Tax season is fast approaching!  Time to enjoy your family time during the holidays and get ready for a busy season especially with the new health care laws.  This year will bring some changes to the WAA.  We are gearing up for our annual convention as we have changed the date to be July 26-30th in 2015.  Mark your calendars now to attend!  We also will be offering both a one day and a two day business tax update seminar in 2015.  Look for the 2015 calendar to be out in January! 

We have a new website design and with that you have your own personal login so you can manage your profile and track your seminar attendance.  When registering for seminars you will have to login with your own password.  This ensures you are signing up as a member of the WAA and receiving the member rates on seminars.  If you have forgotten to pay your dues, the website will remind you of that too!  

December 2014

Good news for ABA and ATP holders

Accredited Business Accountants/Advisors (ABA) and Accredited Tax Preparers (ATP) holders will not have to take the annual tax refresher course and pass an exam to obtain the IRS annual filing season program (AFSP) record of competition.  Additionally, you will be listed on the IRS preparer database launching in 2015.

ACAT was mentioned in July 18, 2014 Kiplinger Tax Letter and is getting national recognition.

Congratulations to all ACAT members.

Please contact me for more information if you have more questions about the program or ACAT.

Thomas M. Adler, CPA, ATA, ATP

NSA State of Wisconsin Director

The 2014 Tax Extender Bill

Matt Johnson

TaxSpeaker is pleased to announce that we will be recording a special one hour long seminar called "The 2014 Tax Extender Bill." This hour long course will be covering the 2014 Extender Bill and the new 2014 ABLE bill which between the two of them has over 50 items that originally expired at the end of 2013 but now extend to 12/31/2014, also we will be touching on the new 529 equivalent plan to use for the disabled.  The course will count for one hour of CPE and will only cost $29. We want to extend this to our affiliates as it will have the most up to date information and be a very worthwhile hour.

Below are the dates we will be rebroadcasting it (12/29/2014 will be live)

12/29/14 - 9:00-10:00

12/30/14 - 12:00-1:00

1/5/15 - 12:00-1:00

1/7/15 - 12:00-1:00

1/12/15 - 12:00-1:00

1/14/15  -12:00-1:00

1/16/15  -12:00-1:00

1/19/15  -12:00-1:00

1/21/15  -12:00-1:00

1/23/15  -12:00-1:00

1/26/15  -12:00-1:00

1/28/15  -12:00-1:00

1/30/15  -12:00-1:00 

Individual Retirement Accounts are an important way to save for retirement. If you have an IRA or may open one soon, there are some key year-end rules that you should know. Here are the top four reminders on IRAs from the IRS:

1. Know the limits.  You can contribute up to a maximum of $5,500 ($6,500 if you are age 50 or older) to a traditional or Roth IRA. If you file a joint return, you and your spouse can each contribute to an IRA even if only one of you has taxable compensation. In some cases, you may need to reduce your deduction for traditional IRA contributions. This rule applies if you or your spouse has a retirement plan at workand your income is above a certain level. You have until April 15, 2015, to make an IRA contribution for 2014.

2. Avoid excess contributions.  If you contribute more than the IRA limits for 2014, you are subject to a six percent tax on the excess amount. The tax applies each year that the excess amounts remain in your account. You can avoid the tax if you withdraw the excess amounts from your account by the due date of your 2014 tax return (including extensions).

3. Take required distributions.  If you're at least age 70½, you must take a required minimum distribution, or RMD, from your traditional IRA. You are not required to take a RMD from your Roth IRA. You normally must take your RMD by Dec. 31, 2014. That deadline is April 1, 2015, if you turned 70½ in 2014. If you have more than one traditional IRA, you figure the RMD separately for each IRA. However, you can withdraw the total amount from one or more of them. If you don't take your RMD on time you face a 50 percent excise tax on the RMD amount you failed to take out.

4. Claim the saver's credit.  The formal name of the saver's credit is the retirement savings contributions credit. You may qualify for this credit if you contribute to an IRA or retirement plan. The saver's credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim. 

The law provides that if a participant's account balance in a plan includes both pretax and after-tax amounts, then distributions from the account generally are considered to include a pro rata share of both pretax and after-tax amounts.  For example, if your account balance is $100,000, and consists of $80,000 in pretax amounts and $20,000 in after-tax amounts, and you request a distribution of $50,000, your distribution would consist of $40,000 of pretax amounts and $10,000 of after-tax amounts.   

Prior to the issuance of Notice 2014-54, the IRS treated disbursements from a retirement plan that were rolled over to multiple destinations as separate distributions to each destination, with each distribution treated as containing a pro rata portion of the pretax and after-tax amounts.  Notice 2014-54, which was issued September 18, 2014, provides that all disbursements from a retirement plan scheduled to be made at the same time are treated as a single distribution even if they are sent to multiple destinations. 

As a result of this notice, taxpayers with pretax and after-tax amounts in their plan, for example, can transfer through direct rollovers the pretax portion of the distribution (including earnings on after-tax amounts) to a traditional IRA and the after-tax portion of the distribution to a Roth IRA.  (Previous interpretations allowed accomplishing this result through 60-day rollovers but not direct rollovers.)  The guidance provided in Notice 2014-54 applies only to distributions from qualified plans described in section 401(a) of the Code (such as profit-sharing and 401(k) plans), section 403(b) plans and section 457(b) governmental plans.  The guidance in Notice 2014-54 is generally effective January 1, 2015; however, transitional rules included in the guidance permit taxpayers to utilize the new rules provided in the guidance prior to the effective date. 

The guidance in Notice 2014-54 does not apply to distributions from IRAs.  

The Service has received a number of questions following the issuance of Notice 2014-54.  The following FAQs are provided to assist taxpayers in applying the notice.

Can I roll over just the after-tax amounts in my account to a Roth IRA and leave the remaining amounts in the plan (i.e., take a partial distribution of just the after-tax amounts)?

No.  The guidance provided in Notice 2014-54 does not alter the requirement that each distribution from a plan must include a proportional share of the pretax and after-tax amounts in the account.  Accordingly, any partial distribution from the plan must include some of the pretax amounts you have in your account -- you cannot take a distribution of only the after-tax amounts and leave the pretax amounts in the plan.  In order to roll over all of your after-tax contributions to a Roth IRA, you could take a distribution of the full amount (all pretax and after-tax amounts) in your account, roll over all the pretax amounts in a direct rollover to a traditional IRA or another eligible retirement plan, and roll over all the after-tax amounts in a direct rollover to a Roth IRA.  

I want to roll over my after-tax contributions to a Roth IRA and roll over earnings on my after-tax contributions to a traditional IRA. Can I do that?

Yes.  Earnings associated with after-tax contributions are pretax amounts in your account.  Thus, after-tax contributions can be rolled over to a Roth IRA without also including earnings.  Under the guidance, all pretax amounts in a distribution may be rolled over to a traditional IRA and, in that case, will not be included in income until distributed from the IRA.