Category: KRS Blog

What Is the New GAAP Lease Accounting Standard?

Posted by Simon Filip on

In February 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (“ASU”), ASU 2016-02, Leases (Topic 842).

New GAAP Accounting Rules for Leases
For public companies, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. For all other entities, this update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for all entities, using a modified retrospective approach.

ASU 2016-02 impacts all entities that lease property, plant, or equipment. ASU 2016-02 defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment for a period of time, in exchange for consideration.

What will change?

Currently, operating lease obligations (for example, a lease of office space for 10 years) are disclosed in a company’s financial statement footnotes, but not recorded on the balance sheet. Under the new guidance, a lessee will be required to report on its balance sheet assets and liabilities related to lease obligations with lease terms of more than 12 months. This differs from current GAAP, which requires only capital leases to be recognized on the balance sheet.

How will the change impact financial reporting?

Companies will have to report their leases (finance leases and operating leases) as both assets and liabilities on their balance sheets. This must be done regardless of the lessee’s (tenant’s) intent to vacate the space at the end of its lease term. Rent obligations that were previously disclosed in the footnotes of financial statements will be reflected on the balance sheet as debt. Debt impacts a company’s credit, compliance with debt covenants and other capital requirements.

What about the lessor (landlord)?

For lessors, the impact of ASU 2016-02 is largely unchanged from current GAAP. For example, the vast majority of operating leases should remain classified as operating leases. In general, lessors should continue to recognize lease income for those leases on a straight-line basis over the lease term.

We’ve got your back

Not sure how the new FASB lease reporting standards impact accounting for your real estate leases? The real estate accounting experts at KRS CPAs are here to help. Reach out to me for a complimentary initial consultation at sfilip@krscpas.com or (201) 655-7411. 

Prepare Now for Easier 1099s in January ’18

Posted by Marika Dugan on

Now is the time to contact vendors for any missing W-9 forms, so that you have a less frenetic year-end.

In fact, we recommend that you obtain a vendor’s W-9 before you pay any of their invoices. Don’t wait to the end of the year to begin the process.

Prepare Now for Easier 1099s in January '18If your company uses  independent contractors, you need to send them a 1099 form for their taxes.The IRS requires anyone providing a service who is not an employee and was paid $600 or more during the year, to be issued a 1099. There are exceptions for attorneys who have no dollar threshold, and payments to corporations, which are exempt from 1099 reporting.

Get detailed instructions for completing Form 1099-MISC.

Important deadlines for filing 2017 Form 1099-MISC

Copy B and Copy 2 of the 1099-MISC form (recipient’s copy)                     January 31, 2018

File Copy A of the 1099-MISC form (IRS copy)                                          February 28, 2018

If filing electronically                                                                                            April 2, 2018

Electronic filing requires software that generates a file according to IRS specifications. When reporting nonemployee compensation payments in box 7 of Form 1099-MISC, the due date remains January 31, 2018.

Recommendations

It is much harder to contact independent contractors for information if their services were used sparingly, or if they no longer provide services. That’s why we recommend that you:

  • Withhold payment to any vendor who has not provided your company with an updated Form W-9.
  • Keep an electronic file of all W-9 forms received.
  • Accept W-9 forms from all vendors – even if you believe the entity may be exempt from 1099 reporting. (Better safe than sorry!)
  • Incorporate the Form W-9 requirement in your initial vendor setup and contract agreements.

Remember, taxpayers may be subjected to fines for late 1099 forms, missing forms, or wrong/omitted taxpayer information. To ensure a stress-reduced year end, start collecting any missing taxpayer information during these summer months.

We’ve got your back

From 1099s to 1040s and more, we believe in making tax season as stress-less as possible for our clients. Contact me at mrollins@krscpas.com to learn more about our proactive tax planning and preparation services.

 

How Does the Net Investment Income Tax Apply to Rental Real Estate?

Posted by Simon Filip on

Taxpayers should be mindful that their rental income may be subject to taxes in addition to ordinary income tax.

What is the Net Investment Income Tax?

