This issue of BIZGrowth Strategies articles include "Did the IRS Open the R&D Tax Credit Floodgates?"; "Global Expansion: Enhancing Your Supply Chain’s Tax Efficiency"; "Maximize Your Not-for-Profit’s Social Media Presence in Five Steps"; "Seven Affordable Care Act Myths"; and "It’s Time to Change the Way You Think about Life Insurance."

1. ISSUE 61 • FALL 2014 BIZGROWTH S T R A T E G I E S
I D E A S T O H E L P G R O W Y O U R B U S I N E S S
our business
is growing yours
It’s Time to Change the
Way You Think about
Life Insurance
Maximize Your
Not-for-Profit’s
Social Media
Presence in
Five Steps
Global Expansion:
Enhancing Your
Supply Chain’s
Tax Efficiency
SEVEN
AFFORDABLE
CARE ACT
MYTHS
Did the IRS Open the
R&D Tax Credit
Floodgates?

2. In This Issue…
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@cbz CBIZ BIZ Tips
Videos
Tax Strategies.........................2
Did the IRS Open the R&D Tax Credit
Floodgates?
Expanding Your Business.........3
Global Expansion: Enhancing Your
Supply Chain’s Tax Efficiency
Employee Benefits...................5
Seven Affordable Care Act Myths
Insurance Strategies...............6
It’s Time to Change the Way
You Think about Life Insurance
Marketing...............................7
Maximize Your Not-for-Profit’s Social
Media Presence in Five Steps
CBIZ in the News
For complete articles:
cbiz.com/news/in-the-news
MarketWatch
Should you pull a ‘Burger King’
to cut your tax bill?
August 26, 2014
CNN Money
How Wall Streeters
blow off steam
August 23, 2014
Fox Business
What if your business
outlives you?
June 9, 2014
2 | BIZGROWTH STRATEGIES – FALL 2014 CBIZ, INC.
Did the IRS Open the
R&D Tax Credit
Floodgates?
Tax Strategies
BY MICHAEL S. SILVIO
If your business has ignored the research and development (R&D)
tax credit for any reason, now is the time to perform an R&D credit
analysis.
Why now? Quite simply, the IRS has opened the floodgates by
removing a restriction that prevented a business from electing the
alternative simplified credit (ASC) method on an amended return when
claiming R&D tax credits.
This seemingly minor ruling is a chance for probably thousands of
small- and medium-sized companies to finally start benefiting from R&D
tax credits.
Why is this such a huge opportunity?
The ASC method is a much simpler process for calculating the R&D
tax credit than the traditional method which requires a “lookback” into
the 1980s and 1990s to establish a baseline for claiming the credit.
This has proved very cumbersome for many businesses and, as a result,
these companies have abandoned the effort to claim the credits due to
lack of records or high-threshold requirements.
Instead, the ASC method uses a prior three-year average of qualified
research expenditures (QREs). The QRE average is then divided in half
and any expenditures over that amount receive a 14% tax credit.
For example, if a company had QREs of $100,000, $110,000
and $120,000 over the previous three years, the average would be
$110,000, and the threshold would be $55,000 ($110,000/2).
Therefore, a QRE of $120,000 would result in a tax credit of $9,100
($120,000 - $55,000 * 0.14).
Unfortunately, until now the ASC method only could be elected on
a timely filed current year tax return and not prior years. The result is
that many companies would not see enough of a credit to make the
R&D credit process worth the effort, or they were stuck trying to use the
traditional method with sometimes lackluster or poor results.
Now that the IRS has opened the floodgates by allowing the election
of the ASC method for open tax year via the filing of amended returns,
companies should find the R&D credit process worth the effort. And,
in some instances, high-revenue companies with substantial R&D that
couldn’t meet the threshold requirements of the traditional method
could also see significant R&D credits.
Consider this example of a software company. Before the ruling, it
was estimated that the company would only have been able to claim
(Continued on page 3)

