Hawkins Ash CPAs https://hawkinsashcpas.com Part of your business. Part of your life. Fri, 13 Dec 2019 22:19:37 +0000 en-US hourly 1 https://wordpress.org/?v=5.3.1 QuickBooks Newsletter: December 2019 https://hawkinsashcpas.com/quickbooks-newsletter-december-2019/ Fri, 13 Dec 2019 21:52:21 +0000 https://hawkinsashcpas.com/?p=8157 View our latest QuickBooks Newsletter. Topics included in this newsletter include the following: Sales Tax in QuickBooks Online 2020 Key Tax Fact Sheet Software Lifecycles and How They Affect You Fraud Scheme Targeting Payroll 6 Year-End Must Do’s View it here>>>

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View our latest QuickBooks Newsletter. Topics included in this newsletter include the following:

  • Sales Tax in QuickBooks Online
  • 2020 Key Tax Fact Sheet
  • Software Lifecycles and How They Affect You
  • Fraud Scheme Targeting Payroll
  • 6 Year-End Must Do’s

View it here>>>

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Your 2020 Financial Planning To-Do List https://hawkinsashcpas.com/your-2020-financial-planning-to-do-list/ Fri, 13 Dec 2019 20:07:03 +0000 https://hawkinsashcpas.com/?p=8145 It’s crazy, but we are at the end of the year. When you think back at the resolutions you made at the beginning of the year, how many did you accomplish? What are your 2020 resolutions? In this podcast, we cover a few financial planning items that should be on your 2020 list: Retirement funding, […]

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It’s crazy, but we are at the end of the year. When you think back at the resolutions you made at the beginning of the year, how many did you accomplish? What are your 2020 resolutions? In this podcast, we cover a few financial planning items that should be on your 2020 list: Retirement funding, education funding, wills, trusts, insurance, beneficiaries, insurance and others.

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Cool to be Kind https://hawkinsashcpas.com/cool-to-be-kind/ Thu, 12 Dec 2019 18:34:50 +0000 https://hawkinsashcpas.com/?p=8141 In 2019, employees chose to donate their time to causes that promote and inspire compassion, care and love for animals of all kinds in our local communities. This holiday season, we’ve donated $5,760 to local organizations whose missions are to care for and support animals of all kinds. In addition to monetary donations, our employees […]

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In 2019, employees chose to donate their time to causes that promote and inspire compassion, care and love for animals of all kinds in our local communities. This holiday season, we’ve donated $5,760 to local organizations whose missions are to care for and support animals of all kinds. In addition to monetary donations, our employees have been actively volunteering in their communities to help those organizations with animals as their focus. In 2019, our employees donated just over 550 hours of volunteer time.

Scroll down to view the organizations our employees chose to either volunteer with or give a donation to.

Click here to see our volunteer teams in action>>>

Green Bay, WI

NEW ZOO: The NEW Zoo strives to be THE regional destination that inspires appreciation and stewardship of wildlife and the natural world.

Happily Ever After Pet Shelter: HEA provides a loving home to every companion animal that enters its care. Lifetime guaranteed.

La Crosse, WI

Coulee Region Human Society: The Coulee Region Humane Society actively promotes the humane treatment of animals and positive human-animal relationships.

HorseSense: HorseSense for Special Riders is dedicated to enriching the lives of individuals with special needs through a partnership with horses.

Clearwater Farm: The Clearwater Farm demonstrates, teaches and advocates the sustainable use of natural, architectural, historical, and agricultural resources.

Capable Canines of Wisconsin, Inc.: Capable Canines is a nonprofit organization that trains and places service dogs. It is dedicated to providing support to children and adults living with autism, seizures, diabetes, hearing impairment, and physical disabilities.

Manitowoc, WI

Lakeshore Humane Society: The Lakeshore Humane Society is a no-kill facility that cares for the stray and surrendered animals of Manitowoc County, WI.

Lincoln Park Zoo: The mission of the Lincoln Park Zoological Society is to assist and support the City of Manitowoc’s efforts to maintain an ethical, high quality public zoo.

Marshfield, WI

Marshfield Area Pet Shelter: The Marshfield Area Pet Shelter strives to treat all animals with dignity and respect, enrich the lives of animals in need, and improve the relationship between people and pets.

