Tag Archives: CBIZ


CBIZ promotes new Tucson market leader

CBIZ, Inc. today announced the promotion of Eric Rustand to market leader for Tucson for CBIZ Benefits & Insurance Services, Inc.

Rustand, who is licensed in nearly 20 states, has been with CBIZ for 13 years, holding various positions as a senior benefits consultant, vice president of business development and vice president and sales manager. In these capacities, Rustand has worked with CEOs, CFOs and senior HR professionals on their long range strategic planning, corporate benefit compliance and communication, claims reporting and other financial needs.

In his new position, Rustand will be responsible for growing employee benefits revenue through personal production, and leading producers and client service teams to enhance CBIZ’s market share in Tucson. His role will include serving as a market influencer and collaborating with all CBIZ partners to broaden cross-serving success. Rustand will work with other members of the Tucson office to outline organizational design and responsibilities for future team members.

“As CBIZ seeks to expand the Arizona employee benefits market, Eric will play a crucial role in growing market share, hiring fresh talent and leading the team to revenue growth in Tucson. We’re confident that Eric will deliver exceptional results as he leads the CBIZ team in this territory,” said Jim O’Connor, president of CBIZ Employee Benefits.

Rustand is a former collegiate and professional golfer and has played on four worldwide tours, including the PGA tour. He holds a Bachelor of Science degree in international relations from Brigham Young University.


CBIZ hires new Phoenix market leader

CBIZ, Inc. today announced the hiring of Will Spong as market leader for Phoenix for CBIZ Benefits & Insurance Services, Inc.

Spong comes to CBIZ with 14 years of professional experience and the professional designation of Group Benefits Disability Specialist (GBDS). Before joining CBIZ, Spong was a senior sales consultant at Hartford Life Insurance Co. and a sales consultant at Unum. Most recently, he was senior vice president at Brown & Brown Insurance of Arizona, a position he held for eight years, leading the national sales contest teams.

In his new position, Spong will be responsible for growing employee benefits revenue through personal production, and leading both producers and client service teams to expand CBIZ’s market share in Phoenix. His role will include serving as a market influencer and collaborating with all CBIZ partners to broaden cross-serving success. Along with other members of Phoenix senior leadership, Spong will work to develop and enhance the Phoenix organizational design and outline responsibilities for future team members.

“Will joins the CBIZ team at a transformational time in the Arizona employee benefits market, as the firm seeks to add new creative talent to grow our market share. Will is a strong addition to our leadership team in the region, and we’re confident that he will be a prominent player in leading our next chapter,” said Jim O’Connor, president of CBIZ Employee Benefits.

Spong holds a Bachelor of Arts degree in business administration and marketing from Benedictine College in Atchison, Kan.

CBIZ provides professional business services that help clients better manage their finances and employees. CBIZ provides its clients with financial services including accounting, tax, financial advisory, government health care consulting, risk advisory, real estate consulting, and valuation services. Employee services include employee benefits consulting, property and casualty insurance, retirement plan consulting, payroll, life insurance, HR consulting, and executive recruitment. As one of the largest accounting, insurance brokerage and valuation companies in the United States, the company’s services are provided through 100 company offices in 34 states.     


Looming changes to lease accounting standards

The Financial Accounting Standards Board (FASB) has been working to finalize changes to the lease accounting standards.  Recently, the AICPA Financial Reporting Executive Committee (FinREC) provided FASB with recommendations to the lease accounting proposal (see the full article at http://www.journalofaccountancy.com/News/20138910.htm).  FinREC believes its recommendations would simplify what will be a very complex process of adopting the new lease standards once they are finalized.

The momentum of this project suggests that the “right of use” model, which generally requires leases with terms in excess of twelve months to be captured as an asset and liability on the balance sheet, will become a reality.