Net Investment Income Tax and Rental Real EstateThe Net Investment Income Tax (NIIT) is a surtax that took effect in 2013. The NIIT was intended to boost tax revenue from Medicare payroll taxes on earned income by broadening its reach to unearned investment income.

Net Investment Income Tax basics

The NIIT only applies to certain high-income taxpayers. Specifically, taxpayers with adjusted gross income of more than $200,000 (single filers) or $250,000 (joint filers) are subject to the surtax on investment income that exceeds the thresholds. Note that these amounts are not indexed for inflation.

NIIT imposes a 3.8% surtax on income from investments. Investments includes portfolio income items such as interest, dividends and short-term and long-term capital gains. Royalties, rental income and business income from activities that are treated as passive are also subject to the surtax.  Read my post on passive activities in rental real estate to learn more.

What about self-rentals?

It is common for recipients of rental income, which include taxpayers who own rental properties directly or through pass-through entities (partnerships, LLCs or S Corporations), to also be involved with the business operations conducted on the property. The common scenario is a business owner that also owns the real estate in which he operates. The real estate is held in a separate entity that collects rents from the operating entity. Check out my previous post on IRS rules for self-rentals to learn more.

The NIIT is intended to apply to passive investment income, rather than income generated from an active trade or business. Therefore, it should not penalize a taxpayer who separates its real estate from business operations. This was clarified in an Internal Revenue Bulletin that made it clear that, if an individual derives rental income from a business activity in which the individual is materially participating, the 3.8% tax will not apply.

Does the surtax apply to real estate professionals?

While losses from real estate activities are passive per se, the losses of a real estate professional are considered ordinary losses and available to offset other ordinary income. Net rental income is generally included in the calculation of NIIT and is therefore subject to the 3.8% surtax. There is an exception if the following three conditions are met:

  • the taxpayer is a real estate professional
  • the rental activity rises to the level of trade or business; and
  • the taxpayer materially participates in the trade or business.

If all three of the conditions are met, the income from the rental real estate activity can be excluded from the calculation of net investment income.

What about sales of real estate?

Gains from the disposition of property (other than property held in an active trade or business) is subject to NIIT, including gain on the sale of stocks, bonds, mutual funds and real estate. The gain from the sale of rental property is also subject to NIIT unless the rental activity is part of an active trade or business.

If the real estate activity is considered a passive activity, any gain on the sale of property would generate gain that would be subject to the net investment income tax. However, if the taxpayer qualifies as a real estate professional, and the activity is considered an active trade or business, any gain on the sale of the property may be exempt from the net investment income tax. The characterization of the property for purposes of taxation of the gain on disposition is determined based on the treatment of the property during its operation.

With the 3.8% Medicare surtax on net investment income, real estate professionals should have a renewed focus on tax implications relating to their level of participation in real estate businesses.

We’ve got your back

If you’d like some additional insights into net investment income tax as it relates to real estate investments, contact me at sfilip@krscpas.com or (201) 655-7411.

Food Industry Trends and More: Notes from the Summer Fancy Food Show

Posted by Maria T. Rollins on

Maria Rollins at the Summer Fancy Food ShowWhenever a local industry trade show aligns with a KRS service offering or niche I look forward to an opportunity to get out and network with its exhibitors. I also find that the breakout education sessions are extremely relevant and offer insight to the business challenges faced by industry members. Recently I had the opportunity to attend the Specialty Food Associations’ Summer Fancy Food Show in New York City.

I was drawn to this particular show because we have many clients who are in the food and beverage industry. In addition, I am a “foodie” and was enticed by the thought of spending a day in New York City networking while sampling the latest in specialty foods and beverages.

The show lasted for four days and although I only attended the last day (usually the day with the most giveaways) I was able to get a flavor for many product and business trends. Here’s just a sampling of what I learned.

Hot product trends and business challenges

In light of the shift in consumer demand from processed foods to healthier options, I wasn’t surprised to see gluten-free, vegan, raw and “sugar conscious” products as the hot items on exhibit. Many of the dessert and snack items I sampled were marketed as gluten-free and many amount were also dairy-free and vegan.

