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

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.

Is There Someone Missing from Your Team?

Is There Someone Missing from Your Team?

As a business owner, you wear a lot of hats from CEO and CFO to HR expert, technology guru, and more – and that’s in addition to your brewery-distillery-distributor-focused responsibilities. Over time, especially as your business grows, you may find yourself wanting or needing deeper expertise in a particular area. While a full-time staff member may not be warranted, you may want to explore opportunities to outsource work, engage professionals for a defined number of hours a month, or simply have resources lined up for you to access as needed or on demand.

For example, have you been wondering whether you are effectively using financial data to identify opportunities or recognize red flags for your business? Do you think about possibly adopting a retirement or other benefit plan to strengthen your employee value proposition but don’t know where to start? Do you know what options are available for your business over the long-term and how this intersects with your personal financial legacy?

Here’s how some experts can support you and your business on a part-time, full-time, outsourced, or contract basis…

Accountant: Prepares and examines financial records, including accurate, complete, and compliant financial statements. Helps you understand, meet, and navigate tax obligations and liabilities while maximizing tax opportunities. Completes tax filings. Provides assistance with banking, finance, financial technology, and more.

Auditor: Reviews and verifies the accuracy of financial records and accounting methods to ensure tax compliance and protect against financial crimes (i.e., embezzlement and fraud). Recommends best-in-class practices, processes, and systems to protect the financial integrity of the business, benefit plans, and more.

Benefits administrator: Designs benefit plans (i.e., retirement, health, life insurance, disability, and more); provides administration, actuarial, and recordkeeping services; performs compliance services; and educates employees.

Bookkeeper: Records and maintains all financial transactions for your business; manages payroll; processes invoices; produces financial reports; automates transactions; and organizes data.

Chief Financial Officer: Manages financial operations and serves as a senior business advisor. Develops, monitors, and updates financial plans and goals. Advises on taxation, investing, and cash flow management. Analyzes strengths, weaknesses, and course corrections. Identifies opportunities and strategic financial moves based on your industry, geographic location, competitive environment, and national trends, and a deep understanding of economics, finance, business, and compliance.

Estate planner: A financial expert who creates a plan defining your personal wishes and wealth legacy. Ensures your wishes are documented and legally protected while helping you employ financial vehicles and strategies (i.e., trusts and gifting) so more of your wealth goes to the people and causes you care about rather than taxes.

Human resources expert: Someone with expansive knowledge of the people side of running a business, so you have the processes, plans, and infrastructure to attract and retain the right talent to promote business success. Includes everything involved with recruiting, hiring, and onboarding; benefits and compensation; legal compliance; engagement; training and development; performance management; succession planning; diversity, equity, and inclusion; retention; and more.

Valuation expert: Provides the information you need to understand your business’s worth, potential, and options, so you can make informed decisions to help you meet future goals. Conducts professional business valuations, intangible asset appraisals, and financial consulting to define, enhance, and protect business value. Includes business valuation, forensic accounting, equipment appraisal, appraisal review, economic damages, and business planning.

If you are interested in learning how any, some, or all of these experts can help your business without adding to the headcount, give RBT CPAs a call. Our team of world-class professionals and those at our affiliates – Advent Valuation Advisors; Spectrum Pension & Compensation; and Visions Human Resource Services – can help you assess your needs, explore options, and design an engagement that fits your business and budget, proving we can be Remarkably Better Together.

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

Does Your Construction Business Need to Register to Pay Taxes in Another State?

Does Your Construction Business Need to Register to Pay Taxes in Another State?

Understanding and complying with nexus laws is critical for construction companies operating across state lines and within certain municipalities.

Nexus determines where a company has state or local tax obligations, which can be triggered by various factors. Once triggered, a company must register its business, collect sales tax, and file tax returns.

One of the most common triggers of nexus is economic activity. In general, economic nexus can be triggered when a company’s sales and/or number of transactions exceed a particular threshold. Thresholds vary by state and are subject to change. For example, in New Jersey economic nexus is triggered when you reach $100,000 in sales or have 200 or more separate transactions. In Florida, it’s triggered after $100,000 in sales.

There are additional triggers like physical nexus, which may occur when a business has people (i.e., employees, subcontractors, agents, remote workers, and more) or property (i.e., a storage warehouse) in another state.

