Changes to Personal Taxation on the Federal Income Tax Level

March 13, 2019 § Leave a comment

Tax Reform has caused many changes to personal taxation on the federal income tax level. Today, Nick Finkenauer, Tax Director, discusses these changes and what impact they may have on your federal tax return.

 

Five Topics that Every QuickBooks User Should Know

March 6, 2019 § Leave a comment

Although QuickBooks is the most widely used accounting software for small businesses, there are often updates or changes that make it hard to use. Today, Jonathan Porter shares five topics that every QuickBooks user should know.

 

I’m a Rower…Now!

March 4, 2019 § Leave a comment

I’m a rower…now! 

Late last year while at an audit client’s office, the company’s president randomly stopped in and asked if I was a rower, as in boat rowing. Supposedly, my tall frame is a good one for rowing. (Who knew? Not me!). 

I row in my work out classes (when I’m told to), but never without instruction and never more than a few minutes at a time. He then went on to tell me about an indoor rowing facility he belongs to and suggested I give it a try. 

I was definitely intrigued. What he didn’t know was that I was bored with my current workout routine, but the thought of trying something different hadn’t crossed my mind yet (change is hard). His random comment got me thinking about rowing. I did some research, called the rowing facility, and ended up going to a beginner’s class to try it out.  

The client’s random comment is such a great example of a referral that I didn’t even realize it was a referral until I looked back on the conversation. His passion of the sport and rowing facility was evident in his comments and inspired me to take action. 

If you are happy with an experience/service, store, professional, really anything – let people know! They may or may not be interested, but you won’t know until the conversation starts. And if they’re like me, they might not even know they are in need of a referral.  

View More: http://alexandbrenda.pass.us/mhcs

 

 

 

 

 

 

Abby Hood, CPA | Manager
AHood@MHCScpa.com

Tax Simplification – Are the Days of Itemizing Over?

February 26, 2019 § Leave a comment

Now that the calendar has turned to February, taxpayers have likely received most of their W-2s, 1098s, 1099s, and other tax reporting documents from their employers, mortgage company, banks, brokers, etc.  

Next on the list for many people this time of year is to summarize information related to other common expenses that they have become accustomed to deducting on their tax returns so they can provide it to their CPA or tax preparer in a well-organized, presentable manner (hint, hint). Medical expenses, charitable contributions, mortgage interest, real estate taxes, state income taxes, car license fees, investment fees, and employee business expenses are the most common of these types of expense deductions.

But wait! Didn’t the Tax Cut and Jobs Act (TCJA) simplify things for a lot of people this year, by increasing the standard deduction and eliminating a lot of these typical deduction items?  

Yes….and No.

Prior to the TCJA, the standard deduction for a married couple was $12,700. If a married couple had itemized deductions (such as those listed above) totaling more than this, they benefitted from using the higher itemized deduction amount on their return rather than taking the standard deduction.

The TCJA increased the standard deduction for a married couple to $24,000 for 2018. In addition, the TCJA eliminated some of the typical itemized deductions that taxpayers were used to taking – home equity loan/line of credit interest, investment fees, employee business expenses (including unreimbursed travel/mileage and home office expenses), job search expenses, and casualty and theft losses.  Also, the overall deduction for state and local income, real estate, and personal property taxes is limited to $10,000 per tax return.

With these new restrictions on itemized deductions and the nearly- doubled standard deduction, tax filing (and the agony of totaling receipts and ledgers for an entire weekend or more) for a lot of people will be A LOT simpler this year because their itemized deductions will not exceed the $24,000 standard deduction, meaning they can kick back, rest easy, and simply take the standard deduction on their federal Form 1040s.

Federal 1040s? What about their Iowa tax returns? I’m glad you asked…but many people may not be quite as happy or see it the same as tax guru like me. You see, Iowa’s standard deduction for a married couple for 2018 is a mere $5,000. Also, Iowa did not reduce or eliminate the list of deductions above that were affected by the TCJA.  

What does this mean? It means that many taxpayers who will now take the standard deduction on their federal returns will still benefit from itemizing on their Iowa returns. While this is good news for the most part, it does mean you will still need to set aside some indoor/desk time over the next few weekends, sharpen your pencils, and start organizing those documents and receipts! With the Iowa winter we’ve been having lately, along with the short-term forecast, that shouldn’t be a problem.

View More: http://alexandbrenda.pass.us/mhcs

Mike Brinker, CPA, Partner
MBrinker@MHCScpa.com

Revenue Recognition for Construction and Engineering Companies

February 25, 2019 § Leave a comment

Wendy Moran, Assurance Partner, strives to help clients in all industries understand the new Revenue Recognition Guidance that is required for all non-public companies with years beginning after December 15, 2018.  Check out this video as she breaks down #RevRec for #Construction and #EngineeringCompanies. #Assurance #LeadingTheWay #MHCScpa

Budget Planning for Your Business

February 21, 2019 § Leave a comment

Whether you are a well established business or just getting started, a budget is an important tool for managing a successful business. In this video, Brian Newton, Partner, shares how our Business Advisory team can help you create a strategic budget for your business’ success.

Iowa Ruling Addresses State Apportionment for Transportation Brokerage Companies

February 20, 2019 § Leave a comment

The Iowa Department of Revenue issued a declaratory order on how transportation brokerage companies and other similar transportation service providers allocate revenues for state income tax apportionment. In this recent case, the taxpayer was a transportation brokerage specialist who connected clients needing goods transported with transportation providers. The taxpayer did not physically transport any goods, however it apportioned its revenues using the specific allocation rules allowed for transportation service companies, which based the allocation on miles in a state compared to total miles. The Director of the Iowa Department of Revenue concluded that since the taxpayer did not physically move the goods, the allocation should be based on the service provider rules. Under these rules, the revenue should be allocated based on where the benefit of the service was received, which in this case was the location of where the delivery was received. For example, if the delivery of goods the brokerage company coordinated was made to an Iowa location, the revenue from that delivery would be allocated to Iowa and therefore be considered Iowa revenue for the brokerage company.

This is an important ruling because often times transportation companies automatically use the transportation service company rules, apportioning revenues based on mileage in a state even though they are not actually moving goods. For the 2018 tax year, transportation companies providing brokerage services should revisit how revenue is apportioned and determine whether the mileage apportionment rules apply, or if, like the case of the transportation brokerage company, the service provider apportionment rules apply. It should be noted that this does not impact the apportionment for transportation companies who physically haul goods.

Our experienced transportation team along with our knowledgeable state and local tax team are closely watching this development. Please reach out to us to discuss how this new ruling may apply to your specific situation.