If you’re looking for an overview of recent developments in accounting and auditing practices, be sure to register for our free webinar on Wednesday, Dec. 21st from noon to 1 p.m.
The session will cover audit and accounting standards in effect for the first time during 2011, review changes and updates to existing standards, as well as provide information on anticipated tax changes. One hour of Continuing Professional Education Credit is available.
“This webinar will leave participants better equipped to communicate with their accounting professionals and determine if they, or their organization, require additional assistance in any of the areas covered,” Karl Newton, CPA, my colleague who will lead the presentation.
Karl, who has been with the firm since 1999, oversees audits for not-for-profit agencies and single audit filings in accordance with the Office of Management and Budget Circular A-133. He has worked with a variety of not-for-profits, including rehabilitation centers, substance abuse centers, membership organizations, foundations and day care centers.
PC-based attendees are required to have Windows® 7, Vista, XP or a 2003 Server, while Macintosh®-based attendees need Mac OS X 10.5 or newer.
Space is limited. Reserve your seat now by going to: http://www2.gotomeeting.com/register/513899818
After registering you will receive a confirmation email containing information about joining the session.
For more information, call 518-785-0134 or shoot me an email kpo@marvincpa.com.
Satisfying Accounting and Tax Needs for Individuals and Corporations Throughout the United States for over 85 years.
Thursday, December 15, 2011
Another Great Article by the Journal of Accountancy
Very interesting for all of those of you on non-profit boards and such:
AICPA Letter to PCAOB Raises Concerns About Mandatory Audit Firm Rotation
December 14, 2011
The AICPA recommended that the PCAOB refrain from imposing mandatory audit firm rotation.
AICPA Chairman Greg Anton, and President and CEO Barry Melancon signed a comment letter sent by email Wednesday to the PCAOB stating that mandatory audit firm rotation is costly and has the potential to hinder audit quality rather than enhancing it.
In August, the PCAOB issued a concept release on auditor independence and audit firm rotation seeking comment. The release noted that proponents of rotation contend term limits could decrease client pressure on auditors and create opportunity for a fresh look at a company’s financial reporting.
The AICPA letter supported the PCAOB’s goals for enhancing auditor independence and objectivity, and professional skepticism. But the Institute said the PCAOB should not impose mandatory audit firm rotation without evidence linking audit firm tenure to audit failures detailed in PCAOB inspection findings.
Even if such a link is indicated through further study, the AICPA would like the PCAOB to carefully weigh the costs associated with mandatory firm rotation and consider other potential enhancements that would be less costly and disruptive.
The AICPA cited research indicating that mandatory firm rotation may hurt audit quality and that audit quality increases with audit firm tenure. The letter also said:
Audit firm rotation may limit institutional knowledge and industry specialization, which the AICPA said increases during audit firms’ relationship with a company and is crucial to a high-quality audit.
Mandatory firm rotation may unintentionally undermine the role of the audit committee by preventing the committee from selecting and retaining the most qualified audit firm to perform a company’s audit.
Existing partner rotation requirements provide the necessary “fresh look” to ensure auditors’ objectivity.
The PCAOB’s release is part of the reason audit firm rotation has become a big issue in recent months. Last month, the European Commission proposed limiting to six years the period in which an outside audit firm can perform audits for public companies. Companies that opt for voluntary joint audits would be allowed a nine-year window; a four-year cooling-off period was proposed.
At last week’s AICPA National Conference on Current SEC and PCAOB Developments, Anton said research indicates that mandatory audit firm rotation has the unintended consequence of increasing the propensity for fraud.
“We caution the EU member states and the European Parliament—as well as the PCAOB—to carefully consider the consequences of such proposals and focus on proven solutions to enhanced transparency, increased objectivity and improved audit quality,” Anton said on Dec. 5.
Wednesday was the final day of the comment period. In March, the PCAOB will hold a public round table on auditor independence and mandatory audit firm rotation.
AICPA Letter to PCAOB Raises Concerns About Mandatory Audit Firm Rotation
December 14, 2011
The AICPA recommended that the PCAOB refrain from imposing mandatory audit firm rotation.
AICPA Chairman Greg Anton, and President and CEO Barry Melancon signed a comment letter sent by email Wednesday to the PCAOB stating that mandatory audit firm rotation is costly and has the potential to hinder audit quality rather than enhancing it.
In August, the PCAOB issued a concept release on auditor independence and audit firm rotation seeking comment. The release noted that proponents of rotation contend term limits could decrease client pressure on auditors and create opportunity for a fresh look at a company’s financial reporting.
The AICPA letter supported the PCAOB’s goals for enhancing auditor independence and objectivity, and professional skepticism. But the Institute said the PCAOB should not impose mandatory audit firm rotation without evidence linking audit firm tenure to audit failures detailed in PCAOB inspection findings.
Even if such a link is indicated through further study, the AICPA would like the PCAOB to carefully weigh the costs associated with mandatory firm rotation and consider other potential enhancements that would be less costly and disruptive.
The AICPA cited research indicating that mandatory firm rotation may hurt audit quality and that audit quality increases with audit firm tenure. The letter also said:
Audit firm rotation may limit institutional knowledge and industry specialization, which the AICPA said increases during audit firms’ relationship with a company and is crucial to a high-quality audit.
Mandatory firm rotation may unintentionally undermine the role of the audit committee by preventing the committee from selecting and retaining the most qualified audit firm to perform a company’s audit.
Existing partner rotation requirements provide the necessary “fresh look” to ensure auditors’ objectivity.
The PCAOB’s release is part of the reason audit firm rotation has become a big issue in recent months. Last month, the European Commission proposed limiting to six years the period in which an outside audit firm can perform audits for public companies. Companies that opt for voluntary joint audits would be allowed a nine-year window; a four-year cooling-off period was proposed.
At last week’s AICPA National Conference on Current SEC and PCAOB Developments, Anton said research indicates that mandatory audit firm rotation has the unintended consequence of increasing the propensity for fraud.
