WILLIAMS OVERMAN PIERCE ACCOUNTING NEWS


October 2019 Newsletter

In This Issue:

  • When Nonprofits Need to Register in Multiple States
  • DOL and IRS Encourage Workplace Retirement Savings for Smaller Employers by Expanding Availability of Multiple Employer Plans
  • For Best Results, Start Your Strategic Planning Early
  • Take Advantage of the Gift Tax Exclusion Rules
  • Leadership Spotlight: Hannah Milewski, CPA

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When Nonprofits Need to Register in Multiple States

Many not-for-profit organizations use fundraising methods that cross state boundaries. If your nonprofit is one of them, it may need to register in multiple jurisdictions. But keep in mind that registration requirements vary — sometimes dramatically — from state to state. So be sure to determine your obligations before you invest time and money in registering. 

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Take Advantage of the Gift Tax Exclusion Rules

As we head toward the gift-giving season, you may be considering giving gifts of cash or securities to your loved ones. Taxpayers can transfer substantial amounts free of gift taxes to their children and others each year through the use of the annual federal gift tax exclusion. The amount is adjusted for inflation annually. For 2019, the exclusion is $15,000. 

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For Best Results, Start Your Strategic Planning Early

Time flies when you’re having fun — and running a business. Although it’s probably too early to start chilling a bottle of bubbly for New Year’s Eve, it’s certainly not too early for business owners to start doing some strategic planning for next year. Here are some ways to get started. 

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DOL and IRS Encourage Workplace Retirement Savings for Smaller Employers by Expanding Availability of Multiple Employer Plans

A multiple employer plan (MEP) allows employees of unrelated private-sector employers to participate in a single tax-qualified retirement plan sponsored by an employer group or association or a professional employer organization (PEO). Generally, joining an MEP is an efficient way to reduce the cost of establishing and maintaining a broad-based retirement plan that is subject to the Employee Retirement  Income Security Act of 1974 (ERISA) by using a common plan administrator and pooled investments. 

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Fall 2019 Non-Profit Newsletter

In this Issue:

  • Governmental Accounting Standards Board Statement No. 91, Conduit Debt Obligations
  • Don’t Turn Your Back on CECL
  • FASB Proposes Delayed Effective Dates of Certain Standards
  • 1 Year After Wayfair: What Nonprofits Need to Know
  • Maximizing Good: 3 Steps to Meeting Your Nonprofit’s Potential
  • Challenges With Gifts-In-Kind
  • Gift Acceptance Policy

This and more...

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September 2019 Newsletter

In This Issue:

  • Why Plan Sponsors Should Read Their Service Providers’ SOC Reports
  • Proposed Income Recognition Regulations Provide Clarity for Accrual Method Taxpayers
  • Regulations Clarify Bonus Depreciation Treatment
  • A Roadmap for Preventing Construction Disputes
  • Leadership Spotlight: Gwen Vass

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A Roadmap for Preventing Construction Disputes

Whether resolved through mediation, arbitration or trial, construction disputes can be costly and time consuming for both project owners and contractors. Construction disputes may involve just a few thousand dollars or may be valued in the billions. The time required to resolve disputes may span years, and cripple both the contractor’s and owner’s financial resources. To eliminate the risk of being embroiled in a costly construction dispute, some construction firms may not bid certain types of projects and avoid working for owners who have a reputation for contentious relationships with contractors.

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Proposed Income Recognition Regulations Provide Clarity for Accrual Method Taxpayers

On September 5, 2019, the IRS and Treasury released proposed regulations addressing the timing of income recognition for accrual method taxpayers under Sections 451(b) and 451(c), as amended by the 2017 tax reform bill known as the Tax Cuts and Jobs Act (TCJA). These eagerly-anticipated regulations provide additional clarity for taxpayers by adding applicability and definitional guidance in several areas, as well as addressing key interactions with ASC 606 (the new revenue recognition standard for financial reporting purposes).

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Eight Key Tax Planning Opportunities for 2019

More than a year after sweeping federal and state tax reform were enacted, businesses of all sizes are still wrapping their arms around the changes. Additional guidance and regulations have been issued nearly every month—indeed, change is the new normal. Strategic tax planning now is key to lowering businesses’ total tax liability. Read on for eight top planning opportunities and considerations businesses should review as part of their 2019 strategy.

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August 2019 Newsletter

In This Issue:

  • What Is the SECURE Act?
  • Breaking Down the Basics of HSAs
  • IRS Automatically Waives Estimated Tax Penalty for Eligible 2018 Tax Filers
  • 3 Biggest Disruptors in the Construction Industry of the Future
  • Alimony Tax Gap Swells to $3.2 Billion, TIGTA Finds
  • Amber Milby Receives Her CPA License

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Summer 2019 Non-Profit Newsletter

In this Issue:

  • Top 10 Trends in the Nonprofit Industry
  • FASB Issues ASU 2019-03, Updating the Definition of Collections
  • From Idea to Impact: 4 Fundamental Elements for Sustainability
  • Don't be a CF-NO: How Nonprofit CFOs Can Collaborate with Senior Leadership

This and more...

