the WISCONSIN ACCOUNTANT
a newsletter of the Wisconsin Association of Accountants
 

October 2014

Executive Corner

 

 

Fall is here and winter is fast approaching, so time now to get your CPE credits in for the upcoming tax season!  We have both Gear Up and Jennings seminars available on individual tax.  Come to Brookfield WI on November 3rd and 4th for the first of our Gear Up seminars or attend in Hudson on December 8th and 9th.  In the WI Dells you will find Jennings 1040 tax on December 1st and 2nd.

 

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!

 

Make plans to register now for our last three seminars  - simply go to www.waainc.org 


 

 

Byron L Dopkins, EA, ABA                                

WAA Executive Director

 


 Byron Dopkins

Executive Corner
 

Dear WAA Members,

 

I don't know about you but I am happy that October marks the end of the 2013 tax filing season.  Now we can nicely concentrate on preparing for the 2014 tax season.  I hope you all are able to find personal time for yourself and your families between now and the end of the year.  Personally I plan to do some hunting.  


 

As far as the WAA, we have plenty of work to do before the 2014 year end. We are actively looking for a replacement of our executive director who is stepping down in June and we are working toward removal of the "or compilation" wording added by the Wisconsin legislature last spring that could potentially harm your right to practice as accountants in the state of Wisconsin.  I know it is October and Halloween is right around the corner, but don't be too scared, I am confident we will prevail.  

 

Be sure to sign up for upcoming continuing education seminars and make your hotel reservations early so you don't encounter any issues with room availability.  We have many great seminars scheduled as usual and continue to strive to bring you top quality education that you can afford.

 

Have a great October.  I look forward to enjoying the changing of the leaves and rustling of critters through the woods.



 

Paul F Kersten, CPA

WAA President 


 

 

 

Executive Director

Wisconsin Association of Accountants

-Position Available-

 

After 15 years of leading the Wisconsin Association of Accountants, Byron Dopkins has decided to step down. 

 

The Board of Directors is currently accepting applications for the position of Executive Director. 

 

The successful candidate must have excellent people skills and be detail oriented. We are looking for a motivated individual with a professional, polite personality; who has a focus on membership services. 

 

The successful candidate will be responsible for the operations of the WAA, will promote our association with potential members, will attend all board meetings and seminars of the WAA and will make recommendations to the board that meet the association's goals and objectives. 

 

Please submit your cover letter and resume by Friday, November 21, 2014 to:

Steven J. Smith, EA, ABA, ATA

34 N 4th Street

Black River Falls, WI 54615

 

[email protected]arter.net

 

Small Employers Should Check Out 

the Health Care Tax Credit 

IRS Tax Tips

 

New and existing small employers who do not yet benefit from the Small Business Health Care Tax Credit should look into whether the credit can help them provide insurance to their employees.

 

For tax years beginning in 2014 and after, the maximum credit is 50 percent of premiums paid for small business employers, and 35 percent of premiums paid for tax-exempt small employers, such as charities.

 

Beginning in 2014, a small employer may qualify for the credit if:

  • It has fewer than 25 employees who work full-time, or a combination of full-time and part-time. For example, two half-time employees equal one full-time employee for purposes of the credit.
  • It pays premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program Marketplace or qualifies for an exception to this requirement.
  • The average annual wages of full-time equivalent employees are less than $51,000. The annual average wages will be adjusted annually for inflation.
  • It pays a uniform percentage for all employees that is equal to at least 50 percent of the premium cost of the insurance coverage.

The credit is available to eligible employers for two consecutive taxable years.

 

A small business employer who did not owe tax during the year can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments is greater than the total credit claimed, eligible small employers can still claim a business expense deduction for premiums in excess of the credit.

 

For tax-exempt small employers, the credit is refundable. Even if the tax-exempt small employer has no taxable income, it may be eligible to receive the credit as a refund so long as it does not exceed its income tax withholding and Medicare tax liability.

