Want to write an accounting blog, but don’t know how to get started?

March 19, 2013

Writing a blog is quite a bit different than some of the reports and other papers you may write – if you do much professional writing at all. Doing work

People read blogs to learn new information from the writer’s distinct point of view. They want easy reading, and they want interesting information.

Here’s how you can give them what they want.

What should I write my blog about?

As a CPA, you have an abundance of information at your fingertips that people are really interested in hearing about.

Think about the questions you get asked most on a daily basis by your clients or by your friends at a cocktail party or backyard barbeque.

Those conversations will give you the best ideas because you’re writing a blog for the public – and those people are the public. You don’t want to write about the latest FASB update or the new IRS Revenue Ruling, which may be water cooler conversation at the office, but is in the stratosphere for your intended reader.

Your readers want information that will help make their lives better – that will earn them more money, cost them fewer taxes, protect their businesses from fraud or cut their office expenses.

It’s essential to remember who your audience is. So, unless you are writing for a professional site directed toward other CPAs, your audience is either the general public or a particular business or industry group – none of whom are CPAs.

If you work in the tax area, there are dozens of topics people would like to learn more about, especially at this time of year.  You can write about their individual taxes or tax issues that affect their businesses. If your website is divided into different niche areas, you can customize your blog to builders, manufacturers, nonprofit organizations, professional service businesses or other industry groups.

Here are just a handful of possibilities that might spark an idea:

  • How businesses can take advantage of the reinstated R&D credit
  • Gifting opportunities and other planning measures to avert higher estate taxes
  • How Obamacare will affect businesses
  • Making the most of the home office deduction
  • How enhanced Section 179 elections can help small businesses
  • Planning to reduce capital gains taxes
  • Minimizing taxes on IRAs, 401(k)s and other retirement plans

If fraud is your area, there are endless possibilities for blogs on how to prevent and detect fraud. Consider topics related to workers’ comp, tax evasion, identity theft, collusion, employee pilfering, embezzlement – the list goes on and on.

Case studies and recent court cases can serve as colorful examples to illustrate broader issues.

A&A also has areas of interest to business people. Some possible topics are:

  • How to prepare for your annual audit
  • What your auditor does – and doesn’t do
  • Understanding your financial statements
  • How to develop adequate internal controls

Regardless of your area of expertise, when you’re looking for a topic, think of the questions most often asked by your clients, as well as important information that could be beneficial to them but that they might not know to ask about.

How do I write the blog?

Read the rest of this entry »

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Posted by cpamericaintl

Welcome Changes Proposed to Circular 230

March 6, 2013

On September 14, 2012, the IRS proposed a number of changes to Circular 230, at least one of which will be a welcome relief to practitioners and clients.

Linda Harding, Director of Tax

Linda Harding, Director of Tax

Rules implemented in 2004 regarding some tax opinions (“covered opinions”) were complex and ensured that practitioners could avoid running into trouble of Circular 230 if they prominently disclosed in the opinion that it could not be relied upon by the taxpayer to avoid penalties.

As most of us know, this provision resulted in practitioners displaying a disclaimer on almost every form of written communication with their clients, which stated that the communication could not be relied upon to avoid penalties.

These disclaimers were built into email signatures and were automatically printed on letters so that they appeared even if the communication had nothing to do with tax advice.  Clients didn’t understand why they were there and since they appeared everywhere, simply ignored them.

The government and practitioners agree that these covered opinion rules were burdensome and provided only minimal protection for taxpayers.

One of the proposed changes to Circular 230, eliminates the rules regarding covered opinions and the need for any disclaimer in an opinion or otherwise.

That’s right!  We can all get rid of the disclaimers we have lived with for the last eight years.  We could probably eliminate these right now since they were ineffective, but most practitioners will wait until the proposed regulations become final.

In place of the covered opinion rules, the IRS is proposing new requirements for written advice, but these new rules are reasonable.  They require that practitioners base all written advice on reasonable factual and legal assumptions, exercise reasonable reliance and consider all relevant facts that the practitioner knows or should know.

Among other changes proposed: Read the rest of this entry »

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Posted by cpamericaintl

New Taxes in 2013 – Start Planning Now!

July 24, 2012
Tax

Tax (Photo credit: 401(K) 2012)

With the recent Supreme Court decision upholding the Affordable Care Act, there are two new taxes applicable to “high income” taxpayers, scheduled to be effective January 1, 2013.

