Speaking with Mark was a truly gratifying experience — he was kind, organized, interested, and sincere, and asked great questions. As a sneak preview of a few good ones:
How did you end up being interested in Music from an education standpoint, and how did you end up moving towards accounting?
At what point did you decide to further your education with the Masters in Financial Analysis and why that particular major? Was it difficult to return to school?
How has your practice evolved over the years? I see you use the DBA The Dancing Accountant. Was that always the case, or did that come later? Is it related to a niche, or more about branding?
You’ve been listed on the 50 Top Women in Accounting list. Congratulations! How does that make you feel? Is it acknowledgement of hard work, even more responsibility, honor…?
What does the future look like for you if it goes exactly how you would like it to go? When you look back on your career & life, what will you want to be able to say you accomplished?
If you could go back in time and give your younger self just one piece of critical advice, what would that be?
We spoke for over half-an-hour and I felt like we could have gone on for days… his conversational style was comfortable and disarming. I enjoyed sharing personal stories, talking about the great folks I’ve studied and worked with, about how hard it was to go back to school while working, how much I love helping small businesses in my neighborhood, how much I hate saying “no”, how a client came up with my business name… and so on. Give it a listen — and raise a glass to our amazing team while you’re at it!
I would love to be remembered as someone who helped keep our communities vibrant by helping small businesses succeed. Thatâs the whole point of any of this, and my staff is a group of women who feel the same way. Our work really has meaning. ~Nancy McClelland, CPA
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
State and county taxes are still in place, meaning that in the City of Chicago, the tax on groceries went from 2.25% down to 1.25%.
Interestingly, medical products and devices — which are usually taxed at the same low rate as groceries — will remain taxable at their usual rate instead of getting the additional 1% suspension.
For retailers, this means that all “grocery low-tax” departments will need to have the tax reduced in Point of Sale systems, but not in medical/drug departments or grocery high-tax (alcoholic beverages, food consisting of or infused with adult use cannabis, soft drinks, candy, and food that has been prepared for immediate consumption).
There are also signage requirements for retailers. Per the IDOR’s May bulletin:
Retailers, to the extent feasible, shall include the following statement on any cash register tape, receipt, invoice, or sales ticket issued to Retailers, to the extent feasible, shall include the following statement on any cash register tape, receipt, invoice, or sales ticket issued to customers: âFrom July 1, 2022, through June 30, 2023, the State of Illinois sales tax on groceries is 0%.â If it is not feasible for the retailer to include the statement on any cash register tape, receipt, invoice, or sales ticket issued to customers, then the retailer shall post the statement on a sign that is clearly visible to customers. The sign shall be no smaller than 4 inches by 8 inches. A printable sign will be available on our website at tax.illinois.gov.
In related tax news, the same state budget also provides automatic $50 income tax rebates for individuals who made less than $200,000 in 2021, $100 for couples filing jointly who made less than $400,000, and $100 per dependent claimed in 2021, up to three. Additionally, the Illinois state earned income credit will increase from 18% to 20% of the federal credit, and eligible homeowners will receive property tax rebates equal to their 2021 property tax credit, up to $300.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
Effective July 1, the IRS standard mileage rate — the amount that can be deducted per-mile in lieu of reporting actual costs — is increasing by 4-cents, to $0.65/mile, per Annoucement 2022-13.
The adjustment is being made in recognition of recent increases in the cost of gasoline. Normally, the adjustment is made annually, but in special cases such as this, the IRS Commissioner will make an exception.
Not only is this amount the official deductible amount when the optional standard method is used, but many businesses, and the federal government, also use it as the reimbursement rate for employee travel and transportation.
If you use a mileage-tracking template, make sure to update the per-mile multiplier. Most programs like Mile IQ do not track actual costs — they simply report the number based on a report’s date range, and the taxpayer or their CPA will do the math on the tax return. In 2011, the last time this happened, the IRS had a field for the number of miles driven Jan 1-June 30 and a separate field for those from July 1-Dec 31 — which is likely to be the case this year as well.
The 14 cents per mile rate for charitable organizations remains unchanged as it is set by statute.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
The annual scheduled increase in Chicagoâs minimum wage goes into effect on Friday, July 1, 2022. The Chicago minimum wage is tiered for large businesses with 21 or more employees, and small businesses with 4-20 employees. Since reaching $15 per hour in 2021, the minimum wage for larger employees increases annually according to the Consumer Price Index or 2.5%, whichever is lower. The minimum wage for small businesses continues to increase towards $15 per hour by 2023.
