Blog | Padgett Advisors

Financial KPIs, EBITDA, Gross Profit, and 12 other financial terms you should know

Posted on June 7, 2023 - 4:42 pm by Padgett Advisors

Financial literacy: “the knowledge and skills that give you the ability to manage your finances, including budgeting and investing”

Financial literacy is the key to successful money management and the reduction of financial stress. Yet many people struggle with financial literacy, to the point that the National Financial Educators Council (NFEC) estimates that financial illiteracy cost the U.S. population more than $352 billion in 2021 alone.

Below, we have a defined a few key financial terms to improve your financial literacy and support your money management abilities:

Financial KPIs: Financial key performance indicators are quantifiable metrics that help measure a business’s performance in terms of things like revenue, expenses, profits or other financial targets.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization. It is a metric used to evaluate a business’s profitability and a common starting point in determining a company’s value. It is calculated using this formula: EBITDA = Net Income + Taxes + Interest Expense + Depreciation & Amortization.
Gross Profit Margin: A metric often used to analyze a business’s financial wellbeing by calculating the amount of money made from product sales after cost of goods is subtracted,
Net Income: The amount of profit left after subtracting other costs (selling, administrative and other general expenses) from the gross profit margin.
Accounts Receivable (AR): The amount of money owed to a business for good or services delivered that hasn’t been paid yet by the customer.
Accounts Payable (AP): The amount of money that a business owes to its creditors or suppliers.
Return on Capital: A payment (also known as a return) received from an investment that is not considered taxable income or capital gain.
Capital Gains: Income that results when an asset is sold for more than you originally paid for it.
Capital Loss: The opposite of capital gain; A possible tax deduction resulting from an asset being sold for less than its cost or book value.
IRA: Individual Retirement Account, which may be one of the several types. Traditional IRAs are typically funded with pre-tax dollars while Roth IRAs are often funded with after-tax money.
Defined Contribution (DC) Plans: A type of retirement plan (such as a 401k) in which employees contribute a set amount of their wages to the account, usually pre-tax.
APR: Annual Percentage Rate; refers to the amount of interest on a loan or investment, not including compounding interest.
APY: Annual Percentage Yield; refers to the amount of interest on a loan or investment, including compounding interest.
Articles of Incorporation: A set of documents filed with the government to legally create a corporation, such as a C-corp or S-corp.
Articles of Organization: Similar to Articles of Incorporation, these are a set of government documents files to create a limited liability company (LLC).

If you want to continue improving your financial literacy or are worried about your finances, Padgett’s nationwide network of CPAs and EAs can help. Our advisors can work with you to understand your personal or business finances and can help you make financial decisions with confidence. Find an office near you today!

Graduating? Here’s what it could mean for your taxes!

Posted on June 1, 2023 - 8:57 pm by Padgett Advisors

If you or your child is graduating this year, you’re likely caught up in a swirl of pomp and circumstance. You may be thinking about ordering regalia, planning grad parties, taking senior photos or what the next step in continuing education may be. But graduating comes with some implications for your taxes and finances as well.

Student Loans

One of the biggest ways graduations — either from high school or college — affect your finances is through student loans.

Following high school graduation, you may be looking at taking on student loans to pay for college and other educational expenses. It’s important to consider whether these loans will be in the parent’s name or the student’s name, as this influences who will be responsible for the loan later, as well as who can deduct the interest on their tax return. Some taxpayers may be able to deduct up to $2,500 of interest paid on qualified education loans, but this can depend on factors like your filing status or modified adjusted gross income. It’s a good idea to talk with a tax professional about setting up your student loans correctly for your situation to make the most of tax benefits.

If you or your child is graduating college, you may be faced with the realization that soon you’ll have to pay those loans back. In the past, most federal loans began repayment after a six-month grace period from leaving school. However, with COVID relief measures and loan forgiveness plans, these expectations have become murkier. Check the FSA website for the status of loan forgiveness programs and for details about eligibility. Please be aware that in some states, there may be a tax obligation for forgiven loans. If you’re worried about making those payments, a financial consultant can help you restructure your budget and select the best repayment plan to fit your needs.

Tax Credits

If you’re wondering if there are any other tax credits available to help with education costs, the answer is yes, if you’re eligible. The American opportunity tax credit (AOTC) and the lifetime learning credit (LLC) are two of these available education credits. You may be eligible for these credits if you or your dependent pays qualified education expenses and is enrolled at an eligible educational institution.