Self Rental Gains Cannot Offset Passive Losses 

Ashwaubenon Tax Professionals 

 

This case is not something new, but we felt it was worth writing about as a reminder of the rules involving self-rental.

 

Mr. Schumann rented two properties to two of his corporations that he also owns.  Both of these rentals resulted in net incomes.  He also owned other rental properties which were each rented to unrelated third parties at losses.  Mr. Schumann claimed the real estate professional status on his tax return.

 

At audit Mr. Schumann was unable to prove he materially participated in the rental activities, therefore the losses from his rental properties were considered to be passive and were suspended due to his high income.  The question next came to whether or not the net incomes from the two profitable rentals could be offset by the losses from the other rentals.

 

IRS denied the offset and Tax Court agreed.  Regulation 1.469-2(f)(6) states the net rental income from a self-rental property is considered to be nonpassive when the property is rented to a business in which the taxpayer materially participates.,  Therefore the income from these two rentals was nonpassive and could not be offset by the losses from the other rental activities.

 

Although it was not part of this case we want to share the other part of this regulation which states a self-rental activity that results in a loss is considered to be a passive loss.  In other words, the regulations gives the IRS the best of both worlds:  nonpassive treatment when there is a self-rental gain and passive treatment when there is a self-rental loss.

 

Douglas D Schumann, TC Memo 2014-138.  This case can be found at www.ustaxcourt.gov by clicking on Opinion Search and then entering Schumann in the Case Name box. 

IRS News for Tax Professionals

Tax Professionals

 

Webinar on October 29, 2014, 2:00 p.m. (ET); 1:00 p.m. (CT); 12:00 p.m. (MT); 11:00 a.m. (PT)

Tax Practice Ethics - Circular 230 from A to Z, including amendments effective June 12, 2014

To register for the event, visit the Internal Revenue Service Webinar Registration website.

 

Tax professionals can earn continuing professional education credits online through seminars filmed at the 2014 IRS Nationwide Tax Forums. The 14 self-study seminars are now available on the IRS Nationwide Tax Forums Online (NTFO). Self-study seminars provide information to students using interactive videos, PowerPoint slides and transcripts.

 

Notice 2014-57 announces the special per diem rates effective October 1, 2014, which taxpayers may use to substantiate the amount of expenses for lodging, meals, and incidental expenses when traveling away from home. The rates are the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. Notice 2014-57 will be published in Internal Revenue Bulletin 2014-41 on Oct. 6, 2014.

 

For those who love numbers: See this page for data reported on individual income tax returns for every county in the U.S. The data include:

  • Number of returns, which approximates the number of households 
  • Number of personal exemptions, which approximates the population 
  • Adjusted gross income 
  • Wages and salaries 
  • Dividends before exclusion 
  • Interest received 

 

Notice 2014-52 describes regulations that the IRS and Treasury Department intend to issue with respect to inversion transactions.

 

Farmers and ranchers who previously were forced to sell livestock due to drought have an extended period of time in which to replace the livestock and defer tax on any gains from the forced sales. See Notice 2014-60 which will be published in Internal Revenue Bulletin 2014-43, dated Oct. 20, 2014.

 

The Internal Revenue Service today made it easier for taxpayers who hold interests in either of two popular Canadian retirement plans to get favorable U.S. tax treatment and took additional steps to simplify procedures for U.S. taxpayers with these plans. Further details can be found in Revenue Procedure 2014-55.

 

Victims, survivors and some dependents of those killed during the Sept. 11, 2001 attack on the World Trade Center, the Pentagon and United Airlines Flight 93; the Oklahoma City bombing in 1995; and the 2001 anthrax terrorist attacks may be eligible to claim certain types of tax relief. To benefit, taxpayers must file claims for these benefits using the guidelines and time frames set by law.