As the gluten-free trend continues, manufacturers will face challenges in production when gluten-free and gluten products are manufactured in the same facility. The gluten-free trend will also continue to boost the need for gluten-free flour substitutes such as coconut, corn and rice flours, in addition to other ingredients needed to improve texture and consistency.

Shelf-life of gluten-free products can also be a business challenge. Many exhibitors stressed the shelf-life of their products since many of the ingredients in these gluten-free alternatives result in a shorter shelf-life compared to full gluten products.

Many of the beverage samples offered by exhibitors continued the “healthier” option theme and were low sugar alternatives to traditional sodas. Flavored waters and spritzers containing organic juices, apple cider vinegar or Acai berries were positioned as healthier alternatives to sugar-laden sodas.

I also saw many dairy-free and vegan products exhibited by small businesses and start-ups. Many of the small business exhibitors I spoke with are challenged with expanding their distribution beyond their local geographical region. Attending such premier show was an important way for these companies to get their products in front of the many distributors and buyers attending.

All the small businesses and start-ups I spoke to have e-commerce sites and will ship their products to consumers. We talked about how important e-commerce is to their growth and how it requires that they invest in technology. I also listened to panelist Monica Schechter, specialty and international food category manager at Jet.com and Walmart.com, who cited technology as a catalyst to finding new products and assisting with the discovery experience through online searching and shopping.

Turning a food idea into a successful business

My favorite experience at any trade show is talking to the exhibitors and learning the story behind their product or brand. Many are family businesses or friends who came up with an idea. They are passionate about their ingredients and the quality of the product they deliver to their consumers. As an accountant working with many start-ups and “well-seasoned” businesses, I find these stories are refreshing and often heart-warming. Common for start-ups, these stories usually include a business mistake or two they encountered along the way. After all, having a great idea is only the first step. A successful food manufacturer must build their brand, secure efficient manufacturing, seek distribution channels, set pricing, manage inventory, finance the business and market their product. The most successful businesses deliver their product more efficiently than their competitors.

My advice to small businesses and start-ups is to seek out help from professionals and mentors. I recently spoke to one food manufacturer who has grown a significant business and now offers advice to those entering the market. They are willing to share their challenges and how they overcame obstacles in growing their business.

How are start-up expenses treated for new rental properties?

Posted by Simon Filip on

When projecting taxable income from your new rental property be mindful of start-up expenses

Expenses incurred prior to the commencement of a business are not currently deductible. In the instance of rental real estate, costs incurred before a property is ready to be rented are considered start-up expenses.

What are start-up expenses?For tax purposes, be sure to track start-up expenses for your new rental property

Start-up expenses generally fall into three categories:

  1. Investigatory costs – amounts paid or incurred in connection with investigating the creation or acquisition of a trade or business.
  2. Formation/organizational costs – amounts paid or incurred in creating an active trade or business.
  3. Pre-opening expenses – amounts paid or incurred in connection with “any activity engaged in for profit and for the production of income before the day on which the active trade or business begins, in anticipation of such activity becoming an active trade or business.”

How are start-up expenses treated for tax purposes?

Costs that have been identified as start-up expenses are treated differently for income tax purposes. The expenditures cannot be deducted automatically in a single year. Since these costs are deemed to provide a benefit over multiple years, they are treated as capital expenditures and must be deducted in equal amounts over 15 years. There is a special provision that allows taxpayers to deduct up to $5,000 in start-up expenses in the first year of active business, with the balance amortized over 15 years.

What about expenses to obtain a mortgage?

Certain settlement costs incurred in connection with obtaining a mortgage are required to be amortized over the life of the mortgage. Expenses such as mortgage commissions, loan processing fees, and recording fees are capitalized and amortized.

Points are charges paid by a borrower to obtain a loan or mortgage. Sometimes these charges are referred to as loan origination fees or premium charges. Points are essentially prepaid interest, but cannot be deducted in full in the year of payment. Taxpayers must amortize points over the life of the loan for their rental property.

When is a property deemed ready for rent?