Students must have a properly completed Form 1098-T to claim these credits. According to the IRS, schools must provide Form 1098-T to any student who paid “qualified educational expenses” in the preceding tax year. Qualified expenses include tuition, any fees that are required for enrollment, and course materials the student was required to buy from the school. Schools must send the form to the student by January 31 and file a copy with the IRS by February 28. Be on the lookout for this form in the mail and bring it to your tax preparer, so you don’t miss out on this tax-saving opportunity!

Remember that when dependency is involved, it’s important to know who is eligible to claim the credit on their return. Working with a tax professional can help you avoid errors in claiming these credits and help you make the most of available benefits.

Scholarships and Fellowships

School can be expensive, and if you can get them, scholarships are a great way to help pay for education expenses without additional debt!

If the recipient of the scholarship or fellowship funds is considered a degree candidate and uses the funds for approved expenses, such as tuition, books, and equipment, that income is generally not taxable. But be aware that this comes with some additional rules and regulations, and it’s not always easy to know what income is and isn’t taxable. You may want to talk to a tax professional during the year, so you don’t accidentally misrepresent your income when it’s time to file.

Higher education can be a noble pursuit, and a valuable one. But don’t let it become an expensive mistake on your tax return. If you need a professional to help you make the most of your loans, credits and scholarships, Padgett’s nationwide network of CPAs and EAs are ready to lend a hand. Find a location near you today!

What is an IRS audit, really?

Posted on May 10, 2023 - 9:28 pm by Padgett Advisors

Especially since the passing of the Inflation Reduction Act that provided $80 billion in funding to the IRS, many small business owners have been concerned about the possibility of having their finances audited. While most of the funds are dedicated to improving taxpayer services, it is true that some of the funding will be used for enforcement and audits.

So, what does that mean for your business, and how can you avoid being audited in the future?

What is an IRS audit?

An IRS audit is an examination of your tax returns, financial records, and other documents to ensure that you have reported your income and deductions accurately and in compliance with the tax laws. Receiving an IRS notice doesn’t mean you’re being audited, and an IRS audit is not the same as other types of business reviews. An IRS audit is conducted by the government, and it can result in penalties, interest and even criminal charges if it uncovers fraud or other serious issues.

But don’t panic—audits are not a common occurrence. Last year, only 0.38% of returns were audited by the IRS, according to USA Today. It’s also unlikely that taxpayers making less than $400,000 in annual income will be targeted for audits.

What are the different types of audits?

While the prospect of an IRS audit may seem daunting, it’s important to remember that not all audits are created equal. There are several types of IRS audits that you may encounter as a small business owner. Here are the most common ones:

Correspondence Audit: This is the most common type of audit, and it can be conducted entirely by mail. The IRS will request specific documents or information from you, and you will have a deadline to provide the requested materials. This type of audit is usually focused on a single issue, such as a missing tax form or a discrepancy in reported income, and most commonly occurs with charities and nonprofit organizations.
Office Audit: An office audit is conducted in person at an IRS office. During an office audit, an IRS agent will review your financial records and ask you questions about your tax returns. This type of audit is typically focused on one or two specific issues, such as a deduction that the IRS believes may not be valid.
Field Audit: A field audit is the most comprehensive type of audit, and it involves an in-person visit from an IRS agent to your place of business. During a field audit, the agent will review all of your financial records and ask you questions about your business operations. This type of audit is usually reserved for larger businesses or more complex tax issues.
Taxpayer Compliance Measurement Program (TCMP) Audit: This type of audit is relatively rare, and it is typically used to measure compliance rates across a larger population of taxpayers. The IRS will select a random sample of your returns and conduct a comprehensive audit of those returns to measure your compliance with the tax laws.
Specialized Audit: A specialized audit is conducted by an IRS agent with expertise in a particular area, such as international tax issues or employee benefit plans. These audits are typically reserved for businesses with complex tax issues that require specialized knowledge.

Note: Beware of scam calls impersonating the IRS! If you are selected for an audit, the IRS will only notify you by mail, not by telephone.

What should you do if you’re audited?

