Hieronymus Brings Restaurant Accounting to the Table

Coastal Hospitality began with a day of frustration… and a restaurant accountant frustrated at the juggle of reports between franchisees and franchisor. Streamlined? Efficient? Effective? None of the above. She knew there had to be a smarter way to manage reports and financials that let restaurant owners do what they do best – ensuring customers have a fantastic experience.

The restaurant accounting company that launched in 2001 as ASG is now known as Coastal Hospitality Services. Ward Hieronymus left a career in banking to buy the company in 2018 and expand its offerings to not just restaurants but small businesses with the same unique needs.  The focus is cost effective, cloud-based, user-friendly foundations that let owners run the restaurant, not the books.

“My years as a lender in community banking were incredibly rewarding, “said Ward.  “Building relationships whether a $500 or $3 million loan gave me a sense of purpose in solving problems or helping someone pursue their dreams. You get to know someone well.  We develop real friendships with our restaurant clients as well.”

CHS is a Platinum Partner with Restaurant 365:  the restaurant -specific software system fully integrated with POS systems, payroll providers, food & beverage vendors, and banks. Financial reports can be accessed as often and with as much detail as needed. Clients can quickly visualize the financial health of multi-unit restaurants so franchisees can focus on improving operations, and franchisors have side by side analytics per location to help each improve its bottom line.

“One of my favorite stories is a client that was paying far too much in shipping for a certain supply.  We happened to have another client using the same shipping method…but paying far less. We helped negotiate a much better contract based on that insight and leverage.”

With a broad range of clients across the country over the last 20 years, Coastal’s hallmark is the experience to share when it comes to vendors, typical expenses, or troubleshooting in a variety of sectors.  That insight has been invaluable during the catastrophic impact of COVID-19 on the restaurant industry.  Ward and team navigated clients successfully through the Payroll Protection Program, CARES Act, SBA loans and more on a state and federal level.

“We work with an amazing variety of clients – from a rockstar cupcake entrepreneur in New York City, to franchise owners with a pub expanding in the Southeast, to a Mexican Cantina chain in Oklahoma.  Throughout the country and in all size operations, many of the frustrations are the same.  It’s a joy to dive into their challenges and simplify life. None of these folks went to culinary school or dreamed of a restaurant to get sidetracked by bookkeeping. We get them back to the kitchen and the front of the house doing what they love.” 

Tax Credits for Caretakers

Have you spent some of the past year as a family caregiver?  You likely knew it would take much of your time, but perhaps not so much of your money.  According to the AARP, the average family caregiver spends about $7,200 a year on household, medical, and other costs related to the care of a loved one. (2021) Good news! If you’ve been taking care of an elderly parent, grandparent, or dear friend – you may be eligible for these 4 tax breaks:

1. Medical Expenses

If you are providing over half of the support for an elderly relative, regardless of if they are your dependent or not, and you itemize deductions on your tax return, you can include any medical expenses you incur for the individual, along with your own, when determining your medical deduction. This can sometimes be called a “medical dependent.” As stated above, an individual qualifies as a medical dependent if you provide over 50% of his or her support, which includes medical costs. This test is less stringent than that used to determine whether an individual is your “dependent,” which is discussed below.

There are a wide range of deductible medical expenses from eyeglasses to physical therapy and much more. Some of the more common expenses include:

  1. Prescriptions
  2. Doctor Appointments
  3. Chiropractor Appointments
  4. Hospital Care

In addition to some of the common expenses listed above, the costs of qualified long-term care services required by a chronically ill individual and eligible long-term care insurance premiums are included in the definition of deductible medical expenses. There is an annual cap on the amount of premiums that can be deducted. The cap is based on age, going as high as $5,640 for 2022 for an individual over 70.

Do keep in mind that medical expenses are deductible only to the extent they exceed 7.5% of your adjusted gross income (AGI) and to the extent that you were not compensated by insurance or otherwise.

2. Filing Status:

If you have been filing as “single” and taking care of an elderly relative, you may qualify for “head of household” status by virtue of the individual you’re caring for. A head of household (HOH) filer allows for a higher standard deduction and lower tax rates. You can claim this status if:

  1. The person you’re caring for lives in your household (see exception below),
  2. You cover more than half the household costs,
  3. The person qualifies as your “dependent,” and
  4. The person is a relative.

3. Claim Your Loved One as a Dependent

Taxpayers have long been able to claim a tax credit for children up to age 16. Unlike a deduction, which lowers your taxable income, a tax credit directly reduces your tax bill. The 2017 federal tax law expanded the Child Tax Credit (CTC) to allow taxpayers to claim up to $500 as a nonrefundable “Credit for Other Dependents,” including elderly parents.

Under this provision, in effect through the 2025 tax year, the IRS allows family caregivers to claim some individuals related by adoption, blood or marriage — and even some friends — as “other dependents” on their federal tax return if both parties meet IRS requirements.

  • You must provide more than 50% of the individual’s support,
  • The individual must be related, or if not related, then lived with you for the full year,
  • The individual must not have gross income more than $4,400 for 2022 (gross income does not include certain social security benefits),
  • The individual cannot be claimed as a dependent on someone else’s 2022 return,
  • The individual cannot file a joint return for the year, and
  • The individual must be a U.S. citizen or a resident of the U.S., Canada, or Mexico.

4. Dependent Care Credit

If the cared-for individual qualifies as your dependent, lives with you, and physically or mentally can’t take care of him- or herself, you may qualify for the dependent care credit for costs you incur for the individual’s care to enable you and your spouse to go to work. The amount of the credit is based on a percentage of the dependent care expense, up to $3,000 per one dependent for 2022.

Talk to us about caretaker credits, or use the IRS interactive tool to determine whether you’re eligible for these deductions click here.

Letter from Uncle Sam? Don’t Panic.  

The IRS sends notices or letters for a variety of reasons; a change to your return, a balance due, or a request for additional information just to name a few.  Now that the tax filing deadline has come and gone, we have reached that time of year when the IRS computers start sending out notices/letters to taxpayers.

Rule 1: Do NOT panic.

Rule 2: Respond in a timely fashion.

An important note, the IRS will never initiate contact with a taxpayer via phone call, email, social media, or text message. They always start contact through the mail.  That is why it is important that if you receive correspondence from the IRS that you open and read the notice immediately.

These notices explain the reason you are being contacted and what you as the taxpayer need to do to comply with the notice.  Often these notices required timely responses; ignoring or failing to comply timely with these notices can lead to penalties and interest being assessed to your account.  Timely responses are also important if you disagree with the IRS assessment and plan to appeal their changes.  It can also help avoid delays in processing your return.

The IRS handles notice appeals on a first-in basis so a timely response can get you to the front of the line.  An appeal can be made by writing a letter in response to the notice or calling the phone number listed on the notice.  If contacting the IRS by phone, you should always have available a copy of your return and the notice to refer to during the conversation.

It is important to compare the IRS assessment against what was filed on your original return.  If you agree with the changes usually no response is necessary.  If an amount is owed to the IRS, pay as much as you can on the balance due.  If you are unable to pay the total due by the deadline provided there are payment plan options available at IRS.gov.

If it’s determined that you do owe some money to the IRS the IRS accepts tax payments in several ways.  Payment via credit card, over the phone, or through the IRS website, direct debits from your bank account, and payment via check/money order to the address listed on the notice are all acceptable methods of payment.

If you have questions about an IRS notice/letter, make sure to reach out to us – the Hieronymus team is happy to help review the notice, draft an appeal, or take other steps to respond effectively.   

Ward Hieronymus