With that in mind, companies should take a close look at their current property and equipment capitalization policies to make sure they are reasonable in light of the size and nature of the company’s operations.  A reasonable capitalization threshold may allow a company to determine that small leases would not be subject to capitalization under a “right of use model”.  At a minimum, this may reduce the volume of leases that would require retrospective adoption of the new lease standards.


Allan Klose is an audit manager with the Attest Division of CBIZ & Mayer Hoffman McCann P.C.’s Phoenix office.  Allan serves clients in a wide array of industries and serves as a key member of the firm’s nonprofit practice group. His extensive experience focuses on complex accounting issues including contribution accounting, agency transactions, and endowment accounting as well as assisting clients with the complex fair value (FASB ASC Topic 820) and lease (FASB ASC 840) reporting requirements. In addition to serving his clients, he speaks at various educational events both within the firm and externally to the public.

Tax Strategies for Subcontractors

With the individual tax rate increases starting in 2013, now is a good time take advantage of the many deductions and credits available. In addition to the tax rate increases in the American Taxpayer Relief Act of 2012 (ATRA) there are also two new taxes arising out of the 2010 healthcare reform legislation known as the Patients Protection and Affordable Care Act (PPACA) that also become effective in 2013.

Tax Rate Increases under ATRA

A big relief was that there was not an across the board rate increase as was feared if the Bush Tax Cuts were allowed to expire, however, a 39.6% rate will now apply to individuals with income over $400,000 for single taxpayers or $450,000 for married couples. The top rate on capital gains and qualified dividends was kept at 15% for taxpayers with income below the $400,000/$450,000 levels, but for taxpayers with income above those levels the rate on capital gains and qualified dividends will be 20%.

New Medicare Taxes

Under the PPACA there are two new Medicare taxes starting in 2013. The first one is a .9%
increase to the current Medicare tax on wages and self employment income from 1.45% to
2.35% on earned income above $200,000 for single taxpayers or $250,000 for married

The other new Medicare tax is the 3.8% surtax on net investment Income (NII). This tax
applies to the lesser of the taxpayer’s net investment income or adjusted gross income over
$200,000 for single taxpayers or $250,000 for married couples. A taxpayer must have both NII and gross income over the applicable thresholds in order to be subject to the 3.8% surtax. NII is defined as investment income less otherwise allowable deductions properly allocable to such income. Under the proposed reliance regulations issued by the IRS, NII can come from one of following three categories:

-Gross income from interest, dividends, annuities, rents and royalties (other than
such income derived in the ordinary course of an active trade or business)
-Gross income from any passive trade or business or business in the trading of
financial instruments or commodities
-Net gains attributable to the disposition of property (other than property held in an
active trade or business)

The inclusion of passive activities in the definition of NII represents a huge shift in
traditional tax planning. More emphasis will be placed on treating profitable activities as
active instead of passive to avoid the 3.8% surtax. However it is important to watch that
passive losses do not go unused and be aware that net income from an active trade or
business may be subject to self employment tax.

Taxpayers should review their current structure to see if any passive activities can be
grouped with non passive activities to avoid passive income. The proposed regulations
allow taxpayers a “fresh start” regrouping election to replace any previous grouping

When you combine the new top rate of 39.6% with the new surtax, taxpayers whose
income is above the applicable thresholds will see ordinary rates go from 35% to 43.4%
(39.6% plus 3.8%). Likewise, the tax on capital gains and qualified dividends will go from
15% to 23.8% (20% plus 3.8%).

Expensing Provisions

The $500,000 section 179 expensing provision was also extended by ATRA through
2013. The deduction begins to phase out when total qualified purchases for the year
exceeds $2 million.

The 50% bonus depreciation was also extended for 2013. Under the bonus depreciation
provisions the original use of the property must begin with the taxpayer, therefore used
equipment will not qualify. Qualified property must also have a recovery period of 20 years or less. The IRS clarified that unlike regular tax depreciation; bonus depreciation is not required to be allocated to long-term contracts for those contractors that use the
percentage of completion method of accounting. This provision allows contractors to
benefit from bonus depreciation even when a contract is not completed in the same year
in which it began.

