The Arkansas Secretary of State is once again collecting franchise taxes for all companies registered with the State of Arkansas. Due to the recent transition of franchise taxes from the Department of Finance and Administration back to our office, Secretary of State John Thurston has waived the penalty and interest on 2021 franchise taxes until July 15th.

After much anticipation, on September 24, 2019, the U.S. Department of Labor (DOL) has announced its long-awaited Final Overtime Rule to update the federal overtime regulations governing which employees are entitled to minimum wage and overtime pay under the federal wage and hour law by increasing the salary level required under the executive, administrative and professional (EAP) white-collar exemptions. The Final Overtime Rule is effective as of January 1, 2020.

The IRS has begun sending letters (Letters 6173, 6174, and 6174-A) to taxpayers who:

1. Potentially failed to report income and pay the resulting tax from virtual currency transactions
2. Did not properly report virtual currency transactions.

Before money, there was bartering. And a significant percentage of business is still conducted by trading goods and services. If your company barters, understand this: These transactions are generally taxable.

• 400,000 companies worldwide used baartering to earn an estimated $12 billion.
• 30% business activities world-wide are barter-based.
• 33% U.S. small business regularly use bartering.

A barter exchange enables business to barter with each other, or with the exchange, for goods, services and credit, For example:

Fleet maintenance company needs to advertise

1. Exchange connects maintenance company with ad agency to develop campaign. It debits maintenance company’s account and credits ad agency’s account.

2. Exchange connects ad agency with office supply company, applies ad agency’s credit and credits office supply company’s account.

3. Exchange connects office supply company with fleet maintenance company and applies office supply company’s credit.

To ensure you’re complying with tax authorities:

• Consider any barter income taxable in the year goods or services received.
• Report the fair value of goods or services received.
• Deduct related business expenses.
• Determine whether activities trigger other taxes.
• Ensure you receive Form 1099-B from your barter exchange (if applicable).

For more information about bartering and taxes, please contact us.

If reducing your taxable estate is an important estate planning goal, making lifetime charitable donations can help achieve that goal and benefit your favorite organizations. In addition, by making donations during your lifetime, rather than at death, you can claim income tax deductions. But some of your charitable deductions could be denied if you don’t follow IRS rules.

An S corporation must comply with several strict requirements or risk losing their tax-advantaged status. Among other things, they can have no more than 100 shareholders, can have no more than one class of stock and are permitted to have only certain types of shareholders.

In an estate planning context, it’s critical that any trusts that will receive S corporation stock through operation of your estate plan be eligible shareholders.

Asset protection (sometimes also referred to as debtor-creditor law) is a set of legal techniques and a body of statutory and common law dealing with protecting assets of individuals and business entities from civil money judgments. The goal of asset protection planning is to insulate assets from claims of creditors without perjury or tax evasion.

If you drive for work, you may pay attention when the IRS updates the standard mileage rate used to deduct business driving expenses. The rate rises most years, but it also falls occasionally. That’s because mileage rates follow gas prices.

For 2017, the standard mileage rates are:

• 53.5 cents per mile for business miles driven, down from 54 cents for 2016.
• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016.
• 14 cents per mile driven in service of charitable organizations.

Just as people can get out of shape over the course of a stressful year, so can companies. Whether your business has experienced a rapid growth spurt – or perhaps been starved for sales or adequate capital – it can benefit from refocusing on three core objectives:

Ways to Avoid Probate

Probate is generally about as desirable as a case of shingles.  A legal procedure in which a court validates a will and resolves other estate-related issues and probate is public.  It can also be costly and time-consuming. So do your family a favor: Take steps to avoid, or at least, minimize, probate.

Instead of giving your grandchildren the latest tech gadget or cash they may blow through by New Year’s, consider financial gifts of lasting – even increasing- value. In many cases, these gifts can also provide tax advantages.

December can be stressful for retailers and shoppers alike. But here’s a cup of cheer: The average American plans to spend $967.13 this holiday season – 3.4% more than 2016 estimates – thanks for higher employment rates and rising wages.

If you are a business owner, you may be wondering if you can pay bonuses in 2018, but deduct them in 2017.  Is it even possible?

The answer is Yes, but only if:

1. Your company uses  accrual-basis accounting.
2. The bonuses were earned in 2017 and are paid by march 15.
3. Bonus liability must be fixed by the end of 2017.

This process can be complicated, which is why you should talk to a experience CPA.

Turkeys have always been an interesting study for economics.

A whopping 88% of Americans eat turkey on thanksgiving. As basic economic theory tell us, when everyone wants to buy the same limited product at the same time, prices generally spike. Yet turkey prices decline around the holiday. Why?