There is considerable confusion about when property is ready for rent and rental activity begins for income tax purposes. It is important to establish this point in time as subsequent expenditures are no longer treated as start-up expenses requiring capitalization.

The rental activity begins when the property is ready and available for rent, not when it has actually rented. In other words, expenses incurred by the landlord while the property is vacant are not start-up expenses. For example, assume a taxpayer landlord has a vacant property that is being advertised for rental and has received a certificate of occupancy, but the landlord has not been able to find a tenant for three months. The costs incurred during that time period are not considered start-up because the property is ready and available for rent.

If a taxpayer does incur start-up expenses, they should be separated and capitalized in accordance with the Internal Revenue Code. Proper tax planning includes minimizing start-up expenses to the extent possible and/or keeping them below the $5,000 threshold.

We’ve got your back

If you have questions about start-up expenses for your new rental property, we’re here to help. Contact me at SFilip@krscpas.com or 201.655.7411.

Allocating Between Land and Building when Acquiring Rental Real Estate

Posted by Simon Filip on

How purchase value is divided up between land and buildings impacts the depreciation tax benefits you get as a real estate owner. Here’s what you need to know.

Depreciation for residential and commercial properties

Apportioning costs between the land and the building for favorable tax treatmentA tax benefit of real estate investing is the tax shelter provided by depreciation. Depreciation is an IRS acknowledgment that assets deteriorate over time. The IRS provides specific depreciable lives for residential and commercial property of 27.5 and 39 years, respectively.  Unlike other expenses, the depreciation deduction is a paper deduction.  You do not have to spend money to be entitled to an annual deduction.

Allocations favorable to taxpayers

When acquiring real estate, a taxpayer is acquiring non-depreciable land and depreciable improvements (excluding raw land, land leases, etc. for this discussion). In transactions that result in a transfer of depreciable property and non-depreciable property such as land and building purchased for a lump sum, the cost must be apportioned between the land and the building (improvements).

Land can never be depreciated. Since land provides no current tax benefit through depreciation deductions, a higher allocation to building is taxpayer-favorable. This results in the common query of how a taxpayer should allocate the purchase price between land and building. The Tax Court has repeatedly ruled that use of the tax assessor’s value to compute a ratio of the value of the land to the building is an acceptable way to allocate the cost.

For example, a taxpayer purchases a property for $1,000,000. The tax assessor’s ratios are 35/65 land to building. Using the tax assessor’s allocation the taxpayer would allocate the purchase price $350,000 and $650,000 to land and building, respectively.

Other acceptable methods used as basis for allocation include a qualified appraisal, insurance coverage on the structure (building), comparable sales of land and site coverage ratio.

Assessor’s allocation vs. taxpayer proposed values

In the recent U.S. Tax Court case, Nielsen v. Commissioner, the court concluded the county assessor’s allocation between land and improvements were more reliable than the taxpayer’s proposed values. Nielsen (the “petitioners”) incorrectly included their entire purchase price as depreciable basis, with no allocation between the improvements and the land.

When the petitioners were challenged they acquiesced and agreed the land should not have been included in their calculation of the depreciable basis. However, the petitioners challenged the accuracy of the Los Angeles County Office of the Assessor’s assessment as being inaccurate and inconsistent. Petitioners relied on alternative methods of valuation, which included the land sales method and the insurance method.  The Tax Court ruled the county assessor’s allocation between land and improvement values was more reliable than the taxpayer’s proposed values.

We’ve got your back

In Nielsen vs. Commissioner, the Tax Court chose the assessor’s allocation over those provided by the taxpayers. However, facts and circumstances may not support the assessor’s allocation in all cases. It is important for a taxpayer to have reliable support and documentation to defend an allocation if it should be challenged.

If you have questions about how to allocate value between land and building, we’re here to help. Contact me at SFilip@krscpas.com or 201.655.7411.

Don’t Be Surprised by a Tax Liability on the Sale of Your Residence

Posted by Simon Filip on

Tax liability on the sale of your residenceRegularly, clients contact me to discuss the tax consequences of selling their primary residence. It seems there is a lot of misinformation floating around that I aim to clarify below.