As of July 1, 2022, the Chicago minimum wage will be:
$15.40 for employers with 21 or more employees (including all domestic workers, regardless of the number employed)
$14.50 for employers with 4-20 employees
The minimum wage for tipped employees will be $9.24 for employers with 21 or more employees, and $8.70 for employers with 4-20 employees (employers must make up the difference between any tips received and the applicable minimum wage for non-tipped workers.)
Anyone age 24 or younger employed by, or engaged in employment coordinated by, a nonprofit organization or government agency will see a minimum wage increase to $12.00.
Employers that maintain a business facility within the City of Chicago or are required to obtain a business license to operate in the City are required to pay their employees at least the Chicago minimum wage. Additionally, any employee that works two hours or more in the City within a two-week period must also receive at least the Chicago minimum wage.
Chicago BACP recently presented a free hour-long webinar called “Employer Responsibilities Under Chicagoâs Minimum Wage Ordinance”, available here.
Employers in “covered industries ” (see below) to post work schedules with at least 14 daysâ notice, an increase from the previous 10 daysâ notice.
Employees will need to earn less than $29.35 per hour or $56,381.85 per year to gain protection under the Fair Workweek Ordinance.
Covered industries include building services, healthcare, hotel, manufacturing, restaurant, retail, or warehouse services.
Chicago businesses are required to post the Minimum Wage Notice and Fair Workweek Notice at their business. The notices will be available to workers and business owners in English, Spanish, Polish, Simplified Chinese, Tagalog, and Korean by July 1, 2022. Employers that violate the minimum wage ordinance can be fined $500 to $1,000 per day for each offense.
Chicago BACP recently presented a free hour-long webinar called “Employer Responsibilities Under Chicagoâs Fair Workweek Ordinance”, available here.
Sexual Harassment Law Updates
As of July 1, 2022, all employers in the city of Chicago must have a written policy on sexual harassment. Additionally, employers are required to display a public notice advising of the prohibition on sexual harassment where employees can see it, and there are increased training requirements. A model policy, written notice, and training templates are available by visiting Chicago.gov/SexualHarassment.
Recent updates to the law include:
Adding sexual misconduct to the definition. Sexual misconduct is defined as any behavior of a sexual nature which also involves coercion, abuse of authority, or misuse of an individualâs employment position.
Requiring all employers to have a written policy on sexual harassment. The written policy must be available in the employee’s primary language within the first calendar week of starting employment.
Increasing the statute of limitations from 300 to 365 days.
Create flexibility to notify a respondent up to 30 days from the time of complaint (compared to 10 days currently), to mitigate any retaliation such as denial of a reasonable accommodation request.
Requiring additional annual training for all employees including the one hour of prevention training aligned with State requirements and one hour of bystander intervention. Supervisors and managers are required to have an additional one hour of training.
Increasing the penalty for individuals or businesses that participate in discriminatory practices in the workplace including sexual harassment. The penalty is increasing from $500 – $1,000 per violation to $5,000 – $10,000.
It seems not all small business owners are aware of the responsibility to provide Chicago workers paid sick leave. It applies to any business or individual that employs at least one âemployeeâ and has a facility within Chicagoâs city limits (though Cook County now has a similar requirement). The term âemployeeâ covers anyone who works at least 80 hours within a 120-day period (20 hours a month). â For hourly employees, paid sick leave accrues at one-hour for every 40 hours worked. Salaried-exempt employees are presumed to have worked 40 hours/week. â Employees are capped at accruing a total of 40 hours of sick leave each year, unless the employer opts to set a higher limit. â Employers must permit employees to carry over half of their accrued leave, to a maximum of 20 hours of unused sick leave each year (40 for employers with 50 or more employees). â Employers are not required to pay out any accrued but unused sick leave upon employment termination.
Even the least expensive version of Gusto Payroll allows for a sick pay plan, and it’s not hard to set up and track (see instructions here).
Reminder that if you sign up and run Gusto using my link, you’ll get a free trial period… and after running your first payroll you’ll receive a $100 Visa gift card! My clients instead will receive a 15% discount for the life of the plan.
And a final point: all Chicago worker protections are enforced by the BACP Office of Labor Standards (OLS). The OLS is dedicated to promoting and enforcing Chicagoâs labor laws, including Minimum Wage, Paid Sick Leave, Fair Workweek, and Wage Theft Ordinance. The BACP OLS webpage offers informational materials on Chicagoâs Labor Standards Laws.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
“Really great interview. I appreciated how the highlights were amplified. Nancy is smart and real. Blake does a great job allowing the interviewee talk and share her knowledge. Well done!” -YouTube viewer comment
I was honored to be interviewed recently by the one-and-only Blake Oliver for Relay‘s “Gearing Up” series, where every two weeks, he talks to a real accountant or bookkeeper about ONE challenge in their firm â and how to solve it.
In this episode, we discuss how to build a team with whom you love to work (kudos to Bookkeeping Buds for helping me make that happen).
