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Manufacturing and Wholesale Distributors
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Is today's business environment presenting unique opportunities and issues for your manufacturing operation? How are you addressing the push from your customers for continuous quality improvement? Are you having difficulty finding and retaining quality employees? Add to these issues declining profit margins and strained resources due to rapid growth and you have major challenges facing you day in and day out.
At Harding, Shymanski & Company, P.S.C. we have a dedicated team ready to assist you with those unique challenges and issues facing your industry.
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Changes in Foreign Bank Account Reporting Requirements |
The Treasury Department has implemented a change in the filing requirement for taxpayers (individual and corporate) who hold over $10,000 in financial accounts in a foreign country. The FBAR (Report of Foreign Bank and Financial Accounts) is a report filed with the Secretary of the Treasury stating that the person filing has a financial interest in or signature authority over financial accounts in a foreign country with an aggregate value exceeding $10,000 at any time during the calendar year. Penalties for failing to appropriately file an FBAR report can be up to $10,000 per account in cases where noncompliance was non-willful. In cases of willful noncompliance, the penalties are much more severe, including criminal penalties of up to $250,000, 5 years in jail, or both. Due to these heavy penalties, appropriately filing the FBAR report should be a high priority for affected taxpayers.
Previously, the filing process consisted of checking the appropriate box on an individual's tax return or business tax return and then filing Form TD F 90-22.1. The deadline for filing this report for each calendar year is June 30 of the following year.
As of July 1, 2013 a new process is in place. While the deadline for filing the report has not changed, the Foreign Bank Account Reporting forms must now be electronically filed using FinCEN's BSA E-filing System. The name of the report has also changed to FinCEN 114. Taxpayers required to file the FinCEN 114 may e-file the completed form using the electronic filing system available at www.fincen.gov. If a taxpayer wishes to submit the report via a third-party preparer, such as an attorney or accountant, they must file authorization Form FinCEN 114a and designate their selected third party.
For more information related to FinCEN 114 filing, please contact Aaron Wilzbacher, CPA at 800.880.7800 ext 1322 awilzbacher@hsccpa.com or John Rittichier, CPA at 800.880.7800 ext 8484, jrittichier@hsccpa.com. |
Interest-Charge Domestic International Sales Corporations |
An interest charged domestic international sales corporation (IC-DISC) can be a powerful tax-savings opportunity for companies exporting products to foreign countries. An IC-DISC is a domestic corporation that primarily engages in foreign sales and exporting activities. Utilizing an IC-DISC requires minimal structural changes to your current business. Further, the definition of export for purposes of the benefit enables more than just direct exporters to qualify.
For qualified U.S. exporters, an IC-DISC can provide nearly 16 percent in federal tax savings. Some of the other benefits are increased liquidity for shareholders or the business, ability to leverage cost of capital, opportunities to create management incentives, and means to facilitate succession or estate planning. Click click here for more information on the advantages and benefits of an IC-DISC.
For more information, please contact Aaron Wilzbacher, CPA at 800.880.7800 ext 1322, awilzbacher@hsccpa.com or John Rittichier, CPA at 800.880.7800 ext 8484, jrittichier@hsccpa.com.
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Manufacturers Cite Health Care as Top Concern in NAM/IndustryWeek Survey |
According to the fourth quarter 2013 National Association of Manufacturers/IndustryWeek Survey, the rising cost of health care insurance was the number one issue facing manufacturers going into 2014. Seventy seven percent of the respondents to the survey stated healthcare cost was their primary concern. This issue was closely coupled with one other major concern facing manufacturers. It seemed respondents were just as troubled with the current unfavorable business environment. Seventy six percent of the participants were apprehensive about taxes, regulations, and government uncertainties heading into the New Year. With parts of the Patient Protection and Affordable Care Act taking effect beginning January 2014 and the continued deadlock in Washington, it is unlikely that either of these concerns will diminish for manufacturers in the foreseeable future.
Centering on the healthcare issue, the survey inquired how the Patient Protection and Affordable Care Act had currently affected manufacturers. Ninety six percent of manufacturers stated that their health insurance costs had increased, with an average increase of 8.76%. In addition, more than 75% of the respondents stated their insurance costs had increased at least 5%.
Moreover, according to the survey, it appeared that the accompanying concerns over taxes, regulations, and government uncertainties have placed a roadblock in the manufacturing industry's efforts to invest and grow. Thirty two percent of manufacturers that responded to the survey said they reduced their outlook for 2014 and almost 47% of the survey participants stated that there will be no change made to their employment, business investment strategy, or outlook for 2014.
In addition to noting the primary issues facing Manufacturers, the survey asked the participants what policymakers can do in 2014 to support a pro-growth manufacturing agenda. Just over 86% of respondents stated that they were looking for a long-term federal budget deal that tackled the deficit/debt issues of the nation. Other priorities for the manufacturing sector were; slowing the growth of entitlement spending, reducing the regulatory burden on manufacturers and other businesses, controlling rising health care costs, and passing comprehensive tax reform.
The overall 2014 outlook for manufacturers appeared to be cautious optimism, where there has been an equal mix of positive and negative sentiment. It seems to be that the downside risks such as possible government shutdowns, uncertainties surrounding the Patient Protection and Affordable Care Act, slow growth in overseas markets, and issues over monetary policy around the globe have hindered the growth of the manufacturing industry and will continue to do so for the foreseeable future.
For additional information, please contact Scott Olinger, CPA,CPIM, at 800.880.7800 ext 8466 or at solinger@hsccpa.com.
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Manufacturing and Wholesale Distributors - Crucial Steps to Prevent Fraud |
As companies around the globe continue to battle a challenging economy, their fight against fraud is a critical part of any winning strategy. A typical organization loses an estimated 5% of its revenue to fraud annually, resulting in total losses of more than $3.5 trillion, according to examiners participating in the Association of Certified Fraud Examiners' survey of worldwide fraud, 2012 Report to the Nations on Occupational Fraud and Abuse.
The manufacturing industry certainly isn't immune: 10.1% of fraud cases occurred in manufacturing companies, accounting for a median loss of $200,000. Unfortunately, your employees are a natural culprit because they have the most immediate access to funds and materials.
Here are a few steps you can take to reduce the chances of fraud at your company:
- Hire the right employees.
- Separate accounting duties and/or implement mandatory job rotations.
- Have bank statements mailed to your home or post office box.
- Arrange for surprise examinations.
- Create an ethical work environment and a no-tolerance culture.
- Implement a code of conduct.
- Insist that all employees take allotted vacation time.
- Create formal management review.
- Implement an anonymous employee hotline.
- Consult with an expert - Our team of specialists can assist in identifying red flags commonly associated with organizational fraud and help develop internal controls to detect and prevent future frauds.
Please contact Amy Mings, CVA at (800) 880-7800 ext. 1350 or amings@hsccpa.com for more information.
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Disclaimer
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The information contained in this email is for general guidance on matters of interest only. The publication does not, and is not intended to provide legal, tax or accounting advice.
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Harding, Shymanski & Company, P.S.C. provides accounting, tax, and consulting services to our clients from offices in Evansville, Indiana, and Louisville, Kentucky.
Call us today! 800.880.7800
www.hsccpa.com
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