“We caution the EU member states and the European Parliament—as well as the PCAOB—to carefully consider the consequences of such proposals and focus on proven solutions to enhanced transparency, increased objectivity and improved audit quality,” Anton said on Dec. 5.
Wednesday was the final day of the comment period. In March, the PCAOB will hold a public round table on auditor independence and mandatory audit firm rotation.
Monday, December 12, 2011
Mileage rate for 2012 updated!
This article is from the Journal of Accountancy:
The IRS on Friday released standard mileage rates for use in 2012 (Notice 2012-1). Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile.
For business use of an automobile remains at 55½ cents per mile. For medical or moving expenses, it is 23 cents per mile (a half-cent decrease from the second half of 2011). For services to charitable organizations, the rate (which is set by statute) is 14 cents per mile.
Rather than using the standard mileage rates, taxpayers may instead use their actual costs if they maintain adequate records and can substantiate their expenses. The rules for substantiating these amounts appear in Rev. Proc. 2010-51.
For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 23 cents per mile for 2012 (it was 22 cents per mile for 2011).
Friday, October 14, 2011
10/19 WEBINAR: WHAT'S IN YOUR ESTATE PLAN? (AND IS IT STILL WORKING FOR YOU?)
For most Americans, estate planning is something that they'd rather put off for another day. After all, deciding how they want their assets distributed is a stark reminder of their mortality.
However, there are numerous reasons why each of us should tackle this task with at least some eagerness. This includes naming the people to whom we wish to give our assets, ensuring that the government receives only its fair share, gaining the satisfaction of having our financial house in order, and knowing that we're not burdening our loved ones with an administrative nightmare.
On Wednesday, Oct. 19 from noon to 1 p.m., we'll be hosting a free, informative Webinar entitled "What's In Your Estate Plan? (And Is It Still Working For You?)." Led by my colleague, Christopher L. Cimijotti, CPA, manager, the session will focus on the basics of an estate plan, as well as how it needs to be reviewed and revised periodically in order to be effective.
Participants will learn how to take stock of their assets, including investments, retirement accounts, insurance policies, real estate and any business interests. Chris, who has has provided personal, estate and trust planning and business taxation services to an array of clients for more than 25 years, will also discuss what they want to achieve with those assets and who they wish to inherit them, as well as changes brought about by the late 2010 legislation.
PC-based attendees are required to have: Windows 7, Vista, XP or 2003 Server, while Macintosh-based attendees need Mac OS X 10.4.11 (Tiger) or newer.
Space is limited. Reserve your seat now by going to: https://www2.gotomeeting.com/register/932654882
After registering you will receive a confirmation email containing information about joining the session.
For more information, call (518) 785-0134, or drop me a note at kpo@marvincpa.com.
Cheers!
However, there are numerous reasons why each of us should tackle this task with at least some eagerness. This includes naming the people to whom we wish to give our assets, ensuring that the government receives only its fair share, gaining the satisfaction of having our financial house in order, and knowing that we're not burdening our loved ones with an administrative nightmare.
On Wednesday, Oct. 19 from noon to 1 p.m., we'll be hosting a free, informative Webinar entitled "What's In Your Estate Plan? (And Is It Still Working For You?)." Led by my colleague, Christopher L. Cimijotti, CPA, manager, the session will focus on the basics of an estate plan, as well as how it needs to be reviewed and revised periodically in order to be effective.
Participants will learn how to take stock of their assets, including investments, retirement accounts, insurance policies, real estate and any business interests. Chris, who has has provided personal, estate and trust planning and business taxation services to an array of clients for more than 25 years, will also discuss what they want to achieve with those assets and who they wish to inherit them, as well as changes brought about by the late 2010 legislation.
PC-based attendees are required to have: Windows 7, Vista, XP or 2003 Server, while Macintosh-based attendees need Mac OS X 10.4.11 (Tiger) or newer.
Space is limited. Reserve your seat now by going to: https://www2.gotomeeting.com/register/932654882
After registering you will receive a confirmation email containing information about joining the session.
For more information, call (518) 785-0134, or drop me a note at kpo@marvincpa.com.
Cheers!
Friday, September 2, 2011
Tax Implications of Marriage Equality Act (TV Interview)
In my last post I outlined some of the key changes brought about by the recent passage of New York's Marriage Equality Act. To provide you with even more information about this sweeping measure, here's a TV interview featuring Kevin McCoy, CPA, managing partner and myself at TV-17 in Colonie -- http://vimeo.com/28509226 Richard Naylor is the host. I hope you find it helpful!
Wednesday, August 24, 2011
New Marriage Equality Act Raises Important Tax Concerns
It has been just over a month now since New York became the sixth state in the nation to allow same-sex couples to head to the altar to take their wedding vows.
The trailblazing Marriage Equality Act, which took effect on July 24, 2011, grants same sex couples the same legal rights as heterosexual couples and applies to all legally performed marriages regardless of where the ceremony took place.
With the passage of the bill, which applies to all taxes administered by the New York State Department of Taxation and Finance, are a host of tax-related considerations ranging from personal income tax to estate planning that need to be addressed in 2011 and 2012 by those couples entering into marriage.
The following questions and answers help shed light on key changes brought about by the new measure:
1. How do same-sex couples file their Federal and NYS tax returns?
For same-sex couples married before December 31, 2011, the 2011 tax returns filing status for NYS tax returns will be either Married Filing Joint or Married Filing Separate. Since the Federal government does not recognize same-sex marriages, the filing status for both individuals would be either Single or Head of Household, if qualified.
2. What is the added costs of the filing methods that are now required?
To complete the required New York return(s), a married same-sex couple must re-compute their Federal income tax return(s) using a married filing status, applying all the Federal rules for married taxpayers. That return should not be submitted to the IRS. The return(s) should only be used to complete your New York return(s) and kept it with your tax documents. Therefore, the cost of preparing at least one extra return will be incurred.
