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Taxes….Phew! Depreciation Extenders for 2014

Posted Tuesday, January 20, 2015 by Stuart W. Margolis, CPA, MT, Margolis Partners LLC.

Extension of Bonus Depreciation and Code Sec. 179 Expense: 2014 Tax Prevention Act

alt textBy Stuart W. Margolis, CPA, MT, Margolis Partners LLC

Congress has enacted the Tax Increase Prevention Act of 2014 (2014 Tax Prevention Act), which provides a one year extension of popular incentives for business investment in capital and equipment. These incentives include an extension of bonus depreciation provisions and temporary increases in the deductible amount and investment limitation under Code Sec. 179. Also added, Corporations may continue to accelerate the AMT credit by forgoing bonus depreciation on certain property placed in service in 2014 if you have AMT credits available and the election is made not to take bonus depreciation.

Bonus depreciation. The 2014 Tax Prevention Act extends the 50-percent first-year bonus depreciation allowance for one year to apply to qualifying property acquired after December 31, 2007 and placed in service before January 1, 2015 (or before January 1, 2016, for certain longer-lived and transportation property). There is no limit on the total amount of bonus depreciation that may be claimed in any given tax year, and the bonus depreciation allowance rate of 50 percent remains unchanged.

Although the placed-in-service deadline for 50-percent bonus depreciation property with a longer production period is extended one year through December 31, 2015, only pre-January 1, 2015 progress expenditures are taken into account in computing the bonus depreciation allowance.

As a reminder, the 50% depreciation is taken first, then regular MACRS or accelerated depreciation on the remaining 50%. By example, a 5 year asset worth $10,000 received $6,000 in depreciation in 2014; $5,000 in bonus depreciation and another $1,000 (20%) on the remaining $5,000 using the regular MACRS depreciation method.

Code Sec. 179 expense deduction. In addition to the bonus depreciation changes, the 2014 Tax Prevention Act retroactively extends the increased deduction and investment limits under Code Sec. 179. Generally, Code Sec. 179 permits a business that satisfies limitations on annual investment in fixed asset to elect to deduct (or “expense”) the cost of qualifying property rather than depreciate the cost over time.

For tax years beginning after 2009 and before 2015, taxpayers are permitted to expense up to $500,000 of the cost of qualifying property under Code Sec. 179, reduced by the amount by which the qualified investment in fixed assets exceeds $2,000,000. Qualifying property includes depreciable tangible personal property purchased for use in the active conduct of a trade or business. Off-the-shelf computer software placed in service in tax years beginning after 2002 and before 2015 is treated as qualifying property.

By example, a 7 year asset with a cost of $2,000,000 is the only asset purchased in 2014. You may take a 179 expense deduction of $500,000 (the maximum amount). With the remaining $1.5 million you can take bonus depreciation of $750,000. Then with the remaining $750,000 in asset cost basis, another $107,143 (1/7 or 14.286%) in regular MACRS depreciation is added. This totals $1,357,143 or 67.86% of the asset cost on a 7 year asset.

The incentives for investing in business property in 2014 were significant. It’s a shame congress did not act sooner as the ability to plan on equipment investment was lost due to the late extension of both the bonus depreciation and 179 expense deduction provisions. Once again, we enter 2015 with no bonus depreciation and greatly reduced 179 expense deduction and investment limitation. As always, planning for your capital and equipment acquisitions and retirements is essential. If you have any questions call us, Margolis Partners, 610.667.4310. We’d be glad to help walk you through it.

*About Margolis Partners

Margolis Partners has long been recognized as the financial expert for family-owned businesses with a specialty in the printing, packaging and allied graphic communications industries, assisting thousands of companies with strategic and financial management, valuation, mergers/acquisitions, accounting, audit and tax services. The firm is noted for its expertise in enabling companies to optimize profits. Proudly, it is the purveyor of the industry’s Value-Added Principles of Management, and compiles the annual Printing Industries of America Ratios, the printing industry’s premier financial benchmarking tool.*.