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July 2019 Newsletter

In This Issue:

  • Tips for Taxpayers Who Make Money From a Hobby
  • Final Rules Permit Truncated TINs on W-2s
  • IRS Form 5329: Reporting Taxes on Retirement Plans
  • Employers: Let Us Help With Your Employee Benefit Plans
  • The Construction Industry’s Impact

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June 2019 Newsletter

In this issue:

  • IRS Releases New Draft Form W-4 to Help Taxpayers Avoid Withholding Surprises
  • Hiring This Summer? You May Qualify for a Valuable Tax Credit
  • Associations: Avoid Certain Activities to Preserve Tax-Exempt Status
  • Donating Your Vehicle to Charity May Not Be a Taxwise Decision
  • IRS Reminder: Tax Scams Continue Year-Round

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Associations: Avoid Certain Activities to Preserve Tax-Exempt Status

Nonprofit trade associations exist to promote their members’ common interests and improve business conditions or “one or more lines of interest.” Whether the association is a local chamber of commerce, a real estate board or a large professional group, associations’ tax-exempt status is contingent on their sponsoring certain types of activities — and avoiding others. When they fail to do so, the IRS may take action.

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Hiring This Summer? You May Qualify for a Valuable Tax Credit.

Is your business hiring this summer? If the employees come from certain “targeted groups,” you may be eligible for the Work Opportunity Tax Credit (WOTC). This includes youth whom you bring in this summer for two or three months. The maximum credit employers can claim is $2,400 to $9,600 for each eligible employee.

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May 2019 Newsletter

In this issue:

  • Employee Vs. Independent Contractor: How Should You Handle Worker Classification?
  • IRS Highlights Credits and Deductions for Small Businesses
  • 10 Important Ages for Retirement Planning
  • Plug in Tax Savings for Electric Vehicles
  • Prepare for the Worst with a Business Turnaround Strategy 

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Prepare for the Worst With a Business Turnaround Strategy

Many businesses have a life cycle that, as life cycles tend to do, concludes with a period of decline and failure. Often, the demise of a company is driven by internal factors — such as weak financial oversight, lack of management consensus or one-person rule.

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Employee Vs. Independent Contractor:  How Should You Handle Worker Classification?

Many employers prefer to classify workers as independent contractors to lower costs, even if it means having less control over a worker’s day-to-day activities. But the government is on the lookout for businesses that classify workers as independent contractors simply to reduce taxes or avoid their employee benefit obligations.

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April 2019 Newsletter

In this issue:

  • MaryEllen Prance to Assume Partner In Charge Role
  • Why You Should Run Your Nonprofit Like a Business
  • Seniors: Medicare Premiums could Lower Your Tax Bill
  • Divorcing Business Owners Need to Pay Attention to Tax Implications
  • Understanding How Taxes Factor Into an M&A Transaction

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Seniors: Medicare Premiums Could Lower Your Tax Bill

Americans who are 65 and older qualify for basic Medicare insurance, and they may need to pay additional premiums to get the level of coverage they desire. The premiums can be expensive, especially if you’re married and both you and your spouse are paying them. But one aspect of paying premiums might be positive: If you qualify, they may help lower your tax bill.

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Divorcing Business Owners Need to Pay Attention to Tax Implications

If you’re getting a divorce, you know it’s a highly stressful time. But if you’re a business owner, tax issues can complicate matters even more. Your business ownership interest is one of your biggest personal assets and your marital property will include all or part of it.

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Employers May Soon Receive Notices About Mismatched Names and Social Security Numbers on 2018 Form W-2’s

The Social Security Administration (SSA) recently announced that it is mailing “Employer Correction Request Notices”to employers and third-party submitters with at least one 2018 Form W-2 where the name and Social Security number (SSN)do not match the SSA’s records. The notice informs the employer that corrections are needed. 

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March 2019 Newsletter

In this issue: 

  • In Memory of Rick Dodson 
  • Helping Participants Understand Tax Diversification Strategies for Retirement 
  • Eight Key Tax Planning Opportunities for 2019 
  • The Top Three 2019 Tax Numbers Employees Should Know 

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February 2019 Newsletter

In this issue:

  • How Employers Can Calculate Nondeductible Employee Parking Expenses, and Possibly Reduce them by March 31, 2019 
  • Top 10 Property Tax Myths 
  • New Rules for Business Annual Report Filings 
  • Labor Department Proposes Auto-Transfer Plan 

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New Rules for Business Annual Report Filings

Effective January 1, 2019, all business annual reports must be filed directly with the North Carolina Secretary of State. Tax preparers are no longer permitted to complete the annual reports on behalf of their clients, requiring the entities to prepare and file the annual reports directly online through the Secretary of State website. 

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Why Plan Sponsors Should Read Their Service Providers' SOC Reports

When a plan sponsor hires a service provider, that organization and its professionals become part of the team operating the client’s retirement plan. Each member of the team is expected to perform a specific task according to what is prescribed in the plan document. But how do you know whether each service provider has effective systems and controls in place to ensure that they are executing their roles correctly?