With proper planning in 2012, it is possible to reduce the impact of these taxes.

The new taxes are:

  • Unearned Income Medicare Tax (UIMC)
  • Increased Hospital Insurance (HI) tax

Effective January 1, 2013, these taxes will apply to joint filers with incomes exceeding $250,000 ($200,000 for singles). The UIMC tax is 3.8% on unearned income above the threshold, and the HI tax is .9% and applies to earned income.

Help your clients begin planning now, and this may reduce the tax burden in 2013 and years to come. The timing and composition of earnings become critical. Potentially, a bonus from the taxpayer’s company during 2012 instead of 2013 – or a 2013 capital transaction accelerated into 2012 – could save significant tax dollars.

Although the new healthcare taxes apply to most types of earned (HI tax) and unearned (UIMC tax) income, the new taxes will not apply to retirement plan distributions, IRA payouts or tax-exempt income (such as interest from state and local government bonds).

Increases in tax rates are generally adverse for most taxpayers, but with increased rates comes increased value in your deductions, making this a great year for tax advisers and clients to strategize about the best timing for deductions.

Here are a few planning points for clients and tax advisers to consider:

Pay attention to the income threshold—if you expect your 2013 income to be close to the $250,000 (joint filer) or $200,000 (single filer) threshold, you may be able to avoid the HI and/or UIMC tax by accelerating income into 2012 when these taxes are not yet in effect.

Consider timing of capital gains and losses—because the UIMC tax will apply to capital gains, consider selling capital gain property in 2012. Also, if you receive an installment note as part of the payment, you may want to elect out of the installment sale method so that the entire gain is taxed in 2012 and thereby avoid any UIMC tax in future years. Conversely, if you are in a net capital loss position, consider deferring the utilization of these losses or deferring recognition of capital losses until 2013 when they will be more valuable.

Adjust your investment portfolio—consider shifting your investments to tax-exempt vehicles or tax-deferred income such as non-dividend growth stocks, tax-deferred annuities and state and local bonds. The sooner this is done in 2012, the more tax that will be saved.

There are certainly other opportunities available to minimize these and other scheduled 2013 increases in tax. If there ever was a good year for consulting with your tax adviser to do some midyear tax planning, 2012 is it!

Want to send your clients a Mid-Year Tax Planning letter? Click here to find out how to become a CPAmerica member.

Linda Harding is the Director of Tax Services at CPAmerica International. She has more than 30 years of Big 4 tax experience and was a tax shareholder with a large local firm. Harding manages the technical tax resources, tax practice matters and reviews tax publications for CPAmerica. Follow her on Twitter @LHardingLin.

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Posted by cpamericaintl

Webinars Sizzle at CPAmerica

July 16, 2012

This summer, many of you will be searching for CPE opportunities.

Luckily, most firms have embraced the online method of receiving these valued CPE credits.

CPAmerica International members have taken advantage of the summer S Corporations Series – a soup-to-nuts approach on S corporation taxation that provides education for staff from basic to intermediate- level webinars.

Averaging more than 350 participants per webinar, programs held in June show the value of providing online CPE at a good price.  Starting in July, the S corporation series will continue with more advanced topics.

CPAmerica members receive not only CPE credits, they actually learn S Corporation taxation, starting with the very basic through the more advanced issues.

You’ve heard the advantages of online CPE vs. live programs.  In addition to less time out of the office and better pricing than live courses, many firms are taking advantage of the group participation option.  From new staff to partners, our members’ tax personnel gather in conference rooms to participate in the webinar together.  After the webinar, they take time to discuss specific client situations or revenue opportunities.

A great instructor doesn’t hurt either.  Many recognize Jim Hamill as one of the best tax instructors in the nation, and members participating in this series certainly agree:

“Jim Hamill is one of the best instructors I have had: concise, clear, does not patronize – effectively presents the material in a way that can be understood without boring you to death even though it is dry material.  Retention of information provided is guaranteed.  Great choice of presenter.”

“Jim always does a nice job.  This elementary class in S-corps was very helpful for our newest accountants and a good review for those who have been in the business for a while.”

 “Great topics for some new practitioners and seasoned veterans to refresh on.”

 “This series is awesome; James also does an incredible job at presenting material.  So much to learn from him!”

