S Corporation Medical Insurance Premiums

If you own more than 2% of an S Corporation then you need to be aware of the following.  

Health and accident insurance premiums paid by your corporation on your behalf must be reported as income on your annual Form W-2.  If the insurance premiums are not included in the W-2 then the IRS will not allow the corporation to deduct them.  The Shareholder, in most cases, is allowed to have an equal deduction on their individual tax returns.  At the end of the day, there is no impact other than the additional headache of getting the amounts reported correctly on the W-2.

One thing to be aware of is that amounts added to the W-2 should not be subject to any payroll taxes.

If this affects you and you would like additional information on how to report company paid health insurance premiums, or if you are a greater than two percent S corporation shareholder receiving this taxable income and would like information about what this means to you, please contact us at info@tysllp.com.

CPA Licensure Requirements

Anybody that will soon be graduating with an accounting degree or that is currently working on getting their CPA license knows that the rules for licensure in California have been a hot topic for quite some. One of our partners, Glen Thomas, is on the Californnia CPA Society Accounting Education Committee along with UC Berkeley Professor Maria Nondorf. Professor Nondorf recently created a Powerpoint presentation which clearly presents the CA CPA licensure requirements. If you have any confusion regarding the new rules here is a link to Professor Nondorf's presentation which should help clarify.

The Pathway For Accounting Students

Good luck to all you future CPAs.

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.

Meet Our Newest Employees

The TY team would like to welcome our two newest employees. John Williams joins us as a Tax Manager and Chad Rahmani is a Senior Accountant. John has been a CPA for approximately 15 years with experience in public accounting, industry and academia. His public accounting experience includes both audit and tax. Throughout his career, John has specialized in international, corporate, and partnership tax. Some of his previous responsibilities included world-wide tax compliance, planning, provision, FIN 48, SOX 404 and audit. In addition, John was an adjunct professor of accounting at San Francisco State University teaching courses in accounting and taxation. John’s education includes a BS – Accounting from S.F. State, a MBA from Baylor University, a Juris Doctor from Oklahoma City University School of Law and a Master of Laws in Taxation from New York University School of Law. Chad Rahmani joins us a Senior Accountant with 11 years of experience. He is a Certified Public Accountant and graduated from California State University Fullerton with a Bachelor of Arts in Business Administration focused in Accounting. He previously worked for a San Francisco based CPA firm since 2000. Chad's experience includes tax preparation, audit planning, review, compilation, and financial statement preparation. Please join us in welcoming John and Chad to TY!

That time of year!

With tax time upon us, the IRS has again reminded taxpayers to use caution in choosing a tax preparer in its January 3 article titled How to Choose a Tax Return Preparer and Avoid Preparer Fraud. The IRS explains:

While most preparers provide honest service to their clients, the IRS urges taxpayers to be careful when choosing a preparer –– as careful as they would be choosing a doctor or lawyer. Even if someone else prepares a tax return, the taxpayer is ultimately responsible for all the information on the return. For that reason, taxpayers should never sign a blank tax form. And they should review the return before signing it and ask questions on entries they don't understand.

The article goes on to provide the following specific suggestions when choosing a preparer:

• Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
• Avoid preparers who base their fee on a percentage of the refund.Use a reputable tax professional who signs the tax return and provides a copy.
• Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.
• Check the person’s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
• Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.

The California Franchise Tax Board often issues similar advice. As we've said before, regardless of whether you choose ThomasYork as your preparer, we encourage you to follow this counsel!

2009 Best Accounting Firms to Work For

During the summer everyone at TY participated in the 2009 Best Accounting Firms to Work For survey. We are proud to announce that we ranked #14 out of 20 in the Small Firm category (15-24 employees). Accounting Today’s Top 100 Best Accounting Firms to Work for rankings are available online at www.AccountingToday.com. The rankings will also be published in the December 14th issue of Accounting Today. Companies 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 company'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.

Leading the Way - Top 100

The list of the top 100 most influential people in the accounting industry was recently released. ThomasYork, LLP would like to congratulate our friends and associates that have made this prestigious list. We are proud to have worked with and learned from some of these fine people and look forward to using their experience and knowledge to assist us in creating a leading edge CPA firm. If you are interested you can use the link below to review list.

Look Inside >> Top 100 People - 2009

Governor Signs Four Critical Bills for CPAs

Glen Thomas, who is on the statewide CalCPA Society Accounting Education Committee (AEC), has been working very hard over the past three years with fellow members for the passage of SB 819. According to the CalCPA:

After 33 years, California is no longer the problem child when it comes to CPA licensing. Sunday night, Gov. Schwarzenegger signed SB 819 into law, which will require all California CPAs licensed after 2014 to have 150 hours of college education prior to licensing. CPAs licensed prior to 2014 will be grandfathered in as substantially equivalent. California should now be considered a substantially equivalent state, likely easing mobility for California CPAs providing services in other states that have adopted the new mobility provisions consistent with the Uniform Accountancy Act. Those provisions allow out-of-state CPAs to provide temporary services in those states without notifying the board of accountancy or paying a fee. This is a really big step for California CPAs. "While some of the details of the bill remain to be worked out, the passage of this legislation is historic and at long-last puts California CPAs on a level playing field with CPAs from other states who have been considered substantially equivalent for years," says CalCPA CEO Loretta Doon. "We owe a tremendous debt of gratitude to our government relations team lead by Bruce Allen and Jeannie Tindel, and Paul Regan, our Government Relations Committee chair.” Doon also praised the multitude of members from students to seasoned partners who participated in CalCPA’s grassroots efforts. Those members met with legislators in their district offices, and in the Capitol, to discuss the importance of substantial equivalency and other key legislation. Additionally, the governor signed AB 138, which requires mandatory peer review for CPA firms. The peer review requirement will start in 2010, but firms don't have to provide their peer reviews until the 2011 renewal for firms with the last digits 1-33. The new law will use a phased in implementation over a three-year period. Also signed into law were AB 117, which requires license status disclosure for inactive CPAs, and AB 129, which reinstates a taxpayer privilege provision. Visit CalCPA's website to learn more about these important new laws that will pave the way for the future of the profession in California.