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Category: Society Updates

Key Takeaways from MSATP’s Tax Season Wrap-Up Facebook Live

Posted on by Sandy Steinwedel

It’s time for you to check out MSATP’s latest Facebook Live Stream installment! Sandy kicks off the episode with an insightful analysis of a few impactful financial consumer bills the legislature passed during its latest session. We then had the pleasure to hear from MSATP President, William Feehley, CPA, as he reflected on an eventful tax season and provided tax professionals with some useful resources to take their practice to the next level. Donny Lala capped off our presentation by introducing the USB Payment Processing Refer a Client Program, an innovative tool to help your clients increase their profit margin. Here’s a quick recap of this week’s video—make sure to check out the video as well!

3 KEY FINANCIAL CONSUMER FINANCIAL LEGISLATION UPDATES

HB 856 / SB 647:

This bill removed the requirement that you must be at least 25 years-old to apply for Earned Income Tax Credit for Individuals Without Qualifying Children. The bill will come in effect on July 1, 2018.

HB 710 / SB 202:

Many consumers have put a freeze on their financial information due to the recent rise in security breaches. Previously, these individuals would be charged up to $5.00 to freeze their accounts and an additional $5.00 to re-open them. This bill prohibits creditors from charging these fees and permits consumers to request a freeze at any time without cause. This bill will come in effect on October 1, 2018. To place or lift a credit freeze, please contact the three major credit bureaus: www.experian.com, www.equifax.com, www.transunion.com

HB 17 / SB 69:

In 2016, Maryland required higher education institutions to send an annual letter to individuals who are receiving financial aid detailing their accrued debt. HB 17 / SB 69 expands the requirement to for-profit institutions.

REVIEWING ANOTHER EVENTFUL TAX SEASON
WITH MSATP PRESIDENT, WILLIAM FEEHLEY

Bill started off his reflections of the past tax season by pointing out the impact of the Tax Cuts and Jobs Act that was passed on December 22, 2017 and how 85-90% of his clients will benefit from the new legislation. While in Bill’s opinion, Maryland did relatively little else to assist taxpayers this session by only granting a small increase in the standard deduction and not allowing taxpayers to itemize on the Maryland returns if they opted for the standard deduction on federal, he was quick to express his gratitude that the IRS stepped in to resolve the HSA issue we covered in last week’s episode.

Bill then turned to the future—offering some useful insight and resources on how those in the tax industry can get ahead before the next tax season rolls around. For tax professionals specializing in multistate returns, Bill anticipates the Supreme Court will hear more cases concerning this issue in the near future that could impact income and sales tax matters. To make sure you’re ready to handle any changes, Bill advises developing additional checklists or implement additional staff training now, rather than waiting until November or December when it will likely be too late for these efforts to be useful to your business.

Bill reminded those that missed out on the new tax law class in January that they can attend the class in Ocean City at the upcoming annual convention. Thompson Reuters published a handy guide of the tax act and developed sample letters tax professionals can use to inform clients and potentially general additional billable hours over the summer. There will also be an all-inclusive Solo & Small Firm event in Bethany Beach this November that includes hotel, meals and entertainment—in addition to outstanding educational opportunities, a chance to get to know fellow practitioners and gain some valuable insights into how others run their practices.

ADD VALUE TO CLIENTELE WITH USB PAYMENT PROCESSING

We were excited to welcome Donny Lala of USP Payment Processing to introduce their quick and easy client referral program. USB Payment Processing has been helping accountants and tax professional grow their businesses since 1996. They can help you assist clients in identifying revenue savings that they can then invest back into their business—adding value to your tax practice and drive revenue to your clients. USB’s Refer a Client Program allows accounting and tax professionals to request a free payment processing quote in 3 easy steps:

STEP 1:

Email a minimum of 2 months of your client’s current payment processing statements to: statements@usbne.com, with the subject line: “MSATP Client Proposal Request.” Be sure to remove the name and address of the client to safeguard their privacy.

