Two of our firm’s estate planning experts will be speaking about on asset preservation at an upcoming event to occur May 22 at The Legend at Bristlecone Pines, near Hartland. John Sage and Patricia Prestash will present information about Title 19 eligiblilty and planning. A representative from Prudential Insurance will discuss an insurance product which helps deal with the cost of long term care. Clients and/or attorneys are welcome to attend this free event. The sponsor, Senglaub Financial, of Delafield, has a history of bringing experts together to discuss issues critical to both its clients and the general public.
Business Deductions Passed as a Result of the Fiscal Cliff
Posted in Operating a Business, TaxWhile the new tax law was aimed at averting the “fiscal cliff,” it contained some provisions which benefitted American business. As I see it, here they are:
- Section 179 Deductions – in 2012, Section 179 (first year expensing) provided businesses with a write off of up to $139,000 on new, or used, newly acquired equipment. That limit was reduced dollar for dollar for equipment purchases over $560,000. The new law permits up to $500,000 in first year expense and doesn’t begin the phase out until $2 Million has been purchased. This is retroactive for 2012. Unfortunately, this provision expires and cuts the deduction to $25,000, with a phaseout starting at $200,000, in 2014. Congress has consistently extended this provision and is likely to do so again to keep the economy going.
- Bonus Depreciation – the new tax law allows the current 50% bonus, or first year, depreciation to continue through 2013, with the balance amortized and deducted over the useful life of the equipment. This allowance only applies to new equipment purchased.
- New Deadlines for Old Items – several items had their tax lives extended through 2013. These include: qualified R&D credits, new markets tax credits, some investments in low income communities and the work opportunity tax credit. Under the latter, businesses can get credits for 40% of the first-year wages of a qualified individual hired, up to $6,000, and for some hires, such as certain veterans, the credit may be as ghigh as $9,600.
If you are contemplating certain business decisions relating to acquiring either a business or expanding a current business, careful thought ought to be given to the new law and its benefits and consequences. If you need help sorting all this out, please feel free to contact any of our business attorneys at Schober Schober & Mitchell, S.C. at 262-785-1820 or 262-569-8300, see us on the web at www.schoberlaw.com or email me at tgs@schoberlaw.com .
Trucking Companies’ Biggest Headaches: Overweight Tickets
Posted in Operating a Business, Other Legal Issues
Recently, one of my partners, Eric Raskopf, published the following on his legal blog, On Legal Ground. For those of you running trucks who occasionally get stopped for overweight tickets, it may provide you with a cost effective way to get them reduced:
Anyone who has ridden on the interstate has driven by a roadside scale where tractor trailers are weighed to assure that they are in compliance with weight restrictions. Local municipalities have set limits on some roads generally because of the damage caused by these large vehicles. The fines for driving a large truck on these posted roads are astronomical. I have had four calls in the last two days where drivers received fines ranging from $3,500 to $6,000. This is definitively an area where an experienced lawyer can save a client a great deal of money. The savings can be in the thousands. Based on conversations I have had with drivers and their employers, the investment in legal fees here can mean the difference between keeping and losing a means of livelihood. Give our office a call at 262-569-8300 for this and any issues related to commercial motor vehicles.
Updated IRS Employer Withholding Requirements for 2013
Posted in Business Formation, Buying, Owning and Selling a Business, News and Recent DecisionsIRS issues new updated withholding requirements for employers. See http://www.irs.gov/uac/Newsroom/IRS-Provides-Updated-Withholding-Guidance-for-2013
Supreme Court’s Decision on Arbitration of Noncompetes
Posted in Business Litigation, Noncompete Agreements, Other Legal IssuesNoncompetes are generally thought of as unique agreements given the varying way states view the restrictive covenants imposed on employees by such agreements. The U.S. Supreme Court recently clarified that that Federal Arbitration Act, 9 U. S. C. §1 et seq., requires arbitration, not litigation, as the proper dispute resolution method for determining enforceability of noncompetes if the applicable noncompete agreement contains an enforceable arbitration clause. In, NITRO-LIFT TECHNOLOGIES, L. L. C. v. EDDIE LEE HOWARD, the Supreme Court vacated the Oklahoma Supreme Court’s decision that the state court was the proper forum for deciding whether the particular noncompete was enforceable under state law.
New Tax on Investment Income to start January 1!
Posted in Buying, Owning and Selling a Business, Operating a BusinessWhile we await resolution of the fiscal cliff issues, one thing is for certain: there will be a new medicare tax of 3.8% that will apply to investment income as of this coming year. While such taxes have always been associated with “earned” income, this is a new thing, that it will apply to “investment” income. This is a result of the 2010 Health Care Act (Obamacare).
This tax will have a significant effect upon partners, LLC members and S-corporation shareholders, whose investment income is considered “passive.” Additional tax code provisions govern the definition of “passive” income, and it would be a good time to discuss whether you may be subject to such tax with your accountant, attorney and financial advisor.
If you have questions in this area, please don’t hesitate giving us a call at Schober Schober & Mitchell, S.C. , 262-785-1820 or 262-569-8300.
