The Internal Revenue Service and the Treasury Department have proposed new rules for withholding and reporting on gambling winnings from horseracing, dog races and jai alai pari-mutuel betting, and finalized regulations for reporting on bingo, keno and slot machine winnings.
The proposed regulations on pari-mutuel betting affect both payers and payees of gambling winnings subject to withholding under Section 3402(q) of the Tax Code. The 31-page document, entitled “Withholding on Payments of Certain Gambling Winnings,” resulted largely from the efforts of the National Thoroughbred Racing Association, accomplishing goals the NTRA initiated over two years ago, according to the association. The NTRA said it met with officials from the IRS and the Treasury Department. Horseplayers also visited Washington to lobby regulators. The effort also included grass roots campaigns and direct contact involving thousands of members of the horseracing industry, including bettors, along with involvement by members of Congress, governors and other elected officials.
Read Article: http://www.accountingtoday.com/news/irs-proposes-and-issues-new-rules-for-gambling-winnings
The IRS announced on Thursday that it has launched an online tool that allows individuals to check their tax account balances online, including tax due, penalties, and interest, after they complete an online registration process called Secure Access. To register for Secure Access the first time, taxpayers must have an email address, a text-enabled cellphone in the taxpayer’s name, and specific account information for the taxpayer, such as credit card accounts and loan account numbers.
Read Article: http://www.journalofaccountancy.com/news/2016/dec/tax-tool-to-check-irs-accounting-information-201615621.html#sthash.iU3LYbrX.dpuf
Given the rise of tax-related identity theft and phishing attempts that can result in infiltrators taking over accounting firm employees’ credentials and gaining access to critical and confidential data, a password is no longer enough to protect the private information of accounting firm clients.
Yet only a small number of accounting and tax software providers are implementing a security standard known as multi-factor authentication to protect professional users and their clients from the mounting threat of cyber-attacks.
Read Article: http://www.accountingtoday.com/opinion/multi-factor-authentication-the-new-security-standard-for-accounting-firms
Tax practitioners never really “start fresh” as a new calendar year rolls around. For 2017, carryover from 2016 not only includes the usual reporting and compliance issues related to the 2016 tax year just ending, but also those tax changes and issues begun in 2016 that are by no means finished at year’s end. Our column this month focuses on identifying these latter changes that carry over into 2017. We have chosen a “Top 10” format for presentation for our 2016 picks, aware of the dangers of missing one or debatably prioritizing one over another.
Debt versus equity
Final debt-equity Code Section 385 regulations issued in October not only make our Top 10 list because of the counterpoint they represent against the scope of the considerably more aggressive proposed version released last May. Although these final regulations represent substantial modifications from proposed regulations that would have impacted many more transactions, they remain controversial in their broad potential for debt/equity reclassification. These final regulations may get another look under the new administration, especially with Republican tax reform proposals that would limit business interest deductions.
Read Article: http://www.accountingtoday.com/opinion/tax-strategy-a-top-10-list-of-2016-developments-ready-for-2017
"The 12 Whys of Audit
Watch Slideshow: http://www.accountingtoday.com/list/the-12-whys-of-audit#slide-1
Winging it won't work. Keeping books up-to-date and planning ahead for tax filings is essential for good company growth.
An understaffed accounting department caused big trouble for the city of Spokane, Washington. During an audit of the city’s 2014 taxes, several errors surfaced, including revenue miscalculation, an overstatement of general fund expenses and inaccurate reports of debt changes.
While many of these mistakes were simple spreadsheet flubs -- a matter of figures placed in the wrong spots in the city’s financial statement -- the result was a multimillion-dollar miscalculation. Fortunately, the state auditor’s office identified these slips in time, but the lesson was clear.
Spokane now has a fully staffed accounting department and internal procedures to prevent future disasters. A large-scale issue like this should be a warning to small businesses: Avoid the kinds of errors that carry implications for your company’s reputation and bottom line by making a year-end accounting checklist your new best friend.
What to put on your year-end accounting to-do list
Here’s why the “winging it” approach to tax preparation doesn’t suit new companies: Not only does it threaten a potentially harmful financial fallout, it also damages company morale and paints you as disorganized.
Not having up-to-date books or a plan to file taxes -- correctly and on time -- may hinder growth. Plus, if your company reports payroll taxes or contractor 1099s, you may face costly penalties for not meeting requirements. That’s why establishing solid year-end procedures is so important.
And trust me: The earlier you do this, the better. It’s much easier to install an annual plan while the company is young and the tax requirements are relatively simple because filings get more complex as businesses grow.
