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March Week 3 Down

   
The positive breakthrough in week two of March did not continue in week three. Independent grocers reported that their same store sales were down 1.93 percent compared to the same period in 2016.

We’re entering another period in which sales are heavily influenced by moving holidays. Easter 2016 fell on March 27, which likely means that next week’s funnel will show a large drop in sales comparisons. This year, Easter occurs on April 16, which will in turn provide a big boost to 2017 sales compared to 2016.

Last Chance: Early Bird Registration for 2017 FMS Financial Symposium Ends March 31
   
In the spring of 2017, FMS will be hosting a three day educational event designed specifically for our independent grocers. Attendees will have the opportunity to participate in several workshops and seminars that will give you more tools to help you succeed.

Learn from industry experts and guest speakers on the state of the industry, e-commerce, the latest best practices, and more. Registration includes several evening receptions where attendees can relax and enjoy downtown Baltimore. Attendees can earn up to 14 CPE credits on eligible sessions over the course of the Symposium.

Sign up by March 31 and save 50% on your registration fee.
Same Store Sales        
% Change from last year

Same Store Sales – Previous Months

BGBC Partners, LLP Tax Update: Deducting Costs to Pursue an MBA
As a business owner, you are well aware of the importance of learning new processes, techniques and procedures to keep your business a step-ahead of your competitors.  Many business-owners have viewed obtaining a Master of Business Administration (MBA) as an opportunity to improve decision-making skills as they relate to their business.  In this Tax Update, we will examine the rules of when costs for obtaining an MBA are deductible.

A recent Tax Court case (Long, TC Summary Opinion 2016-88) sheds some light on the various tests a business owner has to meet to obtain a deduction for these types of educational costs.  First some general background.

Background. Education expenses are deductible under §162(a) if made by a taxpayer either to maintain or improve skills required by the individual in his employment or trade or business, or meets the express requirements of the individual’s employer, or the requirement of applicable law or regulations, imposed as a condition to the retention by the individual of an established employment relationship, status, or rate of compensation. (Reg. §1.162-5)

Deductions are not allowed if the education
1. Is needed to meet the minimum requirements for the taxpayer’s present or intended employment, trade, business or profession;
2. Is undertaken to fulfill general education aspirations or for other personal reasons; or
3. Is part of a program of study that will lead to qualifying the individual in a new trade or business.

In the Long case, the Tax Court determined that a taxpayer could deduct the costs of obtaining an MBA as an unreimbursed employee expense.  The Court found that the MBA didn’t qualify him for a new profession but rather refined his existing business and investment skills used in his managerial position.  It further concluded that the taxpayer remained in the same trade or business after attaining the degree.

Generally, the tax law considers employees as being in a trade or business. A taxpayer may deduct unreimbursed employee expenses incurred only as miscellaneous itemized deductions on Schedule A, and the only to the extent such expenses exceed 2% of the individual’s Adjusted Gross Income.  Therefore, even if you can meet the general requirements, there might be limits based on your Adjusted Gross Income.

If you have thought about pursuing an MBA to enhance your role as a business owner, Uncle Sam might be willing to partly subsidize it.  However, as you can see with the Tax court case discussed above, your specific facts are crucial to getting a deduction.  Consult with a qualified CPA in order to determine whether you meet the statutory, regulatory and judicial tests necessary to avoid missing out on this educational opportunity and its related tax benefit.
 

BGBC Partners, LLP is a full service certified public accounting and business consulting practice.  

For more information, contact
Brad Bell, CPA
or Steve Reed, CPA/ABV/CFF at BGBC Partners, LLP (317-633-4700).
For More Information,
Contact Mark Ehleben
877-435-9400 x1402
marke@fmssolutions.com
8028 Ritchie Highway | Suite 212 | Pasadena, MD 21122


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