Your BRC Team:
Tonia Hedrick, CPA, Supervisor, receives 4Q 2013 BRC Superstar Award!
Recognized for her diligence in developing staff and overall time management, Tonia demonstrates an unyielding commitment to ensuring the quality and efficiency for which BRC is known. Thank you and congratulations Tonia!
Effective January 1, 2014, NC residents are no longer allowed to deduct contributions to a NC 529 plan on their NC individual income tax returns. In prior years, up to a $5,000 annual deduction was permitted. With the new NC individual income tax overhaul, this deduction has been eliminated.
|Super Foods for Super Performance: Flaxseed|
Like advisors, not all foods were created equally, some just deliver more...
Why They're Super
Not only does flaxseed lower blood cholesterol and reduce the risk of heart attack, but it is also a rich source of lignan, a powerful antioxidant that may be a powerful ally against disease and certain cancers, especially breast cancer. Just 2 tablespoons of ground seeds (which are digested more efficiently than whole seeds) contain about 20% of the recommended daily fiber* intake and more than 100% of the recommended intake for inflammation-fighting omega-3 fatty acids.
How to Enjoy Them
Try finely grated raw beets in your salads or roast them along with sweet potatoes and parsnips for a colorful and flavorful side-dish-just keep in mind that certain cooking methods (like boiling) may decrease their nutritional value. And don't forget about the leafy green tops, which are rich in iron and folate, and can be prepared much like their cousins, Swiss chard and spinach. Add ground flaxseed to baked goods for a nutty flavor or sprinkle it on top of your favorite cereal. It's also delicious when blended with yogurt and fresh fruit for a tasty smoothie.
*One word of caution: Incorporate flaxseed into your diet gradually as it can have a laxative effect.
Go confidently in the direction of your dreams. Live the life you have imagined. - Henry David Thoreau
|People Who Care About People|
BRC is proud to continue to be acknowledged as one of the "Best Accounting Firms to Work For" annually!
|2014 Programming with You in Mind|
| Honored to be your trusted advisors, we are pleased to offer you informative programs designed with your success in mind. See what's on the docket this year below...
-Paula McMillan, CPA, Director of Marketing & Practice Development
BRC Privately Held Business Forums -
From family-owned businesses to entrepreneurial start-ups to mature companies in traditional industries, privately held companies today face increasingly complex challenges in the quest to grow in size and profitability. In these quarterly forums, we will be focusing on the issues most relevant to privately held businesses. Whether you attend to discern a new way of looking at a challenging issue, determine actionable ideas for ways to capture opportunities, network with others in similar situations or a myriad of other reasons, we look forward to seeing you!
[ongoing quarterly meetings]
Triad: Tues. Sept. 23, 2014 / (ongoing meetings to follow each first Tuesday of the first month of every quarter)
BRC Not-for-Profit Board Seminars -
Save the date!
Triad: Tues., Oct. 21, 2014
Triangle: Thurs., Oct. 23, 2014
Whether interested in maximizing your board's effectiveness through a greater understanding of financial statements or tax forms, attaining a better understanding your fiduciary responsibilities or networking with other influential leaders on not-for-profit boards with the desire to make a difference, this program has something for you. Advising and serving over 140 not-for-profit entities, this program was client-requested and developed with client input.
BRC Financial Symposiums - Save the date!
Triad: Tues. Oct. 28, 2014
Triangle: Thurs., Oct. 30, 2014
This past December, we conducted full day 8 hour CPE workshops in the Triad and Triangle. Well-received, with participant ratings of 4.8/5.0 and 4.9/5.0, we plan to hit it out of the park again with knowledgeable presenters and relevant topics - delivering high value CPE.
There will be more to come on these programs... Mark your calendars and make plans to attend now! All programs above qualify for CPE credit.
|Charitable Giving Strategies|
Consider a Donor-Advised Fund for Your Charitable Giving
By Freddy Robinson, CPA, Partner
A donor-advised fund (DAF) is a charitable giving vehicle administered by a public charity and created for the purpose of managing charitable donations on behalf of an organization, family, or individual. A donor-advised fund offers the opportunity to create an easy-to-establish, low cost, flexible vehicle for charitable giving as an alternative to direct giving or creating a private foundation. Like a private foundation, a DAF can be named after the donor, and acts as a conduit. Donors make their contribution and claim a tax deduction now, then pay out to specific charitable organizations over years or even decades while the charitable dollars are invested and growing tax free.