Hart Equine Therapy Center, Inc.: HART Equine Therapy Center, Inc. has a vision to educate the community of the benefits of equine-assisted therapy through basic horsemanship. Those with challenges and/or special needs have an opportunity to partner with a horse to give them a sense of accomplishment and self-worth while in a fun and safe environment.

Medford, WI

WIGM/WKEB Christmas Wish Program: Christmas Wish grants wishes to families that are going through a difficult time in their lives. Recipients live in Taylor, Price, Marathon, or Clark Counties.

Mequon, WI

Wisconsin Humane Society–In memory of Carlie Beaudin: Carlie Beaudin was a Froedtert Hospital nurse practitioner who passed away suddenly on January 25th, 2019. She had a kind, vivacious personality and loved animals. Donations in her memory were given to the Wisconsin Humane Society.

Milwaukee Area Domestic Animal Control Commission (MADACC): MADACC’s goal is to increase the number of animals transferred or adopted from MADACC and prevent animal cruelty and neglect. Many of the animals who come in to MADACC are friendly, healthy, and highly adoptable. Its efforts give them a second chance at finding permanent, loving homes.

Rochester, MN and St. Charles, MN

Paws & Claws Humane Society: PCHS promotes and provides humane protection and shelter for abandoned or lost companion animals. PCHS does not euthanize.

Winona, MN

Winona Area Humane Society: WAHS’s mission is to heal, shelter, and care for animals who have nowhere else to turn. They place homeless animals in new, loving homes, and reduce the overpopulation of homeless animals by spay and neutering.

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2020 Key Tax Fact Sheet https://hawkinsashcpas.com/2020-key-tax-fact-sheet/ Mon, 09 Dec 2019 19:26:23 +0000 https://hawkinsashcpas.com/?p=8133 Download our 2020 Key Tax Fact Sheet to ensure you’re up to date. Rates included: Social Security, Medicare and Federal Unemployment Rates WI and MN Unemployment Rates Federal Minimum Wage Mileage Rates Retirement and IRA Contribution Limits Health Savings Accounts Contribution Limits Click here to view and print the fact sheet.        

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Download our 2020 Key Tax Fact Sheet to ensure you’re up to date. Rates included:

  • Social Security, Medicare and Federal Unemployment Rates
  • WI and MN Unemployment Rates
  • Federal Minimum Wage
  • Mileage Rates
  • Retirement and IRA Contribution Limits
  • Health Savings Accounts Contribution Limits

Click here to view and print the fact sheet.

 

 

 

 

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2019 Payroll and Year-End Reporting https://hawkinsashcpas.com/2019-payroll-and-year-end-reporting/ Thu, 05 Dec 2019 20:55:48 +0000 https://hawkinsashcpas.com/?p=8118 As an employer, you know year-end payroll processing and reporting is a complex undertaking that adds to the stress of closing the books for the year. To ensure a smooth, error-free year and to get the latest information watch this training video. View PowerPoint slides>>>    

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As an employer, you know year-end payroll processing and reporting is a complex undertaking that adds to the stress of closing the books for the year. To ensure a smooth, error-free year and to get the latest information watch this training video. View PowerPoint slides>>>

 

 

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Net Operating Losses and Unrelated Business Taxable Income https://hawkinsashcpas.com/net-operating-losses-and-unrelated-business-taxable-income/ Wed, 27 Nov 2019 21:35:43 +0000 https://hawkinsashcpas.com/?p=8044 The Tax Cuts and Jobs Act of 2017 (TCJA) that was signed into law on December 22, 2017, has some tax implications that impact nonprofit organizations. In this article we specifically address the Net Operating Loss (NOL) rules and how they apply to Unrelated Business Taxable Income (UBTI) for nonprofit organizations that file Form 990-T. […]

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The Tax Cuts and Jobs Act of 2017 (TCJA) that was signed into law on December 22, 2017, has some tax implications that impact nonprofit organizations. In this article we specifically address the Net Operating Loss (NOL) rules and how they apply to Unrelated Business Taxable Income (UBTI) for nonprofit organizations that file Form 990-T. These rules are generally effective January 1, 2018.