No matter what industry you are in, including these items in your end-of-the-year rundown keeps your books in order and a CEO’s mind at ease:
1. Keep internal operations on point.
Now is a great time to double-check the internal controls you already have in place, and -- if necessary -- create fail-safe procedures. Some good reasons exist for creating and sticking to internal control operations, such as maintenance of accurate financial records, fraud prevention and early embezzlement detection.
The Association of Certified Fraud Examiners found in 2014 that internal deception results in businesses losing a median sum of $145,000 annually. Even worse, 22 percent of those cases posted revenue reductions of at least $1 million.
So, look honestly at your business. Does your plan contain holes that make you susceptible to errors? Ensuring that your procedures are in place and working smoothly can help you maintain a solid year-end close as your company grows.
2. Keep payroll compliance top of mind.
Get employees their W-2 forms no later than January 31, and include accrued bonuses or special gifts. This not only calms impatient workers, it also prevents major penalties. Don’t risk being charged with a federal violation, which can happen if the IRS proves you intentionally avoided filing to pay.
3. Collect accounts receivable.
Consider this: CB Insights discovered that up to 29 percent of startup failures owe to cash crises. Before the year is up, aim to close out all outstanding receivables.
That means collecting on those unpaid invoices and reissuing or voiding checks as needed. A strong push to collect as much as possible and clean up reconciliation issues will help you maintain better control over your company’s cash flow. Expediting payments -- before taxes are due -- will help.
Related: One Exec on Escaping Accounts Payable Hell
4. Mind the GAAP (generally accepted accounting principles).
Clean books are essential to satisfying both investors and acquiring companies. If your company’s financials are not already in line with accounting principles, they need to get there -- now.
Not sure whether you are running GAAP-compliant books? Speak with a professional as early as possible. This is another area that, if monitored, can save valuable time and money.
5. Send out 1099s.
Employees will claim income regardless of whether you provide them 1099s. You can save yourself some trouble by collecting W-9s along the way and sending out 1099s early. It’s much easier to take care of things early than to scramble at year-end.
Failure to send these documents out results in a $250 fine, so don’t delay: 1099s must go to recipients on or before January 31 and to the IRS on or before February 28 (or March 31 if you file electronically).
6. Plan for income tax.
Now is the time to identify tax needs and engage with a tax pro in order to minimize your payments and capture potential savings. To avoid nasty surprises and save your company serious money, invest time now.
The end of the tax year is still a little way off, and, yes, your plate is full. But you should not put these important tasks aside for later. You don’t want to be among the estimated 40 percent of small businesses that rack up $845 per year in penalties.
7. Ensure you have the green to go.
Twenty-nine percent of respondents in a CB Insights survey reported “running out of cash” as the second biggest reason for startup failure. Don’t get caught in January wondering if you have the money set aside for that first-quarter sales hire you wanted to make or the purchase of that new piece of equipment you’ve been eyeing since the summer.
Get with your stakeholders and compile a budget for the year. Involve investors and anybody else to make sure all your fiscal ducks are in a row.
8. Stop and smell the roses.
The sense of urgency that fuels your end-of-the-year push shouldn’t preclude you from looking back at the work you’ve done. Early-stage companies, especially, have much to do -- including filing their taxes -- and little time to do it.
Review the year’s performance and stack the results up against intended goals and milestones. Look at your figures as a barometer upon which to judge the coming year’s objectives.
For example, Google’s Objectives and Key Results method prioritizes the establishment of goals, making these benchmarks measurable, public and lofty, yet attainable. Making financial goals visual and tangible at year’s end can be a trusty guide for where you want to guide your business’s books during the ensuing 12 months.
All emerging companies want to grow, but too many don’t establish the procedures necessary to make growth happen. If you take action before the end of the year, you can tick these concerns off your checklist and be prepared when taxes come due.
Related: Time to Send out 1099s: What to Know
This kind of planning and organization will prevent compliance issues from coming back to haunt you. It will benefit your employees -- and your bottom line.
Read Article: https://www.entrepreneur.com/article/286807
Born: 1445 in Sansepulcro, Tuscany, Italy
Died: June 19, 1517, locatino unknown
Famous For: The Father of Modern Accounting
Luca Pacioli was an Italian accountant and mathematician. He developed the field of accounting, and he is sometimes referred to as its father. He also collaborated with Leonardo da Vinci, teaching him mathematics, and may have worked with him on a book of chess strategy. Pacioli’s occupation was that of a Franciscan friar. He is sometimes known as Luca di Borgo in recognition of his town of birth, Borgo Sansepolcro.
Read Article: http://famous-mathematicians.org/luca-pacioli/
Business owners, be forewarned: The AccTech (accounting + technology) bots are taking over. But they’re not the towering metal giants or eerily humanoid robots of sci-fi nightmares. These bots are lines of code that grab information and communicate with humans about your business operations. They know (almost) everything before you’ve even whispered the thought, and they might want to take your bookkeeper’s job -- or maybe just work alongside her.