Rollover proceeds from a sale

It is common for sellers who have been in their homes for quite some time to cite the “old” rollover rule. Before May 7, 1997, taxpayers could avoid paying taxes on profits from the sale of their principal residence by using the proceeds to purchase another home within two years. Sellers over age 55 had the option of a once-in-a-lifetime tax exemption of up to $125,000 of profits.

Home sale gain exclusion

Internal Revenue Code Section 121 replaced the old rollover rule and allowed taxpayers to exclude gains from the disposition of their home if certain requirements are met.

In order to qualify for the gain exclusion, a taxpayer must own and occupy the property as a principal residence for two of the five years immediately preceding the sale. If a taxpayer has more than one home, the gain can only be excluded from the sale of their main home. In cases where there are two homes that are lived in, the main home is generally the one that is lived in the most.

If the requirements are met, taxpayers may be able to exclude up to $250,000 of gain from their income ($500,000 on a joint return) and are not obligated to reinvest the proceeds.

Sale of a multi-family home

I was recently able to provide guidance to married taxpayers who sold their property. This particular property was a side-by-side duplex where the taxpayers occupied one side as their principal residence for approximately 10 years and rented the other. The taxpayer was familiar with the $500,000 exclusion and the gross proceeds were slightly below that amount. During sales negotiations, they were incorrectly advised that the proposed sale of their principal residence with a gain under $500,000 would result in no income taxes owed after the sale. Needless to say, there was an unexpected surprise when I discussed the true income tax consequences with them.

Selling a duplex is conceptually akin to selling two separate properties. The side the taxpayers occupied is afforded the same tax treatment as any other principal residence, which includes the Section 121 gain exclusion up to $500,000 for married taxpayers. However, the investment side of the duplex is subject to capital gains tax and depreciation recapture taxes. In this particular instance, there was approximately $30,000 of combined federal and state income taxes owed as a result of the sale.

Under current law, taxpayers can sell their principal residence and exclude $250,000 of taxable gain ($500,000 for those married filing jointly). The requirements to reinvest the proceeds or to roll them into a new property have been inapplicable for some time. Taxpayers are free to use the proceeds from the sale in any manner without tainting the exclusion.

We’ve got your back

If you have additional questions about the income tax consequences of a residential sale, especially when a portion of the property has been rented out, we’re here to help. Contact me at SFilip@krscpas.com or 201.655.7411.

You can also download my free Tax Tip Sheet for more ways to save taxes when buying or selling a residential property.

Are Club Dues a Deductible Business Expense?

Posted by Maria T. Rollins on

Are Country Club dues a tax deductible expense?With the warmer weather and longer days of summer here, many business owners turn to golf and other outdoor activities for their business networking and development activities. A question I am often asked by my clients is whether they can deduct the dues for clubs at which they entertain customers or that otherwise may be relevant to their business.

Dues may or may not be deductible; depending upon the type of club and its purpose.

A business generally can’t deduct dues paid to a club organized for business, pleasure, recreation or other social purposes. This disallowance rule would apply to country clubs, golf clubs, business luncheon clubs, athletic clubs, and even airline and hotel clubs.

What about the cost of business meals held at the club with your customers?

Just because the dues are not deductible you can still deduct 50% of the cost of otherwise allowable business entertainment at a club. For example, if you have dinner with a client at your country club after a substantial and bona fide business discussion, 50% of the cost of the dinner is deductible as a business expense.

The club-dues disallowance rule generally doesn’t affect dues paid to professional organizations including bar associations and medical associations, or civic or public-service-type organizations, such as the Lions, Kiwanis, or Rotary clubs. The dues paid to local business leagues, chambers of commerce and boards of trade also aren’t considered “nondeductible club dues.”

If the principal purpose of the club is to provide entertainment facilities to its members or to conduct entertainment activities for them, most likely no tax deduction for the dues will be allowed.

Finally, keep in mind that even if the general club-dues disallowance rule doesn’t apply, there’s no deduction for dues unless you can show that the amount you pay is an ordinary and necessary business expense.