A company must obtain a business registration in any state where it has nexus, collect taxes on sales, and regularly file sales tax returns. Registration deadlines vary by state. For example, in New York, it’s 30 days after meeting the threshold. For Florida, it’s the first day of the next calendar year.

Timely compliance is crucial. If a company doesn’t register as a taxpayer by a state’s deadline after nexus is triggered, it can face back taxes for the period it operated in the state without remitting sales tax. The company might also be liable for penalties and interest. In some cases, the state could hold the company’s owners or officers personally responsible for unpaid taxes.

Here are a few of the more common questions we hear about nexus and their answers:

How do I know if my construction business triggered nexus in another state or municipality?

Laws differ by states and even certain local municipalities, so it’s important to review local laws or consult a tax professional. Be aware that activities like subcontracting, storing materials, or temporary work assignments might trigger nexus. Also, different types of taxes (sales, income, franchise) have different nexus standards.

What do I need to do and by when if my construction business triggers nexus in another state or municipality?

You’re required to obtain a business registration, collect appropriate taxes from customers, and regularly file tax returns in that state or municipality. Deadlines for registration vary.

Does nexus impact payroll taxes for construction contractors and subcontractors?

If contractors or subcontractors perform work or have employees in a state where they establish nexus, they may be required to withhold and pay payroll taxes in that state.

Do I need to account for nexus in my bidding process?

If you are bidding on an out-of-state project, you should understand how nexus may impact your budget and bottom line. You want to avoid getting into a situation where not accounting for local sales taxes results in unexpected liabilities that reduce profitability.

The preceding information provides highlights – the many ways your business may trigger nexus and the resulting obligations are complex and varied. RBT CPAs tax professionals are available to help you understand and navigate nexus, so instead of worrying about tax obligations and repercussions, you can focus on managing your business and driving success. To learn more, contact RBT CPAs today.

 

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

Several Ways to Operate Your Brewery and Distillery More Sustainably

Several Ways to Operate Your Brewery and Distillery More Sustainably

Sustainability is a way of operating to minimize negative impacts on the environment and use resources more effectively. Not only can it be a brand enhancer, as many potential customers feel better about doing business with companies that operate sustainably, but it can also save you money by eliminating waste and effectively using resources.

Every stage of brewing presents opportunities to operate more sustainably and, possibly, save money at the same time. From the water, energy, and other resources used for each batch of brew to sourcing, packaging, and transporting your product – not to mention all of the resources used when running a facility – there are numerous ways to reduce pollution and waste, promote energy efficiency, and lower greenhouse gas emissions.

An easy place to start is with your facility. Explore using LED lighting. Install energy-efficient windows and doors. Motion control lights, touchless taps in sinks, low-flow toilets, autoflush sensors, and hand dryers in bathrooms can help save energy and water. Even when buying paint, furniture, or cleaning products, there are eco-friendly options available. When it comes to the power you need for your entire operation, you may want to consider using renewable energy like solar or wind.

As for the actual brewing process, look for sustainable options at each stage. Starting with sourcing, if possible, grow some of your own ingredients (eliminating shipping and packaging costs); opt for organic; and source locally to improve freshness and reduce shipping and storage costs.

Turning to production, there are numerous to minimize waste and recycle. Reduce water and electricity consumption with retrofits or upgrades to new energy-efficient, automated equipment. Inspect equipment regularly for leaks and maintenance needs. Explore closed-loop water and cooling systems; heat exchangers to capture and reuse heat; and more.

When it comes to packaging, explore using recyclable or biodegradable materials. Not only is it environmentally friendly, but it also puts your business in a better position should legislation on reducing plastic and other materials in packaging come to fruition.

As for transportation, you may be able to reduce associated fees and carbon emissions by sourcing locally. If you have business vehicles, there are tax incentives available to go electric.

Finally, sustainability efforts offer ways to strengthen engagement with your employees and the surrounding community. Involve employees in your efforts by asking for their ideas and suggestions. Show you care about their development by paying for them to get sustainability certifications. Engage with the community by supporting and donating to environmental causes. Be a good neighbor and partner with local farms that can use wastewater and spent grains to feed livestock or for composting (you may even be able to charge a small fee).

Government resources are available to support your sustainability efforts. The U.S. Environmental Protection Agency administers the Energy Star program.  NYSERDA, the New York Energy Research and Development Authority, offers services and resources to help you identify energy-saving opportunities, map out a strategy, and even find equipment. Both can also help direct you to related tax incentives.

