Ann Holtshouser, tax principal, joined the St. Louis Business Journal and a panel of experts to discuss the American Job Acts, which took effect this month.

1. Jumpstart Our
Business Startups
(JOBS) Act
October 30, 2013
Ann Holtshouser, CPA
314.983.1277
aholtshouser@bswllc.com
6 CityPlace Drive, Suite 900│ St. Louis, Missouri 63141 │ 314.983.1200
1520 S. Fifth St., Suite 309 │ St. Charles, Missouri 63303 │ 636.255.3000
2220 S. State Route 157, Ste. 300 │ Glen Carbon, Illinois 62034 │ 618.654.3100
1.888.279.2792 │ www.bswllc.com

2. JOBS Act:
 OBJECTIVE: The JOBS Act makes it easier for
entrepreneurs to find investors & raise money to
launch companies that create jobs.
What Start-up companies and potential Investors
“Need to Know” about the JOBS Act
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3. CPA Responsibilities
 Help investors determine if “Accredited” or “Unaccredited”
 Help businesses meet requirements to seek funding
through public funding portals or “Crowdfunding”
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4. What kind of investor are you and what does this
mean? (Title II)
 Accredited Investor: (Natural person)
– $1M of net worth (excluding primary residence), or
– $200K income or $300K joint with spouse in two prior
years and in current year
 Unaccredited Investors: NOT an Accredited Investor
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5. What kind of investor are you and what does this
mean? (Title II) (cont.)
 Current - As of 9/23/13: Title II is effective allowing
companies to publicly advertise (solicit) and seek funding from
Accredited Investors.
 Title III - Yet to finalize - SEC is working on regulations to
implement Title III of the JOBS Act. It is expected to be
effective in early 2014. Unaccredited investors will then be
able to invest.
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6. Investors' steps to confirm Accreditation
- Income vs. Net Worth
 Businesses seeking funding through solicitation are required to
take reasonable objective steps to verify investors are
accredited. (SEC Rule 506(c))
‒ Some online portals verify accreditation for businesses
‒ Other portals may require the businesses to verify
accreditation
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7. Investors' steps to confirm Accreditation
- Income vs. Net Worth (cont.)
 Income - IRS Forms W-2, 1099, Schedules K-1; Form 1040;
paystubs; publicly available compensation through proxy
statements; third-party verification from someone such as a
CPA
 Net Worth - Value of assets less liabilities
 Review documents dated within prior 3 months including:
Bank stmts, brokerage stmts, credit card stmts, loan
documents
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8. Investors' steps to confirm Accreditation
- Income vs. Net Worth (cont.)
 CPA has a general understanding of assets and liabilities from
income and debt sources reported on tax returns and could
provide confirmation letters or personal financial statements.
 For full disclosure of liabilities, investors' must provide:
1. Consumer credit report, and
2. Written representation that all liabilities have been
disclosed.
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9. Businesses' requirements to seek funding through
funding portals – “Crowdfunding”
Be prepared to WOW investors with the following:
 A business plan and structure
 Information regarding Founders
- Background, Expertise, Education
 How you intend to use funds
 Milestones and indicators of success
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10. Way’s CPA’s can assist emerging growth companies
 Accounting
 Tax Planning
 Consulting
 Compliance
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11. Way’s CPA’s can assist emerging growth companies
(cont.)
Entity Selection
Registration/Licensing – Federal, State, County, City
Establishing “Books” of Record
Software Selection
Outsourced Accounting Function
Pay Bills
Financial Statement Preparation
Tax Planning
Tax Return Preparation
Credits – Enterprise Zone, Work Opportunity, Missouri Works Program
Eligibility
 Outsourced CFO
 Information Technology Security
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12. Businesses' requirements to seek funding through
funding portals:
“Crowdfunding” – Unaccredited Investors
 Maximum offering is $1,000,000 in a 12 month period
 Basic Financial Information (Early 2014)
– Offerings < $100,000 = Compiled F/S
– Offerings $100,000 to $500,000 = Reviewed F/S
– Offerings > $500,000 = Audited F/S
 Funding Limits (Early 2014)
– Greater of $2,000 or 5% of income or net worth for people
earning or worth up to $100,000
– Lesser of $100,000 or 10% of income or net worth for people
earning or net worth $100,000 or more
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13. Potential Penalties
One year penalty from “crowdfunding” for not
adhering to these rules!
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14. Other Current Tax Benefits of the JOBS Act
 Veteran's Credit – (extended thru 2013)
‒ Returning Heroes Tax Credit - up to $5,600 tax credit
to hire long-term unemployed veterans
‒ Wounded Warrior Tax Credit - up to $9,600 tax credit
for hiring long-term unemployed veterans with serviceconnected disabilities.
 Bonus Depreciation - The JOBS Act extended 50% bonus
depreciation rules through 2012. (extended thru 2013)
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