Under the pre-TCJA tax law, a non-profit could net together its various business activities that produced UBTI in determining the amount subject to income tax. Under the TCJA, nonprofits must calculate UBTI for each unrelated trade or business separately, with the total UBTI equaling the sum of each activity’s UBTI. Any activity that produces a loss cannot be used in reducing the current year total UBTI; instead that specific activity will have an NOL that it can carry forward to offset future UBTI for that specific activity only. The NOL cannot be used to offset UBTI from other unrelated business activities.

Also as part of the TCJA, NOLs generated after 2017 can only be carried forward; they cannot be carried back to offset prior tax. In addition, NOLs generated after 2017 can only be used to the extent of 80% of taxable income computed without regard to the NOL. Thus you may not be able reduce your current UBTI to zero by using a prior year NOL. For example, unrelated business Activity A has a 2018 loss of $10,000. This NOL is carried forward to 2019. In 2019, Activity A has profit before considering the 2018 NOL, of $8,000. The NOL that can be used in 2019 is $6,400 ($8,000 profit before NOL times 80%). Resulting UBTI for Activity A in 2019 is $1,600 and the 2018 NOL that remains is $3,600 ($10,000 less $6,400) which can be carried forward to 2020. Now if we change the facts for 2019 and the profit is $13,000 before NOL usage, 80% equals $10,400; now we can use the entire $10,000 NOL from 2018 to reduce 2019 UBTI to $3,000.

If your organization has a pre-2018 NOL generated from UBTI activities, that NOL can be used to offset total UBTI. It is not required to be allocated to any specific business activity.

One final thought; as part of the TCJA, the corporate tax rate changed from a tier (bracket) tax system (0%, 15%, 25%, 34%, and 39%) to a flat 21%. This could be good news or bad news depending on your organization’s level of UBTI. You can reference IRS Publication 598 regarding Tax on Unrelated Business Income, or you can contact your local Hawkins Ash representative for help.

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The Child and Dependent Care Tax Credit https://hawkinsashcpas.com/the-child-and-dependent-care-tax-credit/ Wed, 27 Nov 2019 20:06:04 +0000 https://hawkinsashcpas.com/?p=8100 As the cost of daycare continues to increase, did you know that there is an IRS credit that may be able to offset some of the expense? It’s called the Child and Dependent Care Credit. Who is eligible to take the credit? Basically a qualifying person is a dependent under age 13 unless disabled, then […]

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As the cost of daycare continues to increase, did you know that there is an IRS credit that may be able to offset some of the expense? It’s called the Child and Dependent Care Credit.

Who is eligible to take the credit?

Basically a qualifying person is a dependent under age 13 unless disabled, then there is no age limit. A qualified individual is not just a child. Other rules include that the parent must have earned income and if married both must have earned income. The credit is then going to be based off of what they call qualified expenses. Those qualified expenses are basically just the cost of daycare or the cost that you may pay a daycare provider. It qualifies if the expenses are incurred while the parent/guardian works or for the time they are looking for work. This is in the case if the person is unemployed. They can use this credit for any expenses while they are looking for work. Lastly, the childcare provider must give you their name and SSN or EIN.

How can a family take advantage of these tax savings?

There are two ways. The first way is that they can take a tax credit on their tax return. The second way is they can utilize their employer sponsored cafeteria plan—the Section 125 plan. I see that a lot of people do a combination of both.

How much can someone save by taking the credit?

It really varies widely depending on income level and whether you take advantage of any employer plans. If you take the credit, it can be between 20 – 35% of the qualified expenses paid. Qualified expenses are limited to $3,000 for one child and $6,000 for two or more children. So 35% credit on $6,000 worth of expenses gets you a pretty nice number.

You said people can take advantage of an employer plan?

Yes, usually the Cafeteria plan (Section 125 plan) is the better way to go. If you use the credit, it’s only a credit against your income tax. Like I said, it’s somewhere between 20% and 25%. If you use the Cafeteria Plan, you can actually reduce your taxable income by not only the income tax, but also Social Security and Medicare. Many times the Cafeteria plan is the better way to go assuming your employer offers the plan and you are able to run these expenses through. It is also nice that it’s not limited to $3,000 if you have one child. With the Cafeteria Plan, you can reduce your income up to $5,000 (no matter how many children).

Is there planning that can be done ahead of time?

Yes, there is. It really depends on your income level. From our calculations, the lower your income level is, the better it may be to take the credit. The higher your income level is, the better it is to take the Cafeteria Plan from your employer. It’s nice because it is a pretty easy calculation, and people should do it because many are leaving a lot of money on the table.