For example, under Section 179, you can write off the purchase price of machinery, software, and vehicles. Plus there’s a 60% bonus depreciation that allows you to deduct qualifying costs for equipment placed into service in 2024. If you do research and development related to water recycling and waste management, you may qualify for an R&D tax credit. New York sales tax exemptions may also be available on certain purchases.

While you focus on the many aspects of running a successful brewery and distillery business, you can count on RBT CPAs to be your trusted advisor for accounting, audits, taxes, and more. Learn how we can be Remarkably Better Together by contacting us today.

 

RBT CPAs never offshore work outside of the U.S., so you always know who is handling your financial information.

Tips for Managing Insurance Costs for New York Construction Businesses

Tips for Managing Insurance Costs for New York Construction Businesses

Like so many costs of doing business, insurance premiums have surged in recent years. Storms, inflation, lawsuits, and astronomical awards, plus state laws (a.k.a. the Scaffold Law) are all making New York the most expensive insurance market in the country, especially when it comes to construction. While you can’t control many of the factors driving costs, there are actions you can take to put your business in a better position to keep cost increases under control.

First, make safety part of your business and culture.

Not only can a formal, documented, and comprehensive safety program and a stellar safety record help you manage workers’ compensation premiums (which can help offset larger increases to commercial insurance), but they can also help you attract and retain talent that shares your safety-focus, and serve as additional selling points to potential clients.

If it’s an option, hire or engage a risk/safety manager to develop and execute a comprehensive safety program that encompasses everything from recruiting and hiring employees and vetting subcontractors (plus checking certificates of insurance and risk transfer agreements) to addressing safety in pre-construction planning, equipment maintenance, and work site protocols. A strategy may explore how technologies like drones, robotics, and wearables may mitigate loss while improving your risk profile.

Best practices to consider include creating worksite safety committees, where managers and employees meet regularly to review safety goals and performance and reinforce a safety-first culture; developing and communicating protocols for recognizing, reporting, and resolving potential safety issues immediately; starting each work shift by reviewing a key safety concept with employees; and regularly inspecting and maintaining equipment to ensure safe operation.

OSHA offers a number of resources that can support construction safety efforts, training, and communications, including the Focus Four (key safety areas for construction businesses to focus on); trenching and excavation; heat illness prevention; personal protective equipment; and more.

Second, evaluate your coverage needs and give yourself adequate time to negotiate terms and rates.

Start the process at least 90 days before a renewal. Gather data about any changes to your business (i.e., equipment acquired or sold, or a change in headcount) that may impact coverage. Also, bring documented proof of your safety program, activities, and results – your insurer may offer discounts when you demonstrate a commitment to safety and risk management. Prepare to speak to your loss history, especially if it is favorable.

If you have a longstanding relationship with an insurer that understands your business, commitment to safety, and track record, collaborate on opportunities and options for managing cost increases.

If you’re interested in shopping around, explore programs that may be available through professional affiliations, before moving ahead with any new market entrants, research rankings, customer experiences, customer service, and ability to cover losses before moving ahead. In all cases, make sure coverage will comply with contract commitments.

As you move ahead, explore whether an insurer offers discounts for paying in full upfront versus monthly, or for bundling policies. While it’s tempting to offset insurance premium increases with higher deductibles, lower coverage, and/or more exclusions, balance these considerations with what increased risks and exposure can mean to your business. Consider the pros and cons of creating a contingency fund to keep in reserve for covering higher deductibles rather than paying higher premiums.

While you focus on protecting your business and people with insurance and a safe work environment,  you can count on RBT CPAs to focus on your accounting, advisory, audit, and tax needs. Give us a call or send an email and let us know what you need. We would appreciate having the opportunity to show you how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Summer Season 2024: 12 Ways to Boost Your Brewery Business

Summer Season 2024: 12 Ways to Boost Your Brewery Business

Nothing screams “summer” like a cold brew or cocktail and…

Finish that sentence with the right marketing plan, events, and special touches to make the most of the 2024 summer season.