Here are some of the significant advantages of establishing a DAF:
- No cost to establish" An immediate charitable income tax deduction for your contributions to the fund
- Deduction limitations are higher compared to private foundations
- No capital gains taxes on gifts of appreciated, long-term securities
- Flexibility to time gift recommendations to charities - now or in the future
- Gifts may be anonymous to recipients
- Public anonymity for charitable recipients
- No tax record keeping or administrative burdens
- Professional investment management at efficient cost
A DAF can be a very efficient and effective vehicle to accomplish your charitable objectives. We will be glad to discuss with you in further detail how establishing a DAF could be utilized for your personal situation.
|'Tis the Season... Tax Time|
IRS Audits Projected to Continue to Decline|
By Kevin Witriol, CPA, Partner
For the first time in seven years the individual audit rate has fallen below 1% to 0.96% in 2013. This equates to one out of every 104 returns filed.
The main factor in the decrease was cost pressure leading to reduced agency resources, including a decline in the number of enforcement personnel. Anticipating cost pressures will only increase, we expect the percentage to decrease further in 2014 based on continued cuts and reassignment of agents.
Of those audited, as one might expect, the wealthiest received the greatest scrutiny. The 2013 breakout was as follows:
* Incomes greater than or equal to $1 million: 10.85% (one out of every nine returns). This was down from 12.14% the prior year.
* Incomes between $200,000 and $1 million: 2.7% of their returns (one out of 37)
* Incomes under $200,000: 0.88%.
Businesses with the following deductions typically draw extra IRS attention:
* Claim 100% business use of a vehicle
* Large business meals, travel and entertainment deducted on Schedule C
* Deductions or write-offs uncharacteristically high for the type of business recorded
* Hobby expenses written off as business expenses
* Rental real estate losses deducted (especially by taxpayers who claim to be real estate professionals)
* Businesses that typically involve a lot of cash receipts
* Unreported foreign bank accounts involved
* Higher-than-average deductions where deductions are disproportionately large compared with reported income
Of course, whether or not you have deductions that could be characterized as one or more of the examples above, you should not be uncomfortable writing them off if they are valid and proper documentation exists. If you have any concerns over whether the characterization and/or amount of an expense is deductible, do not hesitate to reach out to your BRC business advisor.
Failure to Receive Actual Notice May Not be a Defense Against Penalties and Interest Accruing for Responsible Party Assessments Associated With Unpaid Employment Taxes
By Amanda Patty, CPA, Consultant
When an entity applies for a federal employer identification number, commonly referred to as FEIN or EIN, a "Responsible Party" is named on the application and that entity's EIN or that person's SSN or ITIN is provided. According to the Instructions for Form SS-4, Application for Employer Identification Number, for entities that do not have shares or interests traded on a public exchange or registered with the SEC, a "responsible party" is the person or entity that has control, management, or direction over, directly or indirectly, the entity and the disposition of its funds and assets. The mere ability to fund, or receive property from, an entity is not sufficient without authority to control, manage or direct the entity. (Note: While it is possible to have multiple responsible parties in an entity, the IRS requires and allows only one responsible arty to be named per entity.) The IRS must be notified of any changes to the responsible party by February 28, 2014.
How to Notify the IRS of Changes to the Responsible Party:
In May 2013, the IRS issued final regulations requiring any person assigned an EIN to provide updated responsible party information to them. Thereafter, the IRS released Form 8822-B, Change of Address or Responsible Party - Business to allow taxpayers to comply with these regulations.
Beginning January 1, 2014, if the responsible party for an entity has changed from the one reported by the entity on its Form SS-4 that has not been reported to the IRS, the entity must file a Form 8822-B to notify the IRS of this change before March 1, 2014. This form requires the name and SSN, ITIN, or EIN of the old responsible party and the new responsible party. (Note: The responsible party does not have to be the same person who signs a business's tax return. Further, signature of a business tax return, whether income, employment or other, is not sufficient notification of a change in responsible party.) Generally, the form must be filed within 60 days of a change in the identity of the responsible party or the responsible party's identifying information.
Why This Notification is Important:
Failure to notify the IRS of the responsible party change will not result in penalties for the entity. However, if an entity fails to notify the IRS of the change in responsible party by providing the name and current mailing address of the current responsible party and that party does not receive actual notice of a deficiency or demand for tax, failure to receive actual notice will not be a defense against penalties and interest accruing against the responsible party.
Recommendation to All Businesses:
Businesses should review their originally filed Form SS-4 to verify that the responsible party listed is, in fact, the current responsible party. Any discrepancies should be cleared up by filing Form 8822-B with the IRS not later than February 28, 2014. (Note: If there have been multiple changes only the name of the responsible party of which the IRS is aware and the current responsible party need to be reported.) Going forward, any changes in responsible party should be reported to the IRS within 60 days of the change on Form 8822-B.