November 27, 2018
Everyone loves this time of year. The cooler weather, the changing of the leaves and of course, the overindulging of Thanksgiving dinner.
Unfortunately, my inbox is usually as stuffed as the Thanksgiving turkey with all sorts of “unbelievable deals” from Black Friday and Cyber Monday (which makes me wonder how much profit these companies are making on what we pay during the rest of the year?) Although this is not a “Cyber Weekend deal” email, it does have the ability to save you over $20,000 if you keep reading. I hope that has your attention.
Over the past few weeks, I have been on conference calls with Tom Rosenberg and several other members of CODA and ACA looking at how the new Tax Cuts and Job Act law passed in December 2017 will affect camps. First and foremost, I AM NOT a tax lawyer, and after spending way too much time researching this, have NO desire to ever be one! Please be sure to consult your own tax advisor, but you need to at least have an idea of what is waiting for camps.
Under the old law, employee meals (even if served on premises), were 100% deductible under the convenience of employer stipulation. Starting in 2018 they will now only be 50% deductible and will be phased out to nondeductible (0%) in 2025. This will have a huge impact on the taxes we, as camps pay each year.
Not many camps I know of breakdown their meal cost so far as to distinguish between camper cost and counselor (employee) cost. Most simply lump the overall meal cost to “food cost” and use that amount as a gross sum of “cost to operate the business”, which is deductible. Here’s where you need to pay attention and where the $20,000 previously mentioned comes into effect.
When, not if, you get audited you’ll have to be able to show the difference in cost of camper meals vs. employee meals. Thats not a difficult task since most camps know the cost per meal they serve to everyone through their own budgeting. The problem is, under the new law, that employee amount is now 50% taxable. Do the math, it adds up quickly.
As an example, if your annual food cost is $150,000, depending on how many employee meals you serve (total cost of 80-100 employee meals X 3 per day X total days), your taxable amount could now be an additional $20,000 to your overall budget.
Most accountants believe that Congress wanted de mimimis employee meals to be 100% deductible, however that is not how Treasury wrote the rules, therefore a “Technical Corrections Bill” will be needed to get the deduction back to 100%.
We all have several campers with “influential” parents and at this time. We’re not asking you to call them (yet) or to send any money to help us use a lobbyist to amend this law (yet). All we are asking you to do is start putting together a list of people you know that can help camps get a Technical Corrections Bill written and passed. That way, when the timing is right we’ll have our resources and our ducks in a row to be able to make the change efficiently and quickly.
Since we’re talking about how to save you money here’s the next tip on how to keep more of your money in your own pocket. Theres a large number of CODA people that have been busy putting together another great National Conference next February 17-19. This year’s conference will be just before ACA’s conference and both will be at the Opryland Hotel in Nashville, TN. More details on that will be coming soon, but to save $25.00 per person be sure to sign you and your directors up BEFORE December 15 to receive the early bird discount!!
Use the link to sign up through the ACA website (you do not have to be attending both conferences to sign up for CODA but will still use the ACA site for conference registration).
Last and certainly not least, many thanks to all the people that joined us for “Frank’s Fall Tour of Camps” this past September. We had one of the most informative and enjoyable times you could imagine. Some of the comments that were heard: “it was the best consulting fee I’ve ever paid for with all the information and ideas that were shared between camp professionals” and “I’m so glad I found CODA, finally a group of people that knows what it really takes to own and run a camp”. The food was incredible, the tours were informative and the hospitality was out of this world. Many thanks to the camps that hosted as well as the members that traveled to North Carolina for the event. It was an overwhelming success and we’ll do it again!
So forget all the emails from Amazon, Cabelas or wherever you shop this year — this is the best money saving email you will receive this week!
Please support our business partners and conference sponsors. They help make the impossible, possible!!
Thanks and be looking out for more information about CODACON 2019 coming soon!