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Tax+Business Alert: November 2019 https://hawkinsashcpas.com/taxbusiness-alert-november-2019/ Mon, 25 Nov 2019 18:42:53 +0000 https://hawkinsashcpas.com/?p=8085 View the November Tax+Business Alert newsletter. Headlines in this edition include the following: New Overtime Rules Effective January 1, 2020 PODCAST: Multi-Level Marketing Company–The Tax Considerations Independent Sales Reps Need to Know Making Gifts to Loved Ones? Don’t Forget Tax Planning View the newsletter here>>>

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View the November Tax+Business Alert newsletter. Headlines in this edition include the following:

  • New Overtime Rules Effective January 1, 2020
  • PODCAST: Multi-Level Marketing Company–The Tax Considerations Independent Sales Reps Need to Know
  • Making Gifts to Loved Ones? Don’t Forget Tax Planning

View the newsletter here>>>

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The Year-End Plan Census https://hawkinsashcpas.com/the-year-end-plan-census/ Mon, 25 Nov 2019 18:19:53 +0000 https://hawkinsashcpas.com/?p=8080 When you’ve reached the end of the Plan year, among other administrative tasks, it is time to compile the census. Assuming the Plan has been operating according to the Plan document throughout the year, the next step is to organize your information. Whether the Plan Sponsor prepares the census or a third party administrator organizes […]

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When you’ve reached the end of the Plan year, among other administrative tasks, it is time to compile the census. Assuming the Plan has been operating according to the Plan document throughout the year, the next step is to organize your information. Whether the Plan Sponsor prepares the census or a third party administrator organizes it on the sponsor’s behalf, it is important to review and verify that the census is complete and accurate. The following paragraphs will describe why the census is important, common problems we observe as auditors, and steps the plan sponsor can perform to take responsibility for it.

Why is it important?

Data contained in the census is used for annual compliance testing required by both the IRS and Department of Labor. This analysis is essential to make sure the Plan remains qualified. The testing will identify any corrective actions needed in order for the Plan to comply with the provisions affecting it. Errors in the census could result in testing inaccuracies and lead to additional testing and corrective action. Issues that go uncovered could affect the Plan’s tax-exempt status. The census is also used by the Plan’s auditor. A smooth audit process starts with a strong census.

What are common deficiencies to look for?

The information contained in the year-end census should cover the entire plan year, not just as of a point of time during the year. It should also include all employees with wages paid during the Plan year. This means that even if an employee is not employed at the end of the year, not yet eligible for participation, or not making deferrals, they should still be on the census if they received compensation. Although the format of the census and categories of data requested varies by Plan, ensure the census is complete and includes all of the required information.

How to ensure accuracy?

One way to identify potential issues in the census is to reconcile the compensation reported on the census to internal year-end payroll records or the W-3. This is a good check to determine if there are people missing. Keep in mind that only payrolls with pay dates that fall within your Plan year should be included. For example, for a December Plan year end, you would not include the payroll on the census that is paid in January even though the dates worked were in December. It is also recommended that the employee and employer deferral amounts be reconciled to contribution records. Demographic data such as birth dates, hire dates, and termination dates should also be reviewed for accuracy by comparing the information to employee files.

Please contact a member of the Hawkins Ash CPAs employee benefit plan team if you have any questions or need assistance regarding this topic.

Author: Emily Baldwin, CPA

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Employee Benefit Plan Resources: November 2019 https://hawkinsashcpas.com/employee-benefit-plan-resources-november-2019/ Mon, 25 Nov 2019 17:26:53 +0000 https://hawkinsashcpas.com/?p=8071 Take a look at our latest Employee Benefit Plan Resources newsletter. Headlines in this edition include the following: The Year-End Plan Census Employee Benefit Plan and IRA Quick Reference Table Changes to ERISA Plan Auditor Reporting Plan Compensation – Are We Defining it Correctly? View the newsletter here>>>

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Take a look at our latest Employee Benefit Plan Resources newsletter. Headlines in this edition include the following:

  • The Year-End Plan Census
  • Employee Benefit Plan and IRA Quick Reference Table
  • Changes to ERISA Plan Auditor Reporting
  • Plan Compensation – Are We Defining it Correctly?

View the newsletter here>>>

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