STEP 2:

Include in your email the industry type (retail, restaurant, car dealership, etc.) and tell USB how the client is currently processing (i.e., online terminal, swiped via mobile device).

STEP 3:

Allow 2-3 hours for the USB specialists to complete your client’s no-cost analysis.

Are you tech savvy? Good news—you can also apply online at: www.usbne.com/MSATP

Be sure to stay tuned for this week’s MSATP Facebook Live Episode on Thursday, April 26th at 9 AM —we’ll be taking a look at how we’re working with young professionals and promoting financial literacy. Not a member of our private MSATP Members Facebook Group yet? Click HERE to join!

Key Takeaways You Shouldn’t Miss from MSATP’s Maryland Jobs and Tax Act Video

Posted on by Sandy Steinwedel

It’s our favorite time of the week once again—the MSATP team just dropped our third Facebook Livestream episode featuring an in-depth analysis of the latest happenings in the tax and financial world!

MSATP’s latest video features a dynamic duo of industry experts. First, Phyllis Burlage returns to break down a busy 2018 legislative schedule that could have a major impact for tax professionals. Then, Jerry Lotz, from Cost Segregation Services Incorporated (CSSI), introduces the concept of cost segregation—a method of re-classifying components and improvements of commercial buildings from real property to personal property to reduce taxable income and ramp up cash flow. Here’s a closer look at what MSATP’s third episode covered—make sure to watch the video to get the full experience!


 

LEGISLATIVE UPDATE

It’s been a busy start to 2018—there were 3,127 bills introduced during the Maryland legislative session spanning from January 10th to April 9th. Here are some key takeaways from all the recent activity:

TAX RELIEF:

It looks like the majority of MSATP’s clients will be paying higher Maryland taxes in the coming year. The Maryland legislature still needs to gauge exactly how much more revenue will be generated by the tax changes before they make further changes. Based on the available information, here’s what to expect for the tax year:

  • Anyone can elect to use the Standard Deduction
  • You must itemize on the Federal return to itemize on the Maryland return
  • The Standard deduction has been increased on the Individual $250 to a maximum of $2,250 AND Head of Household and Joint $500 to a max of $4,500. That’s an estimated $40 tax break for 58% of taxpayers!

WINNING TAXPAYERS:

Several classifications of Maryland taxpayers are getting substantial tax breaks thanks to the new legislation coming down the pipeline—including small businesses and investors. Here’s a quick break-down of who stands to benefit:

  • The subtraction for Military Retirement Income is $5,000 for retirees under 55 and $10,000 for retirees over 55
  • Corrections officers may subtract up to $15,000 of their retirement income
  • The Earned Income Credit has been expanded by eliminating the 25-year-old minimum age
  • Teachers will receive a $250 subtraction for unreimbursed school expenses
  • Small Business Credit for businesses with less than 15 employees who give paid sick and safe family leave to low paid employees receive a $500 credit
  • Investors in cyber security companies now qualify for a tax credit that previously was only available to the company
  • Individuals whose statewide original cost is less than $2,500 are exempt from personal property taxes
  • For estate taxes, the Maryland Unified Credit was increased to $5,000,000
  • Exemption to register as a tax preparer will not apply to employees of exempt tax preparation practitioners if the employee signs the return as the preparer
  • General contractors may now be held responsible for wage violations of a subcontractor

HEALTH INSURANCE:

On last week’s episode, we covered the HSA conundrum when it came to male reproductive coverage and the attempted legislative “fix” for the issue. The HSA “fix” for coverage of vasectomies passed and was approved by the Governor. Another “fix”—this time for Obamacare to prevent skyrocketing premiums also saw some movement. Maryland will take the $380 million federal tax break away from insurance companies and use the money to subsidize the catastrophic claims by those with insurance thru the Maryland Marketplace.

COST SEGREGATION—STAY COMPLIANT, SAVE MONEY

The rules have changed—there’s now a way to keep your clients compliant and get more loyal customers. Sound too good to be true? With cost segregation, you can do both! Cost segregation is a method of re-classifying components and improvements of your commercial building from real property to personal property. This process allows the assets to be depreciated on five, seven, or fifteen-year schedule instead of the traditional 27.5 or 39-year depreciation schedule of real property. This means your clients’ current taxable income will be substantially reduced while their cash flow increases.

