<![CDATA[MBAF - Accounting Services Advisories]]> <![CDATA[Accounting Services Advisory - IRS Raises Standard Mileage Rate for Businesses by One Cent for 2013]]>
Phillip S. Sroka
Ira M. Rubenstein

The IRS on November 21 announced that the optional standard mileage rate used to calculate the deductible costs of operating an automobile for business purposes will increase from 55.5 cents per mile to 56.5 cents per mile beginning January 1, 2013.

The rate for medical and moving purposes also will increase by one cent in 2013, while the rate for charitable organization purposes will be unchanged.

As of January 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56.5 cents per mile for business miles driven
  • 24 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The IRS standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

If you would like additional information about the IRS standard mileage rates, do not hesitate to contact our Tax and Accounting specialists or call us at 1-800-239-1474.

]]> <![CDATA[Accounting Services Advisory - AICPA Readying GAAP-Alternative Statement System for Smaller Enterprises]]>
Phillip Sroka
Steven Morrison

The American Institute of Certified Public Accountants (AICPA) is preparing a Financial Reporting Framework (FRF) for privately held small and medium-sized enterprises to use in their preparation of financial statements, and plans to issue it during the first half of 2013.

In a Fact Sheet it published on June 4, the AICPA said the new Framework "will be a less complicated and a less costly system of accounting for SMEs (small and medium-sized enterprises) that do not need U.S. GAAP financial statements."

The AICPA expects the Framework will be used by many privately held businesses that need to prepare financial statements for banks and for other external and internal users of those statements.

The AICPA said that the Framework will draw upon a blend of accrual income tax methods and other traditional methods of accounting for preparation of statements, in a consistent and reliable manner that has been developed under professional scrutiny.

A working group of AICPA members and staff are preparing the Framework as part of the AICPA's Other Comprehensive Basis of Accounting (OCBOA) Project.

The AICPA noted that it has no authority to require any entities to use the Framework.

Therefore, the Framework will have no effective date and an owner-manager can decide on using it once it is released. The AICPA said that an owner-manager should make that decision in conjunction with those who might use the entity's financial statement.

The AICPA expects that the Framework will be used by entities in every industry group and by unincorporated and incorporated entities. It is not intended for use by non-profit organizations, but they are not prohibited from using it.

If you would like additional information on the AICPA's proposed Financial Reporting Framework for small and mid-sized entities, do not hesitate to contact our Tax and Accounting specialists or call us at 1-800-239-1474.

]]> <![CDATA[Accounting Services Advisory - New York Employers Have February 1 Deadline on Annual Pay Notices]]>
Sandra Eisele

All non-government employers in New York State have until February 1, 2012 to provide all of their employees annual pay notices, with information that includes their annual rate of pay and the basis for determining that pay rate.

Employers must provide those written notices under the Wage Theft Protection Act, a state law that was passed in 2010 and is administered by the New York State Department of Labor (DOL). Also by this February 1, each employee must sign the notice and return it to the employer.

Prior to passage of that law, which took effect on April 1, 2011, employers were required to give each employee a written pay rate notice when they were hired. Now, they are required to provide each employee that notice annually between January 1 and February 1 each year.

In instances where an employee’s primary language is not English the employer must provide the notice in the employee’s primary language (if the DOL offers a translation) as well as in English.

Information in each written notice must include:

  • Rate or rates of pay, including overtime rate of pay (if it applies)
  • How the employee is paid: by the hour, shift, day, week, commission, etc.
  • Regular payday
  • Official name of the employer and any other names used for business (DBA)
  • Address and phone number of the employer's main office or principal location
  • Allowances taken as part of the minimum wage (tips, meal and lodging deductions

Employers who do not provide required notices may have to pay damages of up to $50 per week, per employee, unless they paid employees all required wages. Damages are capped at $2,500 per employee in civil lawsuits filed by workers.

The New York State DOL Web site has copies of the notices for different types of employees such as salaried and hourly.

That Web site has a fact sheet and a list of frequently asked questions on the Wage Theft Prevention Act.

If you would like additional information on the pay notice requirements for New York State employers, do not hesitate to contact our Accounting Services specialists or call us at 1-800-239-1474

]]> <![CDATA[Accounting Services Advisory - FASB Issues Accounting Standards Update on Repurchase Agreements]]>
Yvette Garcia
Steven Morrison

The Financial Accounting Standards Board (FASB) on April 29 issued an Accounting Standards Update (ASU) that indicates it is intended to improve financial reporting of repurchase agreements, also known as "repos," and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity.

In a major change, the ASU provides a new determination of when an entity may or may not recognize such agreements as sales. Typically, in a repo transaction, an entity will transfer financial assets to a counterparty in exchange for cash with an agreement for that counterparty to return the same or equivalent financial assets for a fixed price in the future.