 

 

►AFFORDABLE CARE ACT

 

New! ACA Information Center for Tax Professionals

 

  • Information for your Individual Clients
  • Information for Your Business Client
  • Information for Your Payroll Clients
  • General Resources

 

ACA News for Individuals

 

See the latest Health Care Tax Tips here.

 

ACA News for Businesses

 

New and existing small employers who do not yet benefit from the Small Business Health Care Tax Credit should look into whether the credit can help them provide insurance to their employees. For tax years beginning in 2014 and after, the maximum credit is 50 percent of premiums paid for small business employers, and 35 percent of premiums paid for tax-exempt small employers, such as charities.

 

Notice 2014-49. This notice describes a proposed approach to the application of the look-back measurement method, which may be used to determine if an employee is a full-time employee for purposes of § 4980H of the IRC. The Treasury Department and the IRS invite comments on this proposed approach (by December 29, 2014, see page 12 of Notice 2014-49). However, taxpayers may rely on the approach proposed in this notice until further guidance is issued, and in any case through the end of the 2016 calendar year. See also questions 15 - 17 here: Questions and Answers on Employer Shared Responsibility Provisions under the Affordable Care Act

 

 

►Practitioners who work with small business owners:

 

Starting November 15, for the first time small business owners will be able to enroll their Small Business through the SHOP Marketplace entirely online! The Small Business Health Options Program (SHOP) offers a simpler way to find and buy health coverage for small business that meets the needs of your employees. You can complete an application, choose coverage, and enroll yourself or you can work with an agent or broker. 

 

 

►YOUR PRACTICE 

 

The IRS recently strengthened the security of the e-Service registration process. More details are available here: Changes to e-services Registration were implemented on Sunday, September 28, 2014.

 

Beginning in October the Internal Revenue Service will send due diligence warning letters to tax preparers who appear not to be complying with EITC due diligence requirements. Assistance understanding these requirements is available on the EITC Tax Professional's page.

 

IRC § 7216 Questions and Answers Related to the Affordable Care Act

Internal Revenue Code  § 7216 is a criminal provision enacted by the U.S. Congress in 1971 that, except as provided in regulations, prohibits tax return preparers from knowingly or recklessly disclosing tax return information or using tax return information for a purpose other than preparing, or assisting in preparing, an income tax return. This provision applies to tax return preparers who also offer services and education related to the Affordable Care Act. Violators are subject to a $1,000 fine or a year in prison, or both.

 

 

►EMPLOYERS 

 

Notice 2014-55. Additional Permitted Election Changes for Health Coverage under § 125 Cafeteria Plans. This notice addresses two specific situations in which a cafeteria plan participant may wish to revoke the employee's election for employer-sponsored health coverage under the cafeteria plan.  

 

 

►RETIREMENT PLANS 

 

Tax credit for starting a retirement plan - what is it, who can take it and how much is it? You may be able to claim a tax credit for some of the ordinary and necessary costs of starting a SEP, SIMPLE IRA or qualified plan. A tax credit reduces the amount of taxes you may owe on a     dollar-for-dollar basis.

 

Notice 2014-54 provides guidance on the allocation of pre-tax and after tax amounts when a distribution from a qualified retirement plan is sent to multiple destinations.

 

 

TAX CENTER OF THE MONTH:Automotive Tax Center

  • Avoiding Problems - Automotive
    This section contains important information on recordkeeping, misclassification of employees and warns you of fraudulent automotive schemes.
  • Tax Tips - Automotive
    This section provides general information on subjects such as installment sales and how to value inventory.

 

►TAX-EXEMPT ORGANIZATIONS

 

October 23, 2014, 1:00 pm CST: Helping 501(c)(3) organizations with charitable contributions (a primer). Get more details and register for this phone forum here.

 

If you weren't able to attend recent phone forums for Tax Exempt Organizations, you can listen to recorded versions. See the list here (scroll down to see prior phone forums).

