Spotlight Employee: John Adams
by Beverly Hanson
This quarter our spotlight is on John Adams, CPA, PFS, CFP® an Associate Partner of Alloy Silverstein. John began his association with Alloy in January of 2012. He received his Bachelor’s degree in accounting from Rutgers-Camden, and his Master’s degree in Finance from Temple University. John provides accounting and tax services to our individual clients, as well as a mixed-blend of industrial clients.
He is a licensed CPA in the state of New Jersey and is a member of the American Institute of Certified Public Accountants, the New Jersey Society of Certified Public Accountants, the Financial Planning Association, the Estate & Financial Planning Council of Southern New Jersey, and the Society of Financial Professionals. Along with the professional associations, John is a 4th-degree member of the Knights of Columbus, is active at Christ Our Light Church, and is involved with the Cherry Hill National Little League.
John grew up in Williamstown, NJ, and now resides in Cherry Hill, NJ with his wife, Colleen, and their daughter, Tara. An avid sports fan (John played on Rutgers’ baseball team in college), he enjoys sports, especially watching the Phillies, Eagles, and Flyers. In his spare time, you can catch him coaching little league, golfing, or enjoying a fine cigar.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
Please be aware that John Adams’ CFP® certification is not affiliated with 1st Global. Mr. Adams does not offer and is not licensed to offer financial planning or investment advisory services. Such services are only offered through the appropriately licensed members of our firm.
by Adrienne Onorato
Ren Cicalese, CPA, PFS, CGMA
Received the Chartered Global Management Accountant (CGMA) designation from the AICPA and the CIMA.
Attended the AICPA’s 2012 Group of 400 (G400) Community Meeting in Chicago, May 8-11.
Guest lectured to a Practice Management seminar at Penn Dental Medicine, April 11.
Spoke to Beta Alpha Psi members at Rutgers University-Camden School of Business, March 21.
Ren Cicalese, CPA, PFS, CGMA
Attended the 1st Global Eagle’s Executive Forum in Washington DC, May 14-17.
Dennis Vogt, CPA
Awarded the Thanks Badge by the Girl Scouts of Central & Southern New Jersey.
Rich Middleton, CPA
Reappointed chairman of the board of the Moorestown Visiting Nurse Association and its affiliated organizations.
Duane Miller, CPA
Attended the NJSCPA 52nd Annual Scholarship Award Ceremony as part of the society’s student mentor program, April 19.
Alloy, Silverstein, Shapiro, Adams, Mulford, Cicalese, Wilson & Co.
Welcomed seven of the staff’s children and grandchildren to the office as part of Take Our Daughters and Sons to Work Day, April 26.
Participated in the annual Let’s Move Together Arthritis Foundation Walk at Challenge Grove Park in Cherry Hill, May 20.
Kristel Lauk, formerly employed by a local CPA firm.
Jeremy Ukrainski, a recent graduate of Chatham University.
In need of a guest expert speaker? At your request, we are available to provide informational presentations on technical and timely tax and business issues. Consider us for your next event! For more information, please call our office.
Social Security claiming strategy
Did you know that your monthly Social Security benefits can increase the longer you wait to claim them? Although nearly half of all retirees begin claiming at 62, there are certain factors to consider if waiting until age 66, or even 70, would be more beneficial to your specific circumstances. Higher than ever life expectancy, current earnings, accumulated wealth, and spousal considerations all have an impact when developing a Social Security claiming strategy, and they’re influential factors to take into account if you want to maximize your benefits.
There’s no straightforward answer on what age is best, but putting together a custom plan may show you what you could be missing out on if you claim too early. Looking at the whole picture, we have the capability to advise you on your alternatives to determine what’s best for you based on your individual situation.
Tax responsibilities of selling online
In this day and age, turning to the internet to earn extra cash by selling items on eBay, Etsy, and Craigslist has been surging in practice. However, many sellers may not be aware of the tax obligations resulting from their transactions.
The first question you have to ask yourself is are you engaged as a hobby or as a business. Similar to yard sales, the IRS typically will not look at transactions where the items are sold at less than cost. However, when you consistently sell items for more than your cost basis, or you gain income by earning more than you have spent, you may be liable for sales and income taxes.
Business or not, if income is earned, it is generally reportable. To report the income and expenses of your online selling as a business, you need to file Schedule C, even if the online selling is just a side-job. If you have earned at least $400, after expenses, you are considered self-employed and must file Schedule SE.
If your selling has advanced to a business status, federal law requires you to collect sales tax from buyers within your state. eBay and Etsy both offer settings within your listings to apply the appropriate sales tax to applicable orders. Receipt of collected sales tax is reported to your state on a quarterly basis.