In addition to the S corporation series, CPAmerica is also offering an A&A series beginning this month, presented by national expert, Dr. Tom Ratcliffe.  These programs will differ from the content presented in Ratcliffe’s Plain English programs, to which many members subscribe. Read the rest of this entry »

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Posted by cpamericaintl

Estate and Gift Planning Opportunities Unprecedented in 2012

May 8, 2012

Gift ideas

As most tax practitioners are aware, we are in very uncertain income tax, estate and gift tax times today.

Many believe that not much is going to change until after the election, although there will be much posturing in the coming months.

However, there are a number of changes that will take effect Jan. 1, 2013 without any congressional action – either because new laws will take effect or temporary provisions will expire.

In 2012, the estate and gift tax exemptions are unified, and the exemption is $5.12 million with a top tax rate of 35%.  In addition, the exemption is “portable” among spouses, meaning that if one spouse dies with an unused exemption, the surviving spouse can add that exemption to his or her own.

However, without congressional action, the exemption reverts back to $1 million, the top tax rate goes back up to 55%, and portability goes away.  There is a good chance that the more favorable rates and exemptions, along with portability, will be extended after the election and before the end of the year.  But there is also a decent chance that the unfavorable rates and exemptions will become law, or the maximum rate will increase and the exemption will end up somewhere between $5.12 million and $1 million.

So what is there to do?  If you have significant assets and want to take advantage of today’s higher exemption and lower rates, you still have enough time to meet with your CPA or estate tax attorney to make substantial gifts before Jan. 1, 2013.

The gifts do not have to be made in cash.  In fact, closely-held stock or interests in partnerships may be some of the best assets to gift so you can take advantage of minority interest and lack of marketability discounts. Read the rest of this entry »

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Identity Theft Can Be Prevented

March 7, 2012

There are always plenty of reasons to speed up the process of filing your individual return.

The primary reason has always been that, if you’re expecting a refund, you shouldn’t wait any longer than necessary to receive it.

Well, you can add identity theft to your reasoning this year.

Identity thieves have found ways to fraudulently prepare tax returns and steal refunds from taxpayers, and they’re doing it at exponential rates. In 2010 the IRS identified 49,000 returns that involved $247 million in refunds attributable to identity theft.

In 2011 the numbers grew to 262,000 returns and almost $1.5 billion in fraudulent refunds. In January 2012, the IRS and Department of Justice released the results of a nationwide crackdown on identity theft as discussed in this article from Accounting Today.

Identity thieves haven’t limited their victims to the living.

Many families have suffered the passing of a loved one only to find that the decedent’s tax refund was stolen by identity thieves. Ironically, much of the information used by identity thieves is received from the federal government. Every year, the Social Security Administration releases the names and Social Security numbers of individuals when it learns of their deaths in a Death Master File. The file is meant to be confidential, but it has proven to be easily accessible.

The good news is that the IRS has been actively attacking tax frauds and identity thefts. And, it should be made clear that any tax refund that is stolen from a taxpayer will ultimately be refunded to a taxpayer once the IRS is convinced of a taxpayer’s identity (see the IRS website dedicated to identity theft). Read the rest of this entry »

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Posted by cpamericaintl

The Importance of Knowing the Tax Law or Seeking Assistance

January 11, 2012
US Navy 080206-N-6538W-008 Electrician's Mate ...
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Partner’s Unreimbursed Business Expenses Held Not Deductible

In a recent Tax Court Memoranda Decision (Peter A. McLauchlan v. Commissioner, TC Memo 2011-289, December 19, 2011) a partner’s expenses were found to be nondeductible and the accuracy-related penalty was imposed on the partner.

This case is a bit surprising because most of the disallowed expenses related to his business as an attorney.  The decision in this case also supports the good decision many taxpayers make when they hire a CPA to prepare their return when they clearly do not have the expertise.

Unfortunately, some taxpayers think they can “beat the system” or prepare their own tax returns as they wish and not suffer any consequences.  The McLauchlan case illustrates the importance of knowing the tax law, and if you do not, seeking competent assistance.

Mr. McLauchlan earned more than $300,000 in each of the two years at issue, from his practice of law as a partner in a partnership (“AR” partnership).  He paid various expenses, such as advertising, travel, meals and entertainment, continuing legal education, state bar membership dues and automobile-related expenses.  These are typical expenditures an attorney would be expected to incur.

