Busy Season Stress Relief

Just a little over a week before busy season comes to a close. Everyone is tired and their stress levels are at all time highs. When stress levels are this high, productivity tends to decline. Take a quick 5 minute break and play a game of ZIP-ZAP-ZOP. What, you never heard of this instant stress reliever? Here are the rules of the game:

Everyone stands in a circle. One person quickly claps and points at another, while saying "zip." The person who received the "zip" then claps and points at another, while saying "zap." That person then claps and points to someone while saying "zop." The pattern continues, "zip, zap, zop, zip, zap, zop...."

The goal is to pass the words and energy around as quickly as possible, which is harder than it seems. Many theatre companies use this as a warm-up before going on stage, to establish teamwork and to encourage quick thinking. Don't give up! Eventually, the group will begin to go at lightning speed. (http://www.interplaytheatre.com/Games/ZipZapZop.html)

Don't have the time, no worries. When you pass someone in your office give them a quick ZAP or get a ZIP, ZAP, ZOP game going through email. I started an email game this morning with some of my colleagues who are in public accounting.

No matter how you institute the game, what you will observe are smiles, laughter, and see the stress level drop dramatically and instantly. When stress drops, productivity increases.

Hang in there.

Ohio Dominican University - VITA Program

For the 5th consecutitive year, Ohio Dominican University has partnered with the IRS to offer VITA asssistance to those in need. The VITA Program offers free tax help to low- to moderate-income (generally, $42,000 and below) people who cannot prepare their own tax returns. Certified volunteers sponsored by various organizations receive training to help prepare basic tax returns in communities across the country. The students who are operating this site have all been certified by the IRS and supervised by our accounting faculty.

The ODU VITA site information:
Starting February 28, the ODU VITA site will be open on Saturday from 10:00 to 2:00 (February 28, March 7, 14, 28 and April 4 and April 11)
Starting Wednesday March 4 we will be open from 3:00 to 6:00 (March 4, 11, 25 April 1 and April8)
The VITA site will also be open on Monday March 9 and Monday March 23 from 3:00 to 6:00.
The VITA site is operated here on our main campus, Erskine Hall Room 214.

American Recovery and Reinvestment Act of 2009 - Tax Cuts

This article was written by GBQ Partners, LLC in Columbus, Ohio.  

Last week Congress passed and yesterday President Obama signed the American Recovery and Reinvestment Tax Act of 2009.  The Act contains approximately $300 billion of net tax cuts, including the following:

Tax changes affecting individuals and families

"Making Work Pay" credit. The new law provides an individual tax credit in the amount of 6.2 percent of earned income not to exceed $400 for single returns and $800 for joint returns in 2009 and 2010. The credit is phased out at adjusted gross income (AGI) in excess of $75,000 ($150,000 for married couples filing jointly). The credit can be claimed as a reduction in the amount of income tax that is withheld from a paycheck, or through a credit on a tax return. Under the credit, workers can expect to see perhaps $13 a week less withheld from their paychecks starting around June. In 2010, the extra take-home pay will go down to around $9 per week.

Economic recovery payment. The new law provides for a one-time payment of $250 to retirees, disabled individuals and Social Security beneficiaries and SSI recipients receiving benefits from the Social Security Administration and Railroad Retirement beneficiaries, and to veterans receiving disability compensation and pension benefits from the U.S. Department of Veterans' Affairs. The one-time payment is a reduction to any allowable Making Work Pay credit.

Refundable credit for certain federal and state pensioners. The new law provides a one-time refundable tax credit of $250 in 2009 to certain government retirees who are not eligible for Social Security benefits. This one-time credit is a reduction to any allowable Making Work Pay credit.

Unemployment compensation exclusion. A provision temporarily suspends federal income tax on the first $2,400 of unemployment benefits received by a recipient in 2009.

Expanded earned income tax credit. The new law provides tax relief to families with three or more children and increases marriage penalty relief. The changes apply for 2009 and 2010.

Expanded child tax credit. A measure increases the eligibility for the refundable child tax credit in 2009 and 2010 by lowering the threshold to $3,000 (from $8,500 in 2008).

Expanded and revised higher education tax credit. The new law creates a $2,500 higher education tax credit that is available for the first four years of college. The credit is based on 100% of the first $2,000 of tuition and related expenses (including books) paid during the tax year and 25% of the next $2,000 of tuition and related expenses paid during the same tax year, subject to a phase-out for AGI in excess of $80,000 ($160,000 for married couples filing jointly). Forty percent of the credit is refundable. The new credit temporarily replaces the Hope credit.

