Developing News: 2019

In order to enjoy the maximum potential tax benefits of a Qualified Opportunity Fund (QOF), you must invest in a QOF by December 31, 2019. This will allow you to hold the investment for seven years prior to December 31, 2026 and thus receive the maximum 15% reduction in capital gains. Investors may still invest in QOFs after December 31st, but the potential exclusion from tax for invested gains would be limited to 10%, assuming a five year hold prior to December 31, 2026.

More importantly, December 31st is the only day that a taxpayer can invest in a QOF to receive the maximum tax benefits from deferring Section 1231 gains.

 » Read more

Virtual currency investors, and blockchain miners, take note: the IRS wants to know more about your 2019 cryptocurrency transactions.

In an effort to raise awareness of the tax consequences involving virtual currencies, the IRS added a new check box to the top of Schedule 1, Form 1040, Additional Income and Adjustments to Income that asks whether the taxpayer was involved in any virtual currency transactions in 2019. The IRS noted that some taxpayers with virtual currency transactions may have previously failed to report income and pay the resulting tax or did not report their transactions properly. Thus, the IRS is now directing responsibility for the accurate reporting of these transactions,

 » Read more

Recently, the Office of Management and Budget (OMB) sent out an email alert to those organizations that require Single Audits to be performed. If your organization does not have a Single Audit performed, there is no need to read further. For those organizations that do require Single Audits to be performed, we wanted to draw attention to the alert and what it may mean for your organization.

Each year, the OMB issues guidance to auditors via the OMB Compliance Supplement. Like in the past, the OMB issued this year’s Compliance Supplement in June, effective for audits beginning with fiscal year June 30,

 » Read more

For business and occupation (“B&O”) tax purposes, taxpayers earning apportionable revenue calculate their taxable Washington revenue by applying a “receipts factor” apportionment methodology. Taxpayers computing B&O tax in this manner are required to complete and file an Annual Reconciliation of Apportionable Income form with the Department of Revenue.

When is the Annual Reconciliation of Apportionable Income Form Due?

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

Who Must File?

In-state taxpayers that earn income from apportionable business activities performed for customers located inside and outside of Washington may apportion such revenue to Washington for B&O tax purposes.

 » Read more

April 21, 2020 update: To provide accounting relief and clarity during the COVID-19 crisis, the FASB published an exposure draft with proposals to delay the effective dates for Leases (Topic 842). Find more information here.

The FASB has taken the next step in formally delaying the effective date of the Leases standard.  They are also delaying the effective date for two other new ASUs that impact credit loss accounting and the accounting for derivatives/hedges.

A recent FASB News Alert was issued, noting that the FASB has issued an ASU exposure draft to change the effective dates of these ASUs. 

 » Read more

Qualified Business Income (QBI) Deduction Update

For tax years 2018 through 2025, individuals, trusts and estates can get a 20% deduction of Qualified Business Income (QBI) from sole proprietorships, S corporations and partnerships subject to certain limitations.

In general, all business income/loss qualifies for the deduction with the following exceptions and limitations:

  • It does not include employee wages, capital gains/losses, interest, dividends or partner guaranteed payments.
  • The QBI deduction is limited to 20% of taxable income less capital gain/qualified dividends.
  • Specified Service Trades/Businesses (SSTB) income qualifies for the 20% deduction if the taxpayer’s taxable income is less than $321,400 for 2019 married filing joint ($160,700 single) and is fully phased out at $421,400 ($210,700 single). 

 » Read more

As an executive, if you don’t receive accurate and timely end-of-month financial reports, your business could suffer in a multitude of ways:

  • You’ll be unable to identify errors in a timely manner, allowing the inaccuracies to balloon.
  • Year-end reporting will take longer than necessary.
  • Fraud is more difficult to detect.
  • And, you’ll lose the ability to capitalize on key performance indicators.

The ABCs of the Monthly Close Process

At the end of each month, the accounting department must reconcile the books with supporting documentation. Management then uses these statements to make decisions.

 » Read more

Last year, I wrote an article about the activity around quality of earnings (QoE) reports for M&A activity. To recap, a QoE report is a detailed analysis of all the components of a company’s earnings and the degree to which both cash and non-cash earnings, based on measurement and estimates, are subject to change. They are often prepared by independent third-party firms, such as a CPA firm, as part of due diligence in an acquisition. The one thing a QoE report is not, is an audit. There are no definitive criteria by which to guide the performance of, or reporting on, quality of earnings.

 » Read more

Taxpayers taking advantage of any one of the available State of Washington tax incentives – including tax deferrals, reduced B&O tax rates, exemptions, and credits – may be required to file an Annual Report or Annual Survey.

Some incentives require that both the report and the survey be filed, while other programs do not have a reporting requirement.

For tax incentives taken in 2018, the due date for the Annual Report and Annual Survey is May 31, 2019.

There are over 50 different tax incentive programs in Washington. A partial list of common incentives includes:

  • High Technology B&O Tax Credit for R&D Spending
  • High Technology Sales &

 » Read more

Tax Reform Update: Tax Savings with Depreciation

The Tax Cuts and Jobs Act (TCJA) greatly changed the bonus and Section 179 expense depreciation rules for businesses starting in 2018.  These changes allow businesses to take advantage of even greater deductions and provide a valuable business planning tool.  Any business, big or small, needs to be aware of these rules and changes to take advantage of the new deductions.

Bonus Depreciation

Historically, bonus depreciation had provided taxpayers the ability to immediately deduct 50% of the cost of qualifying fixed assets.  Previously, qualified fixed asset property included only brand new property. Used property was not eligible for the 50% bonus deduction.

 » Read more

Media Contact

Melissa Takade
Director of Marketing
Clark Nuber
Phone: 425-454-4919
Contact Melissa

Blog Archives

  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013