We’ve got your back

If you have additional questions about entertainment, travel, gift or car expenses, we’re here to help. Contact me at MRollins@krscpas.com or 201.655.7411.

Should I Acquire and Hold Rental Real Estate in an LLC?

Posted by Simon Filip on

At KRS, we get this question often from both new and seasoned investors acquiring new properties. Here’s what investors need to consider.

Should you buy and hold rental real estate as an LLC?Limited Liability Company

A limited liability company (LLC) is a legal structure that provides the limited liability features of a corporation and the tax efficiencies and operating flexibilities of a partnership.

The owners of an LLC are referred to as “members.” The members can consist of two or more individuals, corporations, trusts or other LLCs. Unlike a corporation, an LLC is not taxed as a separate business entity. Instead, all profits and losses are “passed through” to each member of the LLC.

A central motivation behind investors forming LLCs is to protect the LLC’s members (owners) from personal liability for debts and claims. At its very root, an LLC is utilized to keep creditors – such as suppliers, lenders or tenants – from legally pursuing the assets of a member. There are exceptions to the limited liability, such as in cases of illegal or fraudulent activity.

Disregarded Entity

LLCs are typically taxed as partnerships, which file separate tax returns. However, a single-member LLC, owned by one individual, does not file a separate tax return, but reports the activity on the tax return of its sole owner (Schedule C for business operations or Schedule E for rental activities). LLCs with one owner are commonly referred to as a “disregarded entity.”

Do I need an LLC?

Many real estate investors and landlords often ask whether they should purchase their rental property in an LLC. I have read numerous articles by attorneys, tax advisors, real estate professionals, and insurance agents with opinions on this matter. I believe there is no “one size fits all” answer. Just as in selecting which property to acquire, where investors consider multiple factors including cash flow, appreciation, capital expenditures, interest rates, proximity to transportation and etc., there are multiple considerations in choosing whether or not to acquire a property in an LLC.

Here are factors investors and landlords should consider when making their decision:

  1. Cost – I have seen clients utilize websites that charge fees as low as $100 to form an LLC (plus state filing fees). It is not uncommon to find an attorney’s fees to form a single-member LLC (including state fees) range from $1,000 to $3,000 depending on the state of formation.
  2. Filing fees – most states have an annual filing fee to keep the LLC in good status. That fee is currently a flat $50 in my home state of New Jersey. However, in New York, the fee can range from $25 to $4,500 depending on gross revenues (disregarded LLCs in New York are subject to a $25 flat fee).
  3. Type of property – the type of property to be purchased impacts risk. For example, a single family rental in a good neighborhood is less risky than a multi-unit property or commercial property.
  4. Financing – it is typically easier to obtain financing as an individual than as a commercial entity (i.e., an LLC).
  5. Interest rates – an individual borrowing to acquire an investment property may pay a higher rate than an LLC borrowing for the same property.
  6. Insurance – an umbrella policy provides coverage beyond the basic property insurance and covers additional risks. Umbrella policies may also pay for attorneys appointed by the insurance company and paid to defend you. Depending on an investor’s risk tolerance, an umbrella policy should be considered whether the acquisition is made with or without an LLC.
  7. Net worth – without an umbrella policy, an individual with a high net worth may be exposing his or her other assets to claims of creditors of his or her rental investment.

Transferring to an LLC

Frequently an investor has already closed on a property and the question arises regarding subsequently transferring the property to an LLC. After the property has been deeded there are concerns that should be reviewed including:

  1. Mortgage – if there is a mortgage on the property, contact the lender. Many mortgages have a “due on sale” clause, which means that if you transfer ownership of the property, the lender could require you to pay the full mortgage amount.
  2. Transfer tax – transfer of real property, depending on state law, may be subject to a transfer tax. Some states may exempt the transfer to a wholly owned LLC.
  3. Title insurance – a review of the title insurance policy should be undertaken to determine if the policy continues after transfer.
  4. Leases – tenant leases should be updated to reflect the LLC, and not the individual, as the owner of the property.