3. MICHAEL S. SILVIO
CBIZ MHM, LLC • Irvine, CA
949.727.1322 • msilvio@cbiz.com @CBZMHM_Irvine
credits of $9,000 in 2011 and $3,000 in 2012 under the traditional method. After the ruling, it is estimated that the company will be able to claim credits of $38,000 and $31,000 in those years. That’s a cash boost of nearly $70,000!
Do not assume this is a credit for tech and pharmaceutical companies only. Companies of all sizes and from many industries can claim the credit. In fact, manufacturing, software, aerospace and food companies also often receive substantial credits.
The R&D credit can be claimed for not only new product development but also for product enhancements and process improvements that increase production.
DISCLAIMER: This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. This information is general in nature and may be affected by changes in law or in the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.
CBIZ, INC. BIZGROWTH STRATEGIES – FALL 2014 | 3
Global Expansion: Enhancing Your Supply Chain’s Tax Efficiency
BY DONALD REISER
While U.S. consumer product companies traditionally have sourced products from Asia and other foreign locations, an increasing number of those companies also are looking to distribute their products in foreign markets. For example, as the consumer class in China and India has grown significantly in recent years and those consumers increasingly desire U.S.- branded products, many companies are recognizing this demand as an opportunity to expand their brand presence into a broader global marketplace.
This international growth certainly entails business risks and challenges, but it also brings opportunities to create value for the owners by building tax efficiency into their developing global business model. Although tax should not drive the business decision, once a company decides to operate internationally, it should be proactive in addressing how best to structure those operations to optimize its tax position.
International trading companies are often used in the consumer products industry. Why? It’s a tax- effective way for a U.S. business to operate globally. Since the U.S. tax system imposes taxes on the worldwide income of its residents, implementing a
Expanding Your Business
(Continued on page 4)
5 Reasons to Use the Alternative Simplified
Credit Method
– 1 –
Prior years’ amended returns allowed
– 2 –
Revenue may be too high to meet traditional threshold requirements
– 3 –
Don’t have records to establish traditional
base limitation requirements
– 4 –
Credit too small under previous
traditional method credit rules
– 5 –
Potentially reduces audit risk

4. 4 | BIZGROWTH STRATEGIES – FALL 2014 CBIZ, INC.
Expanding Your Business (Continued from page 3)
DONALD REISER
CBIZ MHM, LLC • New York, NY
dreiser@cbiz.com • 212.790.5724 @CBIZNewYork
trading company structure will align the taxation of a company’s global profits with its business conducted outside the U.S. and also permit the deferral of U.S. taxes on those international profits until they are brought back to the U.S.
To accomplish this, a trading company typically is established in a low-taxed jurisdiction to conduct specific international activities, assume certain foreign business risks, and either own or license rights to exploit intellectual property assets offshore. Because no two companies have exactly the same business, culture and risk profile, the trading company model needs to be tailored for each company. Determining the appropriate trading company structure will therefore depend on numerous company-specific factors (in addition to those just mentioned), including its current and future business and supply chain model, the location of key employees, its intellectual property ownership and development activities, its sales and distribution channels, and the repatriation needs/ objectives of its owners.
Putting an effective international trading company structure in place requires careful planning to navigate around both U.S. and foreign tax rules, which are often complex and constantly evolving. Choosing the right foreign location for the trading company, for example, will depend on various tax considerations, including local country taxation of ongoing profits and distributions, access to tax treaties and local country incentives. However, other factors such as the business and regulatory environment, the legal protection afforded to intellectual property assets and more practical concerns about whether the company actually can operate from that location are critical to this decision.
Other important tax considerations to be addressed include the tax cost of transferring brands or other intangibles to the trading company, managing U.S. tax deferral on international profits, avoiding the creation of a taxable nexus outside the trading company’s location, efficiently moving low- taxed offshore profits within the global structure, and ensuring that all intercompany sales, licenses and services comply with the transfer pricing rules of each affected country.
Perhaps the most critical requirement to achieve the tax benefits under a trading company model is having sufficient commercial “substance” (actual value from employees performing real functions as opposed to a shell) in that company to conduct its business. While the level of substance needed will vary based on the particular business and its operating model, at a minimum, the trading company must have locally based employees with the necessary experience and decision-making authority to manage its business, risks and assets.
If you are contemplating an expansion into the international markets, you need to carefully consider the tax implications of such a venture. The tax considerations highlighted in this article could have a significant impact on the outcome of your final decision and should be part of the decision-making process early on to help mitigate potential risks and take advantage of opportunities. Consulting with a global tax specialist who is highly experienced in this area can be instrumental in helping to develop and implement a tax-optimized business structure for such international expansion.