As our firm grew, I realized that building The Dancing Accountant in a traditional way was re-creating working conditions that our team and I didnât love — it was immensely important to me that above all, we enjoy working with each other.
But first I had to convince myself I had something to offer — and decided to focus on what I knew employees wanted: meaningful work.
In the latest episode of Gearing Up with our host Blake Oliver, I open up about the a-ha moment that led to our building an entirely different kind of remote firm. In the episode, you’ll learn: Why Nancy is known as The Dancing Accountant Nancyâs favorite tool in her tech stack Three things employees want from work The non-traditional structure of Nancyâs team
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
We learned this week that the EIDL is permanently closing their Rapid Portal on May 16th. What does this mean for you?
If you haven’t already, download a copy of your EIDL loan agreement documents, and snap a screenshot of your loan number and save it to PDF for easy reference.
Your bookkeeper and accountant will thank you for this — and you’ll thank them for insisting you do it!
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
Yesterday I attended an excellent webinar on how two different small business owners transitioned ownership to their employees — one using an ESOP and one using a Worker Co-op structure.
As a CPA and consultant to many small business owners, I often am asked about succession planning and exit strategies, and my experience in cooperative taxation often leads me to recommend a transition to employee ownership. So I was glad for the opportunity to learn from the experiences of these folks who are in the thick of it.
And just in case they might be helpful as an outline or while following along with the recording, the notes I took during the session are below.
Thanks again to Courtney, Steve, the panelists, and UWCC for this excellent resource!
Three main EE ownership structures —
ESOPs, most common, about 70% – better for larger busineses
Worker co-ops, less common but fast-growing
EE Ownership Trust, more common in Britain
Half of privately-held businesses are owned by boomers — who will be retiring soon (the “silver tsunami”).
ESOP – Employee Stock Ownership Plan Employee financial control, not management control. How does it work? the company gets a loan (from bank or owners) to pay the owners (whatever percentage ownership is agreed upon; can happen in tranches) The owners get paid, and the company pays the loan off over time on behalf of the staff, and releases the stock to the employees Employees just “get” their shares as opposed to worker co-ops where each member has to buy in. Owner can remain CEO as long as necessary. The tax benefits of an ESOP can save about 20% of value in terms of the company price compared to selling to private equity. Vests in 20% increments annually until the employee is fully-vested. If someone departs, the company has five years to pay them off.
Worker Cooperative Employee-Owners have both financial and managerial control. One member, one vote. Must sell 100% ownership to the workers; no partial purchases like with an ESOP. Owner may become one of the many worker-owners in the new structure. Owner or bank can finance a loan to pay the owners off over 15 years or however long. John Abrams model – buy-in for each new owner is the price of a decent used car. :) So they are two different things: buy-in by each worker-owner, vs company-held loan to pay off the owner. Company can lend each owner some of the money to buy their share if that helps. What happens if someone leaves from Marty’s worker co-op: the company has five years to pay back $9k initial investment if necessary, but usually pay it off very quickly just to get it off the Balance Sheet if they have the cash to do it. Then the internal capital account gets paid out in a different way, on a schedule with other owners.
Inviting staff to have an ownership mentality and be a democratically-run organization is very valuable, especially in anticipation of transitioning to ownership — but different from actual EE ownership.
Recommended book: John Abrams, “The Company We Keep”.
Neat idea – buying a pie for new owners as a way to say “here’s your piece of the pie”.