Here are some ideas to help get you started:

  • If you’re bringing on the summer brew – typically a lighter 4% to 5% AC for easy drinking, pale ales, and fruit beers – have a naming contest, tasting, and launch party.
  • Create an outdoor seating area. Take advantage of the local view or landscape or build a space with a summer theme where people want to come, relax, and have fun.
  • Add music and entertainment. Feature local bands or create a summer playlist. Get guests moving with line dancing lessons. Have a weekly summer movie night – think Jaws, Caddyshack, and Dirty Dancing. Invite the local ice cream or hot dog truck to stop by periodically.
  • Don’t forget the games – trivia, cornhole, volleyball, and more.
  • Summer-up your menu. Get creative with drinks and their names. Have fun with charcuterie boards and grazing tables. Incorporate local produce into your menu. Serve drinks in small coolers and snacks in mini picnic baskets.
  • Update your décor to make it feel like summer. Find what works with your brand. Explore flowers, scented candles, lighting, fun seating, misting fans, tabletop firepits with smores kits, and anything Hawaiian.
  • Support local businesses. Incorporate local business products into your menu and décor. If you’re hosting contests, offer prizes from local businesses to build goodwill and a sense of community.
  • Hold a fundraiser. Pick a local cause or, even better, a couple of different ones.
  • Invite the dog! Whether you make it an everyday thing or a special event, allow paying customers to bring their furry friend and treat them to something on a dog-friendly menu item.
  • Create a club, with free tastings, a birthday drink, and even a personalized glass that can be used for discounted drinks.
  • Host a tour, pub crawl, brew festival, or scavenger hunt. Join together with other local brewers and restaurants to create an “experience” or “event.”
  • Put your feelers out for local farmers markets, community tag sales, county fairs, and other summer events that may need sponsors and vendors.

As you focus on making the most of the upcoming busy season, remember, RBT CPAs can help lighten your load by handling all of your accounting, audit, advising, and tax needs. Find out how we can be Remarkably Better Together. Give us a call or drop us a line.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial information.

Does My Small Business Need to File Beneficial Ownership Information?

Does My Small Business Need to File Beneficial Ownership Information?

Under the Corporate Transparency Act (CTA), certain businesses formed or operating in the U.S. must report information about their beneficial owners – the people who own or control them – to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This applies to most companies, including small businesses.

While it sounds like the stuff spy movies are made of, FinCEN Beneficial Ownership Information (BOI) reporting is real and is something businesses need to take seriously.

The U.S. adopted the law to protect against money laundering and related crimes while promoting national security. The willful failure to comply or the willful attempt to provide fraudulent information can result in fines of up to $591 each day a violation continues and criminal prosecution (imprisonment for up to 2 years and/or up to a $10,000 fine).

Earlier this year, the law was challenged in the Northern District of Alabama. The court ruled it exceeds Congress’ power and can’t be enforced against the plaintiffs (Isaac Winkles and companies for which he is the beneficial owner; the National Small Business Association, and its members. This is currently under appeal. For now, any covered entity other than those named in the suit are required to comply.

So, what is beneficial ownership information (BOI)? BOI is information about individuals who directly or indirectly own or control a company.

What companies are required to report BOI? According to the U.S. Chamber of Commerce, a reporting company is any privately held company – domestic or foreign – registered to conduct business in the U.S.

There is a list of 23 entity types that are exempt from reporting, including nonprofits, government authorities, publicly traded companies, banks/credit unions, and such. If your business is not considered exempt and it is a domestic or foreign reporting company, filing requirements and deadlines apply.

A business created or registered before January 1, 2024, has until January 1, 2025, to file. Otherwise, the business must file within 90 calendar days of receipt of the company’s creation or registration if it’s before January 1, 2025. Thereafter, the filing must occur within 30 days of creation/registration.

Full details and resources are available on the FinCEN website.  Go there to file BOI information, see Frequently Asked Questions, and access resources for small businesses including a Compliance Guide.

As you take care of the many aspects of running a business – including BOI filings (if required), please remember RBT CPAs is available to meet all of your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

 

Note: RBT CPAs is not a law firm and the information provided herein should not be taken as advice. Any questions should be directed to your legal counsel.

What’s Brewing with AI?

What’s Brewing with AI?

Artificial Intelligence – a.k.a. AI – has taken the world by storm, especially with certain apps making their way to the mainstream in the last year. World leaders are trying to figure out how to govern it. Large companies are looking for ways to maximize it. Discussions about the impact on jobs and industries – from law and accounting to teaching, medicine, marketing, and everything in between – continue. This leads to the question: What role will AI play in the brewing industry?

While images of robots serving customers may come to mind, most of the potential uses aren’t that obvious. As we began researching the topic, numerous technical terms kept coming up, prompting us to take a step back and start with some basics. AI is technology that performs cognitive functions typically associated with human intelligence. It can incorporate visual perception, speech recognition, learning, language processing, decision-making and more, and bases its output on an abundance of data. All of this comes together in smart machines and computer programs.

