Holiday Office Hours

Happy Holidays

To celebrate this holiday season, TYS, LLP will be closed starting Friday, December 24th until Sunday, January 2, 2011. 

We will re-open on Monday, January 3, 2011.

We wish you a safe and Happy Holiday Season!

ThomasYork, LLP is now TYS, LLP

Now there's more of us to love.

We've changed our name and logo to make room for a new partner, Tim Shortsleeve.  Tim and his talented staff of accounting professionals are located in our new office in Rochester, NY. (We didn’t want to make them commute.)

Tim shares our passion for client service, and brings 20+ years of outstanding tax experience.  He also provides accounting, business consulting and coaching support services.  We know you will benefit from his knowledge and skills.

We look forward to serving you as we continue to expand the range of services and solutions TYS can offer.

Disclosure Requirements re: Multi-Employer Pension Plans

If you are a participating employer in a union collective bargaining agreement I'm sure you have been hearing about the possible changes to the financial statement disclosure requirements related to your participation in the union plans. The Financial Accounting Standards Board (FASB) has proposes some pretty onerous requirements which were originally intended to go into effect for public companies beginning with financial statements for years ending after December 15, 2010. All of our clients are non public entities so they have a one year delay on the effective date. This has been a pretty hot topic at the FASB meetings with lots of input from contractors and union representatives among other interested parties. I'm sure most of the comments were not in favor of the new requirements. The FASB met on November 10th and the September 2010 Exposure Draft on this topic was discussed. The result of the discussion is that the FASB has decided that a final standard will not be effective for the 2010 calendar year as originally planned for public companies. Revised effective dates will be decided at a future meeting after it has concluded it redeliberations. Hopefully the final requirements are not quite as onerous as originally published. We will all wait patiently I'm sure for the next Exposure Draft. For anyone wanting more information on the subject here is a link to the FASB website for this specific project. Happy reading. http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FProjectUpdatePage&cid=1176156724606#

AFRs for November 2010

The Applicable Federal Rates (AFRs) for the month of November are as follows:

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤ 3 years)	0.35%	0.35%	0.35%	0.35%
Mid-term (> 3 years but ≤ 9 years)	1.59%	1.58%	1.58%	1.57%
Long-term (> 9 years)	3.35%	3.32%	3.31%	3.30%

What is the Difference Between a Bid, Performance and Payment Bond?

I found this on LinkedIn and thought it could be useful to help us understand the different bonds that are needed on public works contracts and some non public contracts.

What is the difference between a bid bond, a performance bond and a payment bond?

The three primary bonds that are purchased on construction projects are bid bonds, performance bonds and payment bonds. Over the years, I have spoken to contractors and owners and, in many instances, there is confusion about what each bond covers. This brief article will attempt to explain the differences. Example 1: Bid Bond ABC School District has put out a Request for Proposals for a new roof on their high school building. Contractors X, Y and Z submit bids to perform the work listed in the RFP. The School District requires each of the contractors to submit a bid bond with their bid. The bid bonds are purchased by the three contractors from sureties. The School District decides to accept Contractor Y's bid. Contractor Y determines that they have underbid the project and decides not to execute the contract and not to perform the work. In this instance, the School District can make a claim against the bid bond due to Contractor Y's failure to abide by its bid. Thus, a bid bond is a type of bond (often required on publc construction projects, but not exclusively) designed to protect the owner in the event that the bidder refuses to enter into a contract after the contract is awarded or the bidder withdraws his bid before the award. A bid bond is an indemnity bond, which will be discussed below. Example 2: Performance Bond Municipality 123 retains Contractor AB to construct a municipal swimming pool at its recreation center. Contractor AB enters into a written contract and begins performing the work. During the performance of the work, Contractor AB goes out of business leaving the work about 50% finished. Additionally, some of the work that was performed was defective. Contractor AB has provided Municipality 123 with a performance bond. Municipality 123 can assert a claim against Contractor AB's performance bond for the cost to perform the unfinished work and the cost to correct the defective work. Thus, a performance bond protects the owner from the contractor's failure to perform in accordance with the terms of the contract. A performance bond does not provide protection against subcontractor or suppliers who have not been paid. A performance bond is also an indemnity bond. Example 3: Payment Bond Public Water District QQ has retained Contractor ZZ to install a new water tower. Because the project was over $25,000, Contractor ZZ was required by the Water District to provide a payment bond. Contractor ZZ completed the work, but failed to pay Subcontractor X for its work. Subcontractor X cannot pursue any claim against the Water District. However, Subcontractor X can assert a claim against the payment bond for the amount owed to it for its work on the project. Thus, a payment bond is designed to provide security to subcontractors and materials suppliers to ensure payment for their work, labor and/or materials on the project. A payment bond is also an indemnity bond. Indemnity Bonds: As set forth above, bid bonds, performance bonds and payment bonds are indemnity bonds. These bonds are not insurance policies. If a covered claim arises against a commmercial general liability policy, the insurer has a contractual obligation to indemnify and defend the insured (i.e. the party obtaining the policy) and cannot seek repayment from the insured for amounts paid out as a result of a covered claim. If a claim arises and is paid out on a bid bond, performance bond or payment bond, the surety (the party issuing the bond) will look to the contractor to indemnify and defend it. So, if a claim is asserted against Contractor XYZ's performance bond, the surety is going to look to Contractor XYZ to defend the lawsuit and to pay any damages.

FASB Backs EITF Decisions on Four Issues

Based on the FASB's decisions at its most recent meeting, three Emerging Issues Task Force (EITF) consensuses will be issued as proposals for public comment. A fourth will be published as a final standard.

1. EITF Issue No. 09-G, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts,” will be issued as a final standard.
2. The board also agreed to publish EITF Issue No. 09-H, “Health Care Entities: Revenue Recognition,” as a proposal. The proposed amendment to U.S. GAAP calls upon health care providers to disclose the policy for considering the collectability of an unpaid medical bill.
3. The task force agreed to seek public comments on EITF Issue No. 10-A, "How the Carrying Amount of a Reporting Unit Should Be Determined When Performing Step 1 of the Goodwill Impairment Test,"
4. The task force agreed to seek public comments on EITF Issue No. 10-G, “Disclosure of Supplementary Pro Forma Information for Business Combinations.”

Source: WG&L Accounting & Compliance Alert Checkpoint 9/30/2010

AFRs for October 2010

The Applicable Federal Rates (AFRs) for the month of October are as follows:

	Annual	Semiannual	Quarterly	Monthly
Short-term (≤ 3 years)	0.41%	0.41%	0.41%	0.41%
Mid-term (> 3 years but ≤ 9 years)	1.73%	1.72%	1.72%	1.71%
Long-term (> 9 years)	3.32%	3.29%	3.28%	3.27%

2010 Largest Accounting Firms

ThomasYork was ranked #44 on the SF Business Times Largest Accounting Firms list in the Greater Bay Area. We moved up three spots from last year. The ranking for this list is based on the number of professionals (CPA and CPA-track staff) in the Greater Bay Area. Everyone at TY looks forward to moving up the list year after year.