It’s a good idea that couples prepare their NYS tax returns using both statuses to determine which method gives them the best benefit.
3. I understand that some of the benefits available to heterosexual couples are available to same-sex couples such as domestic partner health insurance coverage. How does this change impact the tax circumstances of married same-sex couples?
The cost incurred by an employer providing health insurance to married or unmarried same-sex couples is taxable to the employee for Federal purposes and is included in the employee’s Form W-2. For married same-sex couples, that cost will not be taxable for NYS purposes and will need to be adjusted on the NYS income tax return filing of the employee.
4. When someone dies there can be Estate Tax issues to deal with. Are there any changes to that part of the law that impact married same-sex couples?
For New York State Estate Tax purposes, a surviving same-sex spouse will be allowed all the same deductions and elections allowed for different-sex spouses whether or not a Federal Estate Tax Return Form 706 is filed for the decedent. This allows a same-sex spouse decedent to pass an unlimited amount of assets to his/her surviving spouse free of NYS estate taxes if the estate elects the unlimited marital deduction provision.
All married same-sex couples should consult with their attorney to prepare an appropriate will and related documents.
5. Is there anything that same-sex couples need to do now to prepare for the impacts on their 2011 tax filings?
Because of some of the changes mentioned earlier, an employee should consider revising his/her NYS withholding information with their employer to reflect the new filing status, dependency exemptions and income or deduction changes.
You may want to file a new Form IT-2104, Employee’s Withholding Allowances Certificate, with your employer because you’ll file a New York return using a married status beginning in tax year 2011. It’s a good idea to provide proof to your employer that you’re legally married to have them change the withholding of New York taxes.
If you make estimated tax payments, you should re-compute your estimate based on a married filing status.
As mentioned earlier, for personal income tax purposes, the Act is effective for tax years ending on or after July 24, 2011. Same-sex married couples who are married as of December 31, 2011, will be considered married for the entire year. They must file their returns using a married filing status starting in tax year 2011. The Act is not retroactive. Therefore, a same-sex married couple who was legally married in another state prior to July 24, 2011, is not married for New York tax purposes until July 24, 2011, and may not use a married filing status prior to tax year 2011.
The trailblazing Marriage Equality Act, which took effect on July 24, 2011, grants same sex couples the same legal rights as heterosexual couples and applies to all legally performed marriages regardless of where the ceremony took place.
With the passage of the bill, which applies to all taxes administered by the New York State Department of Taxation and Finance, are a host of tax-related considerations ranging from personal income tax to estate planning that need to be addressed in 2011 and 2012 by those couples entering into marriage.
The following questions and answers help shed light on key changes brought about by the new measure:
1. How do same-sex couples file their Federal and NYS tax returns?
For same-sex couples married before December 31, 2011, the 2011 tax returns filing status for NYS tax returns will be either Married Filing Joint or Married Filing Separate. Since the Federal government does not recognize same-sex marriages, the filing status for both individuals would be either Single or Head of Household, if qualified.
2. What is the added costs of the filing methods that are now required?
To complete the required New York return(s), a married same-sex couple must re-compute their Federal income tax return(s) using a married filing status, applying all the Federal rules for married taxpayers. That return should not be submitted to the IRS. The return(s) should only be used to complete your New York return(s) and kept it with your tax documents. Therefore, the cost of preparing at least one extra return will be incurred.
It’s a good idea that couples prepare their NYS tax returns using both statuses to determine which method gives them the best benefit.
3. I understand that some of the benefits available to heterosexual couples are available to same-sex couples such as domestic partner health insurance coverage. How does this change impact the tax circumstances of married same-sex couples?
The cost incurred by an employer providing health insurance to married or unmarried same-sex couples is taxable to the employee for Federal purposes and is included in the employee’s Form W-2. For married same-sex couples, that cost will not be taxable for NYS purposes and will need to be adjusted on the NYS income tax return filing of the employee.
4. When someone dies there can be Estate Tax issues to deal with. Are there any changes to that part of the law that impact married same-sex couples?
For New York State Estate Tax purposes, a surviving same-sex spouse will be allowed all the same deductions and elections allowed for different-sex spouses whether or not a Federal Estate Tax Return Form 706 is filed for the decedent. This allows a same-sex spouse decedent to pass an unlimited amount of assets to his/her surviving spouse free of NYS estate taxes if the estate elects the unlimited marital deduction provision.
All married same-sex couples should consult with their attorney to prepare an appropriate will and related documents.
5. Is there anything that same-sex couples need to do now to prepare for the impacts on their 2011 tax filings?
Because of some of the changes mentioned earlier, an employee should consider revising his/her NYS withholding information with their employer to reflect the new filing status, dependency exemptions and income or deduction changes.
You may want to file a new Form IT-2104, Employee’s Withholding Allowances Certificate, with your employer because you’ll file a New York return using a married status beginning in tax year 2011. It’s a good idea to provide proof to your employer that you’re legally married to have them change the withholding of New York taxes.
If you make estimated tax payments, you should re-compute your estimate based on a married filing status.
As mentioned earlier, for personal income tax purposes, the Act is effective for tax years ending on or after July 24, 2011. Same-sex married couples who are married as of December 31, 2011, will be considered married for the entire year. They must file their returns using a married filing status starting in tax year 2011. The Act is not retroactive. Therefore, a same-sex married couple who was legally married in another state prior to July 24, 2011, is not married for New York tax purposes until July 24, 2011, and may not use a married filing status prior to tax year 2011.
Wednesday, August 3, 2011
TAX AUDIT UPDATE WEBINAR SET FOR 8/17
Mounting pressure on annual budgets has caused many tax authorities to rethink what they’re auditing and how they’re conducting those audits. These changes have resulted in headaches for business and individual taxpayers alike.