Computers as an education expense. A provision permits computers and computer technology, including internet access, to qualify as qualified education expenses in 529 education plans for tax years beginning in 2009 and 2010.

Expanded first-time credit for first-time home buyers. Last year, Congress provided taxpayers with a refundable tax credit that was equivalent to an interest-free loan equal to 10% of the purchase price of a home (up to $75,000) by first-time home buyers. The provision applied to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit were required to repay the government any amount received under this provision over 15 years in equal installments (or earlier if the home was sold). The credit phases out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return). The new law enhances the credit by eliminating the repayment obligat ion for taxpayers that purchase homes on or after January 1, 2009 and stay in those homes for at least 36 months. It also extends the credit for purchases made through the end of November 2009, and bumps up the maximum value of the credit from $7,500 to $8,000.

Tax break for new car purchasers. The new law allows taxpayers to deduct State and Local sales taxes paid on the purchase of a new automobile, including light trucks, SUVs, motorcycles, and motor homes.  The deduction cannot exceed the portion of the sales tax attributable to the first $49,500 of the purchase price of the vehicle.  The tax break phases out starting with taxpayers earning $125,000 per year ($250,000 for joint returns). The deduction is allowed to both those who itemize their deductions as well as to nonitemizers. However, the deduction cannot be taken by a taxpayer who elects to deduct State and Local sales taxes in lieu of State and Local income taxes.

Alternative minimum tax (AMT) patch. To hold the number of taxpayers subject to the AMT at bay, the new law increases the AMT exemption amounts for 2009 to $46,700 for individuals and $70,950 for joint returns, and allows most personal tax credits against the AMT.

Energy-efficient existing homes. The new law extends the tax credits for improvements to energy-efficient existing homes through 2010. For 2009 and 2010, the amount of the tax credit is increased from 10% to 30% of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements during the tax year. The property-by-property dollar caps on the tax credit are also eliminated, and an aggregate $1,500 cap applies to all property qualifying for the credit.

Residential energy property. The new law removes the dollar limitations on certain energy credits, e.g., for qualified small wind energy property ($4,000 cap); for qualified solar water heating property ($2,000 cap); and qualified geothermal heat pumps ($2,000).

2009 estimated taxes.  For 2009, individuals will avoid estimated tax penalties if they make estimated tax payments based on 90% of their 2008 liability.  This provision is available for individuals with Adjusted Gross Income (AGI) of less than $500,000 ($250,000 if married filing separately) if the individual can certify that more than 50% of AGI is from a trade or business that employs, on average, 500 or less employees.

Tax changes affecting businesses

Extension of bonus depreciation. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write off 50% of the cost of new depreciable property acquired in 2008 for use in the United States. The new law extends this temporary benefit for qualifying property purchased and placed into service in 2009.

Extension of enhanced small business expensing (Section 179). In order to help small businesses quickly recover the cost of certain capital expenses, taxpayers may elect to write off the cost of new or used fixed assets in the year of acquisition in lieu of recovering these costs over time through depreciation. Last year, Congress temporarily increased the amount that small businesses could write off for capital expenditures incurred in 2008 to $250,000 and increased the phase-out threshold for 2008 to $800,000. The new law extends these temporary increases for capital expenditures incurred in 2009.

Expanded loss carryback of net operating losses for small businesses. Under pre-Act law, net operating losses (NOLs) may be carried back to the two years before the year that the loss arises and carried forward to each of the succeeding twenty years after the year that the loss arises. For 2008, the new law extends the maximum NOL carryback period from two years to five years for small businesses with gross receipts of $15 million or less.

Incentives to hire unemployed veterans and disconnected youth. Businesses are allowed to claim a work opportunity tax credit equal to 40% of the first $6,000 of wages paid to employees of one of nine targeted groups. The new law expands the work opportunity tax credit to include two new targeted groups: (1) unemployed veterans; and (2) disconnected youth. Individuals qualify as unemployed veterans if they were discharged or released from active duty from the Armed Forces during 2008, 2009 or 2010 and received unemployment compensation for more than four weeks during the year before being hired. Individuals qualify as disconnected youths if they are between the ages of 16 and 25 and have not been regularly employed or a ttended school in the past 6 months.  These new categories apply to individuals who are hired and begin work in 2009 or 2010.

