CPA Practice Advisor

JUN 2018

Today's Technology for Tomorrow's Firm.

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JUNE 2018 ■ www.CPAPracticeAdvisor.com 23 BUILDING YOUR NICHE PRACTICE ■ Expenses ■ Grants ■ Royalties ■ Intellectual Property ■ Retirement Planning MARKETING TIPS FOR ACCOUNTING FIRMS If you want to increase revenue in an "artist" vertical, consider focusing your efforts on these steps. ■ Clearly define the niche(s) you want to support – painters, actors, theater, etc. – and hone your knowledge about people in these industries. ■ Attend other financial professional's webinars and conferences to see what advice is being offered. ■ Create a plan outlining the problems artists face, along with solutions your company provides. ■ Develop a marketing plan that clearly aligns each marketing effort to the vertical's business goal, including an ROI analysis and measurement strategy. If a marketing effort does not directly support a goal, don't use it. ■ Talk their language. Work with a copywriter that specializes in that niche to help you write compelling materials, ads, and social media posts to help draw that audience toward your services. Tip: Including words like "you" and "your" in the copy will make it feel like you're speaking directly to them. For example, "Did you know you could claim gas mileage as an expense when traveling to and from auditions? Here's how." ■ Consider what your website looks and feels like. If using traditional colors (blue, green, grey, burgundy, etc.), consider new ways to display your content that will attract an artistic eye. Employ a graphic designer that specializes in designing for artists to help you. ■ Develop and share case studies about how working with an accountant, financial planner, and / or tax professional helped a person to succeed. ■ Rely heavily on testimonials rather than "corporate speak" on your site and in social media to help bring a "personal" touch to your media. ■ Engage with artists where they work and play. Avoid relying heavily on online media to help you to reach your goals. When you start thinking about pain points, providing solutions should come easily. It's packaging it in a way that will engourage artists to respond. That's your challenge. Challenge accepted. Now go out and break a leg. ■ Becky Livingston has over twenty-five years' experience in marketing and technology in financial services and engineering firms. She is the President and CEO of Penheel Marketing, a boutique marketing firm specializing in social media and digital marketing for CPAs. In addition to being a marketing practitioner, Becky is also an adjunct professor, author, and speaker. With a graduate degree from Pace University in Information Systems, Becky also holds undergraduate degrees from two other colleges and also has a Certificate in Corporate Training from NYU. She is also an active member of the Association for Accounting Marketing (AAM). Connect with Becky's firm on Facebook, LinkedIn, Google Plus, Pinterest, and YouTube. guaranteed draws as an LLC, that income would also be excluded from the QBI deduction. 3. What is the service business restriction? In order to prevent a lot of doctors, lawyers, and other high earners from quitting as employees and coming back as contractors to claim the deduction, Congress excluded from this deduction "Specified Service Businesses," which includes not only health, law, accounting, financial services, athletics, and consulting, but also performing arts. High earning self- employed people in one of these professions will not be eligible for the 20% deduction. 4. Who is considered a high earner under the Specified Service restrictions? Musicians and other performing artists with taxable income below $157,500 for single filers or $315,000 married filing jointly are eligible for the full 20% deduction. The QBI deduction will then phase out for income above these levels over the next $50,000 (single) or $100,000 (married) of household income. Musicians making above $207,500 single or $415,000 married are excluded completely from the 20% QBI deduction. Please note that these amounts refer to total household income, not the amount of QBI income. 5. Should I try to change my W-2 job into a 1099 job? First of all, that may be impossible. Each employer is charged with correctly determining the status of their workers as an employee or independent contractor. These are not simply interchangeable categories. The IRS has a list of characteristics for being an employee versus an independent contractor. Basically, if an employer is able to dictate how a person does their work, then they are an employee. It would not be appropriate for an orchestra, university, or contractor, to list one worker as a W-2 and someone else doing similar work as a 1099. Second, as a W-2 employee, workers have many benefits. The employer pays half of their Social Security and Medicare payroll tax (combined, this is 7.65% of income, paid by the employer, and the same amount withheld from pay). While the 20% deduction may look like more than 7.65%, remember that a 20% deduction in taxable income in the 24% tax bracket only saves 4.8% in tax. That's less than the value of having the employer pay their 7.65% half of the payroll tax. Employees may also be eligible for other benefits, including health insurance, vacation, state unemployment benefits, workers comp for injuries, and most importantly, the right to unionize. The Lancaster Symphony spent eight years in court, unsuccessfully trying to assert that musicians were not employees, to prevent them from unionizing. A taxpayer could have a lot to lose by not being an employee, so I am not recommending anyone try to change their employment status. Still, I expect many musicians and artists have Schedule C income from teaching private lessons, playing weddings, or other one-time gigs. If they do have this self-employment income, they can benefit from the new tax law as long as they are under the income levels listed above. If they do other related work in music – publishing, repairing instruments, making accessories, etc. – that income might not be considered a Specified Service, so be sure to talk with your tax advisor about your individual situation. We will continue to study this area looking for ways to help musicians like you take advantage of every benefit you can legally obtain. ■ Scott Stratton earned a Doctor of Musical Arts degree and holds the CFP® and CFA credentials. Scott taught music for the State University of NY at Geneseo and at Texas Christian University before embarking in a new career in personal finance. He is the principal of Good Life Wealth Management.

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