As online selling persists in popularity, the IRS will be enforcing voluntary compliance on active sellers. Beginning in 2011, payment settlement entities such as credit card companies and PayPal must issue Form 1099-K to all merchants that have over $20,000 in collections and over 200 transactions for the year.
The best advice is to keep records of all of your income, sales, expenses, and collection of sales taxes if applicable. The IRS has compiled relevant guidelines and tips in an Online Auction Tax Center: http://1.usa.gov/onlinesaletax. If you wish to discuss your situation and ensure proper compliance, please give us a call.
The next big thing
by Charlie Byron
See if you can identify this character. He’s a working-class, underdog type of guy who does a pretty good job following the rules. He is always on time for work and never uses more than the allotted time for lunch, which he carries in a lunch pail packed by his devoted and serious wife. He doesn’t love his job, but it’s a living, and he knows the big score is just around the corner in some too-good-to-be-true get-rich-quick scheme that will free him from the burden of work. He is willing to suspend disbelief and constantly convinces himself that he’s come upon the next big thing that will be the key to unlocking wealth. Do images of Ralph Kramden and Fred Flintstone come to mind? These characters didn’t process the possibility that something was too good to be true. No matter how ridiculous the scheme appeared, Ralph and Fred knew it would be their ticket to a life of leisure.
Those of us who live in the “real world” generally don’t succumb to whacky get-rich-quick schemes. We understand that hard work and diligent saving are required to get to that eventual life of leisure, if not much goes wrong along the way. We still hope a little luck will be on our side, but aside from that bit of luck, we have to make good decisions to improve the probability that we will be able to accumulate sufficient savings to support the retirement we want. It is not easy and it requires a conscious effort.
A well allocated portfolio is vital to successful accumulation. While asset allocation is no guarantee that we will reach our goals, it does provide us the best opportunity for success. Too frequently, we are distracted by the news of the day and tempted to deviate from the path that will lead to success. There are no shortcuts in achieving our goals. Investments that look too good to be true generally are, as the clients of Bernard Madoff discovered. Advisors who make promises and boast about their performance are in most cases making claims they cannot support. As we’ve heard and read hundreds of times, “Past performance is no guarantee of future results.” It is important to understand the relationship between volatility and expected returns, with the emphasis on “expected” and attention to the time horizon.
Unlike the characters on television, real people have to live with the consequences of bad decisions. While it is prudent to bear a higher level of volatility while we are young, as we come closer to accessing our retirement savings, it makes less sense to swing for the fences. When it comes to investing, there is no secret formula or shortcut to success. Establish a plan, work closely with your advisor, be patient and, over time, you will have the best chance of reaching your goals.
Be aware of state
sales and use taxes
Most individuals are accustomed to paying sales tax, but what are you supposed to do when sales tax is not collected, or was lower than your state’s tax rate? This is where use tax comes in. A use tax is imposed when a buyer brings in out-of-state purchases on which either no sales tax was charged or the rate was lower than the home state. Individuals and businesses are responsible for reporting and paying the use tax of either the full sales tax rate of the state, or if a lesser sales tax was paid, the difference of the rates.
For example, if you purchased office supplies out-of-state for your New Jersey office, and did not pay sales tax, you are liable for 7% of the purchase price in use tax. Or, if the other state collected 4% sales tax on the office supplies, the use tax due would be 3% of the purchase price.
If less than New Jersey’s sales tax rate of 7% was paid, businesses are to report and pay use tax on Form ST-50/51 online or by phone through the NJ Sales and Use Tax EZ File Systems. Individuals have the option to declare use tax liability on their New Jersey Resident Income Tax Return or on Form ST-18, New Jersey Use Tax Remittance. Further details including specific rates or exemptions can be found on the NJ Division of Taxation’s website: http://www.state.nj.us/treasury/taxation/su.shtmls.
Pennsylvania’s sales tax rate is 6%, with an additional 2% local tax applied for goods and services within Philadelphia. Businesses can remit use tax using form PA-1, Use Tax Return, and individuals can report use tax annually on their Personal Income Tax Return, PA-40. More information on rates and exemptions can be found on the PA Department of Revenue’s website: http://www.revenue.state.pa.us/usetax.
Without careful record keeping to account for and pay all sales and use tax, you could face a penalty if unreported purchases are exposed down the line. If you have any questions regarding properly reporting your sales and use tax, please contact us.
900 North Kings Highway | Cherry Hill, NJ 08034 | 856.667.4100
165 North White Horse Pike | Hammonton, NJ 08037 | 609.561.1555
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Investment advisory services offered through 1st Global Advisors, Inc., Insurance services offered through 1st Global Insurance Services, Inc.