Florida Tax Amnesty Through September
Got overdue state taxes? Don’t miss out on the Florida Tax Amnesty program. The deadline is Sept
ember 30, 2010.
What’s the benefit?
If you have overdue Florida taxes, until September 30 you can pay them, with no penalty and reduced interest. Plus you get the ability avoid criminal prosecution.
What’s covered?
Taxes covered include
- Sales and Use Tax,
- Florida Corporate Tax and
- Florida Intangible Tax.
The Department of Revenue has a full list posted here.
What’s not covered?
If you entered into an agreement with the Department before July 1, 2010, your overdue taxes aren’t covered by this amnesty. But if you were notified but haven’t made arrangements yet, you should take advantage of amnesty.
What should I do?
There’s a good FAQs document on the FDOR site. If you think you might be eligible, contact your tax professional right away. The window is closing!
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Scott F. Berger is a tax principal with Kaufman, Rossin & Co., one of the top CPA firms in the Southeast. He can be reached at sberger@kaufmanrossin.com.
Category Value For Your Business | Tags: Accountant,Accountants,Accounting,CPA,CPA firm,Florida,Fort Lauderdale,Kaufman,Tax breaks,tax strategies
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Loading ...Financial Reform: What’s in it?
The President signed the Dodd-Frank Act (Financial Reform) this week, and we wanted to share what we know about what’s in it.
Many of the provisions still require what I’d call “implementation planning” — exactly how is this going to work? — but here’s what we know so far. The law is primarily focused on avoiding future systemic banking system failure, and includes provisions that affect consumers, businesses, banks, investors, and investment advisors.
Here are some of the highlights:
For consumers:
- A new regulatory body, the Consumer Financial Protection Bureau, will be responsible for writing new rules on financial consumer products.
- New mortgage rules requiring those granting loans to verify applicants’ credit history, income, and employment status (establishing that you can actually pay back what you’re borrowing) may be helpful to those whose appetites are bigger than their paychecks. And rules that require lenders to hold onto a certain percentage of the loans they write should limit lending to people at a high risk of default.
- New credit card rules may benefit consumers — card minimums now cannot exceed $10, and limits to the “interchange fees” that banks can charge merchants may lead to better prices for consumers.
- Got a complaint about a financial institution? This act creates a national consumer complaint hotline to report problems with financial products and services.
- You’ll now be entitled to a free look at your credit score, not just your credit report, if it affects whether you get credit you’ve applied for.
- And if one of those “too big” financial companies needs to be liquidated, taxpayers will bear no cost. FDIC can borrow only the amount of funds to liquidate a company that it expects to be repaid from the assets of the company being liquidated.
For businesses:
- Finally, the suspense over SOX 404 is over for smaller public companies. For “non-accelerated filers,” (those with less than $75 million in market cap), the act amends Sarbanes-Oxley to make permanent the exemption from its section 404(b) requirement. It also requires the SEC to study (within 9 months) how to reduce the burden of 404(b) compliance for companies with market caps between $75 million and $250 million.
- New rules limiting the interchange fees that credit care issuers can charge merchants may help small businesses.
For investors:
- The bill addresses the conflict of interest created when banks and financial institutions pay a credit rating agency to evaluate their securities.
- It gives shareholders of publicly traded companies a vote on executive pay, though the vote is nonbinding.
- Executives of public companies who are paid based on their financial performance will have to pay back up to three years worth of compensation if the financial reporting that was used to calculate the pay turns out to be inaccurate and is restated.
- The U.S. Commodity Futures Trading Commission and the Securities and Exchange Commission will have authority to regulate over-the-counter derivatives. Banks will be prohibited from trading certain forms of derivatives, and most of the trading must occur on transparent exchanges.
Regarding financial institutions:
- The “Volker Rule” prohibits banks from engaging in proprietary trading (trading the bank’s money for profit), which some perceive as creating conflicts of interest.
- Banks’ relationships with hedge funds and private equity funds will also be limited, and they will be prohibited from trading certain types of derivatives.
- A new council will be watching. The “Financial Stability Oversight Council,” will monitor the U.S. economy for underlying systemic risks and make recommendations to the Federal Reserve on issues created by firms that are deeply interconnected within the financial system. The council will also monitor and advise Congress and the SEC regarding domestic and international accounting standards developments.
- Liquidation authority. The Federal Deposit Insurance Corporation will have a mechanism to unwind “failing systemically significant financial companies,” with no financial impact to taxpayers.
Regarding investment advisors:
- Regulation of more registered investment advisors will move from the SEC to the states. The threshold requiring registration with the SEC will be raised from $30 million in assets under management to $100 million, with smaller advisors regulated by the states. Some exceptions apply.
