Monetize

Let’s Monetize

these 5 reasons to Outsource your WOTC to McKenzie Chase.

Here are the calculations

for the “Let’s monetize” portion of the “5 Reasons to Outsource Your WOTC Program to McKenzie Chase Management”.

#1 – Missed Opportunity:

What is the size of your missed opportunity in employer tax credits each year? Use McKenzie Chase’s tax credit calculator to discover the size of that missed opportunity.

“I was really pleased with the effort that McKenzie Chase put in, in contacting all of our locations because we have multiple locations and we’re spread all over multiple states and they worked with us.”

 

#2 – Do-It-Yourself? After the DEMO it looks so easy!

here are the calculations for the Let’s Monetize = ROI from In-House Program=17% best case vs. 400% by MCKENZIE CHASE always

Here’s the Calculation:

Again, since we’re monetizing only one qualification let’s monetize the highest one at $9,600 in year 1.

    • The tax credit is $9,600 of returned after-tax income.
    • Assume including all benefits, taxes, and work-area overhead the DIY WOTC worker costs $50,000 per year.
    • Assume that McKenzie Chase’s cost is 25% of the tax credit earned, no matter how high or low the result.
    • Return on Investment (for our purposes) = return/investment
    • Assume $9,600 tax credit results for both methods; DIY and McKenzie Chase.
    • DIY WOTC = 9,600/50,000= 19% ROI
    • McKenzie Chase = 9,600/2,400 = 400% /li>
    • QED: the ROI for McKenzie Chase’s tax credit program is 21 times higher than that for the DIY WOTC Program.

    Click here to for client testimonials about the benefits of outsourcing to MCM.

     

    #3 – HR is overwhelmed. McKenzie Chase saves !

    here are the calculations for the Let’s Monetize = Cut cost of hiring 14 new employees by $1,000 with 1 WOTC qualification

    Here’s the Calculation:

    In this calculation the qualified employee will be a veteran unemployed for at least 6 months entitling the hiring company to $5,600 in year 1.

      • The tax credit is $5,600 of returned after-tax income.
      • Assume the tax rate is high: 40%.
      • Now let’s calculate the value of the tax credit in hiring expense dollars
      • Tax credit dollars/tax rate
      • $5,600/40% tax rate = $14,000 in HR hiring expenses.
      • QED: This $14,000 in equivalent hiring expense dollars lowers the hiring cost for 14 employees by $1,000 each , 28 by $500 each, etc.

    HR can became a profit center in your company, too.How’s that? With WOTC HR produces equivalent sales revenue dollars or additional after-tax profits that are equivalent to free labor. Use this calculator to see how much of a profit center HR can become. Hey, HR! McKenzie Chase says, “You deserve the credit!”.

     

    #4 -COMPLEXITY X2 SQUARED:

    Claiming credits can be extra complicated!Here are the calculations for the Let’s Monetize ‘Return on Investment’ and ‘Cost benefit’. Both are so favorable as to make the investment/cost moot and the return/benefit more than substantial.

    Here’s the Calculation:

    Since we’re monetizing only one qualification let’s monetize the highest one at $9,600 in year 1.

      • The tax credit is $9,600 of returned after-tax income.
      • The $9,600 will be the positive side of both calculations; the benefit and return.
      • What is the cost of a tax credit? One 49 cent first class stamp can provide a tax credit of up to $9,600 over 1 year of employment of a qualified employee. However, if 10% of employees qualify we’ll say it the cost/investment required is 10 stamps = $4.90 cents.
      • Return on Investment=return/investment=9,600/4.90=195,00% ROI which in is nearly unbounded (without % limit).
      • Cost Benefit = cost/Benefit=$4.90/$9,600= 5/10,000 of a cent for $1 benefit. Nearly free.
      • QED: Both R.O.I. and Cost Benefit are far beyond normally accepted returns for benefit received.***

      Claiming credits can be extra complicated. For federal credits alone, depending on the certification category here are twenty-nine (29) of the different formulas involving varying credit percentages or wage bases to calculate a credit. In addition, there are 3 different tax forms for federal credits. McKenzie Chase manages all of that complex calculation, including program compliance and provides reports that enable your tax accountants to quickly put the credits on your tax return… which makes it easy on everyone including HR, Tax, and Finance.
      Click here for a summary of wage bases, percentage formulas and IRS tax forms.

       

      #5 -GUARANTEED RISK MANAGEMENT:

      Let’s calculate the increase in Net Present Value (NPV) of your overall Business investment based on your new hires per year, profit margin and effective federal tax rate. Remember, there are never any start-up costs or monthly maintenance fees with McKenzie Chase’s tax credit programs.

      Here’s a simple the Calculation we did in Excel:

      Let’s be very conservative and calculate the NPV of capturing only one qualification at $9,600 each year.

      • The very conservative estimated tax credit is $9,600.
      • We’ll assume 10 years of consistent results at that level.
      • $74,128.66 = the NPV over 10 years assuming a 5% discount rate.
      • 5% is the increase in company worth assuming a current value of $1.5 million.

       

      Discover which tax credits would be most profitable for your organization to pursue; contact MCM today for your complimentary evaluation.