Acquiring real estate in an LLC should be included in an investor’s thought process or deal checklist before an acquisition. As the projects grow in size, value and risk protection afforded by an LLC will likely make their use instinctive.

We’ve got your back

If you have additional questions about rental properties and LLCs, we’re here to help. Contact me at SFilip@krscpas.com or 201.655.7411.

KRS Business Insights Breakfast: Results Z to A

Posted by Maria T. Rollins on

People don’t achieve goals, they achieve results – Jean Oursler, a.k.a., The Queen of Results

Jean Oursler, the Queen of ResultsThe June KRS Insights Breakfast featured Jean Oursler, who is a speaker, author, and one of the country’s top business consultants. Jean shared with us the RESULTS Formula, which is a new way of thinking about goal setting and growing a business.

For those who missed the breakfast, we wanted to share some of Jean’s insights.

Thinking in terms of results requires a mindset change. As Jean pointed out, “It’s our Cave Man Brain – the part of our brain that’s responsible for our survival – that keeps us from achieving results. Our Cave Man Brain is in charge of the thoughts that hold us back, for example, when you find yourself saying ‘I can’t…’ or ‘I don’t have time to…’”

Her RESULTS Formula is a 7-step process that will help to change your mindset and improve your ability to get results:

R = Ready

E = End

S = Steps

U = You

L = Levels of Learning

T = Transformation

S = Success Celebration

Key Insight: You need to tame your Cave Man Brain to achieve the results you want. The RESULTS Formula can help you do this.

The inside scoop on the RESULTS Formula

R = Ready

To achieve results, you have to be ready. Most people are not. Ready means you have decided to want more and you’re willing to do what it takes to get it.  When you’re ready, you know that you can’t do the same thing every day, and get different or better results. You realize that you must improve every day so that you can be more successful tomorrow. You’re ready for the challenges you will face as you seek results.

E= End

What are the end results you want to achieve? What do they look like? The best way to achieve something is to first visualize what outcomes you want. By starting with the end, you can work backward to figure out the best way to begin. “Don’t start at A. Start at Z and work back towards A, so that your Cave Man Brain doesn’t get involved,” said Jean.

S = Steps

What steps will you need to take to get to your results? Think about these as action steps. The more specific you make these action steps, the more likely you will achieve results. Then write these steps down and commit to them.

U = You

To achieve greater results, noted Jean, YOU need to be involved. You need to work on yourself and the specific skills that you need to achieve the results you desire.

L = Levels of Learning

As you start to acquire the skills you need to achieve results, you will be going through different levels of learning. During this time, you may feel uncomfortable or frustrated. That is all part of the process as you try new ideas and improve.

Key insight: Successful people never stop learning and growing. You have to grow to achieve. Your results will always be better if you’re on a growth path, compared to the person who stays stagnant.

T = Transform

When you go through levels of learning, you can’t help but be transformed into a new way of thinking and being. “Don’t blow through this phase, recognize it and view the change as positive,” commented Jean.

S = Success Celebration

When you achieve results, celebrate! Celebration is an anchor that helps your brain remember the successes you’ve achieved. Celebrate every success, no matter how big or small, because it reinforces why it is necessary to continue your lifelong RESULTS Journey.

The RESULTS Formula can be repeated. When you’re ready, you can begin to implement it over and over to achieve higher levels of success.

We’ve got your back

At KRS CPAs, our goal is to make it as easy as possible for you to get the advice and counsel needed, so you can focus on what matters most to you. The KRS Insights Breakfast Series offers timely and relevant information from experts like Jean Oursler, who can help you achieve the results you desire.

Visit our Insights page to subscribe to our newsletter and you’ll be notified about upcoming breakfasts plus other KRS news, events and resources.

As the Queen of Results, Jean Oursler is all about achieving unprecedented results at unprecedented speed, which helps her clients create and maintain market dominance. Jean was recently rated by the Women’s Presidents Organization (WPO) as its #1 facilitator across the globe. She has a Master’s degree in organizational development and is pursuing a PhD in business psychology. Her next book in the RESULTS! series, The RESULTS! Formula, is due out in 2017.