When it comes to brewing, I came across many stories about brewers at locations across the globe playing with AI to create new recipes; brainstorm and tweak existing recipes; and explore which brews are most likely to be a hit based on taste and consumer data. Some brewers are extending their venture into AI beyond recipes and using it for package and bottle designs, labeling, press releases, social media content, and marketing.

In numerous cases, brewers are engaging customers in the novelty of the potential role of AI in brewing by holding contests where customers get to vote on whether they like a non-AI or an AI-generated brew better; where they can give product feedback, and more. No doubt the trend of exploring the role of AI in creating brews and marketing to engage customers in the process will continue to grow.

Beyond recipes, there are AI solutions that are helping brewers with multiple locations adjust for variables like water or altitude so the final brew tastes the same no matter where it is produced. There’s a robot in Australia producing consistent foam with each pour. Systems and sensors are being used to promote quality; identify leaks and reduce waste; monitor variables that can impact quality (i.e., temperature of a shipping container and transit time); and conduct predictive maintenance to keep production moving.

Predictive analytics powered by AI help analyze data about market trends, consumer preferences, buying, and more to help brewers make informed decisions about everything from product development and pricing to marketing and sales.

When it comes to supply chain management, AI algorithms are being used to forecast demand, improve inventory management and production schedules, and cut costs. There are even AI-based tools that use data about production costs, competitors, consumer demand, and buying to create pricing strategies that can be adjusted in real-time to promote sales.

Whether you’re looking to shorten development time, hasten go-to-market time, reduce costs, increase output, promote compliance, standardize quality, boost sustainability, or strengthen marketing and sales, based on what other brewers are doing, it appears there’s a role for AI. Still, there is another side to the story…I’ll use my mom’s banana bread to illustrate the point I want to make.

Personally, if I had to choose a banana bread baked by my mother or one from a robot, I’d choose my mom’s every time. There’s just something about it being made by mom, using my grandmother’s recipe, that makes it taste better than any other banana bread out there. I don’t think this will ever change and I hope this isn’t completely lost as the role of AI in our daily lives evolves.

If you need time to learn more about AI in brewing, you can count on RBT CPAs for your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Why Estate Planning Should Take Center Stage in 2024/2025

Why Estate Planning Should Take Center Stage in 2024/2025

You’ve worked hard to build your wealth. Protect it by resolving to make gift and estate tax planning a priority in the New Year.

This is especially important in 2024 and 2025 since, without legislative action, the valuable Tax Cuts and Jobs Act’s (TCJA’s) gift and estate tax exemption is set to revert to pre-2018 levels starting in 2026, significantly increasing the amount of an estate subject to Federal taxes. Add to that New York’s estate tax rules and planning becomes paramount.

When the TCJA took effect on January 1, 2018, certain provisions increased the amount of assets individuals and married couples may gift annually and over a lifetime (as well as leave as part of an estate), with no federal taxes owed. Each year, exemption amounts are adjusted for inflation. For 2024:

  • The annual gift exclusion limit is $18,000 (or $36,000 for a married couple) per person. You do not have to pay taxes on gifts up to the limit. Also, amounts up to the annual limit do not count toward the gift and estate tax lifetime exemption. So, let’s say you are married and have two children. You and your spouse may each gift $18,000 to each child, for a total combined gift of $36,000/child in 2024. You won’t have to pay taxes on the gift and the gift won’t apply toward your lifetime gift and estate tax exemption. (There is an exception: if you are married and your spouse is a U.S. citizen, you can gift an unlimited amount to your spouse tax-free. If your spouse is not a U.S. citizen, there is an annually adjusted limit on tax-free gifts. For 2024, that amount is $185,000.) To qualify for the annual gift exclusion, the gift must be a present interest gift.
  • The gift and estate tax lifetime exemption is $13.61 million (or $27.22 million/married couple). Amounts above the lifetime exemption are taxable. Even though the exemption is scheduled to decrease starting January 1, 2026, any exemptions for 2018 through 2025 will be honored at the higher exemption amounts in effect at the time. The Federal tax law has a portability provision that provides for the unused exemption of the first spouse to die to be available to the surviving spouse if an estate tax return is filed when the first spouse passes away and the surviving spouse is a U.S. citizen.