SMALL BUSINESS JOBS ACT OF 2010

Looks like the folks in Washington are finally agreeing on something. Yesterday, September 23, the House passed the Small Business Jobs Act of 2010 (H.R. 5297). It is expected to be signed by the President soon.

Here are some of the key provisions:

• §179 expanded: For tax years beginning in 2010 and 2011, expense limit is increased to $500,000 and phaseout threshold increased to $2 million;
• §179 for (some) real estate: For tax years beginning in 2010 and 2011, taxpayers can elect to treat certain real estate as §179-eligible. Qualifying real estate includes:
• Qualified leasehold improvements;
• Qualified restaurant property; and
• Qualified retail improvement property.
• Bonus depreciation extended: Available for property purchased through December 31, 2010;
• Luxury auto depreciation increased: As a result of the extension of bonus depreciation, first-year depreciation of automobiles is bumped up $8,000;
• Deduction for start-up expenditures increased: Under IRC §195, increased from $5,000 to $10,000 for taxable years beginning in 2010 (only);
• Exclusion for small business stock: For purchases made after the date of enactment and before January 1, 2011, the exclusion for small business stock under IRC §1202 is increased to 100%;
• Five-year carryback for general business credits: Effective for credits determined in the taxpayer’s first taxable year beginning after December 31, 2009 (one year only), the carryback period for an “eligible small business” is increased from one to five years. In addition, the credit is not subject to the AMT limitation;
• Built-in gain period shortened to five years: For taxable years beginning in 2011 (only), the recognition period for the BIG tax is shortened to five years;
• Deduction for health insurance for SECA purposes: For 2010 (only), the deduction for self-employed health insurance is also a deduction for purposes of the SE tax;
• Cell phones removed from listed property: Permanent and effective for tax years ending after 2009;
• Information reporting required for rental property: Effective for payments made after December 31, 2010, rental real estate is treated as a trade or business for information reporting purposes. IRS to prescribe de minimis exceptions;
• Higher information return penalties: Penalties under IRC §6721 are substantially increased beginning in 2011;
• §457 plans can include Roth accounts: For tax years beginning after December 31, 2010; and
• Rollovers from elective deferral plans to in-plan Roth accounts allowed: Effective on the date of enactment. Will allow a two-year deferral (2011 and 2012) for rollovers done in 2010.

Now let's see what else happens by the end of the year.

Franchise Tax Board Auditing Head Of Household Returns

Sacramento - The Franchise Tax Board (FTB) announced mailing more than 135,000 review letters to taxpayers who claimed the “Head of Household” filing status on their 2009 state tax return.

Taxpayers who do not qualify will have their tax reassessed at either a single or married-filing-separate filing status. Nearly 29,000 taxpayers who used this status last year did not meet its requirements and were issued more than $31 million in tax assessments.

Each year FTB reviews tax returns of taxpayers who claim the Head of Household filing status because the qualifications are commonly misunderstood. The status generally results in lower tax liabilities for unmarried taxpayers who care for a dependent. To qualify, the taxpayer must provide care for more than one-half of the year and pay more than one-half the cost of maintaining their home. The qualifying person must be related to the taxpayer and meet the requirements to be a qualifying child or relative. More than 2 million California taxpayers use this filing status each year.

FTB advises taxpayers who receive an audit letter to respond promptly by completing the enclosed questionnaire. Failure to respond could result in a tax assessment and penalty. Questionnaires can be submitted by any of these methods:

• Respond electronically at ftb.ca.gov. Use HOH Audit Letter Web Response page.
• Respond by fax at 866.223.8195.
• Respond by mail using the pre-addressed envelope provided with the audit letter.

FTB provides the following tools on its website to assist taxpayers:

• Head of Household “self-test.”
• Answers to frequently asked questions.
• Publication 1540, “CA Head of Household Filing Status,” in English and Spanish.

Final Schedule on Disclosures of Uncertain Tax Positions

The IRS has looked at the comments submitted in response to its proposed schedule of uncertain tax positions, and it's ready to produce a final version. Some of the concerns that businesses raised have been incorporated into the finished product.

Internal Revenue Service Commissioner Douglas Shulman said the agency plans to move forward with an unpopular plan to require businesses with more than $10 million in assets and have taken a reserve on the financial statements to file the new Schedule UTP, Uncertain Tax Position Statement. The schedule will require annual disclosure of uncertain tax positions with a concise description of the positions. The proposal does not require companies to disclose their risk assessment or tax reserve amounts, even though the IRS can issue a summons to compel submission of the information.

Many businesses are required by FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, (FASB ASC 740-10), to identify and quantify a tax position relating to a specific federal tax return for which a taxpayer is required to reserve an amount. The IRS said that the information developed in the course of complying with FIN No. 48 or other accounting standards is highly relevant to understanding the tax positions and assessing how those affect the taxpayer’s tax liability, Shulman said in a speech at Financial Executives International's Washington Policy Conference on September 21, 2010.

The agency said the information would allow it to focus its examination resources on returns that contain specific uncertain tax positions that are of “particular interest or of sufficient magnitude to warrant inquiry, as well as allowing examination teams to identify all of the issues underlying the tax returns more quickly and efficiently.” The proposed schedule and instructions seek information related to three categories of tax data:

• Positions for which a reserve is reflected in the taxpayer’s financial statements;
• Positions for which no reserve is reflected because the taxpayer expects to litigate and win the position; and
• Positions for which no reserve is reflected because the IRS has a general administrative practice of not examining the position.

The IRS released Announcement 2010-09 in January 2010 and extended the comment deadline in March. It was followed with a proposed Schedule UTP and draft instructions in Announcement 2010-30 in April. The comment period ended June 1.

Many accountants voiced concerns during the comment period. One complaint centered on the burden on taxpayers who are already stretched to meet current disclosure requirements. Some accountants argued that the proposal could undercut the integrity of the financial statement process by creating tension between taxpayers and tax advisers. They also feared that a disproportionately large share of the costs would fall on small businesses.

Source: WG&L Accounting & Compliance Alert Checkpoint 9/22/2010

GAAP Just for Private Companies?

A blue ribbon panel on private company financial reporting, expected to make its final recommendations before the end of the year, does not believe the current approach for setting generally accepted accounting principles (GAAP) related to private companies is meeting user needs in a cost-effective matter. The panel also has rejected any near-term future model based solely on International Financial Reporting Standards (IFRS).

