New Intuit Phishing Scam

New Intuit Phishing Scam

Balog + Tamburri  is sounding the “Lookout” alarm for all you users of Intuit’s QuickBooks accounting software involving a new email phishing scam targeting. If you receive an email in your inbox with the subject line, “QuickBooks Support: Change Request.”—DON’T OPEN IT!!

This FAKE email claims to be a confirmation from Intuit that you have changed your business name and contains a hyperlink for you to click to cancel the request. If you do, the click unleashes a vicious virus that takes you to a site that downloads malware to their device.  The malware then allows the cyber-criminals to capture passwords and other personal information from your device.

We advise you not to click on this links. We advise that you check the reply email address in such messages by “hovering” over the suspicious-looking link to see where it leads before clicking to make sure it’s going to a Web domain you recognize and trust and not one with a similar-sounding name. You should also consider how Intuit normally contacts you to determine if this is a bogus request.

We are all too familiar with phishing scams. They have become all too commonplace today and not unique to Intuit.  Other Phishing emails can be skillfully constructed to impersonate a company, including using the actual corporate logo. Businesses should ensure that they have structured processes in place to make sure your employees can recognize a Phishing Scam and that they don’t even open emails from unknown senders, and that they know what to do and who to ask before they click.

Tax practitioners have also fallen victims to phishing schemes, and the Internal Revenue Service has periodically sent out warnings about the latest variations on the scams. Fraudsters sometimes purport to be emailing from the IRS or tax software companies to lure victims into divulging passwords or sensitive financial information.

At Balog + Tamburri, CPA’s, we take internet security very seriously.  We constantly advise our clients to ensure that their vital business records and sfe, protected, and proper back-up files are maintained. about-us-pic-revIf you have any questions, or would like to discuss how to enhance your internet and email security, please contact either Rick Balog or Rob Tamburri, at Info@flgacpa.com, or call Rick Balog, CPA/CFF, Managing Partner, at 904-945-1220.

Business Gifts and the IRS

Business Gifts and the IRS

Deducting Business Gifts and the IRS Regulations

Giving gifts to clients and customers is often an effective and rewarding activity for marketing your business and for establishing long-lasting and very strong client relations. However, it seems that our friends at the IRS may not support this view. Maybe it is because nobody every gives the IRS gifts!!

All business owners need to be sure that your CPA is maintaining clear and accurate financial and operational information to avoid having your gift become non-deductible on your tax return, or worse yet, having you penalized and face tax penalties and owing interest for improperly deducting gift expenses on your tax return incorrectly.

We have scoured the IRS regulations and developed these Balog + Tamburri ProfitPlus Tax Tips for you.  They include the following:

  1. KNOW WHO QUALIFIES AS A “BUSINESS ASSOCIATE:” In order to deduct the expense as a Business Gift, the recipient of the gift must be a bona fide “Business Associate,” which means there must be a demonstrable business relationship. Allowable recipients can include the following:
  • Clients and/or customers – However gifts given to a customer’s child can be deducted, but it is still considered a gift to the business associate. So your CPA should be careful not to count the same person twice in calculating deductions
  • co-workers
  • suppliers and sub-contractors
  • Service providers (delivery folks, janitorial staff, shared receptionists, etc.}
  1. KEEP PROPER RECORDS: You will need to record the date, name of the recipient and their business relationship, the cost of the gift, and any incidental expenses. NOTE: it is always a good practice to record the business purpose (maintain a customer; maintain relationship with a key supplier, etc.)
  1. KEEP RECEIPTS: When the IRS comes knocking, you must show a receipt to receive a deduction. The IRS does now accept electronic copies, so invest in a scanner. The NEAT scanners work very well.
  1. DEDUCTION LIMITATIONS: Be aware that there are limits to how much you can deduct. Regardless of the actual cost of the business gift, the deduction is limited to only $25 per business gift recipient per year. NOTE:  Business Gift Recipient per year. This means that you can give each person in the client’s company a gift and deduct $25 of the cost – so you will need a listing of their names and exactly what you gave each person.
  1. REMEMBER THE INCIDENTAL COSTS: While only $25 is deductible for business gifts, remember that any incidental expense related to the gift also may be deductible. This could include anything that does not add significantly to the value of the item, such as shipping or engraving costs.
  1. ENTERTAINMENT TICKETS: There is a special twist if you gift a client with entertainment tickets, such as tickets to a football game. If you don’t attend the event with the client, you have the option of treating the tickets as a gift or as an entertainment expense. Gifts of up to $25 are 100 percent deductible, while entertainment expenses are only 50 percent deductible. So, with tickets that cost less than $50, you get a bigger deduction if you treat them as a gift. If they cost more, treat them as an entertainment expense.
  1. NOT BUSINESS GIFTS: There are exceptions:
  • Promotional Items: Any items given as part of a general distribution, having a cost of not more than $4 and on which the giver’s name is clearly and permanently imprinted, and signs, display racks, or other promotional items given to a customer for use on his business premises, are not gifts. Since no amount transferred by or for an employer to or for the benefit of an employee is excludable as a gift no such amount is deductible as a gift for an employee, though it may be deductible under other rules—i.e. as compensation.
  • Anonymous Gifts: Businesses can only deduct the cost of advertising and promotions when these expenses are ordinary and necessary. This means that advertising and promotional expenses are only deductible when they have a clear relationship to the business and its ability to reach customers, manage its brand image or provide information about its products. Efforts such as anonymous sponsorships or donations are not promotional because they fail to represent the business to the consumer, making them ineligible for deductions.
  • Employee Holiday Gifts: If, as a means of promoting goodwill, an employer makes a general distribution to employees of food or other merchandise of nominal value at Christmas or a comparable holiday, the value of the gift isn’t included in the employees’ income.
  • Employee “Cash” Gifts: If you give cash, gift certificates or similar items of readily convertible cash value, the value of the gift is additional wages or salary, regardless of the value. These MUST be included in the employee’s W-2.

If you have any tax questions, you can email me at Rick@flgacpa.com

Rick Balog Managing Partner Balog + Tamburri, CPA's
Rick Balog
Managing Partner
Balog + Tamburri, CPA’s

Richard T. Balog, CPA is the Managing Partner of Balog + Tamburri, CPA’s with offices in Atlanta, GA, Jacksonville, FL and St. Augustine, FL. His contact information is lited below.

 

Trump Child Care/Elder Care Expenses

Trump Child Care/Elder Care Expenses

We have been fielding many questions from clients and the community about what we expect under the new Trump Administration.     Although it will be early 2017 before we get any specifics on the future pending legislation, Trump has made various announcements about the scope of his overall tax plan- which will be of similiar magnitude of the Tax Reform Act of 1986.     In the first of a few posts-  child care expenses are of a great concern to many of our clients.  Key highlights include:

  • New Above-the-Line deduction and a new tax-preferred savings account to encourage families to set aside funds for caregiving expenses
  • New Above-the-Line Deduction will now cover up to four (4) children per family from birth to age 13 with the deduction capped at “the average cost of child care” based on he child’s age and state of residence.   The deduction would be available to itemizers and non-itemizers and would apply to families that use paid child care providers as well as families that rely of a stay-at-home parent or unpaid relative to meet their child care needs
  • The deduction would be limited to couples earning up to $500,000 a year and individuals earning up to $250,000.
  • Familys will no income tax liability will potentially receive assistance though a “spending rebate” through the earned income tax credit capped at “half the payroll taxes paid by the taxpayer” (lower earning parent) and subject to a limitation of $31,200 for an individual or $62,400 for joint filers.
  • A similar above-the-line deduction would be available for home care or adult day care for elderly dependent relatives – current proposed would be a cap of $5,000 a year, indexed for inflation.

These proposals are a major change from the current code which offers a small tax credit of based on spending of up to $3,000 per child, max of $6,000 subject to declining percentages.