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North Carolina DOR Responds to SCOTUS Ruling in Kaestner

On June 21, 2019, the Supreme Court of the United States issued a unanimous opinion finding that North Carolina’s imposition of an income tax on trusts based solely on the residence of a trust’s beneficiaries is unconstitutional. North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, No. 18-457. The North Carolina Department of Revenue has since issued a notice advising taxpayers who believe they are entitled to a refund under the Kaestner decision.

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Donating Your Vehicle to Charity May Not Be a Tax-wise Decision

Let’s say you’re buying a new car and want to get rid of your old one. Among your options are trading in the vehicle to the dealer, selling it yourself or donating it to charity.

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The Chances of IRS Audit Are Down But You Should Still Be Prepared

The IRS just released its audit statistics for the 2018 fiscal year, and fewer taxpayers had their returns examined as compared with prior years. However, even though a small percentage of tax returns are being chosen for audit these days, that will be little consolation if yours is one of them.

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Plug in Tax Savings for Electric Vehicles

While the number of plug-in electric vehicles (EVs) is still small compared with other cars on the road, it’s growing — especially in certain parts of the country. If you’re interested in purchasing an electric or hybrid vehicle, you may be eligible for a federal income tax credit of up to $7,500 (depending on where you live, there may also be state breaks and other incentives).

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Spring 2019 Non-Profit Newsletter

In this Issue:

  • IRS Answers Many Questions on New 21% Executive Compensation Tax
  • The Uniform Guidance – Five Years and Counting
  • GASB Simplifies Accounting For Capitalized Interest
  • Guidance Released on Taxable Income From Parking and Other Fringe Benefits
  • Lessons Learned From Implementing ASU 2016-14 – Functional Expenses

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Understanding How Taxes Factor Into an M&A Transaction

Merger and acquisition activity has been brisk in recent years. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law.

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Why You Should Run Your Nonprofit Like a Business

It’s a well-known truism in the corporate world: Organizations that don’t evolve run the risk of becoming obsolete. But instead of anticipating and reacting to market demands like their for-profit counterparts, many not-for-profits hold on to old ideas about how their organizations should be run. Here are a few things your nonprofit can learn from the business world.

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Helping Participants Understand Tax Diversification Strategies for Retirement

Diversification is an important principle of risk management when it comes to saving for retirement. While many investors understand the benefits of spreading their risk exposure across asset classes in their portfolios, many don’t realize that diversifying their tax exposure can have benefits in terms of managing cash flow in retirement.

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Top 10 Property Tax Myths

Nearly all local taxing jurisdictions, including municipalities, counties, and boards of education, generate tax revenue through the imposition of property tax, which is one of the most substantial sources of local government revenue. For many businesses, property tax is the largest state and local tax obligation, and one of the largest regular operating expenses incurred.

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Non-Profit News: Winter 2018

In this issue:

  • Impact of Wayfair Supreme Court Decision on Nonprofit Organizations
  • TE/GE’s Program Letter Provides Projects and Priorities for 2019 
  • Does Your Information Governance Program Look Like an Abandoned Fairground?

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Exempt Organizations Should be Mindful of Changes Effective January 1, 2018 from the Tax Cuts & Jobs Act

Some areas of consideration are:

  • Employee Compensation in Excess of $1 million
  • Transportation Fringe Benefits
  • Gifts
  • Tickets for college athletic events

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Some of Your Deductions May Be Smaller (Or Nonexistent) When You File Your 2018 Tax Return

While the Tax Cuts and Jobs Act (TCJA) reduces most income tax rates and expands some tax breaks, it limits or eliminates several itemized deductions that have been valuable to many individual taxpayers. This article discusses five deductions you may see shrink or disappear when you file your 2018 income tax return.

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What to Expect from the IRS as the Government Shutdown Continues

Due to the lapse in appropriations that began midnight December 22, 2018, the federal government is in its fourth week of a partial shutdown, which includes much of the Internal Revenue Service (IRS). Although tens of thousands of IRS employees have been recalled, the IRS is working with a skeleton staff at about 60% capacity. While we expect the IRS to be handling some matters and investigations, there are many more visible functions that are generally suspended during the closure.

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Labor Department Proposes Auto-Transfer Plan for Small 401(K) Accounts

Each year, nearly 15 million American workers change jobs, with many leaving their 401(k) accounts behind. The Department of Labor (DOL) is trying to relieve this headache for plan sponsors and keep employee accounts more complete by proposing a rule that would transfer retirement balances left behind to participants’ 401(k) plans at their new employers.

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How Employers Can Calculate Nondeductible Employee Parking Expenses, and Possibly Reduce them by March 31, 2019

Employer business deductions for qualified transportation fringes ended in 2018. The 2017 tax reform known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, amended Sec. 274(a)(4) by eliminating employer business deductions for employee1 qualified transportation fringe (QTF) benefit expenses, including qualified parking2, mass transit and van pool benefits (although such benefits continue to be excluded from employee income).

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