- Private advisers are no longer exempt from registering with the SEC. Advisers to venture capital funds remain exempt, as do those who only advise private funds and have U.S. assets under management below $150 million. Family offices are also exempt.
There are more provisions (the bill is 2,300 pages). We’ll keep an eye on developments as the new rules are implemented.
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Alan Chosed, CPA, is a principal at Kaufman, Rossin & Co, one of the top accounting firms in the Southeast. He can be reached at achosed@kaufmanrossin.com
Category Value For Your Business, Value For Yourself | Tags: Accountant,Accountants,Accounting,CPA,CPA firm,CPAs,financial reform,Florida,Ft Laud,Kaufman,Miami,regulation,Rossin
(No Ratings Yet) Loading ...Hurricanes are no joke.
On Sunday night, August 24, 1992, Hurricane Andrew ripped through South Florida and caused more than $26.5
billion in damages. Our firm’s offices were closed for two full weeks – power in the neighborhood was out for a week, and then we were closed for another week to replace the electrical panel that had been flooded and the air conditioning towers that had blown off the roof. The name Andrew was retired by the National Weather Services, and replaced by the name Alex.
If you were in South Florida in 1992, you won’t forget that hurricanes are no joke.
Hurricane season runs June 1 through November 30. Building a “culture of readiness” for your family, employees and business will help you make good decisions and provide you with options to minimize the effects of a disaster like Andrew.
If you don’t have a plan, start planning right away. Ask yourself:
- Who is my emergency management team, and what tasks should each of them be assigned?
- Which staff, materials, procedures and equipment are absolutely necessary to keep the business operating?
- What are my backup plans if any of these are unavailable?
- Can employees work at home if necessary?
- What is my communications plan – how will employees know the status of the business and whether they should try to get to work? How will I know all employees are safe?
- Which customers should I make sure to contact immediately, to let them know the status of the business? Do I have their contact information easily available?
To learn more about how to prepare your business and minimize the effects of a hurricane or other disaster, register for my free breakfast seminar on July 22nd. You’ll get important tips and answers to your questions, and receive a free copy of the Kaufman Rossin Disaster Preparedness Guide.
Jorge Rey is Director of Information Security for Kaufman, Rossin & Co., one of the top CPA firms in the Southeast. He can be reached at jrey@kaufmanrossin.com.
Category Value For Your Business, Value For Your Clients, Value For Your Employees, Value For Yourself | Tags: Accountant,Accountants,Accounting,Boca Raton,business basics,business continuity planning,CPA,CPA firm,CPAs,disaster planning,entrepreneurs,Florida,Fort Lauderdale,free seminar,Ft Laud,hurricane peparedness,information security,Jorge Rey,Kaufman Rossin,Miami,reduced business value,risk assessment
(1 votes, average: 5.00 out of 5) Loading ...Legislative Alert: Is your law practice an S-Corp?
June 25, 2010 Update
The Tax Extenders Bill has been tabled after a third cloture attempt failed yesterday. This is the bill that included the provision to subject all business income from certain S corporations to employment taxes. Senator Snowe (R-Maine) cited the “anti-abuse” provisions for S corporations as one of the reasons for voting against cloture.
The future of the bill is uncertain at this time but don’t breathe too easy — it is likely that the payroll tax issue for S corporations will arise again.
Now is the time to get ready by consulting your tax advisor. Prepare by understanding the tax impact on your practice, which could be substantial, and consider making other tax moves to get ready.
June 23, 2010 Update
The Tax Extenders Bill is still being debated in the Senate. Various amendments are being considered to either ensure the number of votes for passage, or pay for the extended tax benefits. The federal budget deficit is now a hot issue that affects this and other legislation.
However, the provision affecting S corporation shareholders is still in the bill, and when this bill does pass it’s my expectation that it will still be in there, which means many professionals will see a significant tax impact. Contacting your tax professional to plan ahead – even if it’s just getting an idea of the additional tax you’re likely to pay — is smart strategy. See below for a discussion of the S-Corp provision.
The Tax Extenders and Unemployment Bill I wrote about last week was passed by the House and now goes to the Senate. Read on to see how your S-Corp may be affected.
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May 24, 2010
Legislation scheduled to hit the House floor this week would impose Social Security and Medicare taxes on all income derived from professional service businesses. This is a House amendment to a Senate amendment to HR 4213 (Jobs and Closing Tax Loopholes Act of 2010). That means if it passes the House all income of professional service businesses formed as S-Corporations or Partnerships or Limited Liability Companies would be subject to payroll taxes beginning sometime in 2010.