However, he also represented that he paid more than $100,000 in these expenses and was not reimbursed.

The AR partnership agreement required  that McLauchlan pay indirect AR expenses that were unreimbursable. There was no routine practice at AR that required the petitioner to pay any other AR expenses. Read the rest of this entry »

4 Comments | Business, Tax | Tagged: , , , , | Permalink
Posted by cpamericaintl

Keep Your Firm Organized in 2012

January 6, 2012
Tax

http://401kcalculator.org

You’ve made it through the holidays and tax season is knocking at your door…

Kudos to all who made it through the daily grind of trying to balance the holiday season between working a hectic schedule, shopping for gifts, spending time with family and friends, and managing to do all of this without pulling your hair out.

Great job!

Tax season starts at just the same time we welcome in the New Year.   And along with the New Year, come those New Year’s resolutions.   We all make them for personal growth and betterment, but why not incorporate those resolutions into ways that you can create a better environment for your firm during tax time?

Usually on many resolution lists, better organization is at the top.  But what details go into being organized at your firm?

Being organized on a daily basis can make your job easier and makes you a much better resource for the rest of your staff.  Being organized also sets a great example to every person in the firm. Fortunately, there are many sites that offer ways to make your work life better organized.   This article by Rick Suttle on Organizational Skills for Work, covers the basics, but it’s a good start.

Tax season brings a lot of stress for many members of your firm.  From the CPAs, staff accountants, and bookkeepers to the administrative staff — they are all feeling the stress.

Here are some ideas on how to stay organized at your firm and alleviate that stress.

  1. Project management is a key ingredient to a successful and organized busy season.  When the staff and partners know exactly what tax returns have gone out the door and how many returns are in process at all times, the overall workflow benefits.  Read the rest of this entry »

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Posted by cpamericaintl

Circular 230 Update for CPAs

November 22, 2011

Seal of the Internal Revenue Service

On August 2, 2011 a substantially revised Circular 230 went into effect.  Most of the changes have to do with the regulation of tax return preparers other than CPAs, attorneys and enrolled agents (and a few others). 

However, there are a few changes that are applicable to CPAs, and all of us should be aware of these changes.

Most of us became aware of Circular 230 a few years ago when the written opinion governance came into effect.  These changes resulted in many practitioners adding the tag line to our emails and other correspondence to disclose that the information could not be relied upon to prevent penalties, etc.

Circular 230 was promulgated in 1966, so it has been around for a while.  Its purpose is to govern the ethical behavior of tax preparers and advisers.  The changes have become more stringent over the years, and I believe we can expect that to continue.

The Office of Professional Responsibility (OPR) administers and enforces the regulations governing practice before the Internal Revenue Service. In very general terms, individuals who are eligible to “practice” are eligible to advise and represent taxpayers with respect to matters administered by the IRS. Read the rest of this entry »

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Posted by cpamericaintl

A Troubling Tax Court Memo Decision for Family Limited Partnerships

September 6, 2011
U.S. Tax Court, Washington DC

Image by E.L. Malvaney via Flickr

Many taxpayers have successfully used Family Limited Partnerships (FLPs) as part of their businesses, succession and estate tax planning.

FLPs are typically set up to manage a business or investment.  FLP interests can be transferred (via gifts or sales) to other family members to transition ownership and save estate taxes. 

However, it is important that the FLP itself be respected as a separate entity and that there are good, nontax, reasons for its existence in order for the estate tax savings to be upheld.

A recent Tax Court Memoranda Decision (Estate of Clyde W. Turner, Sr. v. Commissioner, TC-Memo. 2011-209, August 20, 2011) should be of concern to tax professionals and their clients utilizing FLPs.

In this case, the Court held in favor of the IRS in determining an estate tax deficiency of $659,912.  This was due to the Court’s finding that the transfers to the FLP during the decedent’s lifetime were includible in his gross estate.  These assets were transferred without adequate consideration and the FLP did not have a valid, nontax, reason for its existence, according to the Court.

In the years prior to his death, Mr. Turner formed the FLP (Turner & Co.) and transferred Regions Bank stock along with other investment assets. His primary reasons for the FLP were to: Read the rest of this entry »

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Posted by cpamericaintl

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