Extension of monetization of accumulated AMT and R&D credits in lieu of bonus depreciation. The new law extends the provision contained in the Foreclosure Prevention Act of 2008 and allows AMT and loss taxpayers in 2009 to receive 20% of the value of their old AMT or research and development (R&D) credits to the extent such taxpayers invest in assets that qualify for bonus depreciation.  In order to receive these credits, taxpayers must elect not to deduct bonus depreciation.  

Delayed recognition of certain cancellation of debt income. To benefit certain businesses that buy their own debt at a discount, the new law lets the businesses recognize cancellation of debt income ("CODI") over 10 years (defer tax on CODI for the first four or five years and recognize this income ratably over the following five tax years) for specified types of business debt repurchased by the business in 2009 or 2010.

Qualified small business stock. The new law increases the exclusion for gain from the sale of certain small business stock held for more than five years from 50% to 75% for stock issued after the enactment date and before 2011.

S corp holding period. The new law temporarily shortens the holding period of assets subject to the built-in gains tax from 10 years to seven years.

Repeal of IRS's built-in loss rules. The new law provides a prospective repeal of Notice 2008-83, the controversial IRS guidance which provided that if a bank recognizes a loss from the disposition of a loan or takes a bad debt deduction under the specific charge-off or reserve methods of accounting after a change in ownership, that loss or deduction will not be treated as a built in loss attributable to the pre-acquisition period.

Long-term extension and modification of renewable energy production tax credit. The new legislation extends the placed-in-service date for wind facilities for three years (through December 31, 2012). It also extends the placed-in-service date through December 31, 2013 for certain other qualifying facilities: closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; waste-to-energy; and marine renewable facilities.

Temporary election to claim the investment tax credit in lieu of the production tax credit. Facilities that produce electricity from solar facilities are eligible to take a 30% investment tax credit in the year the facility is placed in service. Facilities that produce electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy, and marine renewable facilities are eligible for a production tax credit, payable over a ten-year period. The Act provides a temporary election to claim the investment tax credit in lieu of the production tax credit.

Business energy credit. The new law enhances the business energy credit by eliminating the cap on small wind property and repealing the basis reduction requirement for subsidized energy financing.

Tax credits for alternative fuel pumps. The new law provides an increase for 2009 and 2010 in the 30% alternative refueling property credit for businesses (capped at $30,000) to 50% (capped at $50,000).

Credit for investment in advanced energy facilities. The new law establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies.

More funding for bonds. The new law authorizes and provides fiscal relief for states facing large budget deficits by making additional funds available with which additional bonds can be issued for a variety of purposes.

If you would like more details about these or any other aspects of the new law, please do not hesitate to call your GBQ tax representative at 614.221.1120.

Networking during busy season?

February may seem like a strange month to ask an accountant to think about networking because of busy season. However, it is the absolute perfect time to begin thinking about your network because you will need to rely on them soon after April 15th.  

Whether you are contemplating a career change, needing to strengthen existing business relationships, or developing new business you need to begin laying the groundwork now to take full advantage of your time after busy season ends.  

 

Let’s start by having a discussion on the two basic structures of a network. According to a Harvard Business Review article entitled,  “How to Build a Network,” there are two basic structures of networks; clique and entrepreneurial.  A clique network is a self contained network where everyone knows everyone else.  Any new additions to the network have a sense of familiarity within the group.  These types of networks are great for building a strong cohesive self managed teams within an organization but tend to lead to group think.  Clique networks also limit the scope and depth of your network to only those areas that you are comfortable with.  Accountants knowing accountants.  

However, what if you want to extend this network into areas where their exists no familiarity then you need to create an entrepreneurial network structure (accountants knowing architects, engineers, etc). This type of network structure is not a self contained and does require much more work in creating and maintaining.  The greatest benefit of an entrepreneurial network structure is that it allows you to extend your reach of information to many different perspectives.  This extension of reach will open up new markets that would be unattainable in a clique network.   

For example, suppose you have a new product or service that you want to introduce.  Many believe that word of mouth is the best way to advertise.  If you have a clique network, you are restricted in the area of coverage you can reach verses an entrepreneurial network which is far reaching.  