Questions from Q&A: Are you using the terms “Exit Planning” and “Succession Planning” interchangeably, or do they have different meanings for you? How did you educate your employees on employee ownership? I am working with two businesses doing projects with students in my co-op business management course. An existing worker co-op has lots of legal questions how they can and/or must differentially treat workers as employees and workers as owners. Can you advise a good first landing on legal assistance to help get their questions answered or directed to those who should. I’m no lawyer and most that I work with are in the farmer co-op world. Thanks. What is your advice for business-owners where the owner is the key employee with specialized knowledge and credentials that is not easily replaced by other existing staff? In Marty’s buy in model, can that buy in level be paid to the co-op over time (installments) or is it all upfront (day 1). What happens to the equity in the business as an employee leaves, and how is that different between the 2 structures Could a consumer cooperative spin off, say, 30% for employees to become owners under either of these structures? What is the difference in governance control of workers as an ESOP vs a Worker Co-op? I expect there is a range of options. A follow up to the question about spinning off 30% of a consumer co-op, could the creation of the ESOP or worker co-op component be a vehicle for capitalizing the co-op for expansion or other purposes? Are worker equity shares in a worker co-op appreciable over time? Steve, you mentioned existing ESOPs or Coops bringing in another small biz as a merger/acquisition, perhaps sold by a founder with no buyer prospects. Can you talk more about this as another pathway for transitioning an existing biz to an employee-owned company? I appreciate the conversation about sharing the wealth, but one challenge I see as a CPA is that workers are always convinced that owners are “hoarding” the profits and that’s one of the motivations for becoming worker-owned. However, the company has to be healthy and profitable for this to happen! It’s not magic. If the company is struggling, the worker-owned version of the company will struggle, too. It’s not a magic bullet. I know there are food co-ops that are also worker co-ops. How could a consumer co-op facilitate their workers starting their own worker co-op inside the food co-op? Are there incentives, support, programs, etc. for someone looking to start a private business with a roadmap from the beginning to convert to an employee ownership model? If a small worker owned cooperative or ESOP is often structured as a partnership for tax purposes, does the cooperative structure only impact management? For Marty, how do the workers owner manage or address the tension between investment in the equipment needed for the business versus profits place into the internal capital account and subsequently distributed? Interested in any ideas or models for how workers in a consumer co-op might gain “more stake in the game,” feel a real sense of ownership and directly benefit from the growth and success of the business. What are unique challenges associated with performance management (horizon problem, shirking, freeriding, etc) at employee owned businesses? Do you use any tools/tech for reviews, ratings, etc? Can you highlight top 3 challenges of running an employee owned business that technology or tools can help solve? Is there any way to plan succession or manifest employee ownership when the company is merely a one or two person shop without younger family?
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
So excited to share this year’s Top 50 Women In Accounting list from Ignition! It was one of the greatest honors of my career to be included on it last year — and I’m privileged to support this year’s awardees, who are driving change and creating opportunities for the next generation within the Accounting and Bookkeeping industry. Special shout-outs to Cindy Schroeder & Madeline Pratt — two of my inspirations! Congratulations.
A short article in today’s Accounting Today newsletter (which I highly-recommend) included an extremely helpful snippet that I want to make sure to spread far-and-wide.
For those waiting on their 2020 tax return to be processed, enter $0 (zero dollars) for last yearâs AGI on the 2021 tax return.
For those who used a non-filer tool in 2021 to register for an advance Child Tax Credit or third Economic Impact Payment in 2021, enter $1 (one dollar) as the prior-year AGI.
All others should enter the prior yearâs AGI from last yearâs return. Tax preparation software that was used last year will auto-populate this field.
And my personal suggestion to add to this list — make sure to get a transcript before trying these, since there is some possibility that your tax return has already been processed and you are unaware of it, or that the answers you’re looking for will show up on a wage and income transcript (stimulus and child tax credit payments, as well as estimated tax payments, for example).
Hopefully these tips will help expedite your tax return filing and processing — but as the article points out, “significant backlogs, lack of adequate staffing, difficulty reaching tax authority agents by phone and pandemic-related IRS and state and local office closures” are making this tax season particularly challenging one for tax professionals and taxpayers.
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
Last week, the Small Business Administration (SBA) made a welcome announcement for small business owners with Economic Injury Disaster Loans (EIDL) — for the third time in the past 12 months, they have announced that the deferral period for making payments on loan and interest has been extended.
As Journal of Accountancy points out, “the announcement Tuesday came exactly one year after the SBA had lengthened the deferral period from 12 months to either 18 months for loans made in 2021 or 24 months for loans made in 2020. In September, the SBA unveiled several major modifications to the program, including an extension of the deferral period for 2021 EIDL payments to 24 months as part of a series of major modifications designed to broaden the appeal of the program.”
One thing to keep in mind, however, is that borrowers taking advantage of this deferral will still be liable once their deferment period is up, to pay the principal plus interest on the whole period (including the extra deferred months). At around 3 percent, this is considered inexpensive compared to other loans, but it adds up.
We encourage borrowers to log into their SBA EIDL portal once-a-month to download the monthly EIDL statement and provide it to their bookkeeper or accountant to accrue the interest. Not only is this a good bookkeeping practice, but they may be surprised at the amount of interest that has accrued, which could change their approach toward either holding off or repaying it sooner. Unfortunately, if they don’t log into their SBA portal every 30 days, the password expires — so this is a way to avoid that issue and an added benefit of this approach.
Instructions for creating an account are here:
According to Inc. Magazine, “the announcement arrives just days after a group of 16 senators asked the SBA to extend the deferment period. In their letter, the senators emphasized the challenges that small businesses faced amid the surge of the Omicron variant, which included staffing crunches and drops in revenue. Those same challenges continue to linger for many businesses today.”
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.
Why Nancy is known as The Dancing Accountant 
Nancyâs favorite tool in her tech stack 
Three things employees want from work 
The non-traditional structure of Nancyâs team