5. SEVEN AFFORDABLE CARE ACT MYTHS
BY ZACK PACE
Have you ever heard the saying, “To a worm in horseradish, the world is horseradish”? Those of us who have been immersed in the Affordable Care Act (ACA) since March 23, 2010 can relate. It’s like we are swimming in a large jar of ACA horseradish. The good news is that we know when we encounter ketchup. The following are seven incorrect statements (ketchup) we frequently encounter.
1. Employers subject to Employer Shared Responsibility in 2015 can eliminate their penalty risk by providing adequate and affordable coverage to 70% of their full-time employees.
False. The only way to eliminate the Shared Responsibility penalty risk is to offer coverage that is both adequate and affordable to 100% of all full- time employees.
2. The 9.5% of Box 1, W-2 income affordability safe harbor is the only available safe harbor.
False. There are three available safe harbors. Of these, the Federal Poverty safe harbor is the easiest to administer, and many employers already meet its requirements. Check it out.
CBIZ, INC. BIZGROWTH STRATEGIES – FALL 2014 | 5
Employee Benefits
3. The 90-day eligibility waiting period requirement is part of Shared Responsibility.
No, it is part of the Market Reform Rules and is effective when the 2014 plan year begins. Also, a first of the month following 90-day waiting period is not compliant. For administrative ease, most employers are selecting first of the month following 60 days.
4. The only place to purchase individual health policies is via an ACA exchange.
That’s incorrect:
n Individuals can still purchase policies off- exchange.
n On or off exchange, the offered policies are mostly from private insurers.
n Generally, the rates on and off exchange are
the same.
n Premium assistance for those who qualify, however, is only available on the exchange.
5. Small businesses with existing health plans should strive to keep their employee count below 50 full- time employees + equivalents.
Not necessarily. Small business owners, please do not limit the growth of your business without first determining if you’re at risk of paying a Shared Responsibility penalty. You might already be in great shape, and our economy needs your growing business.
6. Before the Affordable Care Act, fully insured health plans were not subject to nondiscrimination requirements.
While it’s true that a fully insured health plan is not yet subject to the TBD ACA nondiscrimination rules, a Section 125 plan is and has been subject to nondiscrimination rules. If an employer with a fully insured health plan allows their employees to pay for their share of the health premiums pre-tax through a Section 125 plan, the employer is subject to the Section 125 nondiscrimination rules.
7. We don’t have the final regulations, so we cannot make plans.
This last one is like coming across pickled herring in the horseradish jar. Now is the time to finalize your preparation for 2015.
ZACK PACE
CBIZ, Inc. • Columbia, MD
443.259.3240 • zpace@cbiz.com @zpace_benefits

6. 6 | BIZGROWTH STRATEGIES – FALL 2014 CBIZ, INC.
BY BARBARA FOSTER
What would you do if your retirement plan did
not work as expected? It’s a common risk,
bearing in mind that most Americans will
spend 20 years or more in retirement. Consider that:
n The average couple retiring at 65 can expect to
pay $220,000 in out-of-pocket medical expenses
during retirement.
n 41% of adults retired earlier than expected due
to a health problem.
n One out of every four adults will live past the age
of 90.
One of the concerns many pre-retirees have is
a fear that they will not have enough income during
retirement to enjoy or even maintain their current
lifestyle. In fact, an estimated 50% of households are
at risk for a decline in their standard of living during
retirement. Those most at risk are high-income earners
who are faced with contribution limitations imposed by
the IRS on their qualified plans, yet lack the means to
adopt many of the advanced planning techniques used
by high-net-worth individuals.
Fortunately, by using cash value life insurance as
a part of their overall retirement strategy, high-income
earners have an additional tax-efficient vehicle to
accumulate the funds they need for retirement. The
graphic below shows how it works.
This planning strategy can also be employed by
companies as part of an executive bonus plan.
Another concern retirees and pre-retirees share
is outliving their savings due to lack of sufficient
It’s Time to Change the Way
You Think about Life Insurance
Insurance Strategies
BARBARA FOSTER
CBIZ Life Insurance Solutions, Inc.
San Diego, CA • 858.444.3110
barbara.foster@cbiz.com • @CBIZLife
funds, a market downturn or unexpected medical
costs. Fortunately, life insurance carriers have begun
addressing these concerns with new features designed
to safeguard one’s assets while living.
Most carriers now offer long-term or chronic-care
health riders whereby the owner withdraws a
percentage of the policy’s death benefit to cover
medical care or even home care costs for chronic
illness or age. There is even a carrier offering a rider
allowing the policy owner to withdraw part of the death
benefit at age 85 for any reason, providing a convenient
retirement safety net.
Protecting assets from a market downturn, which
could erode investments and negatively impact the
ability to generate enough income, is critical for those
nearing or in the early stages of retirement. By funding
a high-cash-value life insurance policy as part of your
retirement savings plan, you can withdraw funds tax
free from your policy during a market downturn instead
of using income from your investment portfolio. This
allows you to preserve your traditional retirement funds
and provides time to recover versus selling into a down
market and locking in losses.
Life insurance has come a long way in the past 10
years. With carriers offering new products and riders
that give people the protection, flexibility and control
they need while still living, life insurance has become an
important tool in any well-constructed retirement plan.
A 40-year-old female
pays $4,500
premium into
Index UL policy for
25 years to age 65.
Cash value grows tax
deferred at a rate of
6.5%. At retirement,
premiums stop and
withdrawals begin.
$20,000 annual income is
taken from age 66-85.
Income is tax free.
Death benefit at age 85:
$128,300