The experienced professionals at Cost Segregations Services Incorporated will conduct a complimentary property analysis and review the potential savings with you and your client. The study will be fully completed in a short 4-6 weeks and will keep your clients happy and compliant! Who exactly qualifies and benefits from this game-changing tax approach? A wide variety of businesses and individuals are eligible for major tax savings, including owners and leaseholders of residential rental, multi-family and commercial properties. Contact Cost Segregation Services Incorporated today to learn how you can save your clients a substantial amount of their hard-earned money!

Be sure to stay tuned for this week’s MSATP Facebook Live stream on Thursday, April 19th at 9 AM to hear our Board President, William M. Feehley, wrap-up the 2017 tax season! Not a member of our private MSATP Members Facebook Group yet? Click HERE to join!

3 Key Takeaways From the HSA Legislation Facebook Live Stream

Posted on by Sandy Steinwedel

 

MSATP just rolled out another Facebook Live episode that’s an absolute can’t-miss discussion covering the latest issues in tax and finance! We welcomed back Phyllis Burlage to review a new IRS tax platform, break down an important Health Savings Accounts update, and preview some upcoming legislation. Here’s a quick recap of 3 takeaways we covered in last week’s Live video.

 

1. IRS LAUNCHES NEW TAX PLATFORM

MSATP has an established, long-time partnership with the Internal Revenue Service (IRS). We’re always excited to see the IRS make improvements to streamline the process for taxpayers—and their new platform does just that! In late March 2018, the IRS implemented a new initiative called “Paycheck Checkup,” encouraging taxpayers to verify their paycheck withholding in light of the recent tax law developments. Tax professionals need to work with clients to insure they don’t incur an underpayment penalty or an increased tax bill on 2018 earnings next year. To help with this process, the IRS has a few handy tools accessible on its website, like the Withholding Calculator.

 

2. IRS INTERVENES TO CORRECT CONTRACEPTIVE EQUITY ACT OVERSIGHTS

In 2016, the Maryland General Assembly passed The Contraceptive Equity Act intending to revolutionize birth control access by expanding coverages and lowering costs for all forms of contraception by state-regulated insurance plans. Unfortunately, the new law jeopardized Health Savings Accounts in several unintended ways:

  • The Contraceptive Equity Act requires that vasectomies have no co-pay or deductible
  • The Affordable Care Act states that only “preventative care” can be fully paid by HSA Qualified High Deductible Insurance Plans
  • The IRS classifies vasectomies as “elective surgery” NOT “preventative care”

The Maryland legislature attempted to resolve the issue by amending the law to exempt HSA High Deductible Plans from the vasectomy requirement; however, the 2018 insurance contracts were already approved. Luckily, the IRS stepped in. On March 5, 2018, the IRS issued Notice 2018-12, providing transition relief for male sterilization and HSA accounts. Page 6 of the Notice clarifies that: (1) Male sterilization is NOT preventative care; (2) Male sterilization must include cost sharing payments such as deductibles/co-pays; and (3) HDHP Policies that mandate payments for male sterilization without cost sharing are NOT qualified for HSA contributions –BUT—for 2018 and 2019, the IRS will allow HSA contributions even if the HDHP policy is not qualified due to the male sterilization requirement.

The Maryland legislature must still correct the male sterilization mandate for HDHP policies, but as long as the bill is passed and signed before 2020, Maryland citizens will be able to make fully deductible, qualified HSA contributions for 2018 and 2019. You can access Notice 2018-12 on the IRS website.

 

3. UPCOMING LEGISLATION PREVIEW

This week’s episode will cover legislation that passed in the 2018 session. While it’s still unclear as to how Maryland is handling the issue of standard and/or itemized deductions in 2018, there has been significant movement and discussion on this issue. Session concluded on April 9th at midnight.

