Community Association Relief – It’s about time!

Friday, June 11th, 2010

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. (more…)

Why did the accountant cross the road?

Monday, April 19th, 2010

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?

Don’t be a target for the IRS!

Wednesday, March 31st, 2010

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.

1. Your deductions are higher than normal for your reported income
2. You give more to charity than most people who earn what you do
3. The income on your return doesn’t match the other forms they received, like W-2′s and 1099′s
4. Your income is incredibly low, compared to others in your profession
5. The numbers look too exact, like you’re guessing - $1,000 in real estate taxes is highly unlikely
6. 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?

1. If you show losses year after year, they may classify your business as a hobby - not deductible.
2. 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.
3. If you try to avoid payroll taxes by hiring everybody as independent contractors, you’ll need to prove it. 
4. 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.  
5. 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

—

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

Now what? Some Impacts of Health Care Reform

Wednesday, March 24th, 2010

After a series of complex parliamentary maneuvers, the House approved a massive health care reform package on March 21, 2010, with over $400 billion in revenue raisers and new taxes on employers and individuals. President Obama signed it into law, and the additional congressional steps have been taken. 

Health care reform has arrived.   But what does that really mean for individuals and businesses? 

The uninsured are clearly the biggest beneficiaries of this legislation, which (starting in 2013) will require all individuals to have “minimum essential coverage” and provide subsidies for those who can’t afford it.   Large businesses will have to provide that coverage (or pay an additional tax) but smaller businesses will be exempt from this requirement and may even qualify for subsidies to help them provide coverage to employees. 

Here are a few of the early changes that may affect you and your family sometime this year.

1. Dependent children will be able to remain on their parents’ insurance plans till age 26
2. Many plans will be prohibited from placing lifetime limits on coverage, or cancelling your coverage if you become ill
3. Plans won’t be able to deny coverage for children with pre-existing conditions.
4. People who have been uninsurable due to pre-existing conditions could qualify for insurance through a federal high-risk program.
5. Medicare beneficiaries who hit the “doughnut hole” in drug coverage will get a rebate this year
6. Some preventive care, including some types of cancer screening, will be free from co-pays and deductibles.

This is a complex bill.   For more information, take a look at this summary, or contact your accountant.   

Some additional good resources include:
Inc. Magazine: What Health Care Reform Means for Your Business
NY Times: For Consumers, Some Clarity on Health Care Changes

Dennis J. Fitzpatrick, JD, is a tax principal at Kaufman, Rossin & Co., one of the top CPA firms in the Southeast.  He can be reached at dfitzpatrick@kaufmanrossin.com.

Best Place to Work

Friday, February 26th, 2010

Yesterday, our firm was once again named the #1 Best Place to Work in South Florida.   That’s a very special honor for us, and I wanted to share a few thoughts.

What makes this place so special is our employees. We don’t just hire great accountants. We recruit, select, mentor and develop great people.

Here’s what I mean.

• Our people love what they do, so our clients get the special attention and the caring service that sets us apart from other accounting firms
• Our people care about each other, so our teams  — everything from client audit teams to our championship CPA softball team – help each other improve performance all the time
• Our people are smart and resourceful.  They recognize that, to continue to grow, they need to see beyond the numbers to what matters most to clients, and find ways to deliver.
• Our people care about our community, and are willing to spend time and energy to make it better.

For 48 years we’ve put our employees first.  As the firm has grown we’ve put new programs in place that help to maintain the caring, family atmosphere.

I’m gratified that, while the economic downturn has affected everyone in South Florida, our employees trust that management is still focused on maintaining our Joy At Work culture.

What do you think makes a great place to work?

Keeping condo associations afloat

Thursday, February 4th, 2010

As foreclosures mount, condominium and homeowner associations have been reeling from sharp decreases in revenue due to the delinquency of unit owners in the payment of their association fees. This has created a tremendous burden for the paying unit owners to shoulder the shortfall so the association will have sufficient income to continue operating.

However, many homeowner and condominium associations in Florida are taking advantage of an equitable remedy known as the “Blanket Receivership” to increase the association’s revenue stream. To effectuate a Blanket Receivership, the association engages an attorney to petition the court to appoint a Receiver over the delinquent units. Once appointed, the Receiver is authorized to collect rent directly from the tenants residing in the delinquent units to pay the association fees. It’s called a “Blanket Receivership” because it eliminates the need to appoint a Receiver over each delinquent unit individually, which is a costly and time-consuming endeavor. Although there is some cost involved in implementing the legal remedy, it allows the association to collect funds it otherwise would not see at all. The “Blanket Receivership,” approved by Florida courts, is a cost effective and efficient remedy that enables the association to stay afloat.