Source:  Deloitte-  2017 essential tax and wealth planning guide

Donald Trump Taxes:   What the Future could Look Like

Donald Trump Taxes: What the Future could Look Like

With Donald Trump as the president elect and Republicans holding a majority in the U.S. House and Senate, GOP tax reform appears likely in 2017. While campaigning, Mr. Trump promised big tax changes. Here’s a digest of his proposals, according to his website.

Individual Tax Rates and Capital Gains Taxes

For individuals, President-elect Trump proposes fewer tax brackets and lower top rates: 12%, 25% and 33% — versus the current rates of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The tax rates on long-term capital gains would be kept at the current 0%, 15% and 20%.

Proposed Rate Brackets for Married-Joint Filing Couples

Taxable Income Rate Bracket
Less than $75,000 12%
More than $75,000 but less than $225,000 25%
More than $225,000 33%


Proposed Rate Brackets for Unmarried Individuals

  Taxable Income
Rate Bracket
$0 to $37,500 12%
More than $37,500 but less than $112,500 25%
More than $112,500 33%

The proposed plan would eliminate the head of household filing status, which could prove to be a controversial idea.

President-elect Trump would abolish the alternative minimum tax (AMT) on individual taxpayers.  Itemized/ Standard Deductions and Personal/ Dependent Exemptions

The president-elect’s plan would cap itemized deductions at $200,000 for married joint-filing couples and $100,000 for unmarried individuals.

The standard deduction for joint filers would be increased to $30,000 (up from $12,700 for 2017 under current law). For unmarried individuals, the standard deduction would be increased to $15,000 (up from $6,350).

The personal and dependent exemption deductions would be eliminated.

Child and Dependent Care

Proposed new deduction: The Trump plan would create a new “above-the-line” deduction (meaning you don’t have to itemize to benefit) for expenses on up to four children under age 13. In addition, it would cover eldercare expenses for dependents. The deduction wouldn’t be allowed to a married couple with total income above $500,000 or a single taxpayer with income above $250,000. The childcare deduction would be available to paid caregivers and families who use stay-at-home parents or grandparents to provide care. The deduction for eldercare would be capped at $5,000 annually, with inflation adjustments.

Rebates for child care expenses: The proposed Trump Plan would offer new rebates for childcare expenses to certain low-income taxpayers through the Earned Income Tax Credit. The rebate would equal 7.65% of eligible childcare expenses, subject to a cap equal to half of the federal employment taxes withheld from a taxpayer’s paychecks. The rebate would be available to married joint filers earning $62,400 or less and singles earning $31,200 or less. These ceilings would be adjusted for inflation annually.

Dependent care savings accounts: Under the proposed plan, taxpayers could establish new Dependent Care Savings Accounts for the benefit of specific individuals, including unborn children. Annual contributions to one of these accounts would be limited to $2,000. When established for a child, funds remaining in the account when the child reaches age 18 could be used for education expenses, but additional contributions couldn’t be made. To encourage lower-income families to establish these accounts for their children, the government would provide a 50% match for parental contributions of up to $1,000 per year. Dependent Care Savings Account earnings would be exempt from federal income tax.

Affordable Care Act Taxes

President-elect Trump wants to repeal the Affordable Care Act and the tax increases and employer penalties that it imposes — including the 3.8% Medicare surtax on net investment income and the 0.9% Medicare surtax on wages and self-employment income.

Estate Tax

His plan would also abolish the federal estate tax. But it would hit accrued capital gains that are outstanding at death with a capital gains tax, subject to a $10 million exemption.

Business Tax Changes

The president-elect proposes major changes to the taxes paid by businesses. Trump would cut the corporate tax rate from the current 35% to 15%, but eliminate tax deferral on overseas profits.

Under the proposed plan, a one-time 10% tax rate would be allowed for repatriated corporate cash that has been held overseas where it’s not subject to U.S. income tax under current rules.

The plan would also allow the same 15% tax rate for business income from sole proprietorships and business income passed through to individuals from S corporations, LLCs, and partnerships, which could cause a significant decrease in tax revenues.

Without getting very specific, the proposed plan proposes the elimination of “most” corporate tax breaks other than the Research and Development (R&D) credit. At-risk tax breaks could include unlimited deductions for interest expense and a bevy of other write-offs and credits.

