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!

Accelerated Deduction for Haiti Relief

On Friday, the President signed into law a special provision allowing taxpayers to deduct on their 2009 tax returns charitable contributions made to provide relief in Haiti. Today's IRS announcement provides guidance on the deduction, including the following requirements for a 2009 deduction:

• Only cash contributions qualify. This includes contributions made by text message, check, credit card or debit card.
• The contribution must be made after Jan. 11, 2010, and before March 1, 2010.
• The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.
• Taxpayers have the option of deducting these contributions on either their 2009 or 2010 returns, but not both.
• To get a tax benefit, taxpayers must itemize their deductions on Schedule A. Those who claim the standard deduction, including all short-form filers, are not eligible.

We do not have word yet as to whether California will conform to this legislation. We'll keep you posted.

Tax Credit Helps Pay for Higher Education Expenses

The IRS provides the following information about the new credit for higher education... The American Recovery and Reinvestment Act was passed in early 2009 and created the American Opportunity Credit. This educational tax credit – which expanded the existing Hope credit – helps parents and students pay for college and college-related expenses. Here are the top nine things the Internal Revenue Service wants you to know about this valuable credit and how you can benefit from it when you file your 2009 taxes. 1. The credit can be claimed for tuition and certain fees paid for higher education in 2009 and 2010. 2. The American Opportunity Credit can be claimed for expenses paid for any of the first four years of post-secondary education. 3. The credit is worth up to $2,500 and is based on a percentage of the cost of qualified tuition and related expenses paid during the taxable year for each eligible student. This is a $700 increase from the Hope Credit. 4. The term "qualified tuition and related expenses" has been expanded to include expenditures for required course materials. For this purpose, the term "course materials" means books, supplies and equipment required for a course of study. 5. Taxpayers will receive a tax credit based on 100 percent of the first $2,000 of tuition, fees and course materials paid during the taxable year, plus 25 percent of the next $2,000 of tuition, fees and course materials paid during the taxable year. 6. Forty percent of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit for each eligible student as cash back. 7. To be eligible for the full credit, your modified adjusted gross income must be $80,000 or less -- $160,000 or less for joint filers. 8. The credit begins to decrease for individuals with incomes above $80,000 or $160,000 for joint filers and is not available for individuals who make more than $90,000 or $180,000 for joint filers. 9. The credit is claimed using Form 8863, Education Credits, (American Opportunity, Hope, and Lifetime Learning Credits), and is attached to Form 1040 or 1040A. For more information about the American Opportunity Tax Credit visit the IRS Web site at IRS.gov/recovery.

10 Questions if Current Health Care Legislation is Passed

The attorneys at Litter law firm give their suggested Top 10 questions employers should ask if the current health care bill is finalized. Here's a summary of their Top 10 Questions: 1. Do we have to provide health care benefits to our employees?

Answer: Yes, if you want to avoid paying a penalty.

2. Do we have to pay a penalty if our employees decide to drop out of the employer sponsored plan?

Answer: Yes, in certain circumstances.

3. Can we provide our employee’s health insurance through the health insurance exchange?

Answer: Initially, smaller employers would be able to offer health insurance through the exchange once the exchange becomes operational in 2013 under the House bill and in 2014 under the Senate bill. Larger employers may eventually be able to do so as well.

4. Do we have to change our benefit plan?

Answer: Yes, if it does not comply with certain new requirements.

5. What is a “Cadillac” plan?

Answer: If you offer a high-premium health insurance plan to your workers, you may be subject to a new excise tax on these so-called “Cadillac” plans.

To help pay for the cost of expanding health care coverage, the Senate bill would, beginning in 2013, impose a 40% excise tax on employment-based health plans whose premiums exceed $8,500 for singles and $23,000 for family plans, indexed for inflation plus 1%.

6. Will health insurance plans be taxed?

Answer: Yes, both the House and Senate bills would impose a new premium tax on group health plans to fund comparative effectiveness research. Annual fees on health insurers and device manufacturers may also be passed on to employers.

7. What is a medical loss ratio and why should employers care?

Answer: A medical loss ratio is the percentage of health insurance premium revenues that must be spent on clinical services and quality.

8. Can we change our retiree health benefits?

Answer: The House bill significantly restricts the ability of employers to change retiree health benefits, while the Senate bill does not.

9. What happens to Flexible Spending Accounts?

Answer: Employers who offer flexible spending accounts (FSAs) and workers who utilize them would face new contribution limits under both the House and Senate bills.

10. Will this reduce our health care costs?

Answer:The ultimate question for employers is whether or not the current health care legislation will, in fact, bend the cost-curve or, in other words, reduce employers’ ever-increasing health care costs. For employers grappling with the impact of rising health care costs in the competitive global economy, the answer is far from certain.

For more information on each question, you may visit the full article. (via CPA Trendlines)

New Year’s Resolutions for Small Business

WebCPA offers 10 tips for small businesses as we head into the new year.

1. Pay your employees first, they are your highest priority and don’t forget the IRS – keep current with payroll taxes.
2. Pay attention to the credit worthiness of your customers so you are confident your will get your money. Remember a sale is not a sale until you have been paid.
3. Limit the amount of business you do with any one customer so you aren’t left penniless if they run into trouble and are unable to pay.
4. Bad business is worse than no business. Customers who fail to pay their bills on time should not be your customer any longer.
5. If a customer becomes undependable, change the terms to COD (cash on delivery). That way you can keep the customer and avoid the uncertainly of payment.
6. Keep an accurate and complete audit trail. Don’t do business on a handshake when the future of your company could be at stake.
7. Keep management accounts and use financial reporting. Plan how you will pay your expenses, rather than paying bills based on how much is in your checking account at that moment.
8. Cash flow counts. Focus on shortening terms with your customers and structure the pricing to coincide with those terms. If you wait 90 days to be paid that means you are financing your customer’s business. Or, if you give extended terms, get paid more.
9. Think about establishing a lending relationship when you don’t need financing; that’s the best time to ask for money. Then follow the financial reporting requirements. Make it easy for the financial institution to lend you money.
10. Explore alternative lenders. You will probably be surprised to learn what’s out there. It can take time to find financing sources. Do your homework and get all of your questions answered ahead of time – before a crisis hits.

National Association of Women in Construction (NAWIC)

We would like to invite you the next NAWIC meeting. Our next meeting will be on Thursday, January 21, 2010 in San Ramon at 5:30pm. Our speaker for this meeting will be Alice Powers from Lewis, Brisbois, Bisgaard & Smith, LLP. Ms. Powers will be discussing wage and hour lawsuits and exempt vs. non-exempt in relation to the construction industry. NAWIC offers a great support system for women who are in the construction industry. Through NAWIC, we have increased our knowledge of the industry by networking with other members employed in the construction industry. It has also enabled us to broaden valuable contacts for our firm and build lasting relationships. The NAWIC meetings are always educational and related to the construction industry. If you are interested in attending this meeting, learning more about our personal experiences, or how you can benefit from NAWIC please contact us and we will be happy to answer any questions you may have. Linda Martins - LMartins@ty-llp.com Lisa Silva - LSilva@ty-llp.com NAWIC Background: NAWIC is a professional Association comprised of women working in construction and related industries. It was established in 1955 by 16 founding members. Today, approximately 5,800 women in approximately 170 chapters across the United States are NAWIC members. Members of the Association are business owners/managers, executives, subcontractors, accountants and estimators. Members are also employed in construction trades, including welding, carpentry, plumbing and electrical work. You can visit the NAWIC website, www.nawic.org, for more detailed information.