No matter the type of audit, you have the right to be represented by a tax professional, so make sure you choose one who is qualified to represent you. If you are notified of an IRS audit, it’s important to respond promptly and professionally. Ignoring or delaying an audit can only make the situation worse. Instead, gather the requested documents and information and work with your tax professional to respond to the IRS’s requests.

It’s also important to remember that an audit does not necessarily mean that you have done something wrong. The IRS uses algorithms to screen returns for potential red flags and sometimes selects random returns for closer review. However, the IRS has stated it will be auditing more employment tax returns in the future because of the possibility of false or incorrect Employee Retention Credit (ERC) claims. If your business has received this credit, make sure to have all the necessary documentation, like employee, wage, and eligibility information, to support the claim under audit.

If you have been selected for an audit, it’s not necessarily a reflection of you or your business. That being said, there are steps you can take to reduce your chances of being audited. First and foremost, make sure that you are reporting your income and deductions accurately and in compliance with the tax laws. By maintaining accurate records, reporting your income and deductions correctly, and working with a tax professional throughout the year, you can reduce your chances of being audited in the future.

If you need a tax professional, Padgett can help! Contact your local office today.

Hiring teens for the summer? Here’s how

Posted on May 9, 2023 - 7:14 am by Padgett Advisors

Each May and June, millions of teenagers begin their search for a summer job. Before hiring teens for any summertime help, it’s a good idea to be aware of the Federal and State laws governing youth in the workplace. The Fair Labor Standards Act (FLSA) youth employment provisions are designed to protect young workers by limiting the types of jobs and the number of hours they may work, based on the age of the minor. The following provisions apply to nonagricultural occupations:

18 Years of Age: Once a youth reaches 18, the Federal child labor provisions no longer apply to them — they can work any job for any number of hours. Remember that states have their own labor laws, so be sure to check your state’s work laws in non-agricultural work.

16 & 17 Years of Age: Under the FLSA 16- and 17-year olds may work on any day for any number of hours. However, individual states may limit the hours or the times of day that anyone under the age of 18 may work. Also, all youth under the age of 18 are prohibited from working any non-farm jobs deemed hazardous.

14 & 15 Years of Age: 14- and 15-year-olds may work:

Non-school hours
3 hours on a school day
18 hours in a school week
8 hours on a non-school day
40 hours in a non-school week
Between 7 a.m. to 7 p.m. (except June 1-Labor Day when hours are extended to 9 p.m.)

Alert to parents who hire their children

There’s a lot to be said for hiring family members to work in your business. Hiring your children won’t only provide them with spending money…your business may obtain a deduction for their wages as well.

Since there’s no specific exception from income tax withholding for wages you pay to family members, you’ll generally have to withhold income taxes from the wages you pay them. However, you’ll be relieved from some FICA taxes and federal (and perhaps even state) unemployment taxes, depending on the type of entity and ownership makeup.

Keep in mind, the Social Security Administration (SSA) may question the validity of wages if the recipient is on record as a young child. Unless you can provide acceptable detail such as date of birth and job responsibilities, your child may not be given credit for the correct amount of wages.

In fact, the information obtained may be given to the IRS or the Department of Justice for investigating and prosecuting violations of the Social Security Act. Matching programs compare the SSA’s records with those of other Federal, State, and local agencies, which are often used to find or prove that a person qualifies for benefits paid by the Federal government.

Rule of thumb: Put your child on the payroll only if there is a legitimate job offering with responsibilities that are within the child’s capability…and then, make sure that your child does the work!

If you are looking into hiring teens or your own children, a Padgett business advisor can help you make sure you’re following the regulations for their schedule and making the most of available tax deductions. Find a location near you today.

Teamwork made Jenna Speight’s dream work

Posted on April 26, 2023 - 6:34 pm by Padgett Advisors

Jenna Speight has always been fashion-forward, but she struggled to find a way to turn her passion into a profit. After changing her college major several times in search of the right path forward, her hairstylist suggested cosmetology school. “It was a lightbulb moment for me,” Jenna says. “I called a school the next day, and within four weeks, I was enrolled.”

Though she was now on the right path, it wasn’t always easy. But the difficulties opened other doors for Jenna: “I worked at a few salons, and there ended up being a lot of drama that made me consider leaving the industry. It was either leave or start my own salon. So, I decided to open my own salon.”

Jenna opened Rue 62 Salon in April 2011, but the challenges wouldn’t stop there. Less than a year later, she discovered she was expecting twins. “It was a bit overwhelming as I was trying to build my new business,” she says. “One baby I could manage, but when I found out it was two, I really had to adjust my expectations.”