Read the whole article

Amir Isaiah is the Director of Receivership & Fiduciary Services for Kaufman, Rossin & Co., one of the top CPA firms in the Southeast. He has been appointed numerous times as Receiver for residential and mixed-use community associations and was the first Receiver to obtain authorization to lease abandoned units under the Blanket Receivership structure. Mr. Isaiah has extensive experience serving as a guest speaker and panelist on the topic of receiverships, and is co-author of “The Receivership Manual for the Florida Juiciary” revised 2009. He can be reached at aisaiah@kaufmanrossin.com.

Teach more, learn more, add more value.

Friday, November 20th, 2009

Just read Bill Taylor’s HBR blog post The Rise of the Teaching Organization and I couldn’t agree more. 

He writes:

“Executives have come to understand that for their companies to stay ahead of the competition, their people, at every level, have to learn more (and more quickly) than the competition: new skills, new takes on emerging technologies, new ways to do old things, from manufacturing to marketing to R&D….

But one thing I’ve learned over the last few years, as I’ve traveled the world in search of organizations unleashing big change in difficult circumstances, is that the most determined innovators — the organizations with the most original ideas about how to compete and win — aren’t just committed to learning. They are just as committed to teaching.”

Organizations that look beyond their own walls to find new ideas, or venture out to share the innovations they have created, can benefit in so many ways!  Building awareness of their business is an obvious one — but sharing ideas that help others comes back in so many more  valuable ways.

Don’t miss this post!  I’d love to hear what you think.

New Tax Act can benefit individuals and businesses

Monday, November 9th, 2009

Congress passed the Worker, Homeownership, and Business Assistance Act of 2009 on November 5, 2009. The President signed the Act into law on November 6. The Act extended unemployment compensation an extra 14 weeks and includes numerous tax law changes. Here are some of the tax highlights.

Are you looking to buy a home? Even if it isn’t your first you may now be eligible for a tax credit!

The $8,000 home buyer tax credit for first-time buyers is extended through April 2010. The Act also provides for a $6,500 “first-time homebuyer” credit for individuals that have lived in a principal residence for 5 consecutive years out of the last 8 years prior to purchasing a new principal residence. The Act increased the Adjusted Gross Income level of qualifying purchasers to $245,000 for joint return taxpayers ($125,000 for single taxpayers). Finally, the maximum purchase price of a qualifying residence has been increased to $800,000.

Do you own a business? These changes may have a sizeable impact on your company.

The .2% FUTA (Federal Unemployment Tax Act) surtax has been extended into 2011. This surtax was scheduled to expire in 2009.

The extended net operating loss carryback period of 5 years has been expanded to include NOLs of all businesses (not just “small businesses”) from either 2008 or 2009. Losses from “Small Businesses” may use the extended carryback period for both 2008 and 2009. The amount of loss available for the 5th preceding tax year is limited to 50% of the taxable income of that preceding year.

Additionally, the penalties for failure to timely file a partnership or S corporation tax return will be $195 per K-1 beginning with the 2010 tax year.

How do you prepare for these changes?
With Congress taking additional measures to help provide relief, this new legislation may have a significant effect on your business’s operations along with your personal finances. As always, consult with your accountant to organize a customized strategy based on your own unique circumstances to take advantage or help offset these recent changes.

Learn more about the legislation from one of our trusted sources, CCH.

Your personal resources: the attention economy

Thursday, August 13th, 2009

Turn on the television, open a newspaper or a magazine, and the leading story will likely be about the state of our economy. It’s on everyone’s mind, and for good reason, but I learned of a new type of economy recently, and its one that’s all too frequently overlooked.

The “attention economy” deals in two of our most valuable and limited resources: our own time and attention. Herb Simon, a Nobel prize winning economist, explained “in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes.” (more…)

New in the workforce? Be prepared.

Wednesday, August 5th, 2009

I’ve been out of college and working full-time for less than a year. Thought it might be helpful to share a few things I wish someone had told me as I made my transition!

The contrast between a collegiate lifestyle and being a part of the workforce is as extreme as night and day. The years spent in college are significantly different than any other time in your life. From the time you’re in grade school, you have a structured day-to-day routine that gets very repetitive. Then college arrives and that routine goes flying out the window. You are in charge of yourself. You can sleep in everyday. You can take classes only three nights a week or choose not to go to class at all. Either way, there is less accountability. Then you graduate and must return to the day-to-day routine again. (more…)