 

Upcoming Workshops for Charities: IRS Exempt Organizations offers one-day workshops for small and medium-sized 501(c)(3) organizations around the country in collaboration with colleges and universities as part of our Academic Institutions Initiatives in an effort to help develop the nonprofit leaders of tomorrow. 

 

Find all of the most current information for tax-exempt organizations

 

 

NEWS FROM OTHER AGENCIES

 

The Census Bureau has been rolling out some interesting data visualization tools lately and one of the more recent releases involves Story Maps (this link may or may not work) that look at population change around the country. The first story map focuses on Metro and Micro area Population Change from 2002-2003 and compares it to 2012-2013 population change data. The second story map focuses on County Population Growth from 2012-2013 along with the primary sources of population change (natural increase vs. net migration).

 


Pdf Version
Welcome to our New Members!
 


 

Kathy Hettick 

Enumclaw


 

Joan Karis 

Madison


 

Diane Beine 

Mayville


 

Daren Schutz

Hudson, WI


 

John Stecker

Cedarburg, WI


 

Nick Stecker

Cedarburg, WI


Steven Stecker 

Cedarburg, WI


 

 

If any of these new members should not be

granted membership to the WAA please submit your objections to the Executive Director.

2014

Seminars

   

Gear Up 1040

Nov 3, 2014 8am-5pm 

Nov 4, 2014 8am-4pm

Brookfield Suites Hotel

Brookfield, WI

  

Bob Jennings 1040 Update

Dec 1, 2014 8am-5pm

Dec 2, 2014 8am-4pm 

Kalahari Resort

Wisconsin Dells, WI

  

Gear Up 1040 

Dec 8, 2014 8am-5pm 

Dec 9, 2014 8am-4pm 

Hudson House Inn

Hudson, WI

 
Visit our website at  
to register or view the seminar schedule. 
 
(608) 328-8341

OFFICERS

 

President:

Paul Kersten, CPA

610 W Green Bay Street 

Shawano, WI  54166 

(715) 524-2302 

[email protected] 

 

Vice Presidents:

Mark Burbey, CPA 

900 South 10th Street 

Manitowoc, WI  54220 

(920) 682-6661 

[email protected] 

 

Secretary:

Chuck Kirsch, EA

155 S Jefferson Street

Lancaster, WI 53813

(608) 723-2502

[email protected]

 

Treasurer:

Darcie Weissmiller, EA, ABA

PO Box 307

Medford, WI 54451

(715) 748-4110

[email protected]

 

 NSA State Director:

Tom Adler, CPA 

1110 Fourier Drive Ste 110 

Madison, WI  53717 

(608) 664-1944 

[email protected]

 

Past President:

Jolynn McIntosh, CPA 

1124 17th Avenue 

Monroe, WI  53566 

(608) 328-8341 

[email protected] 

 

Directors:

Robert Burgardt 

414  Hartford Square 

Hartford, WI  53207 

(414) 520-0863 

[email protected] 

 

Mark Nelson, Jr, EA 

2581 S. Kinnickinnic Avenue

Milwaukee, WI 53207

(414) 481-6812

[email protected]

 

Joe Suttner, CPA

PO Box 187

Chilton, WI 53014

(920) 849-9346

[email protected]

 

Margaret Schell, CPA

6609 Montclair Lane

Madison, WI 53711

(608) 442-7525

[email protected]

WAA Benefits

 

Seminars and Educational Forums

 

Accreditation

 

Local Chapter Involvement

 

Government Agency Liaison

 

Monitor Legislation

 

Insurance Programs

 

Accountants Protection Plan

 
WAA Objectives
 

To raise professional standards and improve the practice of accountancy.

 

To strive for excellence in the profession.

 

To encourage accountants in a continuing program of

professional development.

 

To foster increased recognition for the professional in the public, private and educational sectors of our state.

 

To initiate legislative action and provide government liaison between the accounting profession and

government leaders.

 

To provide meetings and fellowship for accountants.

 

To promote the highest standard of ethical conduct among its member.