Be sure to stay tuned for this week’s MSATP Facebook Live stream on Thursday, April 12th at 9 AM as we discuss how the state of Maryland is addressing the 2018 Tax Jobs and Tax Act for Maryland Taxpayers! Not a member of our private MSATP Members Facebook Group yet? Click HERE to join!

Legal Take on The Maryland Healthy Working Families Act

Posted on by Jordan Savitz

The Maryland Healthy Working Families Act, which took effect on February 11, 2018, requires employers with 15 or more employees provide their employees with 1 hour of paid sick and safe leave for every 30 hours worked. The Act also requires that employers with 14 or fewer employees provide their employees with unpaid sick and safe leave accruing at the same rate. Employees are entitled to carry over up to 40 hours (5 days) of accrued but unused leave in a given year, unless the employer awards the employee the full amount of earned sick and safe leave at the beginning of the year.

Sick and safe leave may be used by an employee:

  • To care for or treat the employee’s mental or physical illness, injury or condition;
  • To obtain preventive medical care for the employee or employee’s family member;
  • To care for a family member with a mental or physical illness, injury or condition;
  • For maternity or paternity leave; or
  • For absences due to domestic violence, sexual assault or stalking committed against the employee or the employee’s family member.

Employers must provide notice to their employees that they are entitled to sick and safe leave under the Act. One way to do this is to include the notice in an Employee Handbook. In addition, employers must provide notice to each employee of how much leave such employee has available when wages are paid.

Penalties for failure to comply with the Act include the full monetary value of unpaid earned sick and safe leave, any actual economic damages, up to 3 times the value of the employee’s hourly wage, and a civil penalty of up to $1,000.00 for each employee for whom the employer is not in compliance with the Act.

Employers may offer alternative paid leave policies which permit an employee to accrue and use leave under terms and conditions that are at least equivalent to the minimum requirements of the Act. Many employers choose to offer a flexible paid leave policy which combines sick and vacation leave (e.g. PTO). This type of flexible policy can be structured to satisfy the minimum requirements of the Act.

It is important to recognize that the Act does not preempt Montgomery County’s existing Earned Sick and Safe Leave Law. Montgomery County’s Law and the Maryland Healthy Working Families Act differ in several respects, including the treatment of employers with 5-14 employees. However, the Act does preempt Prince George’s County’s earned sick and safe leave law, Bill Number CB-87-2017.

We recommend that employers take immediate action to review their employment policies, and modify existing leave policies as necessary to comply with the Act, or develop new policies which satisfy the leave requirements under the Act, including requirements concerning notice to employees.

This article was written by Jordan G. Savitz, Attorney at Law at the law firm of Stein Sperling Bennett De Jong Driscoll PC. Mr. Savitz’s contact information is:

25 West Middle Lane · Rockville, MD 20850
301-838-3256 direct · 301-340-2020 main · 301-354-8156 direct fax
jsavitz@steinsperling.com
www.steinsperling.com
admitted in MD, DC, VA

5 Key Takeaways from the Maryland Healthy Working Families Act Facebook Live Stream

Posted on by Sandy Steinwedel

Great news! MSATP has launched our Facebook Live stream and the first installment is a must-see!

Our inaugural video featured consummate professional and former MSTAP President and CPR Committee Chair, Phyllis Burlage. Phyllis drew on her years of industry experience and thorough research to provide an insightful analysis of the newly-implemented Maryland Healthy Working Families Act. Here’s a quick and handy recap of 5 takeaways from Phyllis’ breakdown of the new legislation:

1. DOES THE ACT APPLY TO ME?

The Maryland Healthy Working Families Act applies to all employers regardless of number of employees, size or industry. This means employers must start maintaining Sick and Safe Leave accrual records as of the effective date of the bill and retain them for 3 years.

2. WHAT DOES THE ACT REQUIRE?

Every employer must have a policy that explains how the Sick and Safe Leave may be awarded and used. Employers have two options:

  • Award all 40 hours at the beginning of the year; OR
  • Employees may accrue 1 hour of leave for every 30 hours worked. Employees can only earn a maximum of 40 hours of leave per year, but any unused hours can be carried over to the next year. Employees may only accrue 64 leave hours at a given time.

