Are Relationships Really That Simple?

By Eric Woodruff, CPA
Manager, Audit & Assurance Services

Spending a little quality time with your colleagues can make a huge difference! Just look at what happened when New England Patriots coach Bill Belichick offered to spend more time mentoring offensive coordinator Josh McDaniels. This gesture reportedly played a large part in convincing McDaniels to stay in New England and pass on the head coaching position for the Indianapolis Colts. McDaniels considered the extra time with Belichick to be “extremely valuable.”

One of the main reasons people quit their jobs is because of an inadequate relationship with their immediate supervisor. The best way to build a strong rapport with your employees is to be like Belichick — pencil in some one-on-one time with them and show that you care. Even a brief, sincere interaction can leave a lasting impact.

Remember — it’s all about quality, not quantity. You don’t have to sit down with your colleagues for hours and tell them your whole life story. Just ask how they’re doing as you pass them in the hallway or take a few minutes to chat with them during your lunch break. Focus on subject matters that are important to them. You’d be surprised how much of a difference it makes just to have these short, simple conversations. You open the door to easier conversations when the topics become more challenging.

These days, we tend to forget about the value of face-to-face communication, or even picking up the phone. We get lost in cyberspace, always sending texts and sifting through emails. Although it may be more convenient, digital communication just doesn’t make the same impression as talking to someone in person. We’re so accustomed to dashing off messages that we lose sight of how much it means to people when we take the time to have a more intimate, meaningful interaction with them. You should make the interaction impactful but in a casual and informal manner.

Please note: Efficient communication rarely results in EFFECTIVE Communication

The more you show your employees that you care about them, the more motivated they will be to deliver on the results that your team seeks from them. Don’t let your relationship with them get lost in the flurry of emails. Make it flourish with a caring relationship, based on mutual respect and achieving the goal of the whole team!

If Sponsel CPA Group can assist you with achieving success in your business or personal affairs, please contact Eric Woodruff at (317) 613-7850 or email

Responsibility Breeds Motivation

By Tom Sponsel, CPA/ABV, CFF
Managing Partner 

Every good manager knows that the key to improving productivity is to hire talented people with skill sets that are commensurate with the needs of the workforce. But as a business grows and more managers are necessary to supervise a larger number of employees, breakdowns can sometimes occur when it comes to delegating responsibility.

Good delegation requires adequate orientation to the task or duty, timely follow-up, meeting deadlines and holding the delegate accountable for the quality of the project. Where managers become frustrated is when they do not see the results they wanted at the end of the process.

A mistake often made is when the supervisor takes the project back and completes it himself or herself. While it may serve as a quick-fix, it only increases the burden on the manager, reducing their capacity to act in a supervisory mode. And it sends the message to the employee that they do not have your trust.

While it’s tempting to blame problems on a lack of drive on the part of the employee, in my experience responsibility actually breeds motivation. The majority of workers desire to do well in their endeavors, and will raise their level of performance to meet higher expectations.

The secret is that the delegation of authority must be performed in a way where the employee is held accountable to the level of expectations. When a project is turned in with sub-par results, the manager should explain where their work is lacking and have them fix what’s wrong, rather than the manager allowing it to boomerang back to them to fix or complete.

Good management is in many ways a teaching process, and that takes time and patience. By omitting the learning experience that comes with timely feedback and accountability, a supervisor is only setting the employee up for more failure.

I believe that when employees know they are solely responsible for the delegated project and that you’re depending on them to deliver at a commensurate level and on a timely basis, they will become more motivated to meet those expectations.

If you really want to motivate your staff, you should delegate liberally, providing clearly defined expectations and giving employees the autonomy they need to complete a task. And let them know they’ll be held accountable to that prescribed high standard.

The only way to build a capable and qualified staff that will help your company grow is by investing your trust in them, so managers feel comfortable delegating important duties, and employees are properly motivated to deliver polished returns.

In the end, you’ll find you have a stronger team of employees, a less frustrated manager, and a culture of coaching that workers will pass on as they move up the chain.

If we can assist you with achieving success in your business or personal affairs, please contact Tom Sponsel at (317) 608-6691 or email

Employee Spotlight — Christopher Sargent

Christopher Sargent started as an intern for Sponsel CPA Group in the spring of 2016 and became a full-time staff member in the fall of 2017. As a Staff Accountant in the Audit & Assurance Services department, his duties include conducting audits, reviews, compilations and agreed-upon procedures for clients across a broad spectrum of industries including construction, distribution, manufacturing, service and not-for-profit.

Christopher earned his master’s degree in accounting from Ball State University this past summer. He also recently passed all four parts of the CPA exam.

Outside of work, Christopher enjoys spending time with friends and family, watching movies and cheering on his favorite sports teams — the Indiana Pacers and Indianapolis Colts. Born and raised in Central Indiana, Christopher is full of Hoosier pride.

Tax Law Changes – The GAAP Effect

By Lisa Blankman, CPA
Manager, Audit & Assurance Services

The tax reform is here, with significant changes to both individual and business taxation that have been covered extensively in recent weeks. As you’re closing out your books for 2017 and preparing the year-end financial statements, you may be wondering if the tax law changes have any direct effect on your company’s GAAP financial statements? The answer is yes, they do — if you have a C corporation.

For C corporations, deferred tax assets and liabilities are recorded based on temporary differences between book and tax reporting. For example, if a company has a significant net operating loss carryforward, the deferred tax asset recorded will represent expected tax relief in future periods.