On Wednesday, August 17 from noon to 1 p.m., my colleague, Tom Donovan, CPA, will host a free, informative Webinar designed to shed light on the latest changes in tax audits, as well as income and sales tax matters. The session qualifies for CPE credit.
“Tax audits come in a variety of sizes and colors,” said Tom, who represents many of our clients undergoing State or Federal tax audits. “This interactive Webinar will allow participants to ask questions and get answers to some of the things that may be keeping them up at night.”
Some of the types of questions he plans to discuss include:
- What can we do to be better prepared in case one of those “letters” arrives in the mail?
- I live and work in New York and travel to Georgia and California on a regular basis to meet with some customers. To which states do I owe income tax?
- What’s the statute of limitations for both me and my tax return?
- My neighbor did not pay sales tax when he put that new roof on his house, but Lowes charged me sales tax when I bought shingles for my house! What’s up with that?
- It seems that we’re being audited for something every year. Are we being targeted or singled out?
PC-based attendees are required to have: Windows® 7, Vista, XP or 2003 Server, while Macintosh®-based attendees need Mac OS® X 10.4.11 (Tiger®) or newer.
Space is limited, so reserve your seat now by going to: https://www2.gotomeeting.com/register/492862154
After registering you'll receive a confirmation email containing information about joining the session.
For more information, drop me a line at kpo@marvincpa.com.
Tuesday, July 26, 2011
2011 Business Tax Ideas Focus of 7/27 Webinar
As the second half of the year gets underway, there are specific deductions that all businesses should consider taking advantage of, as well as important timing issues related to those deductions.
On Wednesday, July 27th from noon to 1 p.m., we'll host an informative, free Webinar designed to lead companies though some of the key deductions that are available.
We'll give participants a step-by-step guide to various business tax ideas they need to know about before the end of the calendar year, since it's never too early to start thinking about tax planning.
The Webinar also qualifies for CPE credit.
PC-based attendees are required to have: Windows 7, Vista, XP or 2003 Server, while Macintosh-based attendees need Mac OS X 10.4.11 (Tiger) or newer. Space is limited. Reserve your seat now by going to: https://www2.gotomeeting.com/register/427448795
After registering you will receive a confirmation email containing information about joining the session. For more information, call 518-785-0134, or email me at kpo@marvincpa.com.
On Wednesday, July 27th from noon to 1 p.m., we'll host an informative, free Webinar designed to lead companies though some of the key deductions that are available.
We'll give participants a step-by-step guide to various business tax ideas they need to know about before the end of the calendar year, since it's never too early to start thinking about tax planning.
The Webinar also qualifies for CPE credit.
PC-based attendees are required to have: Windows 7, Vista, XP or 2003 Server, while Macintosh-based attendees need Mac OS X 10.4.11 (Tiger) or newer. Space is limited. Reserve your seat now by going to: https://www2.gotomeeting.com/register/427448795
After registering you will receive a confirmation email containing information about joining the session. For more information, call 518-785-0134, or email me at kpo@marvincpa.com.
Wednesday, June 15, 2011
Tuesday, March 15, 2011
Great event this Thursday
More details at website posted below, but great event for Non-profits this Thursday at the Italian American Community Center. Hope to see you there!!!
http://acchamber.org/Events/031711-IRSRegulations.aspx
http://acchamber.org/Events/031711-IRSRegulations.aspx
Monday, March 7, 2011
Great events tomorrow!
Great event tomorrow morning at Albany Chamber as part of the Small Business Council, which I am apart of. Here is the website to sign-up - hope to see you there:
http://acchamber.org/Events/031811-BusinessSuccess.aspx
Also, tomorrow night hope to see you in Troy for my personal tax seminar! Se my previous blog for information or visit the Troy Record website for details.
Hope to see you at both - what a great way to start off and finish up the day! Also hope everyone is getting around town safely today. Kev-
http://acchamber.org/Events/031811-BusinessSuccess.aspx
Also, tomorrow night hope to see you in Troy for my personal tax seminar! Se my previous blog for information or visit the Troy Record website for details.
Hope to see you at both - what a great way to start off and finish up the day! Also hope everyone is getting around town safely today. Kev-
Friday, March 4, 2011
Contributions 101
Sorry for not having posted in a while but the 3/15 deadline for Corporations is my worst deadline of them all. Attended a great charity event last night for the Colonie Senior Service Center at the Century House and it got me thinking about the rights and wrongs as they relate to charitable contributions. These types of events are wonderful and really make a tremendous impact on these organizations - last night I bet you they sold about 350 tickets to the event and the atmosphere was electric - congrats to Bill and Kristin Hoblock for putting on a tremendous event.
First, it is unfortunate but unless you itemize your deductions on Schedule A of the 1040 you will not be able to deduct your charitable contributions - not saying you should or shouldn't give because of this but you will get no tax benefit if you don't itemize.
The obvious stuff relates to documentation - keep as many receipts as you can for cash and non-cash contributions. If you bring items to the Salvation Army for example, it is always your responsibility to calculate the fair market value of the donation by using the charts that are available but you should document everything you give to them and how you came up with your tax figure. If you give MORE THAN $500 in non-cash contributions (in the aggregate) you are required to list all of the non-cash contributions that were made, to whom, when and what was given - these would be reported on Form 8283.
With regards to fundraisers - like the one I was at last night. Lets say you pay $500 for 2 NY Giant tickets - 50 yard line, front row seats with limo transportation to the game - the COST of which would be $750 - because you paid less than the cost value, you would receive NO deduction for your contribution. If you had paid $1,000 for the package, your deduction would be $250.
Another misconception out there is donated services. If I was to donate 10 hours of accounting services to a local non-profit and my hourly rate here at the firm is $200, I would be able to deduct $2,000 right? WRONG - there is no contribution for services as there is no way to truly define the fair market rate of those services, but I can deduct the mileage for me to drive there and any supplies I use in working there - but not the services themselves.