Social Security taxes are imposed on compensation and self-employment income up to the Social Security Wage Base (currently $106,800) and the Medicare tax is imposed on all self-employment and compensation income. Under the current tax law, many professional service firms are set up as S-Corporations owned by the professionals in an effort to minimize income subject to payroll taxes. The S-Corporation earns the professional fees and pays the shareholder-professional wages that are less than the income earned by the S-Corporation. Any income in excess of the wages is then treated as earnings of the S-corporation allocated to the shareholder-professional and not subject to payroll taxes.
This legislation would change that. In situations where an S-corporation is in a professional service business that is principally based on the reputation and skill of 3 or fewer individuals or an S corporation that is a partner in a professional service business, all of the earnings of the S-Corporation allocated to the shareholder-professional would be subject to employment taxes. The bill would also clarify that individuals that are engaged in professional service businesses are unable to avoid employment taxes by routing their earnings through a limited liability corporation or a limited partnership.
If this measure passes — and it could pass this week — it could impact the tax planning of many professionals. If your practice is an S-Corporation, contact your accountant to understand the implications.
Dennis Fitzpatrick, J.D., is a tax principal with Kaufman, Rossin & Co., one of the top CPA firms in the Southeast. He can be reached at dfitzpatrick@kaufmanrossin.com
Category Value For Your Business, Value For Yourself | Tags: Accountant,Accountants,Accounting,Boca,Boca Raton,CPA,CPA firm,CPAs,Florida,Fort Lauderdale,Ft Laud,Kaufman,Kaufman Rossin,Miami,pass-through income,s-corporation,Tax breaks,tax changes,tax planning,tax strategies
(No Ratings Yet) Loading ...Community Association Relief – It’s about time!
On June 1, 2010, there was a big sigh of relief across the state of Florida. We all heard it. On that day, the Florida residential community associations’ voice was heard. In a stunning reversal from the year before, Florida Governor Crist elected not to veto Senate Bill 1196 and House Bill 561, also referred to as the Distressed Community Association Relief Act. Long overdue, the Act will finally provide some much needed relief to distressed condominium and homeowner associations, and their law-abiding members, when it goes into effect on July 1, 2010. Read more
Category Value For Yourself, Value for our community | Tags: Accountant,Accountants,Accounting,Boca,Boca Raton,community association,condo law delinquent owners,condominium,CPA,CPA firm,CPAs,Florida,Fort Lauderdale,Ft Laud,Governor,Kaufman,Kaufman Rossin,Miami,new law
(No Ratings Yet) Loading ...Shape up your cash flow
This is the first in a series of “business fitness” posts to help you get your business in shape!
Taking care of the long term health of your business is like taking care of your body. But for many, it’s like that exercise regimen you keep planning to start. As an entrepreneur, you’re too busy to step back and look at the health of your company.
Cash flow is a great place to begin. If you can make payroll and keep on top of your bills, sometimes that seems like enough. But that’s kind of like saying getting out of bed in the morning is your fitness program. Wouldn’t it be nice to know you’d have enough cash next month, too? Here are your first steps to good health.
Step 1: Project
Projecting your cash flow is a simple exercise like preparing a budget. Start with your annual operating budget. Identify each month’s anticipated income, and each month’s anticipated expenses. That’s it! Quickbooks and other accounting programs have simple cash management tools to help you create these projections based on last year’s actuals, and then adjust.
Step 2: Monitor
If you weighed yourself once a year, could you assume your weight stayed stable? It’s just as unlikely that your cash flow projections will remain valid if you never check on them. Update monthly or even weekly for extra peace of mind.
Step 3: Improve
Here are some exercises to consider…
- Lower your property taxes If you own real estate, it’s probably worth less this year. Make the most of it. Property taxes are based upon valuation done by the county effective January 1. Proposed property tax bills are issued by the county later in the year — in Miami-Dade and Broward Counties they are mailed in August. Focus on the assessment. You can’t control the millage rate of the county’s budget, but you can file a protest and contest the valuation. You may need a real estate appraiser or a lawyer who specializes in property tax protests to help you file. Typically these professionals receive a percentage of what they save you, so there’s no out of pocket cost and there’s a potential to achieve some reduction.
- Re-evaluate insurance. As business conditions change, so do insurance needs. You may be over-insured, particularly if you own real estate or other assets that have decreased in value. Make sure your agent is shopping your insurance on an annual basis. If cash flow is very tight, you might consider increasing deductibles. Perhaps most important to cash flow, review the timing of payments. If you don’t have to pay it all in advance, maybe this is the year to spread out your payments.
