybersecurity for Government Entities

Local governments are responsible for safeguarding a great deal of confidential information and critical infrastructure. As such, protecting government systems from cyber threats is of utmost importance. With cyber-attacks becoming more frequent and more sophisticated every day, municipalities need to prioritize cybersecurity and employee awareness. The proposed measures discussed above, if passed, will assist local governments in their efforts against cyber threats.

For now, local governments should monitor the status of the proposed legislation and training requirements. If passed, these new mandates will require municipalities to implement updated reporting mechanisms and training procedures. Municipalities can also visit the Cybersecurity & Infrastructure Security Agency (CISA) and the NYS Office of Information Technology Services Local Government Cybersecurity webpage for access to online training, information resources, cybersecurity awareness, and cybersecurity toolkits for local governments.

While you focus on strengthening cybersecurity in your municipality, know that RBT CPAs is available to support your accounting, audit, advisory, and tax needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 55 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

Taxation of Personal Use of Company Vehicles: What You Need to Know

Do you or your employees use union vehicles for reasons other than work? If yes, you need to be aware of the taxation rules for the personal use of company cars.

What is “personal use of a company vehicle/car”?

Personal use of a company car (PUCC) encompasses any use of a company-owned or company-leased vehicle for purposes not business-related. Examples of personal use include commuting to and from work, use on weekends or during time off, running personal errands, and use by someone other than an employee (i.e., an employee’s spouse or relative).

How do you record personal usage?

It’s important for employees to track both their business and personal use of company vehicles. Without proof that the vehicle was used for business purposes, all use of a company vehicle will be considered personal use by the IRS. Employees should keep detailed records of all business and personal use of the vehicle, including miles traveled, locations, dates, times, and the purpose of the travel.

Is personal use of a company vehicle taxed?

Yes. Personal use of a company car is considered a fringe benefit, meaning it is a form of non-cash compensation provided in addition to a person’s salary. As a fringe benefit, this value is included in the employee’s income and taxed accordingly.

How is the personal use of a company vehicle measured?

There are several methods of measuring personal use of a company car. The rules for calculating the value of fringe benefits are explained in IRS Publication 15-B.

General Valuation Method: This is the most common method for measuring the value of fringe benefits. Under this method, the value of the fringe benefit is equal to the Fair Market Value of the vehicle. The Fair Market Value (FMV) is the amount an employee would need to pay a third party to buy or lease the vehicle under the current market conditions in a given geographic location.
Cents-Per-Mile Method: The cents-per-mile rule uses the standard mileage reimbursement rate multiplied by an employee’s personal mileage to determine the value of PUCC. The standard mileage reimbursement rate for 2025 is 70 cents per mile. This method can be used if the vehicle is regularly used for business purposes or if the vehicle meets the mileage test (the vehicle is driven at least 10,000 miles during the year, primarily by employees).
Commuting-Valuation Method: This method can be used when employees are required to commute to work using a company vehicle and the personal use of the vehicle is limited to commuting and de minimis personal use (i.e., stopping for an errand on the way to or from work). The value of the PUCC is determined by multiplying each one-way commute by $1.50.
Lease Value Method: This method determines the PUCC value by multiplying the annual lease value of the vehicle by the percentage of personal miles (personal miles divided by total miles driven). The annual lease value is determined using the IRS’s Annual Lease Value Table.

Summary

If your employees use union-owned vehicles for personal use, it’s important to know that personal use of a company vehicle is a taxable benefit, and that this usage must be reported on employee W-2s. It is crucial for employees to keep detailed records of all vehicle usage for both personal and business purposes. For more information about the taxation of personal use of company cars and for assistance with reporting, please don’t hesitate to call RBT CPAs. You can count on RBT CPAs to support all of your accounting, audit, tax, and advisory needs. Give us a call today and find out how we can be Remarkably Better Together.

The Importance of Revenue Forecasting for Restaurants

Our last article discussed the rising costs facing restaurants due to factors such as increased tariffs, higher minimum wages, and the bird flu. During times of economic uncertainty, financial planning becomes even more critical to the survival of small and medium-sized businesses. This is especially true in the restaurant industry, where profit margins are already small. Revenue forecasting is a key element of financial planning, but can be difficult for restaurants due to the multitude of factors that affect consumer behavior and revenue stream. Even so, revenue forecasts are crucial tools that allow restaurants to assess and predict financial performance, optimize operations, and make informed business decisions.

Revenue forecasting is the process of estimating a business’s future revenue over a certain period using historical data, trends, economic conditions, and other factors as a basis for analysis. The first step in revenue forecasting typically looks at a restaurant’s historical data, which can be gathered through Point of Sale (POS) systems, inventory management systems, reservation systems, and other tools. The data obtained from these sources provides valuable insight into sales numbers, best-selling menu items, inventory usage, dining patterns, and more. Historical data should not be relied upon as the only source of information for predicting future revenue, as many other factors play a role. However, this data provides a basis upon which restaurant management can assess past sales activity and predict future sales.

Another component of revenue forecasting involves identifying trends, consumer behaviors, and external influences on revenue. Restaurant owners and managers should consider the impact of seasons, holidays, and weather on consumer behavior and sales. Examining these influences can help guide the revenue forecasting process as well as key operational decisions.

Also important to consider when revenue forecasting is economic climate. A range of variables—some predictable and some not—impact the economic conditions under which restaurants operate. Inflation, government policies (i.e., tariffs), natural events (i.e., bird flu, droughts, vegetable blights), and other factors can affect ingredient availability, prices, consumer sentiment, and revenue significantly.

Despite the challenges restaurants face in forecasting revenue, these forecasts remain critical to the financial planning process for several reasons. Revenue forecasts provide valuable information and help restaurants to:

Make key decisions: Revenue forecasts guide management in making important financial and operational decisions related to budgeting, ordering, renovations and improvements, staffing, and more.
Manage inventory: By studying historical data and predicting future sales, restaurants can more accurately estimate inventory needs and thus prevent wasted inventory or ingredient shortages.
Meet staffing needs: Revenue forecasts help restaurants determine which periods will be busiest, and therefore how many staff members are needed at different times to meet consumer demand. Management can then hire and schedule staff strategically to ensure the business runs smoothly without overstaffing.
Increase profitability: Optimizing inventory, staffing, and operations helps to streamline processes and increase profitability.
Improve investability: Investors are more likely to have confidence in restaurants with data-supported revenue forecasts.
Enhance customer experience: Adequate staffing, organized processes, and sufficient inventory all result in an improved experience for restaurant guests. Positive customer experiences build a restaurant’s reputation and drive growth.

Revenue forecasts are important tools that allow restaurants to gain insight into their financial performance and prepare for the future. These forecasts enable management to make informed business decisions and optimize operations using data-driven strategies. RBT CPAs is here to guide you through the process of revenue forecasting and financial planning for your restaurant. RBT’s experts are intimately familiar with the financial challenges and opportunities facing the restaurant industry. We are prepared to help you navigate the complexities of financial planning in the face of an ever-changing economic landscape. For more information on our services, visit our website or call us today.