Another example that people I am sure get wrong relates to donating the use of their rental property - a week stay at your place in Florida. We have all seen these big prizes at events - someone gives their timeshare at Disney away - sounds like a great idea - get to see Mickey and throw-up on all the rides (I don't handle rides that well), the only issue is because you are not donating the entire interest in the property to the organization you CAN NOT take a deduction for it. Even if there are defined nightly room rates and the value is easily calculated, because you are not giving your property completely away, there is no contribution.
Just thought I would follow up last night's great event with some tips on what can and can't be deducted as I wouldn't want anyone to get in trouble :-)
A great read on all of this information is in IRS publication 526 and you can locate it on IRS.gov, along with a lot of other great information.
Thanks again for those who follow my blog and don't forget about our great tax seminar coming up next Tuesday, March 8th - all about personal taxes - check out our website for more information at www.marvincpa.com.
First, it is unfortunate but unless you itemize your deductions on Schedule A of the 1040 you will not be able to deduct your charitable contributions - not saying you should or shouldn't give because of this but you will get no tax benefit if you don't itemize.
The obvious stuff relates to documentation - keep as many receipts as you can for cash and non-cash contributions. If you bring items to the Salvation Army for example, it is always your responsibility to calculate the fair market value of the donation by using the charts that are available but you should document everything you give to them and how you came up with your tax figure. If you give MORE THAN $500 in non-cash contributions (in the aggregate) you are required to list all of the non-cash contributions that were made, to whom, when and what was given - these would be reported on Form 8283.
With regards to fundraisers - like the one I was at last night. Lets say you pay $500 for 2 NY Giant tickets - 50 yard line, front row seats with limo transportation to the game - the COST of which would be $750 - because you paid less than the cost value, you would receive NO deduction for your contribution. If you had paid $1,000 for the package, your deduction would be $250.
Another misconception out there is donated services. If I was to donate 10 hours of accounting services to a local non-profit and my hourly rate here at the firm is $200, I would be able to deduct $2,000 right? WRONG - there is no contribution for services as there is no way to truly define the fair market rate of those services, but I can deduct the mileage for me to drive there and any supplies I use in working there - but not the services themselves.
Another example that people I am sure get wrong relates to donating the use of their rental property - a week stay at your place in Florida. We have all seen these big prizes at events - someone gives their timeshare at Disney away - sounds like a great idea - get to see Mickey and throw-up on all the rides (I don't handle rides that well), the only issue is because you are not donating the entire interest in the property to the organization you CAN NOT take a deduction for it. Even if there are defined nightly room rates and the value is easily calculated, because you are not giving your property completely away, there is no contribution.
Just thought I would follow up last night's great event with some tips on what can and can't be deducted as I wouldn't want anyone to get in trouble :-)
A great read on all of this information is in IRS publication 526 and you can locate it on IRS.gov, along with a lot of other great information.
Thanks again for those who follow my blog and don't forget about our great tax seminar coming up next Tuesday, March 8th - all about personal taxes - check out our website for more information at www.marvincpa.com.
Wednesday, February 23, 2011
A little bit more on the Business Climate Survey and a little tax heads-up
Here is a nice 2 minute video about the survey results as described by Marvin and Company's Managing Director Kevin McCoy.
http://vimeo.com/20151192
Hope you all have signed up for the tax seminar coming up at the Troy Record. Thanks for all the support!
Actually one other thing - working through a lot of corporate returns right now and make sure you are making the right decision on whether or not to use Section 179 or Bonus depreciation (where applicable). I know there aren't too many companies out there that have taxable income over the past 2 years but bonus depreciation can create a net operating loss where section 179 can not - and if you had taxable income in the past two years maybe creating an NOL would be worth it and then you could amend your previous year's return and get some money refunded. I know this is pretty technical but your accountant should know all about this but if you need any help please don't hesitate to contact me at anytime.
http://vimeo.com/20151192
Hope you all have signed up for the tax seminar coming up at the Troy Record. Thanks for all the support!
Actually one other thing - working through a lot of corporate returns right now and make sure you are making the right decision on whether or not to use Section 179 or Bonus depreciation (where applicable). I know there aren't too many companies out there that have taxable income over the past 2 years but bonus depreciation can create a net operating loss where section 179 can not - and if you had taxable income in the past two years maybe creating an NOL would be worth it and then you could amend your previous year's return and get some money refunded. I know this is pretty technical but your accountant should know all about this but if you need any help please don't hesitate to contact me at anytime.
Tuesday, February 22, 2011
Great article for non-profits...
Joanne Berry, Executive Director of the NYS Society of CPA's wrote a great editorial in last month's edition of The CPA Journal, in which she dives into the path that the CPA-non-profit relationship may be on.
http://viewer.zmags.com/publication/205d12e6#/205d12e6/9
The Roslyn School District scandal is probably the Enron of school district scandals with about $11 million in misappropriations and fraud and has since laid the ground work for more state audits and more regulation. We have seen many of our local school districts end up on the front page of the "capital district" section of a local paper talking about how money was spent inappropriately and how internal controls did nothing to prevent it - and Berry asks the same question with regards to NFP's and their spending responsibilities.
I believe this article comes at a good time because of the economic difficulties many non-profits have faced over the past couple years and some of these struggles include layoffs which can really have a negative impact on a small non-profit's internal control. Especially in these times when everyone is hurting a little in the wallet, you want to make sure that your internal controls are structured in a way that even the smallest of departments can handle and that is something your auditor should be able to help you with - but if not, as always, please feel free to give me a call.
http://viewer.zmags.com/publication/205d12e6#/205d12e6/9
The Roslyn School District scandal is probably the Enron of school district scandals with about $11 million in misappropriations and fraud and has since laid the ground work for more state audits and more regulation. We have seen many of our local school districts end up on the front page of the "capital district" section of a local paper talking about how money was spent inappropriately and how internal controls did nothing to prevent it - and Berry asks the same question with regards to NFP's and their spending responsibilities.
