1. ISSUE 61 • FALL 2014
BIZGROWTHS 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
LifeInsurance
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
I
f 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
W
hile 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
H
ave 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
W
hat 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
LifeInsurance
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
N
ot-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
©Copyright2014.CBIZ,Inc.NYSEListed:CBZ.Allrightsreserved.•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