Article Archives: 2015

Posted by: Rick Cooley

By Rick Cooley, CPA

As you’ve heard, the new healthcare law contains many new tax provisions that impact employers of all sizes.

That said, understanding the size and structure of your workforce – whether it is small or large – will help you understand the details of the impact on your organization and navigate the complexities of the new law and comply with those parts that apply to your organization. Calculating the number of employees is particularly important for employers that have close to 50 employees. The following are questions you should be asking yourself:

Is my organization an Applicable Large Employer?  » Read more

Posted by: Shelly Archuleta

By Shelly Archuleta, CPA

Changes to Financial Reporting for Benefit Plans
FASB Accounting Standards Update
ASU 2015-07 and ASU 2015-12

During this past summer, the Financial Accounting Standards Board (FASB) was busy issuing new guidance that changed financial reporting requirements for employee benefit plans. Accounting Standards Update (ASU) 2015-07 was issued in May 2015 and resulted in disclosure changes for investments in certain entities that calculate Net Asset Value (NAV) per share (or its equivalent).

Two months later, ASU 2015-12 was issued, which included changes to disclosures for fully benefit-responsive investment contracts and simplified investment disclosures in benefit plans.

 » Read more

Posted by: Andrew Prather

By Andrew Prather, CPA

On November 11, 2015, the Financial Accounting Standards Board (FASB) voted to proceed with issuing a new accounting standard for leases. This new accounting standard will require all entities that follow U.S. generally accepted accounting principles for financial reporting to include lease obligations on their balance sheets.

This new accounting standard is the result of a 10-year process that started with promptings for improvements to lease accounting from the SEC and other stakeholders.

Highlights of this new accounting standard include:

  • Right-of-use principle: The basic principle that underlies this new standard is that a lease conveys the right to control the use of the leased asset and gives rise to a liability that should be reflected on the balance sheet.

 » Read more

Posted by: Joe Haberzetle

By Joe Haberzetle, JD, LLM

Should retirement communities, assisted living facilities, and the like charge sales tax on the meals provided to their residents? The answer is not a simple yes or no, as guidance posted recently by the Washington Department of Revenue (DOR) on its website shows.

This guidance states that the taxability of meals provided by a senior living or care facility depends first and foremost on whether the facility provides healthcare services. It confirms that meals provided by “licensed boarding homes, hospitals, nursing homes and assisted living facilities” are not subject to sales tax. However,

 » Read more

By Vincent Stevens, CPA, CGMA and Troy Rector, CPA

Imagine asking supporters of your nonprofit to donate to pay for all the administrative fees necessary to run the organization – items such as human resources, accounting and technology. Most funders – individual donors, foundations and government granters – like to fund the actual work, the direct costs a nonprofit spends to help those it serves. But for an organization to be healthy and do direct programming, it also has to pay for the back office infrastructure. All of these so-called “indirect costs” are necessary for the organization to fulfill its mission of helping those it serves.

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The IRS’s track record of disallowing charitable contributions has been dishearteningly successful over the past several years. The winning issue for the IRS is a technicality usually based upon flawed donor acknowledgment letters. One tactic that some donors have taken to try to preserve their deduction is specific language in the statute that allows for an alternative to the contemporaneous written acknowledgment (CWA) in IRC section 170. The statute says that if the charitable organization files a return with the Service, set forth in the Treasury Regulations, which has the same information required on the CWA, the donor’s deduction shall not be denied. The problem with this defense is that the IRS has never developed an approved return for charities to file.

 » Read more

As we enter the fall season and the end of the calendar year, donors are preparing for the upcoming tax season and how they will be allocating donations to their charities of choice. Charities are working aggressively to get out in front of these donors to make one last fundraising push. It’s a good time to remind your employees that they adequately document contributions and adhere to your gift acceptance policies. This may require sending a brief reminder to your accounting and development staff to make sure that your documentation standards and policies are adequately communicated.

First, here are a couple reminders for your gift acceptance policy.

 » Read more

Posted by: Joe Haberzetle

By Joe Haberzetle, JD, LLM

Note: the information in this article had additional updates on February 19, 2018. View the updated article here.

In our May 2014 article, we discussed the difficulties commercial and residential landlords encounter in determining the extent to which amounts received from tenants are subject to Washington B&O tax. While rental income is generally exempt from B&O tax, receipts from ancillary fees and services provided to tenants may not be exempt. A recently published Department of Revenue administrative appeal determination provides new insight on this thorny issue.

The question presented in the determination was whether promotional dues received by mall owners from their tenants were subject to B&O tax.

 » Read more

Posted by: Joe Haberzetle

By Joe Haberzetle, JD, LLM

Seemingly every year the Washington legislature makes a number of changes to the state’s tax laws, and 2015 was no different in this regard. Since 2011, Washington law has provided an exemption from Business and Occupation (B&O) tax and sales/use tax for complimentary meals provided by restaurants to employees. However, the 2015 legislature revised this exemption to significantly limit which employees are eligible.

Under the 2011 law, restaurant operators who provide complimentary meals to employees without a specific charge are allowed an exemption from sales tax, use tax, and B&O tax on those meals.

 » Read more

Posted by: Bob Heller

By Bob Heller, JD, LLM

Taxpayers earning revenue from performing services or from licensing intangibles, and doing business both inside and outside of the State of Washington are required to complete an “Annual Reconciliation of Apportionable Income.”

The form must be submitted to the Department of Revenue by October 31st of each year; failing to file the reconciliation may result in penalties.

The Department of Revenue allows businesses to use the prior year’s apportionment factor for reporting current year liabilities. This simplifies the businesses reporting method but then requires the business to do a true-up at the end of the year to determine the current year’s factor based on actual data.

 » Read more

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