“At Clayton & McKervey, P.C., we actively seek opportunities to participate and take leadership roles within the international business community. We have been involved with the British American Business Council for many years and are proud to have Rob serve on the board,” said Kevin McKervey, President of Clayton & McKervey, P.C.
The American Taxpayer Relief Act of 2012 requires some symmetry in the accounting for asset acquisitions for financial reporting and tax reporting purposes that companies need to act on prior to January 1, 2014. If your company does not require significant amounts of fixed asset acquisitions and you receive an annual audit, you may want to secure the ability to deduct each fixed asset acquisition of less than $5,000.
Each company can make an annual irrevocable election (“De Minimis Safe Harbor Election”) with its tax return to expense a certain amount of Tangible Property acquisitions.
Many companies sponsor employee benefit plans for their employees. Management may not be aware that certain plans require an audit to be completed by an independent auditor. The following is a summary of the audit and reporting guidelines and filing requirements for employee benefit plans.
Basic Filing Requirements
The Employee Retirement Income Security Act (“ERISA”) of 1974 was enacted to protect the interests of employee benefit plan participants and their beneficiaries. ERISA defines pension plans to include all defined benefit and defined contribution plans, including profit-sharing, stock bonus, and employee stock ownership plans. ERISA requires plan administrators to prepare and file various documents annually with the Department of Labor (“DOL”), the Internal Revenue Service (“IRS”), and the Pension Benefit Guaranty Corporation (“PBGC”). The IRS, DOL, and PBGC have consolidated their filing requirements into Form 5500.
Businesses often make payments to individuals and un-incorporated businesses (i.e., partnerships, LLCs, and sole-proprietorships) that are not considered wages and are not subject to income, Social Security, or Medicare tax withholding. These payments are required to be reported on various forms, depending on the character of the payment. Following is a summary of the most common forms.
Form 1099-MISC (Miscellaneous Income)
This form relates to services rendered that do not constitute wages reportable on Form W-2. This form is currently required for each payee that received:
CPA firm Clayton & McKervey, P.C. is pleased to announce it has been named one of Metropolitan Detroit’s 101 Best and Brightest Companies to Work For™ and a 2013 Top Workplace by the Detroit Free Press.
“We are honored to be recognized for the ninth consecutive year as one of Metro Detroit’s 101 Best and Brightest Companies to Work For and a third time as a Top Workplace,” said Kevin McKervey, CPA, president of Clayton & McKervey, P.C. “It is our people that have set Clayton & McKervey, P.C. apart in the marketplace for more than 50 years. This recognition validates our focus to recruit, develop, and retain the best talent to serve our globally minded clients.”
Traditional 401(k) plans are subject to restrictions on the amount of contributions that can be made by or on behalf of highly compensated employees (“HCEs”), compared to contributions made by or on behalf of non-HCEs. These restrictions limit the level of funding by employers and HCEs reducing the benefits of the traditional 401(k) plan.
As we near the end of 2013, it is time to consider some tax planning opportunities. With all of the changes taking effect for businesses and individuals, many tax returns will look different than they have in prior years. Consider the following summary of items to prepare for the law changes as well as to take advantage of some opportunities.
Net Investment Tax
Beginning January 1, 2013, single taxpayers will be subject to an additional 3.8% tax on the lesser of their net investment income or their modified adjusted gross income in excess of $200,000 ($250,000 if MFJ, $125,000 if MFS). Net Investment Income includes taxable interest, capital gains, dividends, annuities, royalties, rents, and passive business income. Some strategies that may help mitigate this additional tax include:
If you happen to meet with clients over lunch at your favorite restaurant to discuss a new professional opportunity, or decide to entertain your clients by inviting them to watch a football game to strengthen your business relationship, you might be able to deduct some of the expenses. It is important to understand there is a thin line between certain expenditures that are deductible on your company’s tax return and other expenses that are not. Here are some ways to make sure your company’s assets are protected against the reach of the Internal Revenue Service:
Who doesn’t love an unexpected cash windfall? Whether looking in the laundry room or under the seat cushions of the family sofa, finding twenty dollars – or even a few quarters – can brighten your day. While certainly not as a lucrative as a lottery win, every little bit helps in tough financial times.
Many multinational companies are missing far more than pocket change when conducting business internationally, but they often do not know where to look. Believe it or not, a fresh look at transfer pricing is one tool that is a regularly overlooked opportunity to improve cashflow on a global basis.