UHY LLP E-Newsletter - September 2012

UHY LLP News Stories - September 2012

In This Issue

Health Care Coverage Cost W-2 Reporting Requirement

Year-End Planning: Making the Most of Quick Write-Offs for Capital Asset Purchases

Spotlight On

Events Calendar

9/12 Petroleum Webinar II

9/12 Health Care Forum

9/20 PEO Webinar II

9/26 Blackline Roundtable

10/16 BRIC Roundtable

10/25 Construction Outlook

11/1 Manufacturing Outlook

11/13 Health Care Reform Update

12/5 Accounting & Regulatory Update

12/5 Tax Forum

Special Announcements

Recruiting Update

UHY Goes Mobile

Farmington Hills, MI
(248) 355-1040

Sterling Heights, MI
(586) 254-1040

National Locations

IC-DISC

Export Sales? Take advantage of the 15% preferred tax rate by using a Domestic International Sales Corporation (IC-DISC). All businesses with export sales can use this relatively simple strategy to realize a reduction in the overall tax liability.

Contact your UHY professional today.

UHY International

UHY Int'l Business Issue 25

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Health Care Coverage Cost W-2 Reporting Requirement

By Jeff Halverson, CPA

Starting in 2013, employers will be required to report the amount of employer paid health care insurance on the annual Form W-2 filed for each employee. The new requirement (as part of The Patient Protection and Affordable Care Act of 2010) is intended to bring more transparency to employees with regard to the cost of their health care coverage. The IRS has issued Notice 2012-9 as guidance to assist in understanding the new reporting requirements, including exceptions and limitations to the reporting, as well as approved methods for calculating the costs required to be reported. It is important to understand the general requirements and what the effect of the new reporting requirement will have on your business.

Employers are required to issue a Form W-2 to each employee no later than January 31 reporting the income and withholdings from the employee for the prior year. Starting in 2013, the W-2's issued to employees for 2012 are required to include the employer paid health care insurance costs for each employee. There are very few exceptions to this requirement; however, those employers who are filing fewer the 250 Form W-2s are exempt from filing. In addition, s corporations are not required to report the amount of employer paid health care coverage to shareholders when the cost is included in taxable wages. Most other employers will be required to report the employer paid health care insurance costs in box 12 of Form W-2 using code DD.

Health care coverage can encompass a wide variety of employer sponsored insurance; so much that the IRS guidance outlines the limitations of the reporting by listing what costs are not to be included. For instance, the reporting requirement does not include employer paid costs for stand-alone dental or vision insurance. It also does not include disability, accident, or liability insurance.

In addition to understanding the exceptions and limitations, employers must understand how to calculate the health care coverage costs to report them correctly on Form W-2. There are several methods allowed by the IRS to calculate the cost of health care coverage including the following:

Premium Charged method - The premium charged by the insurer for each employee's coverage
COBRA method - The COBRA application premium for the coverage for the reporting period
Modified COBRA Premium method - An estimate of the COBRA applicable premium

The new reporting requirement is for reporting purposes only. It is intended to inform employees of the cost of their health care coverage and not to cause employer provided health care insurance costs that are otherwise non-taxable to become taxable. As there are potential penalties for each incorrectly filed W-2, proper planning should take place in order to prevent any compliance challenges.

For more information or questions on this topic, please contact your professional at UHY LLP in Farmington Hills (248) 355-1040 or Sterling Heights (586) 254-1040 or visit us on the Web at uhy-us.com.

Year-End Planning: Making the Most of Quick Write-Offs for Capital Asset Purchases

By Steve Maresca, CPA

As many may know, accelerated write-offs for depreciable property placed into service during the 2010 and 2011 tax years were quite generous. Beginning after September 8, 2010 through December 31, 2011, taxpayers were allowed to take one hundred percent bonus depreciation on qualified property placed into service during this period. Additionally, Code Section 179 expense election was set at a maximum of $500,000 on qualified property purchases of up to $2,000,000 for both 2010 and 2011.

Currently in 2012, some of those accelerated write-offs have expired and been reduced to lower limits. As the law currently stands taxpayers are only allowed to take fifty percent bonus depreciation on qualified purchases placed into service on January 1, 2012 and before December 31, 2012. Also, the Code Section 179 expense election is reduced to $139,000 on purchases up to $560,000.

Unless Congress acts soon, these higher limits are set to expire again and be greatly reduced in the year 2013. The accelerated bonus depreciation election will completely disappear and the IRC Section 179 expense limit is set to tumble to $25,000 on $200,000 of qualifying purchases. In order to mitigate some of these expiring tax cuts, taxpayers should be aware of some of the following tax strategies to help take advantage of these write-offs before it is too late.

Bonus Depreciation Strategies:

Even though bonus depreciation is set to expire at the end of 2012, it may not always be a good idea to accelerate a purchase into 2012. For example, if a taxpayer has net operating losses that are set to expire, they wouldn't be able to utilize it.
Bonus depreciation has the ability to drive a loss, whereas Section 179 is limited to taxable income. If a taxpayer has high net income in the two tax years prior, it may be a good idea to accelerate a purchase, drive a Net Operating Loss, and carry it back to the years with high income and high tax rates.