On the other hand, the proposed Trump plan would allow manufacturing firms to immediately write off their capital investments in lieu of deducting interest expense.

What about Congress?

In addition to President-elect Trump’s proposed plan, House Republicans released the “Better Way Tax Reform Blueprint” earlier this year and Republicans in the Senate proposed their own tax plans. These proposals — which in some cases, differ from Trump’s — would make numerous changes to cut taxes and simplify filing. Despite some differences, members of Congress have expressed support for Trump’s plans and have vowed to act quickly.

When Might Changes Happen?

Democrats in Washington are likely to oppose any meaningful tax cuts, and they can attempt to stall things in the Senate where the Republicans won’t have a filibuster-proof majority. However, the Republicans can use the same procedural tactics that the Democrats used in 2010 to enact the Affordable Care Act. It’s possible that Trump’s tax plan (or parts of it) may pass in the first 100 days of his new presidency. If that happens, we could see major tax changes taking effect as early as next year.

Stay tuned as the tax code legislation unfolds

Source:  checkpointmarketing.net/Vision HR

 

Court Temporarily Blocks Overtime Rule- Happy Holidays!

Court Temporarily Blocks Overtime Rule- Happy Holidays!

On Tuesday November 22,2016 a federal court issued a preliminary injunction to temporarily block the U.S. Department of Labor (DOL) from implementing and enforcing its Final Overtime Rule nationally, pending further review by the court.  What does this mean currently?

  • As a result of this ruling, employers do not need to comply by the original December 1 effective date
  • The injunction is temporary pending further review by the court
  • We have no additional information if or when the status of the regulations will change.
  • Balog+Tamburri CPAs will continue to monitor this situation and will keep everyone updated accordingly

Source :  Paychex.com/accounting-professionals

New Pay Data Reporting Requirements Will Cause Employers More Headaches

New Pay Data Reporting Requirements Will Cause Employers More Headaches

Rick Balog Managing Partner Balog + Tamburri, CPA's
Rick Balog
Managing Partner
Balog + Tamburri, CPA’s

New Data Requirements

Beginning in March 2018, the EEOC will require employers to spend even more money to simply report payroll. The new requirements will mandate that employers collect summary employee pay data. The new data will be used to bolster investigations of possible pay discrimination, which drives more employers to dump employees. Can you say higher unemployment?

Specifically, the summary pay data will be added to the annual Employer Information Report (EEO-1) that is coordinated with the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). That office collects data from federal contractors and subcontractors.

“Collecting data is a critical step in delivering on the promise of equal pay,” noted the Obama appointee to the office of U.S. Secretary of Labor Thomas E. Perez. “Better data will not only help enforcement agencies do their work, but it helps employers to evaluate their own pay practices to prevent pay discrimination in their workplaces.” this translates to “You can only hire people the government says is OK.”

The EEOC intends to provide support to employers as they transition to the additional reporting. The first deadline for 2017 reports is March 31, 2018, giving employers about a year-and-a-half to prepare.

Who Must Report?

Private employers, including federal contractors and subcontractors with 100 or more employees, must submit the additional data. These employers are prohibited from reporting individual compensation or any personal information, such as Social Security numbers.

Federal contractors and subcontractors with 50 to 99 employees won’t be required to meet the requirement, but they must still report employees by job category as well as by sex, ethnicity and race. Employers with 99 or fewer employees and federal contractors and subcontractors with 49 or fewer employees still won’t have to provide the additional information.

Be aware that the EEOC doesn’t disclose any EEO-1 data for a specific employer. It only publishes large-scale aggregated data in a way that fully protects employer confidentiality and employee privacy. The OFCCP holds  EEO-1 data for federal contractors and subcontractors confidential as dictated by the Freedom of Information Act and Trade Secrets Act.

This is another step the Progressives are using to infuse the socialistic mandates into the lives of business owners. In essence, you can no longer hire the best person for the job, but you must hire the right person to meet an EEOC standard.

