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Other Comprehensive Basis of Accounting Fundamentals Webcast | 4142308F

March 24, 2015
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Archive for the ‘CalCPA Buzz’ Category

CAMICO Tip of the Month: Documenting Advice and Decisions

April 3rd, 2015

In some engagements, CPAs should document the advice given and obtain the client’s written consent to the decisions made. This can be done with an “informed consent” letter that provides advice and obtains the client’s understanding and consent. Such letters clarify that the CPA advises and informs, and the client decides. With this letter, it’s difficult for claimants to make it appear that the CPA made the decisions.

Informed consent letters can be used to better manage risk in areas such as Sub-S or C Corp selections or conversions, estate tax planning, and aggressive or gray tax strategies. Documentation should be factual, professional, and without personal comments that may be inappropriate and damaging to the integrity of the documentation. Remember that the documentation may eventually be presented to the “ladies and gentlemen of the jury”—a standard that can be used to determine the adequacy or appropriateness of your documentation.

For more information about CPA firm insurance issues, call 1 (800) 652–1772 or go online.

Time’s Running Out: May 1 Renewal Equals Free, 4-hour Ethics Course

April 3rd, 2015

Renew today and continue to take advantage of the advocacy for the profession, connections with your professional peers and discounted CPE CalCPA and the CalCPA Education Foundation provides. CalCPA also launched a redesigned website that’s much more dynamic, easier to use, simple—and mobile friendly.

Renew by May 1 and receive free 4-hour ethics course.

Economy Improved, E-pay Requirements Apply

April 3rd, 2015

With the sliding economy, your clients may have seen a fluctuation in their financial state. Having made it through difficult financial times, they may have forgotten their requirement to pay all payments electronically.

Under California law, taxpayers are required to remit payments electronically once they make an estimate or extension payment exceeding $20,000 or file an original tax return with a total tax liability of more than $80,000. Once the taxpayer meets this threshold, all subsequent payments—regardless of amount, tax type or taxable year—must be sent to us electronically. The law applies to C and S corps, exempt organizations and LLCs treated as corporations.

Individuals and group nonresident/composite return filers may also be required to make their payments electronically if they meet the mandatory e-pay requirements.

Head of Household Guidelines

April 3rd, 2015

Some of your clients may inquire about claiming the head of household filing status, which provides a lower tax liability and a higher standard deduction than the single filing status. Although many of your clients may think of themselves as the head of their household, they may not qualify for this filing status under state and federal tax laws. To qualify:

  • The taxpayer must have been unmarried and not a registered domestic partner, or, if married, met the requirements to be “considered unmarried” or “considered not in a registered domestic partnership” as of the last day of the tax year.
  • The taxpayer paid more than one-half the costs of keeping up his or her home for the year.
  • The taxpayer’s home was the main home for the taxpayer and a qualifying person who lived with the taxpayer for more than one-half the year. For limited exceptions to this rule, see FTB Publication 1540, California Head of Household Filing Status.
  • The qualifying person was related to the taxpayer and met the requirements to be a qualifying child or qualifying relative.
  • Generally, the taxpayer was entitled to a Dependent Exemption Credit for his or her qualifying person. However, under limited circumstances, the taxpayer does not have to be entitled to a Dependent Exemption Credit for his or her qualifying child. See FTB Publication 1540.
  • The taxpayer was not a nonresident alien at any time during the year.

A Snapshot of IRS Activities for the Fiscal Year

April 3rd, 2015

The IRS released the 2014 IRS Data Book, a snapshot of agency activities for the fiscal year.

During fiscal year 2014, the IRS collected almost $3.1 trillion in federal revenue and processed almost 240 million returns. About 65 percent of all returns were filed electronically. Of the 147 million individual income tax returns filed, 84 percent were e-filed. More than 116 million individual income tax return filers received a tax refund, which totaled more than $330 billion. The IRS examined less than 1 percent of all tax returns filed. About 3 percent of all individual tax returns examined resulted in additional refunds.