The panel was formed earlier this year by the AICPA, the Financial Accounting Foundation (FAF) which oversees the Financial Accounting Standards Board (FASB), and the National Association of State Boards of Accountancy (NASBA) to explore the future of standard setting for private companies.

Three financial reporting models are being considered by the panel and would result in appropriate differences in GAAP for private companies. The panel will be deciding whether to recommend either: (1) U.S. GAAP with exclusions and enhancements for private companies, (2) a basic U.S. GAAP with public company add-ons, or (3) separate, stand-alone standards for private companies based on current U.S. GAAP.

The panel also is exploring whether to recommend a board separate from the FASB to oversee private company standards.

Input on how accounting standards can best meet the needs of users of private company financial statements may be given by visiting www.fasb.org, and the public comment period ends Wednesday, September 15, 2010.

Source: http://www.aicpa.org/News/FeaturedNews/Pages/BlueRibbonPanelUpdate.aspx

Employer Information Report (EEO-1) Due September 30th

The deadline for filing the Employer Information Report (also known as the EEO-1 Report) with the Equal Employment Opportunity Commission (EEOC) is September 30th. The report must be filed by: (1) employers with federal government contracts of $50,000 or more who have 50 or more employees; and (2) employers who do not have a federal government contract but have 100 or more employees.

The report requires employers to provide a count of their employees by job category, ethnicity, race, and gender. Employment numbers may be obtained from any pay period in July through September of 2010. The EEOC prefers the report to be filed using the EEO-1 online filing system. The system requires a login ID and password. Other filing options for private employers include submitting the report as a data file or filing the report as a computer printout. EEOC will only allow the report to be filed on paper if so requested by an employer with no Internet access.

The EEOC website contains a list of frequently asked questions on the report which can be viewed at http://www.eeoc.gov/employers/eeo1survey/faq.cfm. Further information on the reporting process can also be obtained by calling the EEO-1 Joint Reporting Committee at: (866) 286-6440.

Just Announced: 2010 Best Accounting Firms to Work For

New York, NY – September 16, 2010 – 100 accounting firms have been honored as the 2010 Best Accounting Firms to Work For in our third annual program created by Accounting Today and Best Companies Group. These top firms will be announced and honored at an awards luncheon on November 17 during Accounting Today’s Growth & Profitability Summit in Las Vegas and published in the December 13 issue of the magazine.This survey and award program was designed to identify, recognize and honor the best places of employment in the accounting profession, which benefit the nation's economy, its workforce and businesses.

The Best Accounting Firms to Work For list comprises 100 companies organized into three size categories: 45 small-sized companies (15-49 employees), 45 mid-sized companies (50-249 employees) and 10 large-sized companies (more than 250 employees). To be considered for participation, companies had to be public or privately held U.S. accounting firms with at least 15 employees.Firms from across the country entered the two-part survey process to determine the Best Accounting Firms to Work For. The first part consisted of evaluating each nominated firm's workplace policies, practices, philosophy, systems and demographics. The second part consisted of an employee survey to measure the employee experience. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final rankings.

For more information on the Best Accounting Firms to Work for program, visit http://link.p0.com/u.d?f4GrW2cTthyrG_83F0V8h=591.

2010 Best Accounting Firms to Work For (alphabetical order, no ranking)

Anchin Block & Anchin LLP Anglin Reichmann Snellgrove & Armstrong Anton Collins Mitchell LLP Averett Warmus Durkee Bader Martin, P.S. Baker Newman Noyes Barfield, Murphy, Shank & Smith, PC Bartlett, Pringle & Wolf, LLP Bartolomei Pucciarelli, LLC BeachFleischman PC Berlin, Ramos & Company, P.A. Berntson Porter & Company, PLLC Biscotti, Toback & Company, CPA's, P.C. Blue & Co., LLC Bond Beebe Accountants and Advisors Boyer & Ritter, CPAs and Consultants Brown Schultz Sheridan & Fritz Brown Smith Wallace LLC Burr Pilger Mayer, Inc. Citrin Cooperman Clark Nuber Cohen & Company Coulter & Justus, P.C. Covenant Consulting Group LLC Cowan Bolduc Doherty LLC Daszkal Bolton LLP Deemer Dana & Froehle LLP DeLeon & Stang CPAs & Advisors DiSanto, Priest & Co. Dixon Hughes PLLC Dunton & Associates, LLC E. Cohen and Company, CPAs Edelstein & Company LLP Ennis Pellum & Associates, CPAs Fesnak and Associates LLP Fulcrum Inquiry GALLINA LLP Ganze & Company Garcia, Espinosa, Miyares, & Co. LLP GBH CPAs, PC Hancock Askew & Co., LLP Hemming Morse, Inc. Hertzbach & Company, P.A. Homes, Lowry, Horn & Johnson, Ltd. Howard, Wershbale & Co. Hoyman Dobson Hughes Pittman & Gupton, LLP Hungerford, Aldrin, Nichols & Carter, PC Isdaner & Company, LLC Johanson & Yau Accountancy Corporation Johnson Jacobson Wilcox Kahn, Litwin, Renza & Co., Ltd. KatzAbosch Kaufman, Rossin & Co. Kearney & Company Kolb+Co. SC KraftCPAs PLLC Kreinces Rollins & Shanker, LLC Lanigan, Ryan, Malcolm & Doyle, P.C. LaPorte Sehrt Romig Hand Layton Layton & Tobler LLP LMGW Certified Public Accountants, LLP Lumsden & McCormick, LLP Mahoney Ulbrich Christiansen & Russ PA Mark Bailey & Company Martin Starnes & Associates, CPAs, P.A. May & Company, LLP Montgomery Coscia Greilich LLP Onisko & Scholz, LLP Certified Public Accountants Pannell Kerr Forster of Texas, P.C. Payne, Nickles & Company Pender Newkirk & Company Petrinovich Pugh & Co, LLP Pittman & Brooks, P.C. Porter Keadle Moore, LLP PSK LLP RBZ, LLP RINA Accountancy Corporation Riney Hancock CPAs PSC Rodman & Rodman, P.C. Sample and Bailey CPAs SGA GROUP, PC Sikich LLP SingerLewak Sisterson & Co. LLP Smith Leonard PLLC Squire Swindoll, Janzen, Hawk & Loyd, LLC The Bonadio Group The Whitlock Company ThomasYork, LLP Wall, Einhorn & Chernitzer, P.C. Walter & Shuffain, P.C. Wessel & Company WhippleWood CPAs, P.C. Whitley Penn LLP Wilkin & Guttenplan, P.C. Williams Benator & Libby, LLP Windham Brannon WithumSmith+Brown, PC

About Accounting Today and SourceMedia, Inc. SourceMedia's Accounting Today has served as the premier news vehicle for the nation’s tax and accounting community since 1987. Regular coverage includes news and features surrounding tax-law changes, regulatory and legislative updates, technology, financial planning, practice management, mergers & acquisitions and international developments. Accounting Today’s readership encompasses one of the widest demographics of any publication in the field, from the sole practitioner, to firms with multi-professionals, to national firms and ultimately, to the Big Four. SourceMedia, an Investcorp company, is a leading provider of timely and essential news, analysis, research, and insights for members of the financial services community, and the related fields of professional services and technology. SourceMedia offers its clients and subscribers professional publications and online information services, industry-standard data applications and in-depth seminars and conferences.