Developing this entrepreneurial network can be a challenge because it will require you to extend your comfort zone, but it will have greater benefits to you in the long run.  As you are driving to and from work this busy season, think about how you are going to meet new people outside of your discipline so you can have a stronger and more powerful network when busy season ends.   

Dreams Can Come True

Dreams Can Come True

I remember calling the Accountancy Board of Ohio and hearing those magical works, “You have successfully passed the CPA exam.” After celebrating, I took the ethics exam and passed it and in the fall of 1995, I earned my CPA license. One of the first things that I did was to join the Ohio Society of CPA’s (OSCPA). For those of you who don’t know, OSCPA is a professional association dedicated to advancing the accounting profession in Ohio. The Ohio Society represents the interests of its members―whether in corporate or industry practice, public practice, government or education―and supports members in fulfilling their responsibility to serve the public interest and maintain professional competence.

My intention in when I joined the OSCPA in 1995 was to enhance my resume. Around 2000, I decided that I needed to network more within the accounting community, so I began volunteering at the OSCPA. I participated in Accounting for Kids Day, member of the local scholarship committee, and on the board of the local chapter. I remember attending the annual summit in 2003 and watching the installation of the new Chair. I sat there in the audience and said to myself, “I want to be Chair of the OSCPA.”

At that point I began developing a strategy so I could reach this lofty goal. I began volunteering for more activities and networking within the society. In 2005, I was asked to serve on the Executive Board, and in 2006, I also began serving as trustee of the Ohio CPA Foundation. In 2008, I began serving on the Steering Committee for the Centennial Campaign. Also, in 2008, I was nominated for the chair of the society. I was so excited but that excitement died a month later when I learned that I was not chosen. I did not let that discourage me and kept working hard.

In December 2008, I received notice that I was nominated again for the Chair position. I put deeper thought into my questionnaire responses. However, I convinced myself that this lofty goal was probably not going to be achieved because I “don’t look like the past chairs.” I am not a partner in an accounting firm, or a CFO of a company. I am Peter Margaritis, The Accidental Accountant, who has worked in public accounting, has worked for 3 Fortune 500 companies, who has worked full-time in higher education as an Assistant Professor of Accounting, who is currently an adjunct and has his own speaking business. I am more right brained than left brained. What I do possess is a passion for the accounting profession and those who call themselves accountants. I want to see the stereotype of the profession go away. I want our profession to give back to their communities. I want to see our profession change and adapt to that change. I want to see the profession flourish and give those who call themselves accountant’s great financial opportunities.

Yesterday, I just finished attending a webinar on International Financial Reporting Standards when a call from the OSCPA office came in. I get a lot of calls from the OSCPA office because I have a lot of friends there, so this was not uncommon. I pick up the phone and the CEO of the society is on the other line to inform me that I have been selected as the nominee for the Chair-elect position to the Executive Board of the Ohio Society of CPA’s.

Dreams do come true, especially with hard work.

The Failed Bailout Bill

The House failed to pass the $700 billion bailout bill today which sent the DJIA plummenting 777 points. The largest one day point drop in our history. Many say that if sometype of bailout bill is not passed then we will be seeing the next Great Depression. Stock market crash, job loss, businesses fail, credit dries up, bankruptcy rises, and many loose their homes. Who's fault is it? It is all of our fault, not just Wall Street. Much research has shown that for every $1.00 we make, we spend $1.22. You don't have to be an accountant to figure out that is not good math. What have we been spending the extra $.22 on? Fast Food now takes credit cards, most restaurants do, what about the wide screen TV set, or the computer system. We all need to start conserving our expenses and begin saving again to put this country back on track. It is going to hurt for a while but just think of your parents and grandparents that survived the Great Depression of 1929.

Now that I kinda got this off my chest - I will try to go back and write jokes because that seems to be my theraphy.

Hurricane Ike hits Columbus, Ohio

Hurricane Ike hits Columbus, Ohio on Sunday, September 14th and knocks out power to over 300,000 households. Do you find this a little strange especially happening the day after the Buckeyes get demolished by USC? Is this a coincidence or does Woody Hayes have that much power in heaven that he can steer a hurricane to hit Columbus so the Buckeye fans would forget about the humiliating loss and move to more on to more important things. Over a 150,000 households still don’t have power on Wednesday but there are MANY in Houston, TX who have power. If you are reading this and beginning to agree with my thought process, then you need serious help Buckeye fan.