What do I need to know about the Affordable Care Act to file my 2014 taxes?

Margaret Amsden, CPA, MST | Shareholder - Tax ServicesThe Affordable Care Act (“ACA”) creates the Health Insurance Marketplace, also known as the Marketplace or the Exchange. The Marketplace is where taxpayers go to:

  • find information about health insurance options,
  • purchase qualified health plans, and
  • if eligible, obtain help paying premiums and out-of-pocket costs.

If a taxpayer purchased a qualified health plan through the Marketplace, they may qualify for the premium tax credit.

The ACA also includes the individual shared responsibility provision which requires individuals:

  • to have qualifying health care coverage (i.e., minimum essential coverage) for each month of the year,

How to Protect Yourself from Tax Refund Theft

Tood Goodman | Technology Operations AdministratorThis past fall I wrote to alert readers of the serious and growing threat of tax refund theft and recommended some preventive steps we should all take. I gave you statistics on the tens of millions of suspicious returns stopped, and tens of billions of dollars in fraudulent refunds protected by the IRS in recent years.

FASB Update: Simplifying Income Statement Presentation

Wendy Reedy, CPA | Principal - Assurance ServicesOn January 9, 2015, the FASB issued ASU [Accounting Standards Update] 2015-01, Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. The ASU eliminates the concept of extraordinary items and the uncertainty in determining when an item is both unusual in nature and infrequent in occurrence.

Presently, an event or transaction is presumed to be ordinary activity unless evidence supports the transaction as unusual in nature and infrequent in occurrence. If an event or transaction is determined to be unusual and infrequent, it is deemed to be extraordinary, and is required to be segregated from the results of ordinary operations on the face of the income statement, net of tax, after income from continuing operations, along with other financial statement disclosures.

FASB Issues Pushdown Accounting Option

Wendy Reedy, CPA | Principal - Assurance ServicesPushdown accounting is the reflection of the fair value of assets acquired and liabilities assumed in a business acquisition to the acquired entity’s financial statements. The FASB recently issued literature (ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force) that is effective immediately and allows the option of pushdown accounting when a private or public company has had a change-in-control. Previously, pushdown accounting was addressed only in SEC staff guidance and required restrictive percentages of control change for its application to the financial statements of acquired entities.

Our Playing Field has Expanded

Kevin McKervey, CPA | PresidentWhether you are a long-standing or new client of the firm, or one of our many friends in the business community, we would like to thank you for your patronage and, most importantly, your friendship. We hope you had a successful and healthy 2014 and wish you our best for 2015.

As we begin 2015, I thought it would be a good time to share some of the changes happening at Clayton & McKervey.

Federal Extenders Passed by Congress Cause Late Tax Planning Changes

Margaret Amsden, CPA, MST | Shareholder - Tax ServicesAs the legislative sessions drew to a close last week the Senate passed H.R. 5771 and President Barack Obama signed the legislation on December 19, 2014, to retroactively renew a package of tax extenders this year.

The bill, passed by the House of Representatives on December 3, continues more than 50 currently expired tax breaks and other benefits for individual and business taxpayers through December 31, 2014. All of these provisions then expire again beginning January 1, 2015. As a result, legislators will start the new Congress on January 6, 2015, and begin debate anew on whether to carry forward the temporary extenders yet again.

“SALT” – It’s more than a Grain: State and Local Tax

cfoNavigating the patchwork of laws and regulations that govern state and local taxes is never an easy task. Timothy J. Hilligoss, Shareholder – International Accounting, Practice Leader for Asia, and Bryan D. Powrozek, Senior Accountant – SME, both of Clayton & McKervey, P.C., analyzed and discussed important state and local tax (“SALT”) issues affecting all business at the last quarterly CFO/Controller Roundtable. The presentation and discussion touched on a variety of different SALT topics including:

  • Nexus
    • What is Nexus?
    • Tracking Nexus
    • PL 86-272
    • Franchise Taxes
    • Click Through Nexus
  • Audits
    • Sales & Use

Year-End Reporting Requirements

Margaret Amsden, CPA, MST | Shareholder - Tax ServicesAs we approach the end of 2014, following are some items you should consider with regard to year-end reporting for your business.

Form W-2

Employers must file Form W-2 for wages paid to each employee subject to income, Social Security, or Medicare tax withholding. Some items that are frequently missed in the process of year-end preparation of Form W-2 are noted below:

The Affordable Care Act

Employers are required to report the total cost of health care coverage on the W-2 form. In 2012, this reporting became mandatory for all employers with more than 250 W-2 forms. This reporting requirement will continue until further guidance is issued. Reporting does not affect tax liability and is for informational purposes only.

Cha-CHING! States Turn to Transfer Pricing to Raise Revenue

Alex Martin | Principal - Transfer Pricing ServicesNew Multistate Tax Commission Initiative Includes Engaging Outside Economic Consulting Firms

The Multistate Tax Commission (“MTC”) unveiled a new Arm’s-Length Adjustment Service that would enable states to conduct transfer pricing audits with support from specialist economist firms. The nine states investing in the MTC program include Alabama, the District of Columbia, Florida, Georgia, Hawaii, Iowa, Kentucky, New Jersey and North Carolina[1]. The proposed four-year charter period is expected to start shortly after MTC meetings in July 2015. This program represents a significant commitment of states’ resources in an area expected to raise substantial revenue.

Michigan Personal Property Tax Reform – Passage of Proposal 1

Margaret Amsden, CPA, MST | Shareholder - Tax ServicesMichigan voters gave final approval August 5, 2014, to a plan that will phase out Personal Property Taxes (“PPT”) that small businesses and manufacturers pay on business equipment. The reform makes the following changes to the future reporting of PPT:

  • All business owners with personal property having a Combined True Cash Value of less than $80,000 as of January 1, 2014, will be eligible for an exemption from the PPT. Combined True Cash Value is the market value of all personal property owned, leased, in the possession of or controlled by the owner or related entity within a local tax collecting jurisdiction.