- Review all contracts. In this competitive market, reviewing any contracts is one way to control expenditures – everyone is looking for new business and willing to price well to get it. Consider renegotiating contracts, or getting competitive bids. Make sure you’re getting quality people, not just low pricing.
Don’t procrastinate any longer about getting your business into shape!
Steven M. Demar CPA, is a principal at Kaufman, Rossin & Co., one of the top CPA firms in Florida. He specializes in providing tax, accounting and consulting services for entrepreneurs. He can be reached a sdemar@kaufmanrossin.com.
Category Value For Your Business | Tags: Accountant,Accountants,Accounting,Boca,Boca Raton,business fitness,business wellness,cash flow,CPA,CPA firm,CPAs,Florida,Fort Lauderdale,Ft Laud,Kaufman,Kaufman Rossin,Miami
(No Ratings Yet) Loading ...7 tips to protect your new venture
New business ideas are hatching every day. Whether you’re capitalizing on the Green Movement with a new solar-powered motorcycle or marketing the Fountain of Youth to aging baby boomers, starting a new venture brings both opportunity and risk.
One important risk area many entrepreneurs neglect is the risk to your data. Did you know that a business can be held responsible for identity theft if you don’t protect your clients’ sensitive personal information? This is no small matter: the chance of a data breach increases every day; the risks to your financial well-being and your reputation are enormous.
What should an entrepreneur do to protect your data at this very delicate stage of the business lifecycle? Here are some important tips for new businesses…and existing ones.
- When you design your network, you’ll want to provide remote access. But make sure to protect sensitive data. Your network should be protected with firewalls. Publicly accessed servers should be segregated from the internal network. If you are planning to use a wireless access, take additional steps to protect this access point.
- Install anti-virus software and update it regularly. New viruses crop up daily – old software won’t protect you.
- Implement a business continuity plan that takes into consideration business process priorities, maximum allowable downtime and cost associated with downtime.
- Implement physical security devices (e.g. cameras, card readers). If your hardware leaves the building, your data goes with it!
- Require strong passwords, and mandate frequent changes. If staff will be using laptops outside the office, consider hard drive passwords that protect your data even if the hard drive is removed.
- Develop and implement an Information Security Policy. Make sure your employees are trained on the policy. Include:
- policy maintenance
- asset management (including information handling)
- physical and environmental security
- communications and operations management
- access control
- information systems acquisition
- development and maintenance (including vulnerability management)
- information security incident management
- business continuity management, and
- compliance with legal requirements.
- Outsource services that support your business but are not core to your organization. These include IT support, email messaging, on-line back-ups, and more. These disciplines change rapidly, so using outside professionals is the safest choice. But perform the proper due diligence to engage the right vendor. Review audited financial statements, service delivery capability, internal controls and security (e.g. SAS 70) and insurance. Ask for references, and check them.
On yearly basis, review regulatory requirements and verify that your policies address them. Make sure your procedures are updated as changes in your business occur. Verify internal compliance with your policies and monitor third party vendors. And train your employees — the new ones as they join you, and the existing ones annually!
Jorge Rey is Director of Information Security for Kaufman, Rossin & Co., one of the top CPA firms in Florida. He can be reached at jrey@kaufmanrossin.com.
Category Value For Your Business | Tags: Accountant,Accountants,Accounting,baby boomers,Boca,Boca Raton,business basics,CPA,CPA firm,CPAs,electronically stored information,entrepreneur,Florida,fountain of youth,Ft Laud,green,information security,internal controls,Jorge Rey,Kaufman,Kaufman Rossin,Miami,risk assessment,Rossin
(No Ratings Yet) Loading ...Why did the accountant cross the road?
Some have said he did it just to get a laugh.
Others have said she did it to help the chicken with his tax return.
And some accountants would certainly cross the road to win the Corporate Run!
At Kaufman, Rossin, we believe that laughing together is an important part of a healthy environment. Joy at Work is one of our core values, and we like to think it’s one of the reasons we were named Best Place to Work again this year.
So we’d like to spread the joy of laughter today and ask for your help filling in the punch line.
Tell us your punch line – Why did the accountant cross the road?
Category Value For Your Employees, Value For Yourself | Tags: Accountant,Accountants,Accounting,Boca,Boca Raton,CPA,CPA firm,CPAs,Florida,Fort Lauderdale,Ft Laud,information security,Jorge Rey,Kaufman,Kaufman Rossin,Miami,risk assessment,Rossin
(1 votes, average: 4.00 out of 5) Loading ...Who is guarding your wall?