Both the annual limit and lifetime exemption will be adjusted for inflation again at the start of 2025. Then, on January 1, 2026, the gift and estate lifetime exemption goes back to its pre-2018 level of $5 million, adjusted for inflation (so it’s expected to be in the $7 million to $8 million range). This will significantly reduce the amount of assets that can be gifted over a lifetime and passed on as part of an estate tax-free. In New York, it’s a bit more complicated.

New York does not have a gift tax; however, it does have different rules for estate taxes. Key differences include:

  • An estate tax exclusion is tied to federal tax laws from 2014 and gradually indexed for inflation. For 2024, the New York estate tax exclusion amount is $6,940,000.
  • However, there is a “cliff” built into the calculation. If a decedent’s taxable estate is between 100% and 105% of the exclusion amount as of the date of death, exclusion benefits phase out. There is no exclusion benefit if a taxable estate is more than 105% of the exclusion amount as of the date of death. This means New York State estate taxes are due starting with the first dollar of assets.
  • Gifts made within three years of death are not excluded and are “clawed back” to be included in the calculation of New York estate taxes.
  • New York does not have a portability provision and, thus, does not allow an unused exclusion amount to transfer to a surviving spouse.

There are actions New Yorkers can take to stay within the state’s exclusion amount while avoiding the “cliff” and maximize opportunities under Federal estate tax laws. If you’re interested in learning about your options, contact RBT CPA Trust, Estate and Gift Practice professionals by emailing Ita Rahilly, CPA, at irahilly@rbtcpas.com. Your RBT CPA client manager is also available to help start the discussion, in addition to handling your accounting, tax, audit, and business advisory needs. Give us a call today.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Improve Your Bidding Process Before You Make a Bid

Improve Your Bidding Process Before You Make a Bid

Creating winning project bids is a science onto itself. Do it right and you end up profitable and productive. The secret is to invest the time and attention to show the buyer why your business is the best for the job. In truth, that’s easier said than done, but there is some work you can complete before ever submitting one bid to promote your chance at success.

Define your business goals.

A commonly cited statistic asserts that your bidding process can be considered successful if you receive at least one job for every five bids submitted. As an accountant and a business advisor that feels random. To add structure, consider the big picture. What are your overall sales, profit, and cash flow goals for the year, quarter, and month? Can your answers guide your bidding activities, pointing to when you need to make more bids or set goals for improving your hit (win) rate?

Develop your brand.

A brand reflects your business’ identity or reputation. It’s what distinguishes your business from your competitors’, and it sums up the experience a client can expect when he/she awards you a job. Are you known for professionalism, quality, financial stability, safety, customer satisfaction, project management, environmental awareness, or something else? If so, you should be saying that, consistently, every time you submit a bid. If you need help, consider engaging a marketing firm or freelancer to summarize your brand and provide standard language you can use for bids (as well as marketing channels like your website, social media, and more).

Know your strengths and weaknesses.

Not every bidding opportunity is going to be a good fit. Consider creating a checklist – based on past work – to identify the types of projects that are worth your time and align with your business goals and outcomes. Similarly, a checklist of attributes to avoid can help you quickly decide whether it’s better for your business to forgo a bid.

Evaluate software, online tools, and services that can boost accuracy and productivity.

At the very least, an online search can help you find a variety of free construction bid proposal templates. If you’re looking for more, software and services are available to support the entire bidding process, cost estimations, work breakdowns, project management, proposal generation, takeoff accuracy, and more.

Prequalify subcontractors.

Since you should submit bids by the deadline, if not sooner, prequalifying subcontractors you may use on jobs can save you time and promote peace of mind that the people you’re engaging align with your brand, as well as your quality and performance standards. You may also review licenses and certificates of insurance to make sure the subcontractors have what you need when the time for a bid/job comes.

Expand your pipeline for learning about bids.

In addition to getting leads on projects from trade organizations, referrals, and suppliers, consider subscribing to a lead generation service. Evaluate which markets are served, client size, geography covered, success statistics, service options, and prices. Also look for features that would be of value to you – like getting an email when a new bid is opened.

By putting the time and effort in before ever making a bid, you are in a better position to choose and submit bids – and win projects – when the opportunity arises.

To free you up to focus on bids and all other aspects of running your business, please remember RBT CPAs is here to help with your accounting, tax, audit, or business advisory needs. Interested in learning more? Give us a call today.

 

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.