Preparing for The New Impairment Requirements: Practitioner’s View

Preparing for The New Impairment Requirements: Practitioner’s View

Preparing for The New Impairment Requirements: Practitioner’s View BY CHRISTIAN HENKEL AND EMIL LOPEZ Overview An appropriate allowance for loan and lease losses (“ALLL”) covers estimated credit losses inherent in an institution’s loan and lease portfolio. The ALLL represents management’s best estimate of likely net charge-offs that are to be realized for a loan or group of loans, given facts and circumstances as of the evaluation date.1 On April 27, 2016, the Financial Accounting Standards Board (FASB) voted to move forward with a new credit impairment model, known as the Current Expected Credit Loss model (CECL), for the recognition and measurement of credit losses for loans and debt securities. The final standard is to expected be released in June 2016 with implementation beginning in 2018. This new standard is far more than an exercise in financial accounting and bank regulation. It will replace the current incurred loss model with an expected loss model, one of the most significant changes in the history of bank accounting.

 

Source: http://cdn.accountingtoday.com/pdfs/CECL_Preparing_New_Impairment_Requirements.pdf

No delays anticipated in 2017 tax filing season, IRS commissioner says

No delays anticipated in 2017 tax filing season, IRS commissioner says

The IRS will likely begin accepting income tax returns in the upcoming filing season with “no significant delays,” IRS Commissioner John Koskinen told the AICPA National Tax Conference in Washington on Tuesday.Return filing can begin “certainly before the end of January,” Koskinen said, although he did not announce an exact date.The IRS’s ability to start tax season on time partly reflects that the current run-up to tax season, unlike previous ones, is not hampered by uncertainty surrounding the fate of the retroactive extension of expired tax provisions, thanks to the Protecting Americans From Tax Hikes (PATH) Act of 2015 (part of the Consolidated Appropriations Act, 2016, P.L. 114-113).However, for some taxpayers, Koskinen said, the PATH Act will mean delays in receiving refunds. Due to a change to Sec. 6402(m), starting in 2017, refunds for returns claiming an earned income tax credit or additional child tax credit cannot be issued before Feb. 15. Despite this statutorily mandated delay, Koskinen urged return preparers to submit returns as they usually do, and not hold them until after Feb. 15, because that will only put the returns further back in the queue.

Source: No delays anticipated in 2017 tax filing season, IRS commissioner says

IRS De Minimis Safe Harbor Expensing Threshold

IRS De Minimis Safe Harbor Expensing Threshold

The IRS has increased the maximum threshold for expensing certain capital items under the De Minimis Safe Harbor from $500 to $2500.     The increase is in reponse to CPA comments that the $500 limitation was too low to effectively reduce the adminitrative burden of capitalizing the cost of many commonly purchased items such as furniture, computers, phones, and small equipment.   This rule goes into effect tax years on or after January 1, 2016.    Furthermore, if taxpayers are using a threshold higher than $500 but less than $2500 for tax years beginning after December 31, 2011 and ending before January 1, 2016 the IRS will not focus on this issue in an examination.    Please contact us if you have questions or want specifics to your situation.   This post is designed to provide a basic overview.

Free Money from the IRS?  Part I

Free Money from the IRS? Part I

As we review current tax law for late year changes we will be doing a series of blog posts to remind taxpayers that there are a few income sources which might impact your personal tax situation which remain completely tax-free to you (although some are reportable but not taxable)

How many people have heard about an urban legend in the tax code called “The Masters Exemption”? (think Augusta, GA)  The good news is this legend is true!   Situations where your property (primary or vacation home) is rented for 14 or fewer days is completely tax-free to the taxpayer (without any depreciation or maintainance deductions though) regardless of the amount!     Between the hot film industry in Georgia, combined with major sporting and music events these opportunities provide a major possible windfall to the homeowner.

Please note that the title of the blog post only mentions the IRS unfortunately.   Generally any short-term rental has state and local tax obligations and state governements continue to use better techonology to track these types of rentals.

Just a reminder these are rentals of your primary home or second/vacation home not considered an investment property

Next blog post we will talk about when selling your primary residence will result in a zero federal tax bill.