I had a recent conversation with Jan Haugo, CEO and vice president of the Institute of Certified Bookkeepers USA (ICBUSA), who emphasized all the ways emerging technologies will transform the role of small business bookkeeping. In particular, we discussed how machine learning and artificial intelligence will enable accountants to interact with bots the same way they would with a human co-worker.
Accounting technology brands such as Xero are already capitalizing on this trend. It’s continued its innovation by releasing AI tools that will minimize -- and ultimately eliminate -- the amount of transaction coding businesses must do. This may seem scary now (at least for a few old-school number crunchers), but as technology develops and people cozy up to the practice, bookkeeping bots will continue their industry domination.
Read Entire Article: https://www.entrepreneur.com/article/284434
In addition, they’re looking to diversify their skill sets early on in their careers to gain the experience and professional development required to have the luxury of options down the line. Younger employees are comfortable with working for several or more employers in their lifetime to cultivate diverse and well-rounded skill sets, making themselves more attractive to different industries and organizations.
The five steps :
There are several ways firms can proactively combat the loss of top talent in public accounting and ensure that they reflect young professionals’ values; among them:
1. Employee wellness programs. Millennials are concerned with taking care of themselves mentally, emotionally and physically. Firms that offer employee wellness programs in the form of emergency daycare, gym memberships or counseling sessions not only reduce stress and increase productivity among staff, but also show they care.
2. Positive initiatives. Millennials are motivated by meaning, in both their daily tasks and in what their firm represents. Therefore, it’s important that firms partake in unique and positive initiatives that demonstrate social corporate responsibility and other programs that address the issues that Millennials are passionate about, such as advancing and retaining women in the profession.
3. Work/life balance. There is a constant shift in work flexibility among firms, and much of that has to do with Millennials’ preferences. Better parental leave, work-from-home policies, removing limitations on paid time-off and flexible working hours are important to Millennials. More and more firms are implementing a delicate balance that gives their staff this flexibility without leaving their clients by the wayside.
4. Professional development. How much a firm invests in its employees determines how much its employees will invest their work back into the firm. Therefore, offering professional development and training is crucial. As we know, Millennials are ambitious workers who want to climb the corporate ladder quickly and earlier on in their careers. Providing them with the ability to learn, improve, and home in on an area of expertise will be beneficial for both parties.
5. Brand ambassadors. No matter the size or resources, every firm can afford to show their staff appreciation by acknowledging their work and investing in them as an essential piece of the business. This way, when employees are being recruited by clients, they’ll continue to be brand ambassadors for their firm not simply because they worked there, but because they truly valued their experience and the firm’s mission and goals. Firms will continue to maintain or even grow their client base, and some of their top talent may even return to work for them with even more experience and the aptitude to make partner.
The key to understanding and improving retention in the profession is knowing where and how to invest in top talent to make public accounting more appealing. By offering stability, a clear growth trajectory, benefits, and development of unique skill sets, firms will not only increase employee retention, but see overall return on investment in the form of client retention and brand loyalty.
Read Article: http://www.accountingtoday.com/news/5-keys-to-better-retention
Based on current tax rules, the following tips can help you save tax dollars if you act before year-end. While not all actions will apply in every taxpayer’s particular situation, you’ll likely benefit from many of them.
1. Realize losses on stock, while substantially preserving your investment position. There are several ways this can be done. For example, you can sell the original holding, then buy back the same securities at least 31 days later.
2. Postpone income until 2017 and accelerate deductions into 2016. This strategy may enable you to claim larger deductions, credits and other tax breaks for 2016 that are phased out over varying levels of adjusted gross income.
Note: In some cases, it may pay to actually accelerate income into 2016. For example, this may be the case if an individual’s marginal tax rate is much lower this year than it will be next year or if lower income in 2017 will result in a higher 2017 tax credit for an individual who plans to purchase health insurance on a health exchange and is eligible for a premium assistance credit.
3. Consider converting traditional-IRA money invested in beaten-down stocks (or mutual funds) into a Roth IRA, if you’re eligible to do so. Keep in mind, however, that such a conversion will increase your AGI for 2016.
4. Re-characterize the conversion of a traditional IRA to a Roth IRA. If you converted assets in a traditional IRA to a Roth IRA earlier in the year and the assets in the Roth IRA account declined in value, you could wind up paying a higher tax than is necessary if you leave things as is. You can back out of the transaction by re-characterizing the conversion—that is, by transferring the converted amount (plus earnings or minus losses) from the Roth IRA back to a traditional IRA via a trustee-to-trustee transfer. You can later reconvert to a Roth IRA.
Read Entire Article: http://www.accountingtoday.com/opinion/2016-year-end-tax-saving-tips-for-individuals