San Bruno Explosion Employer Payroll Tax Extension

Tax relief extended to Employers Affected by San Bruno Explosion and Fire

Employers in San Mateo County, California, that have been directly affected by the explosion and fire that occurred in that county in September 2010 may request up to a 60-day extension of time from the California Employment Development Department (EDD) to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. Written requests for extension must be received within 60 days from the original delinquent date of the payment or return to file/pay. Related information is available on the EDD Web site at http://www.edd.ca.gov/Payroll_Taxes/.

Source:

http://www.edd.ca.gov/Payroll_Taxes/Emergency_and_Disaster_Assistance_for_Employers.htm#sanmateoseptember

Are Business Owners Risk-Takers?

I recently read the following summary, and as a new business owner found it intriguing. During tough economic times like we have now, many business owners, including yours truly, wonder if it was the right decision to start their own business. Thankfully I can still answer with an emphatic yes.

I hope you find this interesting as well.

Chris-

Are Business Owners Risk-Takers? Not When It Comes to Their Finances

Are entrepreneurs financial risk-takers? Conventional wisdom says yes, but a recent research report from the Kauffman Foundation, Business Owners, Financial Risk, and Wealth, suggests otherwise.

Tami Gurley-Calvez, from the Department of Economics at West Virginia University, studied 1989 to 2007 data from the Federal Reserve Board, Survey of Consumer Finances (SCF) to research three questions:

1.) Are business owners generally more or less financially conservative than their non- business-owning counterparts?

2.) Do business owners accumulate more wealth?

3.) Do business owners hold a smaller share of their financial assets in risky stock holdings?

While entrepreneurs are typically portrayed as financial risk-takers, Gurley-Calvez found that when it comes to saving and borrowing, they are actually more conservative than non-business owners. For instance, 45 percent of business owners said it was important to them to save for retirement; just 32 percent of non-business owners said the same. In addition, business owners were focused on saving for the long term; they were more likely than non-business owners to say their savings horizon was five or more years in the future.

Finally, whether investing, saving or borrowing, business owners were more thorough than non-business owners in investigating their financial options. Ninety-one percent said they spent a "moderate" amount of time or more shopping for the best investment or borrowing terms; just 82 percent of non-business owners said the same.

Business owners accumulate more wealth over time than non-business owners. But although business owners showed more willingness to assume above-average risk in return for financial gain, in reality, both business owners and non-business owners invested similar shares of their portfolios in safe assets.

Business owners were less likely to say that an important reason for saving is having liquid cash available. However, they were substantially more likely than non-business owners to say they could borrow $3,000 from family or friends if needed.

They are also more likely to borrow from other sources. In the past five years, 84 percent of business owners had applied for a loan, compared to just 64 percent of non-business owners. And only 23 percent of them had been declined, compared to 31 percent of non-business owners.

Gurley-Calvez thinks perhaps the reason business owners aren't so concerned with liquidity is that they have "a stronger financial safety net." Compared to non-business owners, business owners seem to have more financial resources available to them—meaning that what others perceive as "risky" does not seem that way to them

Source: http://smallbiztrends.com/2010/09/business-owners-risk-takers-finances.html

OBAMA TO PUSH TAX BREAK

It has been awhile since our last post so I thought this would be a good one to get back on track. I received the following news alert today and thought I would share it. As it says below the details will be released this coming Wednesday but if it does include the ability to write off 100% of new purchases for plant and equipment it could be a huge benefit for lots of businesses. I'm sure there will be all kinds of caveats and limitations but lets keep our fingers crossed that some of this actually comes to be.

__________________________________ News Alert from The Wall Street Journal

President Barack Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to write off 100% of their new investment in plant and equipment through 2011, a plan that White House economists say would cut business taxes by nearly $200 billion over two years. The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways. http://online.wsj.com/article/SB10001424052748704392104575475920686869934.html?mod=djemalertNEWS

Holiday Office Hours

Wishing you a safe and happy 4th of July! The team at TY will be observing the Fourth of July holiday. Please note that our office will be closed from Noon on Friday, July 2nd, until Monday, July 5, 2010. We will resume our normal business hours on Tuesday morning.

2010 Tax Organizer Raffle

Congratulations Chris Avant & David Freer!

Chris Avant (pictured below) and David Freer were the winners of $250 each through our Tax Organizer Raffle.

As an incentive for our clients during tax season, we hold two raffles. To be entered in the first raffle you must be one of the first 25 clients to return a completed organizer. All remaining clients who return a completed organizer will be entered into our second raffle.

Every year the prizes change, so don't miss your opportunity to be the next winner!

New Home Tax Credits Available

From the California Franchise Tax Board (FTB):

The 2010 New Home/First Time Buyer tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable purchase agreement executed on or before December 31, 2010. The purchase date is defined as the date escrow closes.

These tax credits are limited to the smaller amount of five percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over three successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and the unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit.

COBRA Subsidy Eligibility Period Extended to May 31

From the IRS:

Workers who lose their jobs during April and May may qualify for a 65-percent subsidy on their COBRA health insurance premiums, according to the Internal Revenue Service. The American Recovery and Reinvestment Act established this subsidy to help workers who lost their jobs as a result of the recession maintain their employer sponsored health insurance.
The Continuing Extension Act of 2010, enacted April 15, reinstated the COBRA subsidy, which had expired on March 31. As a result, workers who are involuntarily terminated from employment between Sept. 1, 2008 and May 31, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. In some cases, workers who had their hours reduced and later lose their jobs may also be eligible for the subsidy.
Employers must provide COBRA coverage to eligible individuals who pay 35 percent of the COBRA premium. Employers are reimbursed for the other 65 percent by claiming a credit for the subsidy on their payroll tax returns: Form 941, Employers QUARTERLY Federal Tax Return, Form 944, Employer’s ANNUAL Federal Tax Return, or Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees. Employers must maintain supporting documentation for the claimed credit.
There is much more information about the COBRA subsidy, including questions and answers for employers, and for employees or former employees, on the COBRA pages of IRS.gov.
Some people who are eligible for the COBRA subsidy also qualify for the health coverage tax credit (HCTC) and may want to choose the more generous HCTC benefit, instead. The HCTC pays 80 percent of health insurance premiums for those who qualify. See more at HCTC: Eligibility Requirements and How to Receive the HCTC.