Domestic Production Activities Deduction

The Domestic Production Activities Deduction (DPAD) continues to be a popular
deduction for the construction industry. The DPAD generally is equal to 9% of the lesser
of the taxpayers “qualified” production activities for the year or taxable income (adjusted
gross income for individual taxpayers).

In order to qualify for the deduction, taxpayers must have Domestic Production Gross
Receipts (DPGR). The definition of DPGR is very broad, but includes gross receipts from
the lease, rental, license, sale, exchange or other disposition from a broad list of
activities, including construction or substantial renovation of real property in the U.S.,
including residential and commercial buildings and infrastructure such as roads, power
lines, water systems and communication facilities. Revenue from civil engineering and
architectural services performed in the U.S. for U.S. construction projects also qualify as

179D Deduction
This deduction is often overlooked but could be beneficial for subcontractors who are
involved in the design of energy efficient government-owned commercial buildings. The
deduction could be as high as $1.80 per square foot. Generally the owner of a
commercial building would get the deduction but if the building is owned by a federal,
state, or local government, such as a school or municipal building the IRS allows the
deduction to be allocated to the person primarily responsible for creating the technical
specifications of the building. This would include, for example, an architect, engineer,
contractor, environmental consultant or energy services provider. The governmental
entity is also allowed to allocate the deduction among firms if there is more than one

Other Provisions Beneficial to the Construction Industry

Many provisions that were set to expire at the end of 2011 or 2012 were extended under
ATRA through 2013, including but not limited to the following.

-15 year straight-line cost recovery for qualified leasehold improvements – this
also applies to qualified restaurant property and qualified retail improvement property
(Note, this type of property also qualifies for section 179 expensing up to $250,000
and the 50% bonus depreciation).
– Work Opportunity tax credit (WOTC) – for hiring persons who fall into one of the
designated target groups, including qualified veterans.
-Empowerment Zone credit – available to contractors hiring individuals who live
and work within an empowerment zone.
-Research and Experimentation credit (R&E) – examples of R&E credits claimed
by subcontractors include expenditures for design-build, fabrication, architectural and
engineering projects or activities.
-Railroad Track Maintenance credit – the railroad is allowed to assign this credit
to taxpayers that provide railroad related services to the railroad, including railroad
track construction.
-Energy efficient new homes credit – for contractors that cut energy use for
heating and cooling in constructed homes by 50% compared to the 2006
International Energy Conservation Code (IECC).
-Credit for alternative fuel vehicle refueling property – for the development and
installation of the infrastructure needed to deliver alternative fuels to clean-fuel
-Credit for biodiesel and renewable diesel used as fuel – if used by the taxpayer
as a fuel in a trade or business.


Tax planning is increasingly important for 2013. Subcontractors should review their
current structures with their tax advisors and project their income for the year to see if
they will be affected by the rate increases. Also, check that they are claiming all
applicable deductions and credits in order to minimize their tax liabilities.

Zandra O'Keefe

Zandra O’Keefe, CPA – 50 Most Influential Women in Arizona Business

Zandra O’Keefe, CPA – Managing director, CBIZ

With more than 20 years of experience providing accounting, tax planning and compliance services, O’Keefe has developed a specialty and expertise in providing services to professional service practices such as medical practices, architectural and law firms. She is active in the community and serves as the Past President and an Executive Board Member of Southwest Human Development.

Surprising fact: “I used to re-break horses so that they could be ridden safely again.”

Biggest challenge: “I tend to be an impatient perfectionist, so I’ve had to learn to relax, let go and teach and empower others so they can rise and become successful as  part of our high-performing Phoenix office team.”

Fifty Most Influential Women in Arizona Business – Every year in its July/August issue Arizona Business Magazine features 50 women who make an impact on Arizona business. To see the full list, read the digital issue >>