Thankfully, she was surrounded by a strong team of supportive employees who helped the business grow. “Choosing who I can work with has been essential,” Jenna adds. “[My twins] are absolutely a blessing, and my team has been key in our success.”

Years later, when COVID-19 forced her business to shut down for several months and implement expensive safety protocols upon reopening, Padgett Barrington joined Jenna’s team. She had received a PPP loan, and her previous accountant was not equipped to handle the challenging tax situations that came with it. “I needed someone more informed,” she says, so she reached out to Dave Gribben. “He had amazing reviews and his office was only half a mile from my house.”

“He’s always been super responsive, very thorough, and great at explaining things,” she continues. “He made my tax process more understandable, and introduced me to more options for government assistance, like the ERC, which was absolutely essential to help us get out of a tight spot.”

Jenna credits her strong support system with helping the salon succeed despite the challenges life continued to throw her way—including being diagnosed with breast cancer in December 2021. “That changed everything,” she says. “I didn’t work in the salon for 7 months, and I would go weeks without talking to anyone. The cancer journey has really re-prioritized my life and really drives home the point that the girls on my staff can weather any storm.”

“They’re like family,” she adds. “One of my stylists had twins as soon as I came back, and another had her first child when the first returned. Through it all, we’re stronger than ever. I think that’s due in large part to who I’ve hired. I have the most incredible group of women.”

Jenna knew opening a small salon wouldn’t make her a millionaire, but believes the experience of working with a team of incredible people has been priceless.

“My best advice, the best thing I have done as an owner, is hire the right people,” she says. “I have a staff that will really step up and have my back, who will keep the salon surviving and thriving. Having a tax preparer who is professional and responsive and has my best financial goals in mind, somebody who treats me with respect… has been extremely helpful, not just to my business, but to my self-esteem.”

“I absolutely, even 12 years in, still look at the tax return and don’t understand it,” Jenna continues. “It’s not something I could do on my own. Having a great bookkeeper who keeps track of things for me has been a huge burden lifted off of my shoulders. If another small business owner is anything like me and doesn’t have an MBA or a business degree, having a good accountant is essential.”

If you need an accountant or tax professional on your business’s team, Padgett can help! Contact us today.

When a hobby becomes a business: 9 key factors

Posted on April 17, 2023 - 2:32 pm by Padgett Advisors

There’s a saying that everyone should have three hobbies: one to keep you in shape, one to keep you creative, and one to make money.

Many people have found hobbies that make money. In fact, a 2019 survey found that 27% of full-time workers have monetized their hobbies. Another 55% said they would like to turn their hobby into a business, and interest in building a “side hustle” has only grown since then.

With millions of Americans now monetizing their hobbies, it’s important to understand how a side hustle could affect your taxes.

Hobby or business?

Hobby and business tax rules are different and it’s important to understand the distinctions to avoid any potential issues with the IRS. So, at what point does your money-making hobby become a business in the eyes of the IRS? There’s no checkbox for you to claim one way or the other. The main differentiator comes down to motive. Businesses have a goal of earning a profit, while hobbies are activities that are pursued for personal enjoyment.

Here are nine more factors the IRS may consider when determining if your side hustle is a business or a hobby:

Does the activity make a profit in some years? How much profit does it make?
Were you, as the taxpayer, successful in making a profit in similar activities in the past?
Do you and your advisors have the knowledge needed to carry out the activity as a successful business?
Do you change methods of operation to improve profitability?
Does the time and effort you put into the activity show that you intend to make it profitable?
Was the activity carried out in a businesslike manner, and did you maintain complete and accurate books and records?
Do you depend on income from the activity for your livelihood?
Can you expect to make a future profit from the appreciation of the assets used in the activity?
Are any losses due to circumstances beyond your control, or are they normal for the startup phase of your type of business?

What are the tax differences?

Businesses are required to file an annual business tax return and report all income earned. They can also deduct expenses related to their business activities, such as rent, supplies, and salaries paid to employees. Hobbyists are still required to report any income they made through their hobby on their individual tax returns, but hobby expenses are no longer deductible.

Another key difference is that businesses can carry forward losses incurred in previous years to offset future profits, while hobbyists can’t. Additionally, businesses may be subject to additional taxes, such as self-employment tax, but income from hobbies is not.

