KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE

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Last minute tax advice / Rider for alarm.com
December 29, 2018
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Can you terminate horrible payer
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Last minute tax advice
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Ken,
            Just reminding everyone that the 2017 Tax Act changed the way auto and other allowances are handled for tax purposes. If you are paying salespeople or technicians, or anyone else, a flat amount as an allowance each month, you may want to discuss this with your accountant. If it is not an "accountable" plan it could be taxable to the employee and the employee would have no deductions to offset it. For example a $500 per month car allowance would generate $6,000 of income to the employee. It would still be deductible by your business but you may have a very unhappy employee. This does not apply to independent contractors who are truly independent contractors. 
            Also, a new tax provision Section 199 provides for a 20% deduction on “pass through income” or income flowing through an S Corporation, Partnership, or certain other entities.  Call you accountant and discuss ways to shift income from salary to pass through income.  You may also want to avoid purchasing fixed assets and expensing them to lower your income at year end.  It may be better to depreciate them.
            If this sounds complicated it’s because it is.  Call your accountant or call us before year end.  If you wait until 2019 it will be too late.
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX
817-698-9999 
mreitman@sicc.us
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Response
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            I don’t like to give tax advice, and usually don’t.  I don’t even like to get tax advice; the news is rarely something I want to hear about.  But there may still be moves you can make to lessen your tax burden for 2018 and for the years ahead.  You need great, not good, tax advice.  If you have a great tax advisor make sure you seek advice now and plan appropriately.  If you need a great tax advisor, contact Mitch and his team at Reitman Consulting Group.  Mitch has a personal stake in you maximizing the value of your business, he hopes to be your broker one day when you’re ready to sell. 
            PS:  letting Mitch know I referred you to him will get you immediate attention [and no, no referral fee to me]
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Rider for alarm.com
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Ken
            I have two questions:
1. The Alarm.com rider. Is this exclusive to Alarm.com, or does this cover other internet services like Honeywell Alarmnet?
2. Do I need the Certificate of Insurance?
EH
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Response
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            Most of the third party vendors, similar to alarm.com, require the dealer to provide indemnity, and some do ask that you include certain type of provisions in your alarm contracts.  But alarm.com is the only vendor I am aware of that insists that you not only indemnify it but that you have your subscribers agree to the alarm.com Terms and Conditions as part of your subscriber contract.  The alarm.com rider is therefore used exclusively for subscribers using the alarm.com services.
            A Certificate of Insurance is something your subscriber is going to ask for so that it can get insurance or a discount for the insurance.  A subscriber may also need a certificate to for a landlord or a lender who wants to be assured that alarm services are in place.
            There is no “official form” for the certificate.  We have been asked so many times if we have the form that for 2019 we have prepared one and it’s offered as one of the Standard Forms on our order page www.alarmcontracts.com
            You are not required to provide the Certificate but your subscriber won’t be happy if they need one and you won’t provide it.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com