In a news release the FASB noted that under Generally Accepted Accounting Principles the determination of when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements has been based, in part, on whether the entity has maintained effective control over the transferred financial assets.

The new ASU removes from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets, as well as the collateral maintenance implementation guidance related to that criterion.

The amendments in the ASU are effective for the first interim or annual period beginning on or after December 15, 2011, and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted.

If you would like additional information on the FASB’s Accounting Standards Update on repurchase agreements, do not hesitate to contact us at 1-800-239-1474.

]]> <![CDATA[Accounting Services Advisory - Pull the Plug on Employee Theft]]> For years, college students with no independent income have been targeted by credit card companies. In many cases, students rack up thousands of dollars of debt that parents wind up paying, along with expensive interest charges. Fortunately, some of these risks have been alleviated due to a law that went into effect in 2010. Click "Full Article" for information about the law, along with tips on how to help your student manage credit responsibly.

Click here to read full article.

If you have any questions on these matters and wish to speak to an advisor, please contact us at 1-800-239-1474.

]]> <![CDATA[Accounting Services Advisory - New Standards for Compilation and Review of Financial Statements]]>
Raul Incera

Businesses should be aware that beginning with financial statements for periods ending on or after December 15, 2010, accounting firms and their clients will be required to make significant changes in the compilation and review procedures for these statements.

The changes are contained in Statement on Standards for Accounting and Review Services No. 19 (SSARS 19) on Compilation and Review Engagements. The American Institute of Certified Public Accountants' (AICPA) Accounting and Review Service Committee (ARSC) issued this statement in December 2009.

Accountants will be permitted, but not required, to disclose the reasons for an independence impairment in a compilation report.

For more than 30 years accountants have been required to disclose in the compilation report if they were not independent, but had been prohibited from disclosing the reasons. Impairment can occur when an accountant assists a client in preparing payroll reports, maintaining the general ledger and providing other services in preparing financial statements or has an ownership interest or has certain relationships with the entity.

In its summary of SSARS 19, the ARSC said it believes this disclosure will provide additional transparency that is being sought by many users of compiled financial statements.

The statement includes a requirement that the accountant document the understanding with management through a written communication, an engagement letter, regarding the services to be provided.

There also are numerous revisions to the accountant's report that accompanies compiled and reviewed financial statements, to make the reports clearer as to management's responsibilities and the accountant's responsibility.

The impact of the standard on review engagements is expanded guidance with respect to analytical procedures and the requirement to document management's responses to inquires. This may require addtional time in how accountants plan the review engagements of clients by tailoring the procedures to the specific client and industry.

If you would like additional information on the pending new requirements for the compilation and review of financial statements, do not hesitate to contact us at (305) 373-5500.
]]> <![CDATA[Accounting Services Advisory - Florida Businesses Face Deadline to File Annual Report to State]]>
Ira Silver

To maintain "active status," each Florida business must file an Annual Report with the Florida Department of State. Failure to file an Annual Report will result in the administrative dissolution or revocation of the business entity on the Department of State's records. A late fee of $400 may be imposed if the annual report filing is not submitted on or before May 1.

Pre-printed Annual Report forms are not available to be submitted by mail. Thus, all Annual Reports must be filed electronically to the Florida Department of State, Division of Corporations Web site at http://www.sunbiz.org/. Filing can be done by clicking the "File the 2010 Annual Report" box and following the step-by-step instructions.

Annual Report filing fees for 2010 are:

  • $150.00 for a Profit Corporation
  • $61.25 for a Not-for-Profit Corporation
  • $138.75 for a Limited Liability Company
  • $500.00 for a Limited Partnership or Limited Liability Partnership

Payment can be made on-line by credit card, prepaid account or check.

If you have additional questions about the Annual Report for Florida businesses, please do not hesitate to contact us at (305) 373-5500 or (407) 237-3600.

]]> <![CDATA[Accounting Services Advisory - Federal Minimum Wage Increases July 24, 2009]]>
Phillip Sroka

Since January 1, 2009 Florida’s minimum wage has been $7.21 per hour. In deciding whether the federal or state minimum wage applies, federal law directs that businesses must pay the higher of the two. The Florida minimum wage will prevail over the federal rate until such time as the federal minimum wage becomes higher than the state rate. The federal minimum wage will increase to $7.25 on July 24, 2009. On this date, Florida employers must increase the minimum wage from $7.21 to $7.25.

Employers must pay their employees the hourly state minimum wage for all hours worked in Florida. The definitions of “employer,” “employee” and “wage” for state purposes are the same as those established under the federal Fair Labor Standards Act (FLSA). Employers of “tipped employees” who meet eligibility requirements for the tip credit under the FLSA, may count tips actually received as wages under the FLSA. However, the employer must pay “tipped employees” a direct wage. The direct wage is calculated as equal to the minimum wage ($7.21) minus the 2003 tip credit ($3.02), or a direct hourly wage of $4.19 as of January 1, 2009.