Be aware: if your business isn’t profitable and you’ve claimed a loss for too many years, the IRS could consider it a hobby and prevent you from claiming a loss or deducting expenses. In that case, you’d need to prove that profit was the intent in order to claim business deductions.

That’s also where the safe harbor rule comes in. Typically, if your business has been profitable in at least three out of five consecutive years, that’s a signal to the IRS that it’s a valid business, not a hobby.

Making a hobby into a business

If you want to be seen as a business rather than a hobby, it can help to follow best practices like:

Setting up a business checking account
Separating personal and business expenses
Keeping good business records
Choosing the appropriate entity structure for your business
Staying in compliance with other state and federal tax laws, such collecting sales taxes
Having regular business hours
Maintaining a business website and/or social media accounts

If you need help determining how you qualify or are looking to grow your business, Padgett’s network of EAs, CPAs and business advisors can help! Find a location near you today.

Why you need to care about financial literacy

Posted on April 13, 2023 - 7:52 pm by Padgett Advisors

April is Financial Literacy Month, and improving financial literacy may be more important than ever. With recent legislative changes to retirement plans, proposed student debt relief in question, and expiring COVID relief measures, it’s crucial for Americans to understand what’s going on with their finances.

What is financial literacy?

Financial literacy is the ability to understand and manage one’s personal finances. It may include topics such as income, debt, interest rates, credit scores, budgeting, saving and investing. To state it more simply, Padgett president Roger Harris puts it this way: “Financial literacy means that you understand your life by the numbers.”

Why does financial literacy matter?

It’s important because it allows individuals to make informed decisions about their money and be more prepared for the future. “Even though our lives may seem simple, sometimes they’re more complicated than we think, and we need to understand it,” Roger says.

CNBC reported that U.S. adults only scored an average 50% out of 28 basic financial questions in 2022. Financial illiteracy can be expensive: a National Financial Educators Council report showed that the lack of financial literacy cost respondents an average of $1,819 last year.

“The consequences for financial illiteracy are often financial as well,” Roger adds. “It’s all money. Financial illiteracy can lead to people making a bad decision because they don’t know what they’re doing, missing opportunities to save. It’s about learning how to understand and manage your finances, so if you don’t have it, you’re probably going to mismanage your funds.”

“There’s a good example of financial illiteracy in the tax world,” Roger continues. “If I ask someone how much tax they paid, someone who got a refund may tell me they paid none. But that’s not accurate—you would have just paid more tax than you owed. People often hand off tax documents without really looking at them. You still paid taxes, and people who get large refunds have, in essence, loaned the government money at zero interest.”

Data also shows that those who are financially literate are more likely to reach financial stability, and are often less vulnerable to scams, fraud and predatory loans. “If you don’t know these things, you’re susceptible to someone telling you what’s wrong or getting bad advice and not knowing how to question it,” Roger says.

How can I be more financially literate?

To become more financially literate, it is important to educate yourself on personal finance topics. “The first step is to try,” Roger says.

Financial education is on the rise, especially among younger generations. Although Gen Z has the lowest rates of financial literacy, they have the highest rates when it comes to taking financial education classes, and have shown motivation to learn. If you are offered a financial education class, that is a great option to get started.

Additionally, it’s important to regularly review your financial statements and track your spending. “Pay attention to the financial documents that are sent to you,” Roger adds. “They’re sent to you for a reason.” Paying bills promptly, setting aside savings, and checking your credit score can also help you have a better understanding of your individual financial situation.

Other ways to improve your financial literacy include reading books, listening to podcasts, researching financial topics online, and consulting a financial professional.

“Ask questions,” Roger encourages. “Ask questions and ask the right people. You can start with the person who sent you the information—why’d they send you that bank statement, that brokerage statement, that tax document? Ask someone who’s really qualified to answer.”

If you need an advisor to help you understand and strengthen your financial situation, Padgett is here to help! Our network of CPAs and EAs are ready to work with you, so contact us today.

Understanding IRAs: your retirement savings guide

Posted on April 6, 2023 - 9:05 pm by Padgett Advisors

With the recent passing of the SECURE 2.0 Act of 2022, you may have questions about the different types of Individual Retirement Accounts (IRAs) available. How do you choose what retirement plan is right for you?