You may have skimmed the story earlier this month that talked about Chinese espionage gangs hacking into government computers. Among other things, they obtained reports on Indian missile systems, the travel plans of NATO forces, and a year’s worth of the Dalai Lama’s personal email.
We’re not the government, you may have thought. Our data isn’t important enough to steal.
Think again.
- Got customers? Take credit cards? Your data is worth stealing.
- Got patients? Keep track of their medical records? Your data is worth stealing.
- Got clients? Keep files related to litigation, transactions, other legal matters? You’re a target.
- Got employees? Keep their social security numbers? Definitely worth stealing.
You are as secure as your weakest link. And take heed, your weakest link will be exploited.
The Chinese built the Great Wall to protect themselves from their enemies: Huns, Mongols, Turkic peoples, and other nomadic tribes. But, as Genghis Khan said, “The strength of walls depends on the courage of those who guard them.” He and his Mongol hordes bribed a Chinese official to open the Great Wall forts. Thus the Mongols conquered China.
The Great Wall offered no security to the Chinese when invaders identified vulnerabilities and exploited them. All it took was a simple payoff. How confident are you that your information security can’t be breached?
If you said 100% confident, you’re fooling yourself, and you may be seriously at risk. I recently wrote about seven “tales of woe” that happened at companies. (Pay particularly attention to items 3, 4 and 5.) Trust me, every industry is vulnerable. And the risks to your clients, your reputation, and your wallet increase every day.
If you haven’t had an independent information security assessment in the past twelve months, the Mongols may be about to exploit your weakest link.
Jorge Rey is Director of Information Security for Kaufman, Rossin & Co., one of the top CPA firms in Florida. He can be reached at jrey@kaufmanrossin.com.
Category Value For Your Business | Tags: Accountant,Accountants,Accounting,Boca,Boca Raton,CPA,CPA firm,CPAs,Florida,Fort Lauderdale,Ft Laud,information security,Jorge Rey,Kaufman,Kaufman Rossin,Miami,risk assessment,Rossin
(No Ratings Yet) Loading ...Don’t be a target for the IRS!
The chances of getting audited are probably higher than ever this year. After all, tax enforcement is one of the few ways the government can collect more…without anyone risking their next election. Now more than ever, it’s important to pay attention to the factors that will increase the likelihood of an audit.
How do the unlucky ones get chosen?
The IRS relies on technology to take the first step in the process of selecting returns for audit. After your return is filed, it goes through a computer check, comparing it to a model. The return receives a Discrimination Information Function (DIF) score. The model, like so many we deal with these days, is closely guarded (think the recipe for Coca Cola or the Google search algorithm). Then seasoned IRS agents review the highest scoring returns, to identify high potential audit candidates.
What makes high potential? It’s simple. As Deep Throat advised Bob Woodward in All the President’s Men, they “follow the money.” If you earn more than $100,000 a year, you’re already five times more likely to be audited – there’s a larger potential return on their time invested!
What would make me more likely to be audited?
For your individual tax return, here are some key factors.
- Your deductions are higher than normal for your reported income
- You give more to charity than most people who earn what you do
- The income on your return doesn’t match the other forms they received, like W-2′s and 1099′s
- Your income is incredibly low, compared to others in your profession
- The numbers look too exact, like you’re guessing - $1,000 in real estate taxes is highly unlikely
- You work in a cash business, like the restaurant or taxi industry
What makes my business more likely to be audited?
The self-employed, like the wealthy, start out with a target on their backs. How can it get worse?
- If you show losses year after year, they may classify your business as a hobby - not deductible.
- If you intermingle business and personal expenses, that’s a big mistake. Using the same bank account to pay for paper for the office copier and that new Prada bag is a big red flag.
- If you try to avoid payroll taxes by hiring everybody as independent contractors, you’ll need to prove it.
- If you treat office equipment like supplies, you’re making a mistake. Suppies (copy paper) are deductible, but business equipment (your new copier) is a capital expense, and must be depreciated. Good news, though – for property placed in service during 2009 there are several ways to write off all or most of these purchases in the first year.
- If you pay yourself too much – or too little! – IRS will notice and take a deeper look.
And of course, there are simple mistakes you’ll want to kick yourself for. If you calculate wrong, forget to sign your forms, forget to include all the documents – you’re likely to get audited
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Dennis Fitzpatrick is a tax principal with Kaufman, Rossin & Co., one of the top accounting firms in the Southeast. He can be reached at dfitzpatrick@kaufmanrossin.com
Category Value For Your Business, Value For Yourself | Tags: IRS Audit
(2 votes, average: 4.50 out of 5) Loading ...