Health Care Tax Credit

Millions of small businesses have begun receiving postcards from the IRS alerting them to the new Small Business Health Care Tax Credit and encourage them to check their eligibility. The IRS provides a fact sheet to determine whether a business qualifies. The IRS also provides answers to Frequently Asked Questions. Key provisions of the credit are as follows: Eligibility Rules

• Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
• Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
• Average annual wage. A qualifying employer must pay average annual wages below $50,000.
• Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

• Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
• Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

IRS Open House May 15

From the IRS website: The Internal Revenue Service will host a special nationwide Open House on Saturday May 15 to help small businesses and individuals solve tax problems.

Approximately 200 IRS offices, at least one in every state, will be open May 15 from 9 a.m. to 2 p.m. local time. IRS staff will be available on site or by telephone to help taxpayers work through their problems and walk out with solutions.

“Our goal is to resolve issues on the spot so small businesses and individuals can put any issues they have with the IRS behind them,” IRS Commissioner Doug Shulman said. “If you have a problem filing or paying your taxes or resolving a tough tax issue, we encourage you to come in and work with us.”

IRS locations will be equipped to handle issues involving notices and payments, return preparation, audits and a variety of other issues. At a previous IRS Open House on March 27, approximately two-thirds of taxpayers requested and received assistance with payments and notices.

So, for example, a taxpayer who cannot pay a tax balance due can discuss with an IRS professional whether an installment agreement is appropriate and, if so, fill out the paperwork then and there. Assistance with offers-in-compromise will also be available. Likewise, a taxpayer struggling to complete a certain IRS form or schedule can work directly with IRS staff to get the job done.

At the March 27 Open House, 88 percent of the taxpayers who came in for help had their issues resolved the same day.

Locations for the May 15 Open House are listed here.

The Open House on May 15 is the first of three events scheduled through the end of June. The next two are planned for Saturday June 5 and Saturday June 26. Details regarding those events will be available soon.

Value Billing Model

In this excerpt from his presentation, "Transition to Value Billing Model", Glen Thomas describes some of the benefits ThomasYork, LLP has received by moving to a value billing model. This was recorded on December 3, 2009 at the Boomer Technology Circles™ Circle #5 meeting in Kansas City.

Tax Exempt Organizations

I thought this might be of interest for those of you with tax exempt organizations. There have been some significant changes to the Form 990. If you haven't looked into the changes I would recommend doing that sooner rather than later. It may take longer to prepare the return this year. The IRS posted a list of FAQs (updated 4/5/10) to www.irs.gov/charities/article/0,,id=96581,00.html on the annual reporting requirements for exempt organizations. The applicable return (Form 990 or Form 990-EZ, the short form return) is due on the 15th day of the 5th month after the end of the organization's tax year. This is May 15th for calendar year organizations. Organizations with gross receipts and assets below certain thresholds at the end of their tax year can file Form 990-EZ. In addition, certain church-affiliated organizations and governmental organizations are not required to file an annual return. Organizations whose annual gross receipts are normally less than $25,000 are not required to file an annual return, but may be required to file an annual electronic notice (e-Postcard).

Haiti Donations Deductible for California

From the California Franchise Tax Board Tuesday:

The Franchise Tax Board (FTB) announced today that a new state law allows taxpayers to immediately deduct their donations made to provide relief for the January 12 Haitian earthquake.

"This is welcome news for Californians who are supporting earthquake recovery efforts in Haiti," said State Controller and FTB Chair John Chiang.

Charitable deductions are normally taken on a tax return the following calendar year. The new law gives donating taxpayers the added option to claim the deductions immediately on their 2009 returns instead of waiting to claim it on their 2010 returns.

To claim the charitable deduction on the 2009 tax return, both individuals and businesses must have made the Haitian-relief contributions to qualified charities before March 1, 2010. Only cash contributions such as those made by text message, check, credit card or debit card qualify. The contributions must be made specifically for the relief of victims in areas affected by the January 12, 2010, earthquake in Haiti.

The new legislation, Assembly Bill 347 (Stats 2010, Ch. 8), conforms to similar federal law (Haitian Relief Bill H.R. 4462; P.L. 111-126).

Information on the federal law is available in our previous post here.

Women in Construction Week

Women in Construction (WIC) Week will be celebrated March 7-13 by the National Association of Women in Construction (NAWIC). NAWIC’s mission is to enhance the success of women in the construction industry. As a NAWIC community, we will strive to make changes, to build new homes and businesses, roads and bridges. Together, we can make a difference in the lives of others. WIC Week provides a unified time for more than 5,500 NAWIC members to raise awareness of the opportunities the construction industry holds for potential employees and to highlight women as a visible, growing force in the industry. A broad range of activities will be employed to spread NAWIC members’ passion for working in construction. Award banquets, membership drives, community service projects and hands-on workshops will be conducted from coast to coast - all designed to promote construction and the value of women's contributions to the industry. We ask that you take few minutes this week to recognize the Women in Construction who have made a difference in your lives. Women who "do it all" from leading successful businesses, to raising great kids, or being a loving wife, or excelling in a career. We do it all. If there is a woman who you think has made a difference and made things better or brighter, this is the time to recognize her. For more information on WIC Week or NAWIC, click any of the links below. http://www.nawic.org/nawic/WIC_Week_2010.asp http://www.nawic.org http://www.facebook.com/nawicregionten

Free Webinars on California Withholding

The California Franchise Tax Board if offering free webinars about employer's withholding requirements, including changes that became effective in January of this year. To view descriptions, times, and register for a free webinar, click here.

Accelerated California Estimated Taxes Required

In an effort the keep cash coming into the state coffers, the legislature included in the most recent budget a provision requiring taxpayers who make estimated tax payments to pay more upfront. This applies to both individual and corporate taxpayers. Taxpayers may be required to make estimated tax payments if their withholding will not cover their tax liability. For federal tax purposes, the payments must be paid in four equal quarterly installments. Starting in 2009 with the state's fiscal challenges, California began to require a higher percentage of the payments in earlier quarters. Starting in 2010, it is accelerating required payments even more, to the following schedule:

Quarter	% due
1st quarter	30%
2nd quarter	40%
3rd quarter	0%
4th quarter	30%

If you are required to make estimated tax payments, be sure to reference these new requirements.

