The knowledge you need

Earlier this month, the Financial Accounting Standards Board (FASB) announced they extended the effective dates for the new lease accounting standard. It had been rumored for months that the FASB would make this adjustment for non-public entities, and the day has finally come. Public entities struggled to overhaul their business processes in time to comply by their effective date of January 1st of this year, and non-public entities implored the FASB to help them avoid a similar result. The FASB heard these requests from industry groups, professional organizations, and private businesses nationwide and agreed to push back the effective date for non-public entities.

One area that many don’t pay much attention to until the end of the year is tax planning. It’s common to think about what steps can be taken to help reduce the company’s overall taxes before year-end. The good news is since the 4th quarter just started, there are many steps companies can now take to ensure they pay the least amount possible. There are some new opportunities courtesy of the Tax Cuts and Jobs Act of 2017 (tax reform) and a bevy of other strategies as well.

On September 24, 2019, the IRS released a final revenue procedure that helps taxpayers with rental real estate activities to understand how to apply Section 199A. Section 199A often referred to as the qualified business income deduction (QBI deduction), lets business owners deduct 20% of the qualified business income they report from pass-through entities or sole proprietorships. When Congress wrote the QBI deduction into law by passing the Tax Cuts and Jobs Act (TCJA), taxpayers participating in rental real estate activities were unsure if they were eligible for the deduction. The law did not specify when a rental real estate activity would be considered a trade or business worthy of the deduction.

Last month the IRS released important regulations designed to help Atlanta business owners understand how to implement the 100% bonus depreciation which was enacted as part of the Tax Cuts and Jobs Act of 2017 (tax reform). Although the proposed rules did allow for certain depreciation to be leveraged under various conditions, the IRS has been in the process of reviewing changes for some time. On September 13, 2019, they issued final regulations that provide much-needed guidance on how and when bonus depreciation rules can be applied.

On January 1, 2020, an estimated 1.3 million more U.S. workers will become eligible for overtime pay. Just last month, the Department of Labor (DOL) ruled to raise the minimum salary threshold for determining an employee’s overtime status by a whopping 50%. Currently, employees earning less than $23,660 annually are eligible for overtime pay, but beginning in the new year, this threshold will jump to $35,568. This shift will compel employers to review their pay scales and reevaluate their existing employee makeup, and more importantly, they must learn to juggle the new costs associated with this new rule.

The firm will be hosting a free lunch and learn on September 27, 2019, from 11:00am -1:30pm, to be held at the Georgia Center for Nonprofits. The presentation, Understanding Your Organization’s Financial Statements, has been custom-tailored to give executives foundational knowledge on financial reporting, which includes how to assess fiscal fitness through overall strategic planning. There is no cost for the event and lunch will be provided during the session.

The Tax Cuts and Jobs Act of 2017 (tax reform) challenged some long-held assumptions many businesses have about how and when to use bonus depreciation. The changes ushered in through tax reform have transformed how to use bonus depreciation allowing for an expansion of benefits in some respects and a contraction in others. Atlanta business owners that rely on bonus depreciation as part of their tax savings strategy need to be aware of the changes and how it will impact their approach. To help clients, prospects, and others, Wilson Lewis has provided a comprehensive summary of the changes and key considerations

In July, Senators Maggie Hassan (Democrat, New Hampshire) and Thom Tillis (Republican, North Carolina) introduced a bill that would expand the research and development (R&D) tax credit. Currently, the R&D tax credit is available in two forms: as a nonrefundable credit to benefit larger and more established businesses, and as a refundable credit to benefit startups and small businesses. Their bill seeks to double the credit for startups by improving their ability to apply for the credit against payroll tax liabilities. The changes represent a greater tax-saving opportunity for qualifying Atlanta and Georgia based companies.

In Atlanta, there are many firms that can provide an audit to your nonprofit organization. After reviewing the promotional materials, websites and related messaging, it may appear they are equally qualified to manage the task. While each may meet the broad technical qualifications to conduct the audit, it doesn’t necessarily mean they are a good fit for your organization’s needs. The truth is that each organization, it’s management and Board of Directors has differing needs which some firms are better suited to manage than others. Although technical competence is certainly a necessity there are other criteria that an organization needs to assess during the proposal review stage.

Retirement planning is an essential financial discipline that Atlanta area individuals need to focus on throughout their career. While there is no shortage of retirement saving approaches, very few are as effective and utilized as employer-based retirement plans. In fact, the U.S. Department of Labor (DOL) found that ERISA covered plans offer higher contribution limits, lower investment management costs, enhanced regulations such as financial reporting and disclosure requirements and automatic enrollment features. Unfortunately, many small businesses struggle to offer employees a plan because of the associated costs. Unfortunately, this leaves employees without a vital retirement savings tool. To address the situation, the DOL recently issued a new final rule which makes it easier for small businesses to participate in multiple employer plans (MEPs).