This is the time of year to think about “harvesting” (or selling) depreciated stocks to offset any stock gains and possibly reduce your 2017 tax bill. Just keep in mind that:

Are you one of the 63 million American adults who volunteers for charity? Although there’s no tax deduction for the value of your time, you may be able to deduct unreimbursed costs related to:

The recent Equifax hack serves as a pointed reminder: Your financial information can easily fall into the wrong hands, Cyber criminals and old-school pickpockets alike may rack up thousands of dollars on your credit and debit card accounts. If this happens, how liable are you?

You walk the straight and narrow, follow the law, file your taxes. But maybe you know of someone who doesn’t…

The IRS wants to hear from you – and will pay for concrete information leading to the collection of unpaid taxes. Whistleblower awards typically range between 15% and 30% of the outstanding taxes, penalties and interest collected.

Looking for ways to minimize your company’s 2017 tax bill? Consider the domestic production activities deduction (DPAD). Often referred to as “manufacturer’s deduction,” the DPAD can also be claimed by many construction engineering, oil and mining, software and other business.

Traditionally pensions may seem like relics from the past. But although few employers now offer these defined-benefit retirement plans to new hires, plenty of workers and retirees still count on them for retirement income.

Just look at this numbers.

Lower Manhattan, 1920. A rowdy crowd congregates where Broad Street meets Morris. One well-dressed gentlemen shouts orders to an office worker three stores above. A sketchier character talks up a Colorado gold mine to anyone who will listen. Some jokester hawks shares in cocker spaniel puppy – 10 cents apierce – while an apple-seller haggles with hungry customers.

Tax break help storm survivors

Survivors of Hurricanes Harvey, Irma and Maria ara tattered, but they’re also tough – and ready to rebuild. If you were affected by the storms (or another natural disaster), the casualty loss deduction can help. This tax break enables you to deduct the cost of damage to your home or personal property on your 2017 federal return.

This article was sponsored by Tax1099.com. The fastest way to e-file 1099s.  For more information about Tax1099’s services or the requirements for tax information returns check out their website and Knowledge Base.

Penalties Pop-Quiz

How much do you know about penalties for 1099 forms? Test your knowledge on these true and false questions. If you’re not in the mood, don’t worry – the answer key is just below.

Many 401(k) plans allow participants to borrow as much as 50% of their vested balance, up to $50,000. These loans are easy to get and interest rates are low, yet they should be considered only as last resorts. Here’s why:

1. You lose the benefit of tax-deferred compounding on the money you borrow.
2. You may have to reduce or eliminate contributions during the loan term – forfeiting employer matches and future earnings on those contributions.
3. If you lose your job, you typically have only between 30 and 90 days to repay the outstanding balance.
4. Your outstanding balance is taxed as a distribution (and 1 0% penalty applies if you are under 59½) if you don’t fulfill repayment terms.

Other rules and conditions apply. Contact us for more details.

This secure tool, available on IRS.gov allows taxpayers to view their IRS account balance, which will include the amount they owe for tax, penalties and interest. Taxpayers may also continue to take advantage of the various online payment options available by accessing any of the payment features including: direct pay, pay by card and Online Payment Agreement.

The new features added include the ability to:

• View up to 18 months of tax payment history
• View payoff amounts and tax balance due for each tax year
• Obtain online transcripts of various Form 1040-series through Get Transcript
• Give feedback on their experience with their online account and make suggestions for improvement.

Employee fraud is a significant problem faced by organizations of all sizes, types and industries. While we would all like to believe our employees are loyal and working for the benefit of the organization, unfortunately there are still many reasons why some employees may commit fraud.

You may have a refund waiting for you.

DEADLINE – TUESDAY APRIL 18th

The IRS estimates $1 Billion in refunds for unfiled 2013 tax returns.  The IRS grants a 3 year window to file a tax return in order to receive a refund if you are owed one.  It is very interesting that so many people have not filed their 2013 tax return.  The IRS estimates the midpoint for potential refunds for 2013 at $763.

As we near the 4^th quarter, small business owners and individuals should begin thinking ahead as the 2016 tax season is right around the corner.

On September 11, 2016, The Arkansas Society of Certified Public Accountants (Arkansas CPA Society) will mark its 100th anniversary. The organization has since grown to become one of the largest professional associations in Arkansas with more than 3,600 members.

To recognize the centennial anniversary, Arkansas Governor Asa Hutchinson has issued an official Proclamation, declaring September 11, 2016 as Certified Public Accountants Day, to honor and celebrate the Centennial anniversary of the Arkansas Society of CPAs and to increase awareness of the significance of the organization and its importance. Allen Pierce, was among the distinguished group of CPA’s invited by Arkansas Governor Asa Hutchinson to celebrate such an important event for the accounting industry.

Why do I need to hire a CPA? This is a question we hear often, and in this blog we will provide you with 8 reasons why you should hire a certified public accountant.

CPAs act as advisers to individuals, businesses, financial institutions, nonprofit organizations, and government agencies on a wide range of financial matters.