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Tag: Taxes

Key Takeaways from MSATP’s Financial Literacy Facebook Live

Posted on by Sandy Steinwedel

On last week’s edition, we welcomed Rich Gottfried, Second Vice President of the Society and Chair of the Young Professionals Committee, to discuss the all-important topic of Financial Literacy. We then discussed how the Maryland legislature is attempting to offer college financial savings options for Maryland taxpayers. Read on for a closer look at the segments on this week’s recap!

FINANCIAL LITERACY

April is Financial Literacy Month—a very important topic that the MSATP community is actively trying to promote at levels of the education system. We have been collaborating with other agencies, including the Maryland Coalition for Financial Literacy and the Maryland Council on Economic Education, to lay a solid financial foundation for the next generation of competent, confident and financially literate adults. For more information on what financial literacy entails, check out this great resource published by the Maryland Council on Economic Education! (http://www.econed.org/2018/02/1487/)

While financial literacy is a required course offering in some Maryland public schools, it is only a mandatory graduation requirement in Baltimore City Schools and seven other county school systems.

MSATP is working with the Maryland Financial Literacy Coalition to offer our member volunteers as guest speakers that meet with teachers from elementary to high school grade levels and deliver presentations to their classes that focus on financial literacy topics the teacher and member volunteer have selected. Ann Elliot, a long-time member of the Society and a current volunteer with the MSATP Financial Literacy Team, submitted some of her thoughts after a recent visit to Eleanor Roosevelt High School: “In December, I presented at Northwestern High School in Hyattsville…I started with how I’d begun working the accounting field, how I’d begun working for myself, and how long I’d been doing it. I discussed various career opportunities, the pros and cons of accounting and tax work, including hours, sitting at a desk for long hours, multi-tasking, and working within various organizations versus working for yourself.” Ann also offered some suggestions on how the financial literacy initiative might be improved in the future: “One take away would be that I think it might be helpful to have someone available for one on one meetings, questions and discussions with students that are sincerely interested.  If during the career day programs, they allowed for some of us to be available to meet, the interested students may have an opportunity to drill down to their interests. In the classroom environment, it didn’t allow for more directed discussions without most of the class being excluded.”

MARYLAND’S NEW COLLEGE SAVING PROGRAMS

Maryland offers two great Sec 529 plans—the Maryland Prepaid College Trust and the Maryland College Investment Plan—that allow parents to save early for their children’s education while enjoying tax savings on their Maryland income tax return.

The State of Maryland and Maryland 529 are now teaming up to start a new initiative called The Save4College State Contribution Program. The plan, managed by T. Rowe Price, gives eligible taxpayers the opportunity to receive a one-time matching amount of $250. These funds can be applied to tuition at any U.S. college, technical or trade school and even international schools. To be eligible for the program, your tax client must meet the following criteria:

  • Must be a Maryland resident
  • The previous tax year’s taxable income must not exceed $112,500 as an individual or $175,000 jointly
  • Must open a Maryland College Investment Plan or have opened an account after December 31, 2016
  • Submit an application for the Save4College State Contribution Program prior to June 1, 2018 and make a minimum contribution to the investment plan between July 1 and November 1.

Here’s a closer look at the investment chart:

Maryland Taxable Income
 Individual Joint  *Minimum Contribution  State Contribution
$49,999 or less $74,999 or less $25 $250
$50,000 – $87,499 $75,000 – $124,999 $100 $250
$87,500 – $112,500 $125,000 – $175,000 $250 $250

You can apply to the program online here! (https://maryland529.com/MDMatch250)

Additionally, the MSA Scholarship Foundation offers scholarship opportunities for Maryland accounting students who are Maryland Residents. In 2017, the Foundation awarded 17 scholarships totaling $30,500. The Foundation will begin reviewing applications for the 2018-2019 Academic Year on June 15, 2018. If you know a current accounting student who might benefit, make sure you have them complete the on-line application by June 15, 2018! (www.msascholarships.org)

In case you missed it, you can find the full broadcast below and at https://www.youtube.com/watch?v=uXTBeAnhFJE&t=19s



That’s it for last week’s Facebook Live Recap! Be sure to tune in this Thursday for a presentation on Navigating the MSATP Website!

Not a member of our private MSATP Members Facebook Group yet? Click HERE to join!

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!

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?

Working with IRS during the 2014 Tax Season

Posted on by Sandy Steinwedel

Now that tax season is over you can step back and breathe a little easier for a couple of weeks. Then you will begin receiving calls from the clients that are on extension or you may begin calling them. In many cases you will be calling them until October 15th – your next week of craziness.

During these next couple of days of peace and quiet – I would like to hear how your interaction with the Internal Revenue Service worked out this filing season. After IRS Commissioner John Koskinen announced “only to call IRS as a last resort,” I had visions of the phone ringing constantly with tax questions from consumers who were not members or clients. Amazingly the phones were normal – Whew! Maybe this was just us, I have to wonder how others faired over the last four months?? Thoughts? Comments?

MSATP Website

Posted on by Sandy Steinwedel

So if you are like me, you are a busy professional who doesn’t have time to do everything that is competing for your attention.  That said, I’m pretty excited about MSATP’s new website.  Finally!  Succinct seminar offerings right on the front page and easy online registration for courses.  I love talking to Sandy and the staff at the MSATP office but I love the new website’s layout.  Everything I need is right at my fingertips with the new easy to navigate format, where I can get the info and resources I need quickly. There is a Member Discounts section where I can get succinct information about the various discounts that are MSATP has negotiated for all members.  There is savings on office expenses, shipping, and Verizon cellular services as well as tax research services, and IT Support. New on the website are:

  • A discussion board where I can ask questions and get feedback from my colleagues
  • Freecycle – a place to find used equipment that colleagues are letting go of – free.
  • A Lunch and Learn section where I can drop in and listen to brief web presentations on relevant topics to the tax and accounting industry.

Overall I’m really happy with the new layout.  Thanks MSATP for going the extra mile and making it easier to access and use my member benefits.

Appointment Service Test

Posted on by Sandy Steinwedel

In recent years, the IRS has been increasingly encouraging taxpayers to get the help they need through our website, IRS.gov. As the nation increasingly conducts business online, the IRS has seen strong growth in the use of services available on our website, particularly for taxpayers checking the status of their refunds, making payments or finding answers to their tax questions. Still, traffic in many Taxpayer Assistance Centers (TACs), particularly during the filing season, remains consistently more than IRS limited resources can support, forcing people to face lengthy wait times for help.

In order to more effectively use the expertise of IRS TAC employees, we will test delivering face-to-face service through an appointment process in a sample of TACs during this filing season.  All taxpayers have been notified in advance. This test will help determine if an appointment-based service approach can improve efficiency and reduce taxpayer wait times particularly in this period of severe budget cuts.  We are testing this program now during the high peak traffic period to better gauge the output of the testing and make adjustments for the needs of the taxpayers. The appointments will be beneficial to taxpayers who will know in advance that they can get the service they need without waiting. The first come, first served process currently in place cannot guarantee when or if a taxpayer can be helped. Taxpayers can often get the tax information they need or resolve a tax problem without having to call or visit an IRS office. Go to www.irs.gov for more information, and see service listing.

Please remember that taxpayers should always check IRS.gov for days and hours of service as well as services offered at the location they plan to visit by going to “Contact Your Local IRS Office.”

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