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Are Your Collection Practices Reality Or Illusion?

Posted Monday, January 19, 2015 by Andrea Schlack.

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From PPI Partner Printing Industry Credit Bureau’s (PICB) Monthly Digest of Sound Credit And Collections Practices

Volume 12, Jan. 2015

The fabled Man from LaMancha, Don Quixote, lost his mind believing chivalry died. In his delusional imagination he saw only giants and demons who stole bounty from the people he loved and only wished to protect, while his trusted friend knew reality—Don Quixote was chasing windmills.

alt textSound familiar? How many times have you done ’good’ by a customer who later laid blame on your company for supposed ills suffered only so he could refuse payment for the services rendered? Do you go insane because of these imaginary obstacles to your profits or do you behave like Panzo and attack the windmill for what it is?

When you need to topple windmills, PICB is your Pancho Sanchez who will help you avoid imaginary giants:

Maintain a good paper trail of all events because that which is in writing will always supersede that which is supposedly remembered.

When a customer makes a promise acknowledge it in writing via email or fax and make sure to specify who you spoke with, what was discussed and agreed upon, and state clearly when you expect to receive the promised payment.

Never make a demand using negative terms such as ’when will you pay’? or Why have you not paid?” Both of these leave you unresolved because the customer could conceivably answer this with ’never’ or ’because’.

Make your demand positive by staying focused upon the issue at hand and asking questions that limit the answer to a positive result, such as ’How many days do you need to get this paid?” By limiting the answer to a specific time frame you maintain control over your unpaid receivable.

Follow up is key. If an expected payment is not received do not wait to follow up with your customer and again ask the question in a positive fashion, such as “I have not received your payment yet, when was it mailed?’

Never make a statement that you will not follow thru upon. If you repeatedly threaten to hire your outside agency, eventually the customer will just perceive your call as ’noise’ and they will ignore your requests or demands…make your words count!

Be prepared to take necessary steps to protect your profits. Non-paying customers cost money and resources and unlike fine wine they do not improve with age…the longer you wait to take corrective steps the more likely you will suffer a bad-debt write off.

Call us any time at (847) 265-0400

alt textFor Collections, visit PICB:

For Risk Assessment, visit Check It Co:

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Using Data: The Process of Pie

Posted Tuesday, January 6, 2015 by Traci Kinden, Alder Technology.

From the Alder Technology BLOG

alt textOne of the best parts of the holidays is the food, especially the pie. Specifically the homemade variety created by someone with a tried, true, and consistent process… Grandma’s finest beats the store-bought variety every time. Believe it or not, color management is much like pie construction. Blend the right components to roll out a great foundation (the delicate, flaky crust), adjust files to print properly (create a flavor-packed filling with just the right thickness), and print multiple jobs using the same process (pecan, apple, chocolate cream, etc.).

We’ve taken some time to research in-house color management processes at a variety of digital printing facilities over the past few months. Our findings show the same core principle is true in both printing and pie making: process is everything. Prints done without a good color management process are akin to the “poser-pie” that looked decent in the pan but turned out to be soupy and tough-crusted when served. While both the print and the poser-pie pass a visual evaluation, it took too much effort to complete the job, and no one wants to run it again (or go back for seconds).

alt textIn printing, an initial calibration is done with specific printer, ink, and media combinations to achieve balanced color and maximize gamut. This is the foundation for any great print. When a customer submits a job, the pre-press department prepares the file to print accurately using that printer, ink, and media combination. Before producing the job, scanning a quick test print ensures the output device is within spec. This eliminates surprises during production and greatly reduces the need to re-run jobs. Without these three procedures in place, production becomes an inefficient guessing game with unpredictable results.

Process control of PieLikewise, the perfect pie doesn’t come together without a great recipe, the right ingredients in accurate amounts, and a specific baking time and temperature. Without controlling these three things, a pie turns out to be a poorly assembled mass of calories that looks better than it tastes.