7. CBIZ, INC. BIZGROWTH STRATEGIES – FALL 2014 | 7
BY CHRISSY HAMMOND & AMANDA MARKOS
Not-for-profit organizations need innovative practices to spread core messages to potential donors, while keeping costs in check and reaching a wide audience. With its continued growth and success, social media is increasingly being incorporated into these organizations’ long- term marketing initiatives in order to broadcast their missions, increase awareness, encourage donations and share success stories to a large-scale community at a minimal cost.
The number of social media users in today’s environment makes maximizing these platforms critical for drumming up support for your not-for- profit. According to a 2013 survey conducted by Pew Research Center, 73% of online adults belong to social media sites. By maintaining a dynamic social media presence, not-for-profit organizations have the potential to reach their community and donors every day.
Though not all pay-offs will be as large as in the case study, there are ways to harness the power of social media to assist in reaching your goals. While you may not have the resources needed to be active on all
Marketing
Maximize Your
Not-for-Profit’s
Social Media
Presence in
Five Steps
social media sites, you can start out by focusing on
a few.
The following are five steps your not-for-profit can follow to capitalize on your social media presence.
1. Be accessible.
Social media marketing allows not-for-profits and the public to interact in new ways. Unlike traditional forms of marketing, such as email campaigns and direct mail, social media enables dynamic conversations to take place. Not-for-profits can initiate public discussions through open-ended comments, calls for questions and requests for feedback.
Through Facebook, Twitter, Pinterest, blogs and other online resources, not-for-profits can showcase their human side. One example is using social media to follow up with event attendees to help solidify the connections made. In addition to any formal recognition your organization may provide, thank those who donated to your organization. Recognize volunteers and other community members who help make your operations run more smoothly.
2. Collect user data.
Social media tools can provide a number of data- gathering opportunities to help measure your return on investment (ROI). In addition, demographic information about Facebook and Twitter followers can help determine the types of events or activities that interest core supporters. Analytics from social media can also indicate what topics and issues are important to your
Case Study: Social Media Success
In 2010, the Guide Dog Foundation for the Blind raised over $25,000 primarily using a Facebook- based campaign called “Send a Wink.” The campaign featured photos of guide dogs in which the dogs looked like they were winking. Guide Dog Foundation for the Blind’s corporate sponsor, VSP Vision Care, donated $1 each time the content was shared on Facebook, raising the $25,000 in the span of 10 days.
(Continued on page 8)

8. our business
is growing yours
© Copyright 2014. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved. • CBIZ-020, Rev. 61
8 | BIZGROWTH STRATEGIES – FALL 2014 CBIZ, INC.
Marketing (Continued from page 7)
supporters, which can assist in determining the types of educational programs or publications you offer.
3. Keep content varied and interesting.
Many organizations only use social media to promote donations, accomplishments and events. Though self-promotion is an important piece of your social media content, you must also follow the best practice of posting relevant thought leadership articles and blogs. Post about compelling studies or developments in your field, as well. Visual aids go a long way in establishing interest, so be sure to use photos or other illustrative media to help convey your messages.
4. Leverage external support.
Share positive comments and feedback your organization receives to help spread the benefits of your services. In doing so, you have the opportunity to promote your success stories not only to your immediate social network but also to the networks of your followers and their followers and so on through shares, re-tweets, etc.
5. Formulate a plan.
If you have limited social media staff, you can still be active if you stick to a schedule. Divvy up posting responsibility amongst your team. Additionally, ask employees charged with social media to keep an eye out for articles of interest or ideas on what to post about and put them aside for future use.
Not-for-profits without a designated social media staff should identify key volunteers who are active on social media and passionate about helping the organization. Provide these individuals with administrative rights to post on the organization’s social profiles and give them training on what and when to post, as well as advice on best practices.
Social media marketing can be an overwhelming task for any organization; however, with the proper tools and best practices it doesn’t have to be. With a small investment of time and resources each day, social media can have a substantial positive impact on your not-for-profit without compromising your mission.
AMANDA MARKOS
CBIZ, Inc. • San Diego, CA
858.795.2253 • amarkos@cbiz.com @armarkos
CHRISSY HAMMOND
CBIZ MHM, LLC • Boston, MA
617.761.0580 • chammond@cbiztofias.com @CBIZTofias