rlewis, Author at Whalen & Company, CPAs

Credit shelter trust benefits for large estates

rlewis on June 30, 2015

Portability now allows married couples to use up both spouses’ estate tax exemptions without having to make lifetime asset transfers or set up trusts, though this “simpler” path isn’t necessarily the better path.

For couples with large estates, making lifetime asset transfers and setting up trusts can provide benefits that exemption portability does not offer.

With portability, if one spouse dies and part (or all) of his or her estate tax exemption is unused at death, the estate can elect to permit the surviving spouse to use the deceased spouse’s remaining estate tax exemption. But making the portability election does not protect future growth on assets from estate tax like applying the exemption to a credit shelter trust does.

Also, the portability provision does not apply to the Generation-Skipping Transfer (GST) tax exemption, and some states do not recognize exemption portability. Credit shelter trusts offer GST and state estate tax planning opportunities, as well as creditor and remarriage protection.

If you would like to learn more about credit shelter trusts or other estate planning strategies for your situation, please contact Whalen.

Out-of-State Telecommuters: Tax Consequences

rlewis on June 22, 2015

If you have employees who telecommute, make sure you consider the potential tax implications. Hiring someone who telecommutes in another state, for example, might…

Details matter when selling investments

rlewis on June 16, 2015

If you don’t pay attention to the details, the tax consequences of an investment sale may be different from what you expect.

For example, if you bought the same security at different times and prices and want to sell high-tax-basis shares to reduce gain or increase a loss to offset other gains, be sure to specifically identify which block of shares is being sold.

And when it gets close to year-end, keep in mind that the trade date, not the settlement date, of publicly traded securities determines the year in which you recognize the gain or loss.

Finally, consider the transaction costs, such as broker fees. While of course such costs are not taxes, like taxes they can have a significant impact on your net returns, especially over time, because they also reduce the amount of money you have available to invest.

If you have questions about the potential tax impact of an investment sale you are considering — or all of the details you should keep in mind to minimize it — please contact Whalen.

Image courtesy of Michelle Mieklejohn at freedigitalphotos.net

FASB Proposes Not-for-Profit Accounting Standards Update

rlewis on June 11, 2015

The Financial Accounting Standards Board (FASB) recently proposed an accounting standards update (ASU) for not-for-profit entities. The proposed update will affect not-for-profit organizations (topic 958) and health care entities (topic 954), and is designed to make financial statements more useful.

FASB shared this statement in a press release on the topic:

“The proposed ASU contains recommended enhancements to the fundamental reporting model for not-for-profit organizations-a model that has existed for more than 20 years,” stated FASB member Lawrence W. Smith. “We believe that these changes will refresh the model in ways that will make not-for-profit financial statements even more useful to donors, lenders, and other users.”

The proposal, Project: 2015-230 Presentation of Financial Statements of Not-for-Profit Entities, includes major changes to the following reporting areas:

Net asset classification
Liquidity
Statement of activities
Cash flows

FASB is accepting public comments on the proposal through Aug. 20, 2015, which can be submitted here.

The standards board recently held an educational webcast outlining the objectives of the proposal, key improvements that will take place if adopted and rationale behind the updates. The webcast is available for viewing here (you must register to access the archived event).

Whalen & Company will stay on top of the progress of this exposure draft proposal and we will keep our not-for-profit clients apprised of changes to reporting standards. An effective date will be determined by the FASB once they have considered all comments and feedback received from third parties. It is expected, however, that all amendments proposed in the ASU would be applied on a retrospective basis. In the first year of application, a not-for-profit entity would be required to disclose the nature of any re-classifications or restatements and their effects, if any, on changes in the net asset classes for each year presented.

Links to Key Resources for FASB’s Proposed Accounting Standards Update:

FASB In Focus: Overview of Proposed Changes
Full FASB 2015-230 Exposure Draft
Public Comment form for 2015-230 Exposure Draft
Educational Webcast Archive (you must register to launch the presentation)

If you have questions about FASB’s proposed updates to not-for-profit financial statement reporting, please contact your Whalen representative

Ohio BWC Prospective Billing Switch Begins July 1

rlewis on June 11, 2015

July 1, 2015 marks the beginning of the new policy year for the Ohio Bureau of Workers’ Compensation (BWC) prospective billing schedule for private employer premiums. Employers should receive letters over the next few weeks outlining their estimated premium installment schedules for the first policy year from July 1, 2015 to June 30, 2016.

Ohio BWC made this change from retrospective to prospective billing to align the agency with industry standards, and anticipates program benefits will include more flexible payment options and better budget anticipation for employers.

Important Dates for Ohio BWC Prospective Billing:

July 1, 2015: Policy Period and Prospective Billing Begins
- Ohio BWC is paying first installment as a continuation of the transition credit employers received for the first half of the year
Aug. 31, 2015: First payment due from Ohio employers
Nov. 2, 2015: Payment due from Ohio employers
Dec. 31, 2015: Payment due from Ohio employers
Mar. 2, 2016: Payment due from Ohio employers
May 2, 2016: Payment Due from Ohio employers
Aug. 15, 2016: Employers must file a report to reconcile payroll estimates previously paid vs. actual payroll amount for previous policy year (AKA “Payroll True-Up”)
- If “True-Up” is not reported on time, the employer could lose coverage immediately and may be subject to other penalties/fines

(The switch will take effect on Jan. 1, 2016 for public employer taxing districts.)

Free seminars and webinars from Ohio BWC are available for employers to learn more about how prospective billing will impact your business. Click here to see scheduled webinars.

Ohio BWC also launched the “Destination: Excellence” risk-management program, that features incentives and savings programs, to coincide with the switch to prospective billing. To learn more about the programs available and understand the benefits of the program, check out this Ohio BWC brochure.

If you have questions about Ohio BWC’s switch to prospective billing, please contact your Whalen representative.

More information: Ohio BWC Prospective Billing Resources and FAQs

Author: rlewis

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