I believe this article comes at a good time because of the economic difficulties many non-profits have faced over the past couple years and some of these struggles include layoffs which can really have a negative impact on a small non-profit's internal control. Especially in these times when everyone is hurting a little in the wallet, you want to make sure that your internal controls are structured in a way that even the smallest of departments can handle and that is something your auditor should be able to help you with - but if not, as always, please feel free to give me a call.
Monday, February 21, 2011
25th Annual Business Climate Survey Released
Kevin McCoy, CPA and director, Marvin and Company, PC discussed highlights from the 25th Annual Business Climate Survey Friday, Feb. 18, 2011 at the University at Albany.
Compiled by Marvin and the University at Albany’s School of Business, the survey shows that nearly half of Capital Region firms expect business to increase in 2011, while more than nine out of 10 regional businesses expect their employment levels to increase or level off. Forty-two percent of area firms saw an overall increase in their business in 2010, the highest percentage in three years, while 49 percent of businesses believe they will see increases in 2011. You can read the full report here: http://www.albany.edu/news/12031.php?WT.svl=news
Sunday, February 20, 2011
Taking my show on the road...
The Troy Record has asked me to do a presentation on personal tax tips and such on March 8th from 6:30pm - 8:30pm. We will talk about things that did and did not come out of the December 17th, 2010 legislation as well as discuss our opinions as to where we think things might be headed. We will also discuss some common questions we get from clients as well as common errors we see on self-prepared returns. We'll also touch on some topics about IRS audits/inquiries and deciding on whether or not you should have someone prepare your return for you.
The presentation will be about an hour and 1/2 and then we will take questions after that. There will be refreshments and such and the event will be held at The Community Media Lab on 501 Broadway in Troy. If you have any questions or would like to register please contact Rebecca Eppelmann at the Troy Record at reppelmann@troyrecord.com.
Hope to see you there and meet some of you who have been following my blog - I just went over the 500th reader - thanks to all of those who support this blog. Kev-
The presentation will be about an hour and 1/2 and then we will take questions after that. There will be refreshments and such and the event will be held at The Community Media Lab on 501 Broadway in Troy. If you have any questions or would like to register please contact Rebecca Eppelmann at the Troy Record at reppelmann@troyrecord.com.
Hope to see you there and meet some of you who have been following my blog - I just went over the 500th reader - thanks to all of those who support this blog. Kev-
Where do 'my' business concerns rank?
For the past 25 years Marvin and Company has been taking the business pulse of the capital district and beyond, asking business owners what their major concerns were in the upcoming year as well as following up on 2010 and what kind of successes/challenges there were.
Over the past few years we have been teaming up with SUNY Albany to present and conduct the survey and this past Friday we announced the results at a joint press conference on the SUNY Albany campus, with our friends UAlbany President (and former golfing buddy) George Philip and Don Siegel, Dean of the School of Business at UAlbany. The results showed some optimism for the first time in a while but still at the top of the list of concerns is the rising costs of providing health health benefits to employees.
I am linking some interviews from the event so please take a look and if you would like any more information please let me know. Kev-
http://www.timesunion.com/business/article/Firms-see-better-2011-1020087.php
http://bit.ly/fFDPjq
http://www.albany.edu/news/12031.php?WT.svl=news
Over the past few years we have been teaming up with SUNY Albany to present and conduct the survey and this past Friday we announced the results at a joint press conference on the SUNY Albany campus, with our friends UAlbany President (and former golfing buddy) George Philip and Don Siegel, Dean of the School of Business at UAlbany. The results showed some optimism for the first time in a while but still at the top of the list of concerns is the rising costs of providing health health benefits to employees.
I am linking some interviews from the event so please take a look and if you would like any more information please let me know. Kev-
http://www.timesunion.com/business/article/Firms-see-better-2011-1020087.php
http://bit.ly/fFDPjq
http://www.albany.edu/news/12031.php?WT.svl=news
Tuesday, February 15, 2011
Conflicts of interest policies for non-profits
Don't get too far into your fiscal year having not updated your conflict of interest policy. Each board member, officer and/or highest paid employee if in a management position should be signing to the fact that no conflicts are outstanding or if they are, then they disclose the circumstances for the rest of the board to discuss. The 990 and the 1023 both ask about an organization's conflict of interest policy so I would strongly recommend your organization having one especially if you are a 501(c)(3) and receive contributions.
If you need an example of one shoot me an email or you can also google it and there are some pretty good pre-canned ones out there as well. If you have one and would like me to take a look at it I can but I would highly recommend having your attorney take a look at it as well
On another note don't forget about our free webinar on sales tax tomorrow from 12-1pm.
https://www2.gotomeeting.com/register/657762242
If you need an example of one shoot me an email or you can also google it and there are some pretty good pre-canned ones out there as well. If you have one and would like me to take a look at it I can but I would highly recommend having your attorney take a look at it as well
On another note don't forget about our free webinar on sales tax tomorrow from 12-1pm.
https://www2.gotomeeting.com/register/657762242
Monday, February 14, 2011
Friendly reminder on sales tax webinar
https://www2.gotomeeting.com/register/657762242
Check out our FREE webinar this Wednesday from noon to one on sales tax issues and what we are seeing with sales tax audits and other things like that. Hope to see you there! And did I mention it is FREE!
Kev-
Check out our FREE webinar this Wednesday from noon to one on sales tax issues and what we are seeing with sales tax audits and other things like that. Hope to see you there! And did I mention it is FREE!
Kev-
Repairs and Maintenance...
This time every year I am always asked from my business clients what can be expensed and what should be capitalized. I am linking a nice article about what the IRS looks for with regards to their R&M audits and thought it would be a good read for those of you who are nervous about your approach. One thing to think about also is with section 179 and Bonus depreciation available (sorry to get tax-y on you) you might want to consider capitalizing the asset and then use one of these accelerated methods to write most of the asset or all of it off in the first year. As always any questions please shoot me an email. Thanks, Kev-http://www.journalofaccountancy.com/Web/20113719.htm
Friday, February 11, 2011
Get your calendars out Non-Profits!!!
