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Article Dean Dorton

On April 18, Massey Consulting is hosting an event with Dean Dorton “From Visibility to Insight: The Future of Finance in the Cloud”, to show CFOs and finance leaders the benefits of cloud-based financial management in action.

Automation, mobility and artificial intelligence are delivering stronger pathways to success, with even more solutions in the future for tech-savvy companies working in the cloud.

Enhance your business relationships, with modernized communication tools.  Lead your teams with solutions that help your teams succeed and focus on stronger efficiency and productivity. Bring in tools that on-premises systems can’t offer, for stronger insights into your company’s performance.

If your business is in the midst of rapid growth and using the same on-premises systems, or you’ve been noticing that you don’t quite have all the data you need, when you need it, then you don’t want to miss this event.

What You’ll Get

In this exclusive event on April 18, we’ll show you what the cloud is doing today for growing businesses:

  • Modern companies that want a system that will grow with them first need to start with a financial management system that is designed for growth. Find out how the right cloud-based software infrastructure can scale with your changing needs.
  • Learn how moving other finance leaders have moved beyond spreadsheets and limited on-premises systems into cloud-based data management and reporting to build better strategies, and enhance forecasting.
  • Experience real cloud-based financial management solutions in action, to see how the cloud can streamline your own financial processes to work faster and smarter.
  • Meet and network with other finance executives and leaders, as you earn CPE credit.

Who Will Benefit

Anyone who is interested in the latest technology and growth solutions for financial management will get something out of the event:

  • CEOs and CFOs
  • Controllers
  • Executive Directors and Senior VPs
  • Individuals in high-level finance positions

Secure Your Seat

This special event is happening from 4-6 pm EDT at AvidXchange, Inc in Charlotte, NC.  

Share this unique opportunity with other tech-savvy finance leaders as we team up with Dean Dorton to demonstrate the future of the cloud for your financial management. Experience firsthand how to leverage data with the cloud, and do more for your company’s growth.

Article Dean Dorton

You may be aware of the rule that allows businesses to deduct bonuses employees have earned during a tax year if the bonuses are paid within 2½ months after the end of that year (by March 15 for a calendar-year company). But this favorable tax treatment isn’t always available.

For one thing, only accrual-basis taxpayers can take advantage of the 2½ month rule — cash-basis taxpayers must deduct bonuses in the year they’re paid, regardless of when they’re earned. Even for accrual-basis taxpayers, however, the 2½ month rule isn’t automatic. The bonuses can be deducted in the year they’re earned only if the employer’s bonus liability is fixed by the end of the year.

The all-events test

For accrual-basis taxpayers, the IRS determines when a liability (such as a bonus) has been incurred — and, therefore, is deductible — by applying the “all-events test.” Under this test, a liability is deductible when:

  1. All events have occurred that establish the taxpayer’s liability,
  2. The amount of the liability can be determined with reasonable accuracy, and
  3. Economic performance has occurred.

Generally, the third requirement isn’t an issue; it’s satisfied when an employee performs the services required to earn a bonus. But the first two requirements can delay your tax deduction until the year of payment, depending on how your bonus plan is designed.

For example, many bonus plans require an employee to remain in the company’s employ on the payment date as a condition of receiving the bonus. Even if the amount of the bonus is fixed at the end of the tax year, and employees who leave the company before the payment date forfeit their bonuses, the all-events test isn’t satisfied until the payment date. Fortunately, it’s possible to accelerate deductions with a carefully designed bonus pool arrangement.

How a bonus pool works

In a 2011 ruling, the IRS said that employers may deduct bonuses in the year they’re earned — even if there’s a risk of forfeiture — as long as any forfeited bonuses are reallocated among the remaining employees in the bonus pool rather than retained by the employer. Under such a plan, an employer satisfies the all-events test because the aggregate bonus amount is fixed at the end of the year, even though amounts allocated to specific employees aren’t determined until the payment date.

Additional rules and limits apply to this strategy. To learn whether your current bonus plan allows you to take 2016 deductions for bonuses paid in early 2017, contact us. If you don’t qualify this year, we can also help you design a bonus plan for 2017 that will allow you to accelerate deductions next year.