Deferred tax assets and liabilities are recorded as of the balance sheet date based on expected future tax rates. With the tax law changes in effect by the end of 2017, the new effective tax rates starting in 2018 should be used when calculating and recording the deferred tax asset/liability. For GAAP financial statements with footnotes, there will also be a new paragraph added to disclose the change in tax rate, including the prior rate and the newly enacted rate. Considering the tax law changes, this is a relatively minor change to the presentation/disclosure in your financial statements, but it’s something to be aware of when preparing and reviewing your 2017 financial statements.

If you have any questions, please call Lisa Blankman at (317) 613-7856 or email

The Deep Dive: Significant Changes to Itemized Deductions

By Josie Dillon, CPA
Manager, Tax Services

The Deep Dive takes a closer look at individual aspects of the new tax law and how they might affect you or your business.

The Tax Cuts and Jobs Act (TCJA) has brought many changes for individual income tax filers, including significant changes to some of the more popular deductions.

As was the case under previous law, individual tax filers can still subtract from adjusted gross income (AGI) their option of either a standard deduction or the sum of their itemized deductions to arrive at taxable income. However, the Tax Act has nearly doubled the “standard deduction” amount. The standard deduction for 2018 is $24,000 for joint filers; $18,000 for heads of household; and $12,000 for singles or married taxpayers filing separately. The standard deduction figures will be indexed for inflation after 2018. Given these increases, fewer taxpayers will benefit from itemizing deductions.

In addition to the increase in the standard deduction amounts, the new tax law also made changes to several itemized deductions which are explained in more detail below.

Limitation on State and Local Taxes Paid

The new tax law has placed limits on an individual’s ability to deduct state and local taxes as an itemized deduction. Before the changes were effective, individuals were permitted to claim the various types of taxes – real property taxes, personal property taxes, state and local income taxes, and state and local sales taxes (if elected) – as itemized deductions.

For tax years 2018 through 2025, the new tax law limits deductions for taxes paid by individual taxpayers in the following ways:

  • The new law limits the aggregate deduction for state and local real property taxes; state and local personal property taxes; state and local, and foreign, income, war profits, and excess profits taxes; and general sales taxes (if elected) for any tax year to $10,000 ($5,000 for married filing separately). Important Note: The $10,000 limit doesn’t apply if the taxes are paid or accrued in carrying on a trade or business or in an activity meant for the production of income.
  • The new law also completely eliminates the deduction for foreign real property taxes unless they are paid or accrued in carrying on a trade or business or in an activity engaged in for profit.

See previous Sponsel CPA Group article regarding the deductability of prepaid real estate taxes as a result of the new tax law.

Mortgage Interest Deduction

For tax years beginning after 2017 and before 2026, the TCJA modifies the mortgage interest deduction rules, as follows:

  • Acquisition Indebtedness – The deduction for mortgage interest on a principle or second residence is limited to underlying indebtedness of up to $750,000 (down from the $1 million under prior law). The lower $750K limit does not apply to any acquisition indebtedness incurred on or before December 15, 2017. Additionally, the $1 million limitation continues to apply to taxpayers who refinance existing qualified residence indebtedness that was incurred on or before December 15, 2017, so long as the indebtedness resulting from the refinancing doesn’t exceed the amount of refinanced indebtedness.
  • Home Equity Indebtedness – Taxpayers can no longer claim a mortgage interest deduction for interest paid on home equity indebtedness. Under prior law taxpayers could claim a deduction for the interest paid on home equity indebtedness with a loan value up to $100,000. Home equity indebtedness is any indebtedness (other than acquisition indebtedness) secured by a qualified residence. Acquisition indebtedness is any indebtedness incurred in acquiring, constructing, or substantially improving any qualified residence of the taxpayer, and it is secured by such residence.

Charitable Contribution Deduction

For contributions made in tax years beginning after December 31, 2017 and before January 1, 2026 taxpayers can deduct cash contributions to public charities and certain private foundations up to 60% of their AGI (under prior law the deduction was limited to 50% of AGI).

In addition, some experts are predicting a significant decline in charitable contributions as many taxpayers will no longer receive a tax benefit as their total itemized deductions will not exceed the increased standard deduction amount. However, there are still some planning opportunities for charitably inclined taxpayers looking to optimize their deductions. For instance, “qualified charitable distributions” directly from a taxpayer’s IRA remain unaffected by the Tax Act, and “donor advised funds” allow for charitable deductions in one year, with the funds available for distribution to charities in subsequent years.

Other Changes to Itemized Deductions

  • Medical expenses are deductible after they exceed 7.5% of AGI for tax years 2017 and 2018. Previously, the AGI floor was 10% for most taxpayers.
  • Casualty and theft losses have been suspended except for losses incurred in a federally declared disaster.
  • There is no longer a deduction for miscellaneous itemized deductions, which were formerly deductible to the extent they exceeded 2% of AGI. This included such deductions as tax preparation costs, investment expenses, union dues and unreimbursed employee expenses.
  • The overall limitation on itemized deductions that formerly applied to taxpayers whose AGI exceeded specified thresholds has been suspended.

Sponsel CPA Group is here to help you manage these significant changes and maximize your benefits. If you have any questions about the new tax reform law, please call Josie Dillon at (317) 613-7841 or email

Click here for detailed article on “Modifications to Deductions of Losses” 
Click here for detailed article on “Business Expense Deduction Limitations”
Click here for detailed article on the “Pass-Through Income Deduction”
Click here for detailed article on “Changes to Fringe Benefit Rules for Employers”
Click here for detailed article on “New Favorable Depreciation Provisions”
Click here for summary of “Key Provisions Affecting Individual Taxpayers”
Click here for summary of “Key Provisions Affecting Business Taxpayers”

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