IRAs are a powerful tool for retirement savings. They are savings plans that come with tax advantages to help taxpayers build a retirement fund. Each type of IRA has its own set of regulations and deadlines. Here’s a quick overview of the most common kinds:

Traditional IRA:

Contributions to a traditional IRA may be tax deductible and earnings grow tax-deferred until distribution, which means you won’t pay taxes on your traditional IRA funds until you make a withdrawal. The contribution limit for 2022 is $6,000, or $7,000 for those aged 50 and over ($6,500 and $7,500 for 2023). You have until April 15 or the tax filing deadline of the following year to make contributions for the previous tax year. Since the deadline is April 18 this year, you have a few extra days to make contributions for 2022.

Roth IRA:

Unlike a traditional IRA, contributions to a Roth IRA are made after tax, so qualified withdrawals are tax-free. The contribution limit for 2022 is also $6,000, or $7,000 for those aged 50 and over ($6,500 and $7,500 for 2023). Roth IRAs have the same deadline as traditional IRAs, so you can contribute up until April 18 this year.

SEP IRA:

A Simplified Employee Pension (SEP) IRA is a retirement plan for business owners and their employees. Employers can make tax-deductible contributions on behalf of eligible employees to their SEP IRAs. To be eligible, the employee must be 21, worked in the business at least 3 of the last 5 years and made at least $650 in 2022 ($750 in 2023). Like traditional IRAs, the earnings grow tax-deferred until the money is withdrawn. In 2022, employers can contribute up to 25% of compensation or $61,000 (whichever is less) to an employee’s plan ($66,000 in 2023). The same contribution limits apply if you are self-employed. Contributions must be made by your business’s tax-filing deadline, including extensions.

SIMPLE IRA:

A Savings Incentive Match Plan for Employees (SIMPLE) IRA is a retirement plan for businesses with 100 or fewer employees that do not have any other retirement savings plan, including self-employed individuals. Because SIMPLE IRAs have lower start-up and operating costs, they are ideal for small employers. Employers must contribute a matching contribution for each eligible employee of either 3% of an employee’s compensation, or a nonelective contribution of 2% of the employee’s compensation, up to $305,000 for 2022 ($330,000 for 2023). Eligible employees include all employees who received at least $5,000 in compensation during any two preceding calendar years and in the current calendar year. An employee can contribute up to $14,000 from their salary in 2022 ($15,500 in 2023), and up to $17,000 for those 50 and over ($19,000 for 2023). Contributions must be made by the tax-filing deadline, including extensions.

The rules and regulations surrounding IRAs can be complex and can change, so it’s always good to consult with a financial advisor and tax professional to ensure that you’re maximizing your retirement savings while complying with the plan rules.

Whether you’re an individual looking to build your retirement fund or a small business wanting to offer a retirement plan to your employees, Padgett can help! Our nationwide network of EAs, CPAs and small business advisors are ready to work with you to prepare for the future. Find a location near you today!

Form 4868: Extension of Time To File U.S. Individual Income Tax Return

Posted on March 27, 2023 - 1:43 pm by Roger Harris, EA and Annie Schwab, CPA

In this episode, Roger and Annie discuss the most recent IRS updates and recommendations for tax preparers dealing with the surge of inaccurate ERC claims. They also provide some detailed insights into filing extensions for clients.

Sponsors
Padgett - https://www.padgettadvisors.com/join/?podcast

Get NASBA Approved CPE or IRS Approved CE
Launch the course on EarmarkCPE to get free CPE/CE for listening to this episode.

Links mentioned in this episode
Form 4868 - https://www.irs.gov/pub/irs-pdf/f4868.pdf

Chapters

(00:00) - Federal Tax Updates Episode 06
(02:23) - Employee Retention Credit Extention and Updates
(15:46) - Updates on personal tax extentions
(28:40) - What are the penalties associated when failing to file?
(42:04) - Recent IRS tax news
(44:40) - RMD deadline updates
(49:46) - Future topics on the Federal Tax Updates Podcast

Follow the Federal Tax Updates Podcast on Social Media
twitter.com/FedTaxPod
facebook.com/FedTaxPod
linkedin.com/showcase/fedtaxpod

Connect with the Hosts on LinkedIn
Roger Harris
Annie Schwab

Review
Leave a review on Apple Podcasts or Podchaser

Subscribe
Subscribe to the Federal Tax Updates podcast in your favorite podcast app!