A Renewal by May 1 Equals Free, 4-hour Ethics Course

March 17th, 2015

Renew today and continue to take advantage of the advocacy for the profession, connections with your professional peers and discounted CPE CalCPA and the CalCPA Education Foundation provides. CalCPA will also soon launch a redesigned website in the coming months that will be more dynamic, easier to use—and mobile friendly for your phones and devices.

Renew by May 1 and receive free 4-hour ethics course.

IRS Opens TACs to Combat Budget Cuts

March 17th, 2015

The IRS announced that 10 of its larger Tax Assistance Centers around the country would start scheduling appointments to determine if an appointment-based service approach can help reduce taxpayer wait times during a time of severe budget cuts. Starting this month, the IRS plans to add 34 small and medium-sized TACs to the test and has started taking appointment requests in new locations.

Check out the TACs opening in California.

FTB Info on the California Competes Tax Credit

March 17th, 2015

The California Competes Tax Credit is an income or franchise tax credit available to businesses that come to California or stay and grow in California. Tax credit agreements will be negotiated by the governor’s Office of Business and Economic Development (GO-Biz) and approved by a statutorily created California Competes Tax Credit Committee. The committee consists of the director of GO-Biz, the state treasurer, the director of the Department of Finance and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.

For fiscal year 2014-15, $151.1 million of the California Competes Tax Credits will be available for allocation during three application periods. The first and second application periods have closed with $45 million and $75 million available for allocation. For the third and final application period, $31.1 million (plus any unallocated amounts from previous application periods) will be available for allocation.

Applications for the credit will be accepted online until April 6. Information on the California Competes Tax Credit also is available online.

2015 GAAP Financial Reporting Taxonomy Adopted by the SEC

March 17th, 2015

The Financial Accounting Standards Board announced that the SEC adopted the 2015 GAAP Financial Reporting Taxonomy. The GAAP Financial Reporting Taxonomy contains updates for accounting standards and other improvements to the official Taxonomy previously in use by SEC issuers.

The GAAP Financial Reporting Taxonomy is a list of computer-readable tags in eXtensible Business Reporting Language (XBRL) format that allows companies to tag precisely the thousands of pieces of financial data that are included in typical long-form financial statements and related footnote disclosures. The tags allow computers to automatically search for, assemble, and process data so it can be readily accessed and analyzed by investors, analysts, journalists and regulators.

Answers to Common Taxpayer Questions about the Affordable Care Act

March 17th, 2015

The AICPA has answers to taxpayers’ most common questions about the health insurance information reporting required by the Affordable Care Act on 2014 federal income tax returns. A few examples:

  • Where do I report my health insurance information on my tax return? Taxpayers will use Line 61 on Form 1040, Line 38 on Form 1040-A and Line 11 on Form 1040EZ to report on their 2014 federal tax return whether they had health care that met minimum essential coverage standards under the ACA for each month of 2014, unless they were exempt. For many taxpayers, that just means checking the full-year coverage box on their tax return.
  • Is the penalty for those who did not have minimum essential coverage or who did not quality for an exemption the same each year? No. It goes up in 2015 and future years. The penalty for 2014 is $95 per adult and $47.50 per child (with a family maximum of $285), or one percent of household income that is above the filing status, whichever is greater. In 2015, the penalty is $325 for each adult and $162.50 for each child under 18 (with a family maximum is $975) or two percent of household income, whichever is greater. The overall penalty limit is equal to the national average a family would pay for a bronze-level insurance plan on the Marketplace.
  • How do I request an exemption? Qualifying taxpayers can get an exemption from minimum essential coverage through the Marketplace or by claiming the exemption on their tax return using Form 8965, which is filed with the tax return. Some exemptions are granted through the Marketplace, some are claimed directly on the tax return and some are available using either method. The IRS website has a chart explaining how each exemption can be obtained.