More contractors are likely to perform stimulus funded work this year

From the Associated General Contractors of America:

Stimulus funded infrastructure projects are saving and creating more direct construction jobs than initially estimated, according to a new analysis of federal data released today by the Associated General Contractors of America. The analysis also found that more contractors are likely to perform stimulus funded work this year as work starts on many of the non-transportation projects funded in the initial package.

"The stimulus is one of the very few bright spots the construction industry experienced last year and is one of the few hopes keeping it going in 2010," said Ken Simonson, the association's chief economist. "The stimulus is saving construction jobs, driving demand for new equipment and delivering better and more efficient infrastructure for our economy."

Simonson noted that new federal reports show the $20.6 billion dollars worth of stimulus highway projects initiated over the past twelve months have saved or created nearly 280,000 direct construction jobs. That amounts to 15,000 jobs per billion dollars invested, well above pre-stimulus estimates that every billion invested in infrastructure projects would create 9,700 direct construction jobs.

The economist added that heavy and civil engineering construction employment was stable last month even as total construction employment declined by 75,000. Meanwhile, highway and road construction was one of the only areas to see an increase in spending last year even as total construction spending fell by $100 billion. The two figures are a clear sign the stimulus is having a significant, and stabilizing, impact on the industry, Simonson noted.

Simonson cited examples like Pittsburgh's Golden Triangle Construction Co as an indication of the benefits of investing in infrastructure. The company is hiring two new engineers and over 100 employees this spring just to perform $24 million worth of stimulus-funded projects this year.

It also is ordering new construction equipment to perform the work from Ripon, California-based Guntert and Zimmerman. As a result, the equipment maker saved 40 jobs on its assembly line. And thanks to its stimulus work, Golden Triangle decided to complete construction of its delayed headquarters, providing even more local construction jobs.

Simonson cautioned however that overall declines in construction activity have, and likely will continue to overshadow the benefits of the stimulus. "The stimulus will keep a bad situation from deteriorating further," Simonson said. "That may not make for great headlines, but it is welcome news for construction workers anxious to continue receiving paychecks."

Read Ken Simonson's analysis of the impacts of the stimulus.

Tax Tips: Children's Investment Income

IRS Tax Tip 2010-38

The IRS wants parents to be aware of the tax rules that affect their children’s investment income. The following four facts will help parents determine whether their child’s investment income will be taxed at the parents’ rate or the child’s rate.

1. Investment Income Children with investment income may have part or all of this income taxed at their parents’ tax rate rather than at the child’s rate. Investment income includes interest, dividends, capital gains and other unearned income.
2. Age Requirement The child’s tax must be figured using the parents’ rates if the child has investment income of more than $1,900 and meet one of three age requirements for 2009: a. The child was born after January 1, 1992. b. The child was born after January 1, 1991, and before January 2, 1992, and has earned income that does not exceed one-half of their own support for the year. c. The child was born after January 1, 1986, and before January 2, 1991, and a full-time student with earned income that does not exceed one-half of the child’s support for the year.
3. Form 8615 To figure the child's tax using the parents’ rate for the child’s return, fill out Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,900, and attach it to the child's federal income tax return.
4. Form 8814 When certain conditions are met, a parent may be able to avoid having to file a tax return for the child by including the child’s income on the parent’s tax return. In this situation, the parent would file Form 8814, Parents' Election To Report Child's Interest and Dividends.

More tax tips are available on the IRS website.

Have you filed your FAFSA? Financial Aid Filing Deadline Looming.

For those of you that have college bound kids and were thinking about financial aid or trying to get grants to help with college expenses you might want to read the following from SFGATE.com. Good luck with those applications, it sounds like they are making them easier now. College-bound students in California have just one more week to file their federal financial aid application to be considered for some important types of state and university aid for the 2010-11 school year. Many students will find it easier to fill out the online version of the Free Application for Federal Student Aid this year thanks to the addition of skip logic, which skips questions that are deemed irrelevant based on answers to previous questions. Students must fill out this application, known as the FAFSA, to be eligible for federal aid such as Pell grants, work study and guaranteed loans. Many states and schools use the same application to dole out their own financial aid. California residents who will attend a public or private college in California and want to be considered for a first-time Cal Grant must file the application by March 2. These grants go to undergraduate students from low- and some middle-income families. They cover systemwide fees at public universities (up to $4,026 at California State University and $10,302 at UC campuses). Students attending a private university can get up to $9,708 toward tuition. Some students can get an additional $1,551 for books and living expenses. Students must fall below certain income and asset ceilings that vary by family size and type of grant. A dependent student from a family of four with up to $80,200 in income and less than $62,000 in assets might get at least a partial grant. To get a Cal Grant, students also must verify by March 2 that they have a certain minimum grade point average. Many high schools are automatically verifying GPAs for all graduating seniors, but students should check. Students who attend a Cash for College workshop before March 2 and fill out an application and a survey will be entered in a drawing to win an additional scholarship worth $1,000. For details and to find a workshop near you, go to calgrants.org and click on Cash for College. Many universities also encourage or require students to fill out the form by March 2 (earlier in some cases) to be considered for institutional aid. "We always say, file by March 2 to be sure to get the maximum package," says Cheryl Resh, financial aid director at UC Berkeley. Despite federal efforts to simplify the application, it can still be challenging, even for financial aid experts such as Diana Fuentes-Michel, executive director of the California Student Aid Commission, which administers Cal Grants. "It's a little easier this year, but it's still daunting," says Fuentes-Michel, who recently helped her 17-year-old daughter fill out the form. Thanks to skip logic, many students will have to answer fewer questions this year, but some colleges worry they won't get all the information they need. For example, a student whose family has less than $50,000 in adjusted gross income and is eligible to file a 1040A or 1040EZ tax return is no longer required to disclose assets on the federal form. However, without that information, financial aid offices don't know whether the student exceeds the asset limit for a Cal Grant, says Yvonne Gutierrez-Sandoval, associate director of financial aid at Pitzer College and president of the California Association of Student Financial Aid Administrators. Fuentes-Michel says she is taking this and similar questions to the student aid commission. "I hope to get an answer to campuses in writing in the next five to six weeks," she says. David Levy, director of financial aid at Scripps College, says he's getting a lot of questions this year because the worksheet that students fill out before tackling the application was also simplified. The new worksheet, he says, doesn't prepare students for all the questions they will encounter, and as a result, it's taking some families longer to fill it out. Another question he's getting more often is how to explain special economic circumstances. To get aid for 2010-11, students use information from their family's 2009 tax return. That information might look too rosy if a parent recently lost a job, but there's no way to explain it on the form. Levy encourages these students to contact the financial aid offices at schools where they have applied and explain the situation, even before they have been admitted, so "colleges can make a more informed decision" when offering aid. "We want to accept the family in their current financial state," he says, but his office will ask for verification such as termination letters or confirmation of unemployment benefits. Net Worth runs Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender@sfchronicle.com.