I have the pleasure of sitting on the panel for the Tech Valley Not For Profit Business Council's March event which will focus on tax implications and tax issues facing non-profits. The event is scheduled for March 17th from 1130-2 at the Italian American Community Center and to sign up go to the Albany Chamber Website at www.acchamber.org for event details.
These events are very well attended by many non-profit leaders in the area and I don't expect this session to be any different. The panel I believe is myself, someone from the Attorney General's office and someone from the Healthcare industry so there will be many great talking points I am sure.
Hope to see you there and any questions you can also email me at anytime!! Kev-
These events are very well attended by many non-profit leaders in the area and I don't expect this session to be any different. The panel I believe is myself, someone from the Attorney General's office and someone from the Healthcare industry so there will be many great talking points I am sure.
Hope to see you there and any questions you can also email me at anytime!! Kev-
Free webinar
Marvin and Company's FREE webinar series continues this upcoming Wednesday, February 16th and deals with sales tax. The webinar is from noon to one on Wednesday and did I mention it is free!!!
One of my fellow partners Jim Amell, CPA will touch on topics including sales and use tax basics, such as the requirement to collect and pay sales tax, exempt entities, and exempt transactions and changes to sales tax exemptions for Qualified Enterprise Zone Entities. Jim will also discuss sales tax audits and what he has seen lately - some interesting stuff that is for sure!
I will send out the link shortly through a second blog because we are having some technical difficulties at the time - but stay tuned!
One of my fellow partners Jim Amell, CPA will touch on topics including sales and use tax basics, such as the requirement to collect and pay sales tax, exempt entities, and exempt transactions and changes to sales tax exemptions for Qualified Enterprise Zone Entities. Jim will also discuss sales tax audits and what he has seen lately - some interesting stuff that is for sure!
I will send out the link shortly through a second blog because we are having some technical difficulties at the time - but stay tuned!
Saturday, February 5, 2011
2011 Retirement Limits - Start Planning Now!!!
I know it's only February but thinking about retirement limits and retirement goals should be going on at all times. Here are the limits as they relate to 2011:
Defined Contribution/401(k) Plans:
Defined Contribution/401(k) Plans:
- Max contribution is $16,500
- Max Compensation limit is $245,000
- Additional catch-up contributions if age 50 or older $5,500
- Defined contribution plans - contribution limited to $49,000 or 100% of compensation
IRA Accounts:
- IRA contributions are limited to $5,000 with additional $1,000 contribution for people 50 and over.
- Anyone can make a contribution but contributions might not be deductible - if you are not covered by an employer's plan the income limitations are as follows: Single and head of households ($56k-$66k) married filing joint ($90k-$110k)
- If your spouse is a participant in a plan but you are not you are able to take a deduction, but the income phaseout is $169k-$179k.
ROTH IRA Accounts:
- Contribution amounts are the same as the IRA amounts above - obviously there is no deduction related to the ROTH because when you take the money out it comes out completely tax free!
- The income thresholds are a little different however - for single and head of households $107k-$122k) and for married filing joint ($169k - $179k).
- ROTHs are great vehicles because there is no required minimum distribution as there is with a traditional IRA - which means you never have to touch this account if you don't need to.
If you have a SEP or other retirement plan and have any questions please feel free to email me at anytime - especially this time of year I am always in the office!!!
Friday, February 4, 2011
A bonus from the Government? "Spend" it wisely!
One of the big shocks coming from the government lately was the reduction in the Social Security withholding tax. In the past 6.2% of your wages up to $106,800 were withheld for "your" social security account (basically the max they would withhold would be $6,621) but currently the rate has been reduced to 4.2% - which is a shock to a lot of people because of the problems you hear about social security having being in the RED all the time. It will produce revenue for the government though because now that amount that used to be withheld pretax will be taxable income to the employee - unless..... think about increasing your 401(k) contribution by the 2% - meaning net-net you will be taking home the same amount of money as in the past but you will be banking more for your retirement - basically let this reduction fund your retirement account. If you are over the wage threshold of $106,800 or you are already contributing the max to your retirement account this might not be that big of a deal to you but if you are not in either one of those boats think about it!!!
Thursday, February 3, 2011
Future 1099 requirements - changes coming?!?!
Here is a great article about the possible repealing of the crazy 1099 requirements that are headed our way in 2011 and 2012. For 2011 the big change is for landlords - if you own rental property and you have any service done on your rental property during 2011 - anything over $600 (aggregate) would have to be recorded on a 1099MISC. For 2012 - the BIG CHANGE is being required to provide a 1099 for either services or purchases - this could be a HUGE burden on small businesses and any business for that matter. Check out the article and give me a buzz/email if you have any questions...
http://www.accountingtoday.com/news/Senate-Passes-1099-Repeal-Amendment-57177-1.html
http://www.accountingtoday.com/news/Senate-Passes-1099-Repeal-Amendment-57177-1.html
Tuesday, February 1, 2011
Good news for small businesses on the horizon?
I know they don't always stick to their word but it is at least nice to hear that they are talking about small businesses. Now if they will just amend some of the ridiculousness surrounding the new 1099 requirements starting this year and next.
http://www.accountingtoday.com/news/Obama-Proposes-Extending-Small-Business-Tax-Cuts-57104-1.html
http://www.accountingtoday.com/news/Obama-Proposes-Extending-Small-Business-Tax-Cuts-57104-1.html
Monday, January 31, 2011
God Must Be a Yankee Fan!
With President Obama's signing of the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 on December 17th, one thing became clearer: most estates for those who died in 2010 would not be subject to the Federal Estate Tax. For example, the billion dollar estate of form Yankees owner George Steinbrenner will only be subject to New York State estate tax, which tops out at about 16% and not the Federal Estate Tax, which will help the Steinbrenner family to continue to pay the highest dollar for young baseball talent and free agents (some overpriced I may add).