Employees who are not paid the minimum wage may bring a civil action against the employer or any person violating Florida’s minimum wage law. The state attorney general may also bring an enforcement action to enforce the minimum wage.

FLSA information and compliance assistance can be found at:
http://www.dol.gov/dol/compliance/comp-flsa.htm.

If you would like more information, do not hesitate to contact us at (305) 373-5500.

]]> <![CDATA[Accounting Services Advisory - IRS Releases New Withholding Tables]]>
Phillip Sroka

The IRS recently released withholding tables that reflect a new tax credit, called the Making Work Pay Credit, created by the stimulus package.

The Making Work Pay Credit was created, by the American Recovery and Reinvestments Act, which President Obama signed on February 17th. The credit equals 6.2% of a taxpayer's earned income up to a total credit of $400 for individuals and $800 for joint filers. It is retroactive to the beginning of 2009 and is set to expire after 2010. The credit begins phasing out at a rate of 2% of modified adjusted gross income above $75,000 for individuals and $150,000 for joint filers.

The Internal Revenue Service (IRS) has asked employers to use the new withholding tables to adjust workers' take home pay to account for the new credit as soon as possible but no later than April 1, 2009. The credit will then be spread over eligible taxpayers' paychecks for the rest of the year.

The IRS emphasizes that employees do not have to fill out a new W-4 withholding form to have the making work pay credit reflected in their take home pay; employers should automatically adjust their withholding, base on the new tables.

The new tables should be mailed to employers and can also be downloaded from the IRS at:
http://www.irs.gov/pub/irs-pdf/n1036.pdf

If we can be of assistance, please do not hesitate to contact us at 305-373-5500.

]]> <![CDATA[Accounting Services Advisory - COBRA Updates]]>
Phillip Sroka

On February 17th President Obama signed the American Recovery and Reinvestment Act of 2009 and included in it is a revamping of the COBRA (Consolidated Omnibus Budget Reconciliation Act) law for certain employees. This is the federal law that gives terminated employees and their families the right to continue group health benefits provided by group plans. This extended coverage is provided for limited periods of time under circumstances such as voluntary or involuntary job loss, reduction in hours worked, transitions between jobs, death, divorce and other life events. Many states have similar laws.

Individuals who were terminated on or after September 1, 2008, who qualified for COBRA but declined coverage, now have the right to choose to be covered - with a government paid subsidy of the insurance premium through 2009.

Employers who terminated employees between September 1, 2008 and March 1, 2009 must notify qualifying employees who declined COBRA coverage that they (and their spouse, and qualifying dependents) now have the right to choose to continue coverage.

An employer’s notice must tell eligible individuals they have 60 days to elect COBRA coverage. If they do so, under the new law, the premium subsidy ends when they:

  • Become eligible for health insurance coverage from another employer, or

  • Enroll in and are covered by Medicare.

Organizations that terminate employees on or after March 1, 2009 must notify them (and their qualifying spouse, ex-spouse, and dependents) of the right to continue coverage if they’ve been in an employer’s benefit plan. Employers must use a federal government issued model notice. However, the applicable government agencies have 30 days following the law’s February 17th enactment date to design and issue notice. Notices must be sent to eligible individuals within 60 days of the enactment date of the new law. Here’s a rundown of the other COBRA changes:

  • Starting March 1st COBRA premiums may not exceed 35 percent of the cost. The remaining premium cost must be paid by employers, who then can claim a tax credit against wage withholding and payroll taxes to cover all of the COBRA subsidy, the employer will be able to file with IRS for the remaining amount (on Form 941).

  • The Premium subsidy continues for up to nine months for eligible individuals and their qualifying family members.

  • Eligible individuals who declined to take COBRA benefits between September 1, 2008 and March 1, 2009 have a new 60 day election period during which they can choose to enroll and receive the subsidized COBRA coverage.

  • The COBRA premium subsidy continues through December 31, 2009.

  • Individuals are not eligible for COBRA subsidies in a year when their adjusted gross income (AGI) exceeds certain limits. The government recaptures part or all of the COBRA subsidy in the form of additional income tax when the qualifying individuals AGI is between $125,000 and $145,000 for single filers or $250,000 and $290,000 for joint filers. Individuals who anticipate that their income will exceed those amounts in a taxable year can waive the COBRA premium subsidy.

  • The employer can permit eligible individuals to switch their coverage option to a less expensive choice when they elect to exercise their COBRA rights. This is a change from previous COBRA provisions that allowed qualifying individuals only to continue the coverage option they had as active employees.

If we can be of assistance, please do not hesitate to contact us at 305-373-5500.

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