Adopting a data-driven color management solution is not a difficult process, because color is a science. It can be monitored and accurately controlled with data. This leads to efficient, high quality printing. Cooking shows aren’t filmed before the crew knows the workflow and prepares everything required to make a quality end product. When it comes to printing, having the right process in place and verifying printer performance before running jobs will pack your prints with efficient, delicious accuracy. And every customer wants that.

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Ask Dr. B!

Posted Tuesday, December 30, 2014 by Mark Bohan.

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One of the benefits of membership is the technical expertise provided by Printing Industries of America. Each month, Dr. Mark Bohan, Printing Industries’ Vice President, Technology and Research, discusses common production problems and issues. Dr. Bohan is responsible for the Center for Technology and Research, Environmental, Health and Safety; consulting, on-site technical assistance; technology training; and simulators. He oversees technical research, including technology and product assessments, process controls, contract research, and laboratory services..

Why should I monitor fountain solution pH?

Fountain solution pH is important as it is an indicator of properly mixed concentrate and can indicate unknown contaminates. A pH below 4.0 can interfere with ink driers. Measure the pH of freshly mixed fountain solution and when you normally change the fountain solution. There is a pH range that would be considered normal for your press.

What is the recommended temperature of a delivery pile on a press with an IR dryer?

Generally speaking, 85–90 degrees Fahrenheit. Above 90 degrees some ink resins can soften and cause setoff or blocking. Be certain that the inks are recommended for use with IR dryers. With drying, more is not always better.

What is a dyne level?

Dyne level is a number expressing the surface energy of the substrate, most commonly used with non-porous materials such as plastics. Recommendations are typically 40–50 dyne for conventional inks and even higher for UV inks. Too low a dyne level can affect ink adhesion and the ability of the ink film to lie in an even layer.

Printing Industries Resource:
Offering unbiased and confidential results, Printing Industries of America provides a range of testing and laboratory services to help solve printing-related problems. For more information, please contact Dr. Mark Bohan at 800-910-4283, ext. 782, visit (click “Research and Consulting”), or email

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An accident can happen at any time, anywhere. Tips by the Printing Industries of America Experts

Posted Monday, December 29, 2014 by Jules VanSant.

As a member benefit, the following tips are provided to Printing Industries of America members exclusively through local affiliate publications.

alt textGary Jones, Assistant Vice President, Environmental, Health, and Safety, offers this tip on preventing workplace accidents.

An accident can happen at any time, anywhere.

What if there were measures to prevent accidents, due to working with production and other equipment, from occurring in the workplace?

You’re in luck, there are! OSHA’s lockout/tagout standard, published in 1989, when implemented, is designed to prevent injuries and deaths caused by inadvertent equipment during servicing and maintenance. Did you know OSHA estimates that about 120 deaths and 50,000 injuries are prevented every year because of compliance with lockout/tagout? While it may not be obvious, almost every production employee is practicing lockout/tagout every time they operate a piece of production equipment.

Since all employees who operate equipment use lockout/tagout every day, a complete and comprehensive lockout/tagout program, when properly employed, protects employees from serious physical hazards such as amputations, shocks, electrocution, pinching, crushing, cuts, abrasions, burns, and death.

Protecting employees from potential hazards must be a company-wide effort. Those employees who operate and service equipment are at the greatest risk of harm during the work day. However, all employees—and in some instances outside contractors—are affected by lockout/tagout, whether directly or indirectly. Following the lockout/tagout plan, along with constant communication between those employees working on equipment and those working around the area, is very important.

A well-designed lockout/tagout program helps to improve productivity in the workplace, prevent accidents, and help to reduce costs associated with equipment downtime.

For more information on how to set up a lockout/tagout program, contact your local PIA Affiliate or the EHS Affairs Department at Printing Industries of America at or (800) 910-4283 x794.

Printing Industries Resource:For information on any of the products or services mentioned and the discounts provided to members, contact Printing Industries of America at 412-741-6860 or Information may also be found on

Printing Industries’ members-only technical hotline is available to answer questions. Call 800-910-4283, ext. 786.

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