This podcast is a production of the Earmark Media

The full transcript for this episode is available by clicking on the Transcript tab at the top of this page

Making an impact in memory of Hammerin’ Hank

Posted on March 23, 2023 - 4:55 pm by Padgett Advisors

Last summer, Padgett had the opportunity to hear from the President and CEO of the World Champion Atlanta Braves about what it takes to build a championship organization. As a thank you, Padgett made a donation in honor of legendary Braves player, executive and entrepreneur Hank Aaron, to the fund established in his name. The Henry Louis Aaron Fund was created support to the baseball legend’s lifelong passion to increase minority participation in baseball on the field, in baseball’s business operations, in careers at minor and major league level, and in the front offices of Clubs across Major League Baseball.

As we near Opening Day, we wanted to check back in with the organization and see how they are putting those funds to work in the community. Under the guidance of Eugene Brooks, the Braves Director of Diversity Marketing, the organization is following Hank’s lead and making a positive impact on the lives of so many in Braves Country, which comprises six states.

“We want people to know that this is not an exclusive group,” he says. “All are welcome here. Our goal is to invite everyone into the ballpark. I think what’s important about trying to make a diverse audience is appreciating where the sport came from.”

From Bill Lucas, the first Black general manager in major league baseball, to stars like Hank Aaron, Dusty Baker, Terry Pendleton, David Justice, and newly elected member of the baseball Hall of Fame Fred McGriff, it’s clear that Black history is the Braves’ history. “They had an impact on the city as well as the organization,” Eugene says. “They generated a lot of excitement for the sport. It was important for more kids to see African-Americans playing the game. Now, we have to create a new generation for our fanbase, teaching them this sport known as the ‘American Pastime,’ and the teamwork and respect that goes into it.”

As part of this initiative, the Braves recently produced a YouTube short film about NL Rookie of the Year Michael Harris II. “It’s called the Dream and the Journey,” Eugene says. “And that’s what it’s about, showcasing what hard work can do and how you can dream. We’re trying to show more cases like his, more stories of perseverance.”

“I’ve seen a lot of the kids around the Atlanta area loving the Braves, and some of the players that had an impact on the city,” Michael says in the video. “I feel like I wanted to be the same type of person and leave an impact on the city.”

Like so many, Michael is following in the enormous footsteps of Hank Aaron, who broke barriers on and off the field. After his record-breaking career, he became one of the first people of color in MLB upper-level management when he became the Braves’ vice president and director of player development. He also owned a number of businesses around Atlanta and across the country. Long after his playing career was over, he was still looking for ways to make an impact.

“Giving back to the community, restoring fields, granting scholarships, creating opportunities for people to learn the game… that’s what Hank was about,” Eugene says. “It’s an expensive sport. You lose participation in the sport as kids grow up because it gets expensive. You need organizations like this to help schools and kids and rec centers, buying baseballs, cleats and uniforms. That’s where the fund becomes really important to the community.”

“I was introduced to baseball at age 7 when my dad took me to see the Braves at Atlanta Stadium,” he says. “There was a time when my grandmother didn’t have the funds to get me a baseball, so she’d make me one from scraps of fabric. [Being part of the Braves] is very important to me and it’s an opportunity to come full circle and honor my grandmother for doing what she could to give me a baseball. I care about bringing the game of baseball to more African Americans because I know what that’s like.”

Today, the Braves have poured almost $8 million to the community and showcase minority participation in the sport through hosting games like the Native American showcase, the ACLU showcase, and the Hank Aaron invitational.

“We have to do our part to provide opportunities and showcase people of color.” Eugene says, “We can’t help everybody every year, but we help where we can.”

“We all know Hank was great a baseball player, but everyone who has ever come into contact with him knows that he was an even better person,” Padgett president Roger Harris said. “We wanted to continue to honor Hank’s legacy with our gift to the fund and hope that many in our organization will do the same.”

So, on the eve of a new baseball season, let’s remember Hank and the many who have followed him who are using their time and resources to make their communities a little brighter.

If you would like to learn more about the Henry Louis Aaron fund or make a contribution, please visit https://www.mlb.com/braves/fans/hank-aaron/fund

Services

Our Blog

Financial KPIs, EBITDA, Gross Profit, and 12 other financial terms you should know