Real Estate Tax Appeal Deadlines

Thursday, September 2nd, 2010

Many times, we find that clients’ property assessments are incorrect. With the South Florida real estate market being so volatile this past year, it is important to make sure that your property tax assessments are accurate.

If you feel that your assessment may be too high, the deadlines to appeal your property taxes are approaching.

• September 16, 2010 – Palm Beach
• September 20, 2010 – Broward
• September 20, 2010 – Miami-Dade

The steps to appeal your property assessment can be challenging. For example, you’ll need to be able to document the market value of your property as of January 1st of the current year by showing its value relative to the qualified comparable sales. And you’ll need to make your case to the Special Magistrate at the Value Adjustment Board hearing.

If you need assistance with this process, please contact a Kaufman, Rossin accountant or contact the following resources directly who specialize in these tax appeals:

Mitchell Feldman – President of FBS Property Tax Abatement, LLC
305.350.7360 or mfeldman@fbstaxabatement.com

Todd M. Wolff – President of LeaseGuard, Inc.
561.998.2800 or toddwolff@leaseguardusa.com

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Scott F. Berger is a tax principal at Kaufman, Rossin’s Miami office.  Kaufman, Rossin & Co. is one of the top CPA firms in the country.  He can be reached at sberger@kaufmanrossin.com.

Foreign Tax Reform is Law – What Does It Mean for You?

Thursday, August 26th, 2010

On August 10, 2010 President Obama signed into law H.R. 1586, the Education Jobs and Medicaid Assistance Act, which includes a $9 billion package of international tax reform. These international tax provisions will fund most of the bill’s revenue offsets in effort to save thousands of teaching jobs and help states fund Medicaid shortfalls.

The legislation is designed to reduce the opportunities for U.S. corporations to optimize the use of the foreign tax credit by incorporating a host of international tax reform measures and closing a number of foreign tax credit loopholes.

For example, the provisions will:

• Eliminate the ability to split foreign taxes from the associated foreign income in order to prevent inappropriate separation of creditable foreign taxes.
• Reduce foreign tax credits on stepped-up assets in order to prevent taxpayers from claiming the foreign tax credit on foreign income that is never taxed in the U.S.
• Restrict tax treaty use to resource U.S. income in order to segregate the income so that it is not used for claiming foreign tax credits.
• Limit the amount of foreign taxes deemed paid with respect to Sec. 956 inclusions (relating to investments in U.S. property) in order to limit the foreign tax credits claimed on a deemed dividend.

Other provisions of the legislation include the repeal of the 80/20 rules under which interest and dividends received from a domestic corporation or a resident alien were treated as foreign source when for a 3 year period and at least 80% of the gross income was active foreign business income. 

In addition, the new law eliminates the advance payment option for the earned income credit. However, the elimination is projected to impact a relatively small number of taxpayers.

Most of these provisions are effective for taxable years beginning January 1, 2011, yet some may be retroactive.

Keep in mind this is a summary of some of the provisions of the legislation. If you’d like further information on how these provisions may affect you and/or your business, please contact Yadira Hiraldo at 305.646.6031 or yhiraldo@kaufmanrossin.com.

Yadira Hiraldo, CPA, is an international tax manager at Kaufman, Rossin & Co., one of the top CPA firms in Florida with offices in Miami, Fort Lauderdale and Boca Raton.

Still No Estate Tax – A Window of Opportunity for Lifetime Gifts in 2010

Thursday, August 19th, 2010

It’s August and, unbelievably, there is still no estate tax in 2010. We have seen large estates like that of George Steinbrenner, and other billionaires passing in 2010, avoid huge estate taxes. And unless Congress passes retroactive legislation those estates will have avoided estate tax and generation skipping taxes.  

We can’t imagine anyone wanting to die to take advantage of the current estate tax opportunity.  Fortunately, the current law also provides an opportunity to make large lifetime gifts in 2010.

Here are some reasons why making gifts now make sense.   

• The $13,000 annual exclusions and $1,000,000 gift tax exemption for gifts in excess of your annual exclusions is still in place.
• Right now the gift tax rate is 35% on amounts over the $1,000,000 exemption. This rate can be as low as 26% if the transferor survives three years from the date of the gift.  However, in 2011 the maximum rate is scheduled to go up to 60%.  
• As of now, there is no Generation Skipping Tax in 2010.  Gifts directly to individuals more than one generation below the transferor are not subject to the Generation Skipping Tax which historically has been as high as 55%.
• With the extremely low interest rate environment many gift strategies, such as charitable lead trusts and GRATs, result in lower gifts than in higher interest rate periods.
• Transfer values are lower with the depressed real estate values and stock markets. Closely held business interests are likely to be valued lower.

What is the downside?

• Estate and gift tax might be repealed permanently. However, this doesn’t seem likely in a period of budget deficits and the fact that transfer taxes in recent years affect less than 1% of the population.  
• If the transferor dies in 2010, no transfer tax would apply under current law and unnecessary gift taxes would have been incurred.  This can be avoided by using techniques which will make the gift incomplete until after the tax laws for 2010 are certain.

If you have questions about how you can take advantage of current planning opportunities, please contact John Anzivino at janzivino@kaufmanrossin.com or 305.857.6706.

John R. Anzivino, CPA, is an estate and trust principal at Kaufman, Rossin & Co., one of the top CPA firms in the Southeast.

Is your favorite non-profit at risk?

Thursday, August 5th, 2010

In May, the IRS began revoking tax-exempt status from nonprofits that had failed to file required returns (including the on-line postcard Form 990-N) for 2007, 2008, and 2009. According to a free report from Guidestar, 300,000 nonprofits could lose their status.

Is your favorite non-profit at risk?   If your business, like ours, is involved in the community, you’ll want to check.  The IRS has published a list. 

The good news is that there’s a “one-time relief program.”  Organizations can preserve their status by filing returns by October 15, 2010. 

If you’re involved with a nonprofit organization of any type, make sure they’re aware of the IRS actions, and the deadline to file returns if they have not done so!

Janet Fifer is an associate principal in the Estate, Trust and Exempt Organizations department at Kaufman, Rossin & Co., one of the top CPA firms in the Southeast.  She can be reached at jfifer@kaufmanrossin.com.

Florida Tax Amnesty Through September

Friday, July 23rd, 2010

Got overdue state taxes?  Don’t miss out on the Florida Tax Amnesty program.  The deadline is September 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.

Hurricanes are no joke.

Friday, July 2nd, 2010

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.

Legislative Alert: Is your law practice an S-Corp?

Friday, June 25th, 2010

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

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…)

Shape up your cash flow

Tuesday, June 8th, 2010

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…

1. 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. 

2. 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.

3. 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.

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?