Congratulations to
Eric Bregman, Audit Manager
for his graduation from Leadership
Greensboro.
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After more than 12 years with Bernard Robinson & Company, L.L.P.,
Seldon Patty retired effective May 31, 2016. Seldon spent his professional career advising privately held businesses and their owners, first as an attorney, then as a CPA and a CVA. In his retirement, Seldon and his wife Dee plan to travel, play more golf, take care of a few home projects, and spend more time with their family, especially their granddaughter. We want to thank Seldon for his service and we wish Seldon and Dee the time of their lives - they've earned it!
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BRC Financial Symposiums
Presented by Bernard Robinson & Company, L.L.P.
Topics include tax updates, employment law and compliance, economic outlook for business planning, and more!
8 hours of CPE eligible
Three dates and locations for your convenience!
Winston-Salem Symposium-
October 25, 2016
Greensboro Symposium-
October 27, 2016
Raleigh Symposium-
November 3, 2016
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Tax Credit Opportunity for Individuals with Household Employees
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By Brittany Grubbs, CPA, Manager
Do you have a household employee (caretaker, housekeeper, nanny, etc.) and report the employee's income and employer taxes on Schedule H of your individual income tax return? Did you know there is a federal tax credit available if you pay for the household employee's health insurance? This can be a valuable benefit for both the employee and the employer. To qualify for the credit, you must be an eligible small employer. To be an eligible small employer, you must
- Pay for employee health coverage under a qualifying arrangement,
- Have fewer than 25 full-time equivalent employees for the tax year, and
- Pay average annual wages for the tax year of less than $52,000 per full-time equivalent employee.
In general, a qualifying arrangement requires the employer to pay a uniform percentage of at least 50% of the cost of the health insurance premiums for each employee's health coverage. That health coverage must be purchased through the Small Business Health Options Program (SHOP) Marketplace. Before purchasing coverage, contact a professional who is well versed in the Affordable Care Act.
The credit is available to an eligible small employer for two tax years. If you think you might be eligible for this credit and would like more information, please contact your tax advisor.
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The Final Overtime Rule: What Does it Mean for Your Non-Profit Organization?
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By Jennilee Richardson, CPA, Manager
Background
The Fair Labor Standards Act ("FLSA"), enacted in 1938, included overtime pay for employees working in excess of 40 hours per week, with exceptions, including a salary level test. The salary level was last adjusted in 2004 to $23,660.
In its recent Final Rule, the DOL announced the new annual salary threshold will be $47,476 beginning December 1, 2016, and will be adjusted every three years.
Are Your Employees Affected?
To be subject to the Final Rule, an employee must be covered by the FLSA through one of two types of coverage:
- Enterprise Coverage
- In general, Not for Profits ("NFPs") are not covered under FLSA unless they engage in commercial activities (e.g., operating a gift shop) that result in annual sales of $500,000 or more.
- Income generated furthering a charitable mission are not included in the $500,000 limit (e.g., contributions, membership fees, donations).
- NFPs included in the "named enterprises" listed below are covered by FLSA and subject to the Final Rule:
- Hospitals,
- Schools,
- Governmental agencies, and
- Organizations providing medical or nursing care for residents
- Individual Coverage
- NFPs may have employees who are individually covered by FLSA, even though the NFP does not meet the enterprise coverage standards.
- Employees who engage in interstate commerce or the production of goods for interstate commerce are covered by FLSA, including:
- Making or receiving out-of-state phone calls,
- Receiving/sending mail or email to/from other states, or
- Ordering/receiving goods from an out-of-state supplier.
What Can You Do?
- Identify whether enterprise coverage or individual coverage applies.
- Educate employees about the Final Rule.
- Consider implementing time tracking.
- Ensure an appropriate level of review occurs and is documented.
- Talk to legal, tax, and payroll advisers before and after December 1, 2016.
- Start now.
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Estate Planning Series, Part 9
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 By Freddy Robinson, CPA, Partner
Many people wish to make charitable gifts. The basis of an asset is among the factors to be considered when choosing property for charitable gifts. Basis is usually equal to the purchase price of the asset plus improvement costs and less accumulated depreciation, if applicable. The basis of an asset is used for computing taxable gain or loss upon sale.
Benefits of charitable gifts include deductibility for income tax purposes and reduction of the donor's estate. For both benefits, the donation must be given to organizations recognized by the Internal Revenue Service, such as states or political subdivisions, public charities, and religious organizations. Charitable gifts are generally deductible at their fair market value on transfer date, provided the property was owned for more than one year. The amount of charitable deduction may be limited due to the type of charitable entity, the property donated, the holding period for the asset, the donor's adjusted gross income, and other factors.
A common myth of gifting says to always gift the most appreciated asset available. This theory assumes using lower basis appreciated property will maximize tax savings because the gain will not be recognized. However, unless you plan to replace the donated property with personal funds, future appreciation or depreciation should also be considered, as much of the tax savings of a charitable gift can be offset or completely lost by substantial changes in value of the donated property following the charitable transfer. As well, it is rarely advisable to donate devalued property. The more advantageous decision is to sell depreciated property and donate the proceeds, allowing utilization of tax losses.
Choosing specific assets to be used for charitable gifts requires consideration of many factors and will have a substantial impact on the net income tax outcome for the donor. Please contact your tax, legal and financial advisors for assistance in determining which assets to donate to charity.
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GASB 68 - Year 2 - Easy as Pie?
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By Eric Bregman, CPA, Manager
After a year of navigating through implementation of Governmental Accounting Standards Board Statement Number 68 "Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27" ("GASB 68"), everyone can take a deep breath and relax, right? Not quite.
Although the initial implementation has been completed and reflected in each unit's financial statements, GASB 68 requires ongoing consideration in year 2 and beyond. Here are a few things to keep in mind moving forward:- During initial implementation, all financial statements contained a required restatement to net position for both governmental and business-type activities to account for beginning net pension liability and effects on net position of contributions made by the unit during the measurement period. This was a one time only restatement and will not be reflected in financial statements for the year ending June 30, 2016 and beyond.
- It is important to review and evaluate the allocation of the pension expense between funds to ensure it is representative of the unit's make up. The unit's staffing needs and head count may have changed in the past year, and that could have an impact on the allocation of pension expenses.
- Early evaluation of the impact of GASB 68 in the current year is key to ensuring the unit's year end close and associated audit go smoothly. The North Carolina Department of State Treasurer has provided a web page dedicated to GASB 68 and has made available the journal entry information and tables for the upcoming June 30, 2016 year-end. Visit https://www.nctreasurer.com/slg/lfm/audit_acct/Pages/Pension-Standards.aspx for all things GASB 68. Please note the information applicable for June 30, 2016 year-ends is the "Data Tables for June 30, 2015 Measurement Date."
- Stay in touch with your auditors to eliminate confusion and potential adjustments on the back end.
Tackling these items early will make year 2 under GASB 68 a little less painful, and should help you avoid any surprises during the audit. If you have any questions or concerns, make sure you consult auditors with experience in this area early and often.
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Bernard Robinson & Company, L.L.P. | (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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Copyright � 2015. All Rights Reserved.
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