Why is planning so important? The reason is that the future is somewhat grey as to what the Federal Estate Tax is going to be. The Act passed on December 17th only bridged the estate tax issue until December 31, 2012, after that there are concerns that the estate that could return to its 2009 thresholds or even worse, its 2001 thresholds. When we talk about thresholds it is easy to see why this could have a major impact on many estates and that is why it is difficult to determine currently if your estate will be subject to tax in the future. Currently under the new legislation the Federal Estate Tax is for estates greater than $5,000,000 and they would be taxed at 35%, but that could all change. For example, if the government reverts back to the 2001 thresholds, then estates greater than $1,000,000 could be subject to a 55% tax; if they revert back to the 2009 levels, then estates greater than $3,500,000 could be subject to a 45% tax; therefore you can see why estate planning is so important because it is very hard to plan the death side of this equation.
The other part of this that people take for granted is the assumption that they will never have to worry about this because they will never achieve any of these thresholds. This may be the case if the limits stay between $3,500,000 and $5,000,000, but if the levels drop down to approximately $1,000,000 this would effect many more people because of what gets included in your estate. If you consider when you start adding up your investments, house and retirement accounts it might be very easy to get close to that $1,000,000 threshold.
No one ever enjoys talking about dying and planning for one's death but that planning may be able to save your estate thousands of dollars. You should be reviewing your will timely with your attorney and accountant to make sure that you and your heirs will receive that largest benefit from your estate. This may mean establishing gifting timelines or setting up trusts, which may come at a cost, but if it ends up saving your estate and heirs money, wouldn't it be worth it?
Why is planning so important? The reason is that the future is somewhat grey as to what the Federal Estate Tax is going to be. The Act passed on December 17th only bridged the estate tax issue until December 31, 2012, after that there are concerns that the estate that could return to its 2009 thresholds or even worse, its 2001 thresholds. When we talk about thresholds it is easy to see why this could have a major impact on many estates and that is why it is difficult to determine currently if your estate will be subject to tax in the future. Currently under the new legislation the Federal Estate Tax is for estates greater than $5,000,000 and they would be taxed at 35%, but that could all change. For example, if the government reverts back to the 2001 thresholds, then estates greater than $1,000,000 could be subject to a 55% tax; if they revert back to the 2009 levels, then estates greater than $3,500,000 could be subject to a 45% tax; therefore you can see why estate planning is so important because it is very hard to plan the death side of this equation.
The other part of this that people take for granted is the assumption that they will never have to worry about this because they will never achieve any of these thresholds. This may be the case if the limits stay between $3,500,000 and $5,000,000, but if the levels drop down to approximately $1,000,000 this would effect many more people because of what gets included in your estate. If you consider when you start adding up your investments, house and retirement accounts it might be very easy to get close to that $1,000,000 threshold.
No one ever enjoys talking about dying and planning for one's death but that planning may be able to save your estate thousands of dollars. You should be reviewing your will timely with your attorney and accountant to make sure that you and your heirs will receive that largest benefit from your estate. This may mean establishing gifting timelines or setting up trusts, which may come at a cost, but if it ends up saving your estate and heirs money, wouldn't it be worth it?
Friday, January 28, 2011
Where is my refund?
I get this question all the time and the attached is a great article that provides dates as to if you file your return by a certain date when you can expect to get your refund. Notice the dates are about a week to two weeks earlier for direct deposit so keep that in mind when you are filing.
http://www.efile.com/tax-refund/where-is-my-refund/
Also remember for those of you that have to file a Schedule A for your itemized deductions with your 1040 that you are not able to file your return until mid-February because the IRS's site is not ready yet due the legislation being passed so late in 2010.
http://www.efile.com/tax-refund/where-is-my-refund/
Also remember for those of you that have to file a Schedule A for your itemized deductions with your 1040 that you are not able to file your return until mid-February because the IRS's site is not ready yet due the legislation being passed so late in 2010.
Tuesday, January 25, 2011
Everyone loves the IRS (which spells "theirs", ironically)
Thank you all for taking the time to join my blog. My goal is to keep hot tax topics in front of you either at the Federal or state level. I am involved in personal and corporate tax as well as head of our non-profit tax department here at Marvin and Company, so hopefully you will be able to find part or all of my blog useful. As with every other professional though I do have to issue a disclaimer. So much of tax is specific to its situation, so these blogs are to get you thinking about your own personal situation and then take your new found information to your accountant or your attorney to discuss action steps further. Please do not use this information as the end-of-all-ends because without knowing your every detail it would be almost impossible to give you advise over a blog.
If at anytime you would like any more information on a particular blog or would like some clarification please do not hesitate to contact me through my email address.
The title of this blog "Robin Hood" relates to taxes and every one's issue with them. Don't worry I have no plans on wearing any tights or shooting any arrows but I hope that some of this information will assist you in your tax planning and if you can save a $1 for doing something a little differently well that sounds like a good start to me. I hope you enjoy reading my blog and my goal is to stay as current as possible with this.
If any of you would like to join my free webinar tomorrow on personal and corporate tax update from noon to one please go to the link and sign up.
https://www2.gotomeeting.com/register/459328226
If at anytime you would like any more information on a particular blog or would like some clarification please do not hesitate to contact me through my email address.
The title of this blog "Robin Hood" relates to taxes and every one's issue with them. Don't worry I have no plans on wearing any tights or shooting any arrows but I hope that some of this information will assist you in your tax planning and if you can save a $1 for doing something a little differently well that sounds like a good start to me. I hope you enjoy reading my blog and my goal is to stay as current as possible with this.
If any of you would like to join my free webinar tomorrow on personal and corporate tax update from noon to one please go to the link and sign up.
https://www2.gotomeeting.com/register/459328226
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