Access Bernard Robinson & Company's 2015-2016 Tax Planning Guide here!
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Everyone at Bernard Robinson & Company would like to wish you a joyous and prosperous New Year!
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Repair & Maintenance Safe Harbor Changes
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 By Rhonda Skiles, CPA, Partner
Until recently, the repair and maintenance regulations allowed business taxpayers with no audited financial statements a $500 expensing threshold for amounts paid for property used in a trade or business and amounts paid for materials, supplies and other items. In November 2015, the IRS issued Notice 2015-82, which announced an increase in the de minimis safe harbor limit to $2,500. (Please note that the threshold for business taxpayers with audited financial statements remains at $5,000.) In making the decision to increase this threshold, the IRS considered input from small businesses and tax professionals. The IRS believes that the higher threshold will reduce the administrative burden of complying with the final repair and maintenance regulations that were issued in September 2013.
The higher $2,500 threshold applies to expenditures made on or after January 1, 2016. A business taxpayer may follow its book capitalization policy if there is a written accounting policy in place at the beginning of the taxable year and the policy includes a specified dollar amount that does not exceed a per invoice or per item cost. Additionally, taxpayers may use the de minimis safe harbor election to expense amounts paid for materials, supplies and other items with an economic useful life of 12 months or less. If elected, the safe harbor threshold must be applied to all amounts expensed under the book policies.
Finally, the IRS stated that if a taxpayer without audited financial statements used a threshold between $500 and $2,500 in tax years beginning after December 31, 2011, their agents will not pursue the issue if the taxpayer followed a written book policy. Please consult your tax advisor to learn more.
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| Top 3 Ways to Prepare for an Audit |
By Courtney Coker, CPA, Senior Manager
As we approach 2016 and you are looking ahead to your upcoming audit, here are some tips to help you prepare. The following three items are the most crucial steps your organization can take to ensure the audit is completed as efficiently as possible:
1) SCHEDULE A PLANNING MEETING WITH YOUR AUDITOR PRIOR TO YEAR END Discuss expectations for the upcoming audit, changes from the prior year, and any significant contracts or transactions that occurred during the year. Many significant transactions can be structured to have a positive effect for both books as well as tax. Talk to your CPA to find out all your options.
2) CHOOSE AN APPROPRIATE TIMETABLE FOR THE AUDIT Prior to the start of the audit, ensure that your books are closed. Post all year end adjusting entries, including depreciation and all significant estimates such as the allowance for uncollectible accounts receivable or obsolete inventory. Schedule the audit when employees can be available for questions, so the audit does not overwhelm your staff.
3) COMPLETE ALL REQUESTED INFORMATION PRIOR TO FIELDWORK Mitigate any unexpected surprises by providing all items requested by the auditor prior to the auditor arriving on site. Be aware that certain things can cause significant delays in issuing the final audited financial statements, including failure of debt covenant calculations or additional year end entries that significantly change net income or loss.
Should you have any questions about other ways to prepare for your upcoming audit, please contact your CPA. |
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Share Your Estate Plan With These 3 People
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By Amanda Patty, JD, CPA, Consultant
Many of us know that we need to develop an estate plan. Many of us, in fact, have estate plan documents. However, many of us do not tell anyone what is in our documents. While there are many sound reasons to keep the details of such documents to oneself, I suggest at least three people know either the specific terms or the general terms of your estate plan documents. First, your current spouse or other family members should know the general terms of your documents. If spouses prepare their estate planning documents together, this is a nonissue. A conversation about the terms of all of the documents should be as detailed as possible. Be sure to discuss who you have named as attorneys-in-fact, executors, and other legal roles. Second, your current financial advisor should know the general terms of your will and financial power of attorney. Ideally, you consulted your financial advisor before finalizing your estate plan. Once the plan is finalized, circle back with your financial advisor. Third, your current tax planning and return professional should know specifics of your estate plan as they relate to trusts created, gifts being made now and in the future, and beneficiaries. As with your financial advisor, your tax planning professional's opinion should be sought before signing any estate plan. The tax planning and return professional can assist you in determining the value of your estate, the types of assets, and the best options for favorable tax treatment. To ensure that your wishes are carried out as you intended, routinely discuss, and update as necessary, your estate plan.
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By Casey Cox, CPA, IT Support Specialist
Identity theft has become a fact of life in the current information technology age. According to Javelin Strategy & Research, $16 billion was stolen in 2014 alone, affecting 12.7 million people. Businesses face a growing dependence on electronic storage of sensitive information, making targeted cyber attacks more frequent and more severe for victims. These breaches can affect those that rely on businesses to secure their personal information. The most prevalent data theft in recent years was the Target Corporation cyber attack, which affected an estimated 40 million customers.
Did you know that there are a few simple and free things you can do to mitigate your risk of identity theft? First, you can place a temporary freeze on your credit for free in most states, including North Carolina. Simply visit each of the three credit bureaus' websites and fill out the online form. When applying for credit, you can proactively lift the freeze as necessary. For more information visit http://www.ncdoj.gov/freefreeze.
Be sure to check your credit report at least yearly for suspicious activity. Reports are available at http://www.annualcreditreport.com, and federal law requires that each of the three credit bureaus furnish a free report once a year. You can further maximize your fraud detection by requesting only one credit bureau report every four months, allowing you to review account activity three times a year.
Finally, track your spending using personal finance manager software. Services such as Mint.com, PersonalCapital.com, or Learnvest.com allow you to link all of your accounts (bank, credit card, retirement, investments) and access them in one secure place. You can easily track all of your spending/activity on a regular basis without having to look at paper statements or visit multiple websites. This will give you the ability to detect fraudulent transactions more quickly and easily. Although most of these services are free, be sure to read the sites' privacy policies to determine how they intend to use your personal information.
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Bernard Robinson & Company | (336) 294-4494 | [email protected] |
1501 Highwoods Blvd, Ste 300
Greensboro, NC 27410 |
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BRC Strategy is designed to provide information of a general nature and is not intended as a substitute for professional consultation and advice. The opinions and interpretations expressed should not be construed or used as legal or tax advice, written or otherwise, and cannot be used for the purpose of avoiding any penalties that may be imposed under federal, state or local law.
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