Union Retiree Health Benefits

I recently read the summary below about union retirees health benefits and thought it would be good information for our union contractor clients. The short story is that retiring union members can maintain their health insurance benefit even if they elect to take the lump sum retirement distribution. For more details read the following. Battoni v IBEW Local Union No. 102 Employee Pension Plan (2010, CA3) 2010 WL 395823 An amendment to a union welfare plan, which conditioned receipt of retiree health care benefits upon the retirees' not choosing the lump sum offered under the union pension plan, was a constructive amendment of the pension plan. And since the amendment decreased the value of the lump-sum benefit in violation of the anti-cutback rules, the amendment was prohibited. Facts. A merger of two International Brotherhood of Electrical Workers local unions effectively dissolved Local 675 and transferred its members to Local 102. The merger also combined the locals' two pension plans into a single Local 102 Pension Plan. To accommodate Local 675 members whose former plan had allowed them to choose between a lump-sum pension benefit or a periodic monthly pension benefit, the revised Local 102 plan allowed former Local 675 members to receive a lump-sum benefit for pre-merger accruals. As another result of the merger, two welfare plans were combined by moving Local 675 members to the Local 102 Welfare Plan, which, among other things, provided eligible retirees with health care benefits for themselves and their spouses. Shortly after the merger, the Local 102 plan was amended to add an additional condition regarding eligibility for retiree health care. Specifically, the amendment conditioned receipt of health benefits on the retirees' not choosing the lump-sum benefit offered under the pension plan. A group of current and retired Local 102 members who had been members of Local 675, challenged the amendment. They argued that the amendment violated ERISA § 204(g) 's anti-cutback rule which prohibits reducing a participant's accrued benefit (with certain exceptions not relevant here) by plan amendment. While acknowledging that the lump-sum pension benefit was an accrued benefit under ERISA, the union argued that the amendment was an amendment of a welfare plan and that welfare plans are exempt from coverage under the anti-cutback rule. However, the district court ruled in favor of the union members, finding that the amendment did violate the rule. The union appealed to the Third Circuit. Court finds an amendment to the pension plan. The Third Circuit first decided that the welfare plan amendment constructively constituted an amendment of the pension plan. While acknowledging a “certain superficial appeal” to the union's argument that the pension plan had not been amended, the view of what constitutes an “amendment” to a pension plan has been construed broadly to protect pension recipients, the court noted. Accordingly, even though welfare and pension plans serve different purposes under ERISA's scheme, it is the meaning and function of an amendment that determines whether the amendment modifies a pension plan, a welfare plan, or both. Here the court found that the amendment was part of the welfare plan to the extent that it pertained to welfare benefits, and part of the pension plan to the extent the amendment pertained to pension benefits. The amendment constructively amended the pension plan by adding a condition to the receipt of a benefit accrued under that plan, the court said. Assuming, hypothetically, that the pension plan did not exist, the amendment would have no meaning; however, if the amended provision were added to the pension plan, it would retain the exact same meaning and function. Thus, while the amendment was added to the welfare plan and dealt with health care benefits, the amendment also functioned to condition receipt of the lump-sum pension benefit, the court determined. Amendment decreased an accrued benefit. Having determined that there was an amendment of the pension plan, the Third Circuit had to address whether the amendment decreased an accrued benefit. The court noted that in Central Laborers' Pension Fund v. Thomas E. Heinz, et al, (S Ct 6/7/2004) 94 AFTR 2d 2004-5071 ( Weekly Alert ¶ 2 06/10/2004 ), the Supreme Court ruled, among other things, that at the moment a new condition is imposed, an accrued benefit becomes less valuable. The same reasoning applied to this case, the Third Circuit said. The Local 102 Pension Plan imposed a new condition on the receipt of an accrued benefit because previously, the lump-sum pension benefits accrued before the amendment was added to the welfare plan, but after the amendment, receipt of those same accrued benefits was conditioned on forfeiting health care benefits. Thus, this new condition in and of itself, decreased the value of the lump-sum pension benefit, the court held. Similarly, IRS regs supported the union members' position. Reg. § 1.411(d)-3(a)(2)(i) states that the anti-cutback rule is to be construed broadly to cover both direct and indirect amendments to pension plans, and Reg. § 1.411(d)-4, Q&A 7 provides that the imposition of conditions on accrued benefits violates the anti-cutback rule. Relying on both Supreme Court precedent and IRS regs, the Third Circuit concluded that by imposing a condition on the receipt of the lump-sump benefit, the amendment decreased an accrued benefit, and was thus prohibited. References: For the anti-cutback rules, see FTC 2d/FIN ¶ H-7300 ; United States Tax Reporter ¶ 4114.45 ; TaxDesk ¶ 286,018 ; TG ¶ 8093 .