Section 179 Strategies:

Taking into consideration the Sec.179 expense limits for 2012 and 2013 is very important. A taxpayer that has already purchased $100,000 of qualified property during 2012, and is considering purchasing an additional $64,000 of various assets before the current year end, may want to consider acquiring approximately $39,000 of the capital expenditures in 2012 and hold off on the remaining $25,000 until 2013 to ensure the full benefit of the accelerated write-off.
As a general rule, if a taxpayer placed $139,000 of five-year property and $139,000 of seven-year property into service during 2012, the taxpayer should elect to expense the property with the longest recovery period. Hence, in this case, they would elect to expense all of the seven-year property under a Sec. 179 election in the current year. The remaining amount over the expense limitation could then be recovered over five years as opposed to seven.

Spotlight On...

Scott Miller, CPA

Partner

As a skilled professional working with many Petroleum companies, Scott Miller is looking to pass on his knowledge at UHY LLP's next Petroleum & C-Stores Webinar Briefing on September 12, 2012. You can join him and other practitioners in the industry where topics including current trends, recent tax updates and developments, and other important issues affecting business owners and the Petroleum industry will be discussed.

We asked Scott to share some of his expertise with regards to the industry. His best tip? "With the recent expiration of the Michigan Business Tax, the window of opportunity for amending past MBT returns and obtaining refunds is closing quickly. Because there are many Petroleum-specific MBT issues, if UHY did not prepare your prior MBT returns, a quick review of prior filings by UHY could lead to significant refunds."

Having a vital role in the industry, Scott regularly speaks at conferences, generates articles for publications, and provides consulting services to associations pertaining to significant tax and accounting issues. He has been engaged by several different petroleum associations as an industry expert on a number of occasions. Scott is a Board Member of the Michigan Petroleum Association/Michigan Association of Convenience Stores (MPA/MACS). He is also a member of SIGMA, National Association of Convenience Stores (NACS) and Georgia Oilmen's Association (GOA). Scott's civic involvement includes Treasurer of Make-A-Wish Foundation of Michigan and Board of Trustees for Crittenton Hospital.

His journey with UHY LLP started when he was hired as a Staff member with the firm in January 1987 and he has since made Partner. He was one of nine employees to reach the twenty-year or more tenure mark in 2011. Scott is a leading member of the firm's Audit and Assurance Department and works with middle market companies providing a wide range of financial, tax, transactional and business consulting services to businesses including petroleum, manufacturing and distribution. He also works with publically-traded companies and has experience with various SEC filings.

Scott can be reached at smiller@uhy-us.com or 586 843 2574. He is located in the Sterling Heights, MI office.

Events Calendar

9/12 Petroleum & C-Store Webinar Series: Succession Planning

Please join us for this quick hitting lunch hour geared towards petroleum and c-store business owners, chief executives and chief financial officers. Is your succession plan in order? 2012 may be the final year to take advantage of the $5 million gift tax exclusion. Tune in as our experts address your questions. Webinar will conclude with an open discussion.

Wednesday, September 12, 2012

12:00PM-1:00PM EST

CPE credit will be offered. Pre-registration for this complimentary webinar is required. Multiple registrations are welcome. Please contact Courtney Gray via email cgray@uhy-us.com or phone 586 843 2533 to register. Formal invitation and webinar log-in instructions will be announced at a later date.

9/12 Health Care Forum: Build, grow, protect what matters most to your practice

Meet with various Health Care experts at The Capital Grille in Troy as they discuss transaction matters on strategic succession planning, financing options on buying into a practice, benchmarking your practice for increased profitability, why Medicare/Medicaid audits are expanding, preparing for massive 2013 tax increases and practice transition tax strategies.

Wednesday, September 12, 2012

5:30PM-8:00PM

Advance registration for this complimentary event is required. Space is limited. To RSVP please contact Courtney Gray by email cgray@uhy-us.com or phone at 586 843 2533.

9/20 PEO Webinar Series: Mergers & Acquisitions

Please join us for this quick hitting, mid-morning one-hour webinar geared towards PEO business owners, chief executives and chief financial officers. Tune in as our experts address current trends in M&A activity affecting the PEO industry and you. Webinar will conclude with an open discussion.

Thursday, September 20, 2012

10:30AM-11:30AM EST

9/26 Blackline Roundtable: Improving the close process utilizing finance governance technologies

Please join BlackLine Systems and UHY for an exclusive networking breakfast discussing the challenges organizations currently face in creating an efficient and effective record to report process and how new Finance Governance Technology tools help address these challenges. We are also pleased to have Henry Wagner, a Senior Manager in the Accounting & Financial Reporting function at Chrysler, discuss how Chrysler has been successful in addressing these challenges.