Inverse Condemnation Available for Allowing Flights Overhead
Posted in Business Litigation, Real EstateThe Wisconsin Supreme Court in Brenner v. New Richmond Regional Airport Commission 2012 WI 98 (July 17, 2012) reversed a circuit court decision dismissing inverse condemnation claims made by property owners abutting a municipal airport due to the effect of flights of private aircraft over their properties resulting from the extension of runways at the airport.
The Court took into consideration the fact that Wisconsin Statutes Section 114.03 and 114.04 gave property owners certain rights with respect to airspace over their properties. It determined referring to federal case law that the proper standard to be applied in determining whether a taking occurs in airplane overflight cases is whether the government action results in aircraft flying low enough and with such frequency as to have a direct and immediate effect on the property owner’s use and enjoyment of the property. The circuit court had held that the appropriate standard to apply was whether the property owners had been deprived of all or substantially all of the use of their properties.
The Supreme Court found that the circuit court had applied the wrong standard, and remanded the case for submission of evidence and a determination whether the flights were so low and frequent as to constitute a taking.
Two Key Rules to Win When Negotiating
Posted in Operating a Business, Other Legal Issues, Real EstateI have been told that I am a fairly good negotiator. That raises a question: is negotiating inherent or can it be learned? I think it can be learned.
While I have taken many courses about how to negotiate (several from Marty Latz, one of the best negotiators of our time), I spend a lot of time just thinking about the concept of negotiating. I have concluded that I follow two basic rules when I negotiate:
- The other side always has more information than me; and
- The other side is always smarter than me.
When I follow these two rules, I generally don’t get into too much trouble when I’m negotiating.
Knowledge is power. Whenever negotiating, one must learn as many facts and as much law on the subject as possible, given the client’s constraints of time and money. The side with the most information will generally have an edge. In negotiating, we call that “leverage.” Leverage can generally be created by having options. Options can only be created by knowing all the facts, capabilities and desires of the parties, and determining how goals may be accomplished. If there is more than one way to accomplish a goal, there are options, and such options, even if not exercised, may provide a way to achieve the primary desired goal.
Intelligence is most likely determined at birth. However, the kind of intelligence I’m talking about is more than just raw IQ. It is more akin to “wisdom,” which is acquired over much time and helps in determining the emotions of each side, the “uncommunicated words” that accompany each proposal, and ultimately, the right hunches to play. If I start with the proposition that the other side is smarter than me, I will most likely play my hand a bit more conservatively. As a result, I make less mistakes. Downside risk often outweighs upside gain. Consequently, my clients usually prefer to win when they are absolutely sure that winning will given them an overall improved position. They don’t cry over lost opportunities that carry substantial risk.
If I follow these two rules, I generally fair pretty well when I negotiate. Perhaps you should consider setting up some similar rules for yourself the next time you need to negotiate something. If you need help in doing so, don’t hesitate contacting me or our other great negotiators at Schober Schober & Mitchell, S.C., attorneys, at 262-785-1820.
Temporarily Avoiding the Cliff: Congress reaches deal that will fund U.S. Government for 6 months
Posted in News and Recent Decisions, UncategorizedThrough use of a Congressional budget tool called a “continuing resolution,” leaders of the U.S. Congress reached a deal yesterday that would fund the United States Government for part of the upcoming 2013 Congressional fiscal year (the entire Congressional fiscal year 2013 is October, 2012 through September, 2013). Funding under the continuing resolution would be from October 1, 2012 through March 31, 2013 at spending levels very similar to what they have been for the current Congressional fiscal year which ends on September 30, 2012. Continuing resolutions are special joint resolutions of the Senate and House that are used to fund governmental agencies when a formal appropriations bill has not been signed into law by the end of a Congressional fiscal year. By agreeing to this contininuing resolution, Congress has temporarily avoided a political showdown about the so called “fiscal cliff” that is looming at the end of 2012 and has also delayed such showdown until after the upcoming presidential election in November, 2012. The “fiscal cliff” refers to the fact that under current law, all of the Bush-era tax cuts and Obama stimulus measures such as the payroll-tax reprieve are set to expire on December 31, 2012 at the same time when cuts in federal spending that were passed in 2011 will be kicking in. Many on both sides of the political aisle believe that if action is not taken before then, i.e. that we fall off the “fiscal cliff,” our economy will be rocked back into recession.
New Health Care Law and Businesses
Posted in Operating a BusinessI’ve been asked a number of times recently as to what affect the Obama health care law will have upon businesses. I see it having a number of effects.
A small employer with 50 or fewer employees will not have to provide health care coverage for its employees. However, after 2013, businesses larger than that will have to provide such coverage or face penalties. The penalties will apply to companies having at least one full-time employee who receives subsidized coverage in the health insurance exchange. Such penalties are currently set at $2,000 per full-time employee, however, the penalties are not calculated on the first 30 such workers.
Small businesses, with 25 or less employees, may qualify for a tax credit to help offset the cost of covering their employees. So long as average earnings of full-time workers at such companies is $50,000 or less, credits of up to 35% of the cost of premiums is available. After 2013, that credit increases to 50%.
For business questions you may have about the new health care act, do not hesitate contacting us at Schober Schober & Mitchell, S.C., at either of our two offices, New Berlin (262-785-1820) or Oconomowoc (262-569-8300).