Phishing Alert for QuickBooks Customers--security plug-in or digital certificate

For those of you that are using QuickBooks accounting software please be aware that there have been some "phishing" emails floating around. The information below was posted on Intuits website. Please review so you know what Intuit will do if it needs to fix a problem. Overview IMPORTANT UPDATE FOR QuickBooks Customers: Intuit is receiving reports of individuals receiving fraudulent emails from QuickBooks or QuickBooks Online. The two separate emails ask customers to either download a plug in to assess their security or download a Digital Certificate. Customers should delete either of these emails. As we discover these fraudulent sites (cyber criminals often use the same email repeatedly, although they change web sites), we take them down. Email texts The text of the fraudulent emails are below. The first email is about a fake security plug-in. As is the case with many companies that maintain large databases of information, Intuit is the target of fraudulent attempts to access and extract information from its database. We recently learned our database was illegally accessed and certain contact and personal data were taken, including QuickBooks names, email addresses, phone numbers. The information accessed does not include banking information. Immediately upon learning about this, Intuit started an investigation and took corrective steps. It is important to know the company continually monitors for any illegal use of information in our database, and so far, we have not detected the misuse of this information. In order to help assure the security of your information, we have developed a special plug-in for browser and Windows - QuickBooks Update. This software will protect users private information from any kinds of spyware or malware. System requirements: •Windows XP, Vista, 2000, 2003 •Internet Explorer 6.x, 7.x, 8.x ATTENTION: You will not be able to use our service without update from 29 of November 2009 Download: •Windows QuickBooks Update •Internet Explorer plug-in If you are not Microsoft Windows user you can use our services as usual This is the end of the first fraudulent email. The second email is about a fake digital certificate and appears exactly as it is sent (mistakes included): Dear Mr(s). In order to access Intuit after 20 of December 2009, you must have a valid Digital Certificate installed on your Computer. Creating and installing your Intuit digital certificate s a quick and automaed process. Knowing with whom you are communicating, it security on internet operations. only encrypt is not enoug, as it provides no proof of the identity of the sender of the encrypted information. Without special safeguards, you risk being impersonated online. Digital certificates provide an electronic means for Intuit to verify your identity. Used in conjunction with encryption, digital certificates provide a more complete security solution, assuring the identity of all parties participating in a transaction. The Intuit server has its own digital certificate to assure you that you are actually connecting with Intuit and not with an gyp. To generate your own Digital Certificate, you need to download Digital Certificate generation tool. For security reasons, download is available only once. Please download Digital Certificate generation tool direct to your Microsoft Windows PC. It is important to note that: Your Intuit digital certificate will expire after one year. You will be prompted to enter an automatic renewal process 30 days prior to certificate expiration. System requirements : Internet Explorer 6.x, 7.x, 8.x Windows XP, Vista, 2000, 2003 ATTENTION: You will not be able to use our service without update from 20 of December 2009 Download : Digital Certificate generation tool If you are not Microsoft Windows user you can use our services as usual Have more than customers, or want to give your accountant access to your books? Then Upgrade Today! -- simply log in and click "Upgrade" from your home page. For faster access, bookmark accounting.quickbooks.com in your browser. This is the end of the second fraudulent email. Information On the Internet, "phishing" refers to criminal activity that attempts to fraudulently obtain sensitive information.�There are several ways a scam artist will try to obtain your social security number, driver's license, credit card information, or bank account information. Here is our QuickBooks Online commitment to you, as well as some steps you can take to make sure your data is safe and secure. Our commitment to you: What we won't do 1.We will never send you an email with a "software update" or "software download" attachment. 2.We will never send you an email asking you for login or password information to be sent to us. 3.We will never ask you for your banking information�or credit card information in an email.�We will never ask you for confidential information about your employees in an email. What we'll do 1.We will provide you with instructions on how to stay current with your Intuit product, and we will provide you with information on how to securely download an update from your computer. 2.If we need you to update your account information, we will request that you do so by logging into your account. Here's what you can do to protect yourself from a phishing attack: 1.If you suspect you have received a phishing email from Intuit, please forward it immediately to spoof@intuit.com.�We will look into each reported instance. 2.Make sure you subscribe to an anti-virus software�and keep it�up-to-date. 3.Make sure you have updated your web browser to one that includes anti-phishing security features, such as Internet Explorer 7 or Firefox version 3 or higher 4.Make sure that you keep up to date on the latest releases and patches for your operating systems and critical programs. These releases are frequently security related. 5.Do not respond to emails asking for account, password, banking, or credit card information. 6.Do not open up an attachment that claims to be a software update.� We will not send any software updates via email. 7.Do not respond to text messages or voicemails that ask you to call a number and enter your account number and pin. 8.Make sure you have passwords on your computer and your payroll files. Here are 3 common methods that phishers use in their emails 1.Spoofed email address. Don't reply to unsolicited email and don't open email attachments. It's easy to fake a From or Reply To address, either manually or with spam software, so never assume an email is real by looking at its header. You might be able to spot fake addresses by checking for domain name misspellings, but this isn't foolproof. Some email service providers combat the problem of spoofed addresses by using authentication techniques to verify a sender's integrity. 2.Fake link. When in doubt, never click on a link in an unsolicited or suspicious email. Scam emails can contain a hidden link to a site that asks you to enter your log on and account information. A clue: if the email threatens you with account closure if you don't log on soon, you could be the target of phishing. You may be able to tell if a link is real by moving your mouse over it and looking at the bottom of your browser to see the hidden Web address - it will look different than the one you see on the surface. 3.Forged Website. If you must visit a financial site, like your bank or credit card company, enter its known address into the browser location field manually. Use a browser with an anti-phishing plug-in or extension, like FireFox version 3 or higher or Internet Explorer 7. These browsers warn you about forged, high-risk sites. Phony Web sites mimic real sites by copying company logos, images, and site designs. Malicious webmasters can also use HTML, Flash or Java Script to mask or change a browser address. Visit security.intuit.com to get the most up to date information about phishing. Forward suspicious emails to spoof@intuit.com.

Our Knowledge is Expanding

One of the ThomasYork core beliefs is that of continous learning. The firm and it's employees believe in continuing the learning process throughout their careers. Along those lines, the firm would like to congratulate Eric Yeoman, one of the firms senior accountants, for his recent accomplishment. Eric recently obtained his Certified Fraud Examiner (CFE) certification. To obtain this certification Eric had to complete 100 hours of education and pass the CFE examination. With this certification Eric can follow his interests and begin to build an expertise in the area of forensic accounting and the search for fraud in financial statement engagements. TY is very proud of its employees and their individual accomplishments. Congratulations Eric!

Tax Credit for New Jobs

Yesterday, the California Franchise Tax Board (FTB) posted answers to Frequently Asked Questions about a new tax credit that is available starting with the 2009 tax year. Here are some facts about the credit:

• A new tax credit of $3,000 for each additional full-time employee hired is available to small businesses with 20 or less employees beginning January 1, 2009.
• The credit is not subject to the 50% limitation for business credits.
• The total amount of credit available to be claimed by all taxpayers is capped at $400 million.
• The credit must be claimed on a timely filed original return received by the Franchise Tax Board on or before a cut-off date specified by the Franchise Tax Board.
• Taxpayers claiming the credit on an original return received by the Franchise Tax Board after the cut-off date is met will be notified that the credit has been denied.
• Taxpayers that have been denied the credit as a result of the $400 million cap being reached will not be assessed an underpayment of estimated tax or underpayment of tax penalty to the extent the underpayment was created or increased by the disallowance of this credit.

An employer will qualify for the credit if:

• Each qualified full-time hourly employee is paid wages for not less than an average of 35 hours per week.
• On the last day of the preceding taxable year, they employed a total of 20 or fewer employees.
• Each qualified full-time employee that is a salaried employee was paid compensation during the year for full-time employment within the meaning of Section 515 of the Labor Code.
• There is a net increase in qualified full-time employees compared to the number of full-time employees employed in the preceding taxable year. For taxpayers who first commence doing business in California during the taxable year, the number of qualified full-time employees employed in the preceding year would be generally be zero, unless certain special rules apply.

An employer may not claim the credit for those employees who are any of the following:

• Certified as a qualified employee in an enterprise zone or targeted tax area.
• Certified as a qualified disadvantaged individual in a manufacturing enhancement area.
• Certified as a qualified disadvantaged individual or qualified displaced employee in a local agency military base recovery area.
• An employee whose wages are included in calculating any other credit allowed.

More information is available on the FTB website.