CPA Blog

Don’t let scope creep ruin your next IT project

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Published: Monday, 11 March 2019 09:14

Written by Phillip Strickler, CPA.CITP

Today’s business technology is both powerful and restive. No matter how “feature rich” a software solution or hardware asset may be, there’s always another upgrade around the corner. In other words, it’s just a matter of time before your company’s next IT project.

When that day arrives, watch out for “scope creep.” This term refers to the tendency of a project’s objective (or “scope”) to gradually expand while the job is underway. As a result, the schedule may drag and dollars may go to waste.

Common culprits

A variety of things can cause scope creep. In many cases, too few users give input during the planning stage. Or misunderstandings may occur between the project team and users, obscuring the purpose of the job.

Excessive implementation time undoes many projects as well. As weeks and months go by, business processes, policies and priorities tend to change. For a new system to meet the needs of the business, the project’s scope needs to be executable within a reasonable time frame.

Ineffective project management is another common culprit. Scope creep often arises when a project manager underestimates the complexity of the tasks at hand or fails to adequately motivate his or her team.

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Some of your deductions may be smaller (or nonexistent) when you file your 2018 tax return

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Published: Monday, 11 March 2019 09:09

Written by Phillip Strickler, CPA.CITP

While the Tax Cuts and Jobs Act (TCJA) reduces most income tax rates and expands some tax breaks, it limits or eliminates several itemized deductions that have been valuable to many individual taxpayers. Here are five deductions you may see shrink or disappear when you file your 2018 income tax return:

1. State and local tax deduction. For 2018 through 2025, your total itemized deduction for all state and local taxes combined — including property tax — is limited to $10,000 ($5,000 if you’re married and filing separately). You still must choose between deducting income and sales tax; you can’t deduct both, even if your total state and local tax deduction wouldn’t exceed $10,000.

2. Mortgage interest deduction. You generally can claim an itemized deduction for interest on mortgage debt incurred to purchase, build or improve your principal residence and a second residence. Points paid related to your principal residence also may be deductible. For 2018 through 2025, the TCJA reduces the mortgage debt limit from $1 million to $750,000 for debt incurred after Dec. 15, 2017, with some limited exceptions.

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Best practices when filing a business interruption claim

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Published: Monday, 18 February 2019 11:24

Written by Phillip Strickler, CPA.CITP

Many companies, especially those that operate in areas prone to natural disasters, should consider business interruption insurance. Unlike a commercial property policy, which may cover certain repairs of damaged property, this coverage generally provides the cash flow to cover revenues lost and expenses incurred while normal operations are suspended because of an applicable event.

But be warned: Business interruption insurance is arguably among the most complicated types of coverage on the market today. Submitting a claim can be time-consuming and requires careful preparation. Here are some best practices to keep in mind:

Notify your insurer immediately. Contact your insurance rep by phone as soon as possible to describe the damage. If your policy has been water-damaged or destroyed, ask him or her to send you a copy.

Review your policy. Read your policy in its entirety to determine how to best present your claim. It’s important to understand the policy’s limits and deductibles before spending time documenting losses that may not be covered.

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3 big TCJA changes affecting 2018 individual tax returns and beyond

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Published: Monday, 18 February 2019 11:19

Written by Phillip Strickler, CPA.CITP

When you file your 2018 income tax return, you’ll likely find that some big tax law changes affect you — besides the much-discussed tax rate cuts and reduced itemized deductions. For 2018 through 2025, the Tax Cuts and Jobs Act (TCJA) makes significant changes to personal exemptions, standard deductions and the child credit. The degree to which these changes will affect you depends on whether you have dependents and, if so, how many. It also depends on whether you typically itemize deductions.

1. No more personal exemptions

For 2017, taxpayers could claim a personal exemption of $4,050 each for themselves, their spouses and any dependents. For families with children and/or other dependents, such as elderly parents, these exemptions could really add up.

For 2018 through 2025, the TCJA suspends personal exemptions. This will substantially increase taxable income for large families. However, enhancements to the standard deduction and child credit, combined with lower tax rates and other changes, might mitigate this increase.

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