Article Archives: 2018

The Tax Cuts and Jobs Act’s change to the standard deduction provides opportunities for multi-year tax planning. The new law may affect charitable giving, depending on the taxpayer’s taxable income before their charitable deduction.

Let’s take the case of a married couple and their three basic deductions: state and local taxes, home mortgage interest, and charitable contributions. Of these three most common deductions, only the charitable deduction allows for flexibility or tax planning; the remaining are relatively fixed deductions.

Our first couple earns $200,000, has $24,000 of mortgage interest and $10,000 in state in local taxes. For this couple, a $1,500 charitable contribution would reduce their taxable income and reduces their marginal tax rate from 24 to 22%.

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in sales tax.

For accounting professionals and many of their clients, the software or other digital services they use daily are no longer stored on local hard drives or overheated servers stuffed in a back closet. The professional world has moved on to using the cloud, but most states have still not affirmatively recognized this new-ish elephant in the computing room. In terms of the sales and use tax treatment for cloud-based services, many regional governments leave vendors, purchasers, and their advisors in a haze when searching for answers about accounting for cloud services.

Buying and Selling Cloud-Based Services

In dealing with sales tax, one of the principal tasks for any vendor is to determine the proper tax treatment for the items or services they sell in the jurisdictions where they are obligated to comply.

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Posted by: Julie Eisenhauer in Hospitality.

By Julie Eisenhauer, CPA

As we head into May and the prime tourism months of summer, it is an opportune time for hospitality professionals to evaluate the important responsibility they have in maintaining data security and privacy.

One only has to read the headlines to realize that data security and privacy continue to be of paramount importance to customers of hospitality businesses. Several years ago, I wrote an article that outlined basic steps to consider when protecting data. These steps for protecting data I wrote about a few years ago are as relevant today as they were then.

Step 1: Locate and inventory where personally identifiable information (PII) is stored

PII includes first and last names,

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Not-for-profits (NFPs) rely heavily on the most current and innovative methods of communicating and receiving contributions from their supporters. Donor campaigns often use the latest social media platforms and payment methods as a means of staying up-to-date and securing important funds. NFPs and donors also increasingly rely on their smartphones as a preferred communication tool and as a means of managing their lives, business, relationships, and finances. Emails are still a life blood of communication, but text messages are becoming an easier, quicker method of staying in touch.

In this technologically connected environment, it’s more crucial than ever that your NFP’s IT and HR departments have a policy covering the use of smartphones (both from inside and outside of the organization),

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Not-for-profit boards have three fiduciary duties: the duty of 1) care, 2) loyalty and 3) obedience. Part of the duty of obedience is the duty to comply with tax laws. Federal tax law requires boards to annually prepare and file an accurate Form 990 for their organizations. As part of the preparation process, exempt organizations must exercise reasonable efforts to obtain from specific individuals information required to be disclosed on the 990. Some of this information is not readily available to the organization unless it simply queries the individuals. Three areas of the Form 990 where the instructions suggest that reasonable efforts include using a questionnaire are:

I. 

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in sales tax.

To expand sales tax revenues, some states are now searching for and using the presence of Internet cookies dropped across state lines to add to their coffers.

These cookies are the colloquial expression for small snippets of software code stored on remote computers, phones, and other internet-connected devices. Cookies are extremely common. They’re what allows a website previously visited to “recognize” the computer’s user when the site is revisited. Cookies are everywhere. States aren’t looking to tax the transmission or storage of cookies, but instead want to base a claim of sales tax nexus on the transmission and storage of a cookie once transmitted to an in-state device.

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The information provided by the finance departments and the development departments at not-for-profit organizations often does not agree and it doesn’t have to. What does have to happen is the numbers must be able to be reconciled from one to the other, especially if two separate reports are being provided to the Board of Directors. Organizational practices are intended to benefit the organization as a whole and not just one department. While many finance and development departments work well together, here are four areas to collaboratively focus on for better data and compliance.

1. Year-end Cut Off

Establish a collaborative process for proper donation cut-off to ensure recording in the correct year for both the organization and donor,

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Note: This article has been substantially updated since its February 21, 2018 publish date. Please refer to the latest article here.

Note: This article, originally published on January 1, 2018, has been updated to include the latest developments regarding the Tax Cuts and Jobs Act. The new information will be in blue italics.

Certain transportation and, in some cases, onsite recreational facility benefits have been treated as tax exempt to employees, and tax deductible to employers prior to passing the Tax Cuts and Jobs Act of 2017.

However,

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In a previous article, we discussed how expense reimbursements could present a B&O tax trap for real property lessors. Since publishing the article, we have learned that the Washington Department of Revenue (DOR) is aggressively targeting property management fees and payroll reimbursements on audit.  In certain cases, property managers have been assessed sales tax (as well as B&O tax) on management fees and payroll reimbursements the DOR recharacterizes as consideration for sales taxable services.

Payment structures for property management services run the gamut.  For example, property managers may charge a flat fee or a percentage of rental income,

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The Tax Cuts and Jobs Act, signed into law on December 22, 2017, contains provisions that directly impact certain benefits commonly provided to employees.  Employers should be aware of these changes and the effective dates of each change, as it may require changes to payroll, federal income tax withholding, and both the employer and employee share of payroll taxes.  Employers should understand these changes and update payroll procedures as soon as possible.

Bicycle Subsidies

Beginning on January 1, 2018, amounts an employer provides to employees to subsidize commuting by bicycle must be included in the employees’ taxable wages.  Prior to 2018, employers could provide up to $20 a month to employees commuting by bicycle and exclude this amount from taxable compensation for its employees.

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