Finance Governance Technologies (FGT) refers to the tools that automate and digitize the record to report process components. These technologies provide the foundation to establish the monitoring, visibility, and benchmarking necessary to deliver value, manage resources, control risk, measure performance, and capture assurance in an integrated platform. The use of these tools has grown very rapidly over the last two years. This program should help attendees understand where these tools could provide value in their organizations.

Wednesday, September 26, 2012

8:00AM-10:30AM EST

This session is intended for anyone who is involved in supporting the execution of an efficient and effective monthly, quarterly, or annual financial reporting process. In addition, customers of the financial reporting output, such as Tax, FP&A, and Regulatory, should gain insight into how the quality and timeliness of their data can be improved. Companies that are heavy users of Excel, have very manual close and reporting processes, or have complex customer, legal entity, or trading partner relationships should see opportunities to reduce complexity.

CPE credit will be offered. Advance registration for this complimentary event is recommended as seating is limited. Breakfast will be provided. Multiple registrations are welcome. To RSVP please contact Courtney Gray by email cgray@uhy-us.com or phone at 586 843 2533. Formal invitation to follow shortly.

10/16 Climbing the BRIC Wall-Opportunities with Brazil, Russia, India and China

Please join either on-site or on-line us as we convene a panel of experts to discuss inbound investments into the BRIC countries including a general overview of the business climate and economic conditions, opportunities and potential threats of doing business in the country, tax issues and considerations, pitfalls when starting a business in the country, employment considerations, entity structure and tax planning considerations.

Tuesday, October 16, 2012

On-site Program On-line Webinar

Eastern Time 7:30AM-12:30PM 8:00AM-11:45AM

CPE credit will be offered. Pre-registration for this complimentary program is required. Complimentary breakfast and lunch will be provided. Space is limited. Multiple registrations are welcome. To reserve your seat contact Courtney Gray via email cgray@uhy-us.com or phone 586 843 2633. Please declare either on-site or on-line. Formal invitation to follow shortly. Webinar log-in instructions will be released to registered attendees at a later date.

10/25 UHY LLP Annual Construction Outlook

Save the date! UHY LLP is pleased to announce its Annual Construction Outlook that will be held in the Farmington Hills office conference center. Join us to learn more about industry trends, bonding update and the latest financial and tax developments.

Thursday, October 25, 2012

7:00AM-10:30AM EST

CPE credit will be offered. Pre-registration for this complimentary event is required. Multiple registrations are welcome. Please contact Courtney Gray via email cgray@uhy-us.com or phone 586 843 2533 to register. Formal invitation to follow shortly.

11/1 UHY LLP Annual Manufacturing Outlook

Save the date for UHY LLP Manufacturing Outlook 2013: An American Renaissance. Join us either on-site or on-line via webcast to learn more about the latest industry trends and rebirth of American manufacturing. Topics, speakers and keynote will be announced shortly.

Thursday, November 1, 2012

On-site Breakfast Program On-line Webinar

Central Time 7:30AM-10:45AM 8:00AM-10:45AM

Eastern Time 8:30AM-11:45AM 9:00AM-11:45AM

CPE credit will be offered. Pre-registration for this complimentary program is required. Breakfast will be provided. Space is limited. Multiple registrations are welcome. To RSVP contact Courtney Gray via email cgray@uhy-us.com or phone 586 843 2533. Please declare either on-site or on-line. Formal invitation and webinar log-in instructions will be released at a later date.

11/13 Health Care Reform Update

Please join us for this quick hitting, early morning interactive discussion aimed at business owners with 25 or more employees. Tune in as our experts address important aspects of the Health Care Reform Law including legality, tax law changes, Census considerations, employer shared responsibility, and post-election planning opportunities.

Tuesday, November 13, 2012

7:00AM-9:30AM EST

Pre-registration for this complimentary update is required. Multiple registrations are welcome. Please contact Courtney Gray via email cgray@uhy-us.com or phone 586 843 2533 to register. Formal invitation to follow shortly.

Save the date! More UHY events are just around the corner...

12/5 UHY LLP Annual Accounting & Regulatory Update

12/5 UHY Advisors Annual Tax Forum

Contact Courtney Gray via email cgray@uhy-us.com or phone 586 843 2533 to save your spot or for more information.

Special Announcements

Recruiting Update

UHY Michigan is actively looking for experienced candidates to fill key positions in our Sterling Heights office. Please review the openings below and if you know someone who may be interested in any of these roles please reach out to Rina Madias, Recruiting Manager, via email rmadias@uhy-us.com or phone 248 204 9331.

Sterling Heights

Tax Managers

Senior Tax Staff

Tax Staff

SALT Manager

Customer Service Associate

Recruiter with finance/accounting recruiting experience

UHY Goes Mobile

I would like to share some very exciting news! UHY has gone mobile. That's right, we have just released the UHY Mobile site, making it easier to access www.uhy-us.com through your mobile device. This is another illustration of what our pledge to 'The Next Level of Service.' To access the UHY Mobile site, simply type www.uhy-us.com into your mobile device and you will automatically be redirected to our new mobile enhanced web pages. Please make sure to bookmark the page. Enjoy!

Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.