The employer is required to provide each employee with a statement of used and available paid and unpaid leave with each pay period. The DLLR has provided Model Policies to help employers develop their own plan, check them out HERE.

3. WHICH EMPLOYEES DO I COUNT?

Employers whose main work location is in Maryland are required to cover employees whose primary work location is in Maryland, even if they are not state residents. If an employer has more than 14 employees, the leave must be paid. If an employer has less than 15 employees, the leave must be unpaid. The total number of employees is based on the previous year’s monthly average and encompasses all Full, Part-time, Temporary and Seasonal workers.

4. ARE THERE ANY EXEMPTIONS?

Although ALL employees count towards the monthly average, the following are exempt from coverage:

  • Employees who regularly work less than 12 hours per week;
  • Certain independent contractors;
  • Certain associate real estate brokers and salespersons;
  • Individuals younger than 18 before the beginning of the year;
  • Agricultural sector employees in certain agricultural operations as defined in §5-403 of the Courts and Judicial Proceedings Article of the Maryland Annotated Code;
  • Certain construction workers covered by a collective bargaining agreement;
  • Certain employees working on an as-needed basis in a health or human service industry; and,
  • Certain employees of a temporary services agency.

5. WHAT CAN EMPLOYEES USE THEIR LEAVE FOR?

Permissible uses for the leave include:

  • To care for or treat the employee’s mental or physical illness, injury or condition;
  • To obtain preventative medical care for the employee or the employee’s family member;
  • To care for a family member with a mental or physical illness, injury or condition;
  • For maternity or paternity leave; or
  • For an absence due to domestic violence, sexual assault, or stalking committed against the employee or the employee’s family member under certain circumstances.

Be sure to stay tuned for this week’s MSATP Facebook Live stream on Thursday, April 5th at 9 AM as we discuss HSA Legislation and the future of the program! Not a member of our private MSATP Members Facebook Group yet? Click HERE to join!

Proposed Rules for Overtime Pay

Posted on by Sandy Steinwedel

The U.S. Department of Labor just released new proposed rules regulating who is eligible for overtime pay and it will have employers scrambling to determine how many of their workers will need to be reclassified when new regulations take effect.  Currently, the salary threshold for an employee to be exempt from the Fair Labor Standards Act (FLSA) is $455 a week ($23,660 a year).  That figure was last revised in 2004.  The new proposed rule puts the floor at an estimated $970 a week ($50,440 a year).  The regulations propose setting the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers.  The DOL estimates that the 2016 level will be approximately $970 per week.  Following publication in the Federal Register, the proposed regulations will be up for public comment before the DOL issues final regulations.

National Harbor IRS Tax Forum

Posted on by Sandy Steinwedel

On July 7 and 8 Sandy Steinwedel, Rick Messenger and I represented the MSATP at the IRS Tax Forum.  The site of the forum was the Gaylord Hotel at National Harbor near Washington, D.C. Many small firm and independent tax professionals expressed interested becoming MSATP members.  Keeping up their skills and staying current with the latest events impacting their profession was the most prevalent reason for their interest.  Over 10 new applications were received during the 2 days and several membership renewals.  Events such as these are important not just for new members, but members who aspire to be informed, better at what they do and peer interaction. While the new state of MD regulations generated their interest initially (and kept Sandy pretty busy) many became engaged on another level.  Especially once they were informed of the many benefits MSATP membership has to offer.  The solo conference was a point of interest for at least 3 of the new members.  The next time you are at an event or seminar make sure you introduce yourself and welcome these new members.  We know that can make all the difference.

IRS Detects Massive Data Breach in “Get Transcript” Application

Posted on by Sandy Steinwedel

Last week the Internal Revenue Service warned of a huge data breach of its on-line “Get Transcript” application that allowed tax returns of approximately 104,000 taxpayers to be accessed by identity thieves.

Has anyone had a client who was touched by this issue?

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