All posts by Pam Williams

Two NC Budgets Passed!

by Rachel Owens

It’s the beginning of summer in NC.  That means that the two chambers of our General Assembly are hard at work trying to agree on a state-wide budget.

The House of Representatives passed the Health and Human ServicesNC health news budget a few weeks ago.  The Senate just passed theirs.  As always there are similarities and differences in each department; each of which, have very “hot topics” that are addressed.  Thanks to NC Health News for a comparison chart to show the differences between the two.

If you have additional questions about the budget decisions and how they affect your organization, contact our office.  We’ll be happy to give you some insight on what these choices mean for you.

Rachel ([email protected]) is a Senior in the Cost Report department at Langdon & Company LLP.  She works with various healthcare companies, several of which, from the audit all the way through their state reporting compliance.

Stress Relieving Tips

by Brittany Spraginsrelaxing

As a mom and accountant, I sometimes come home from work tired only to find more work at home in the form of a rambunctious child, loads of unwashed laundry, and a hungry husband.  So I use some of these stress relieving tricks.  I hope you find these helpful too.

  1. For a limited amount of time, talk about your day. When I get home, I often want to talk with my husband about the highs and lows of my day.  This helps to release the burden I feel like I am under and allows me to feel appreciated by him for my efforts.  This being said, we have a time limit for “work talk” and after that I am not allowed to talk about it again.  This allows you to say what you need or want to, but prevents you from focusing your whole life on work.
  2. Enjoy the company of those around you. If you walk in from work only to see the undone chores around your house, then you are missing the best part.  When I come home, I make it a point to greet my husband and son.  The greatest stress reliever that I have experienced is the love that they have to offer.
  3. Go exercise. Exercise does not have to be a 3 mile run, just a stroll around the block will work.  The important thing to remember is that when you exercise, your body releases endorphins, which is a neurotransmitter from your brain that helps to decrease stress and increase happiness.  This is where the “runner’s high” comes from.  A little bit of movement can go a long way in stress reduction.
  4. Think of some corny jokes or turn on your favorite radio comedian and just laugh for a few minutes.
  5. Take a few minutes for yourself. Sometimes I have to put myself into time out.  It may be a bad time for you to step out, but sometimes it will be worse if you stay put, so remove yourself from a stressful situation for a few minutes so you do not say something you will regret later.
  6. Take a bath. Soaking in water provides you with that weightless and relaxed feeling.  This may help you refocus on the important priorities in your life.
  7. Finally, if all else fails… eat dark chocolate! It’s delicious!

Langdon & Company LLP may not be able to draw your bath, however, we will do what we can to take the stress off of you.  Call our office to get additional information about ways in which, we can help.

Brittany [email protected] is a staff member of the tax department working on various projects from individuals to organizations’ tax return preparation.

US DOL Announces Overtime Changes

by Rachel Owens

The U.S. Department of Labor recently issued its final rule regarding overtime, at President Obama’s instruction.  Overall, the rule is expected to cover 4.2 million more Americans, and boost wages by $12 billion in the next 10 years. One of the most significant changes is that it doubles the salary threshold—from $23,660 to $47,476 per year—under which most salaried workers are guaranteed overtime (hourly workers are generally guaranteed overtime pay regardless of their earnings level). The final rule takes effect on December 1, 2016.

More information about this rule can be found in the links below.

To learn more about how you or your organization are affected, contact our office.

 

FASB Update

by Josh Bryant

Throughout the calendar year, the Financial Accounting Standards Board, or FASB, meets in order to deliberate on proposed standards and amendments. On March 30, 2016, the authoritative board redeliberated on Topics 954 and 958- of which relate to the presentation of Financial Statements of Not-for-Profit Entities. These pronouncements affect entities that are required to evaluate whether they should consolidate certain legal entities either using the variable interest entity, or the voting interest entity model for consolidation of limited partnerships and similar legal entities.

The discussion was primarily focused on the effective date and the transition method utilized for any not-for-profit or health care entity for which the standard applies.

Effective Date

The Board has decided that the amendments will take affect for financial statements relating to fiscal years beginning after December 15, 2017, and for interim statements following December 15, 2017.

Transition Method

“The Board has decided that not-for-profit entities, or NFPs, should apply the amendments on a retrospective basis for all years presented in the financial statements.”  The Board also made concessions for NFPs during this transitional stage to enable the organization to do so cost effectively. The following two items are optional for any organization that uses presents financials statements on a comparative basis for any years before adoption:

  • Analysis of expenses by both functional and natural classification.
  • Disclosures regarding liquidity and availability of resources.

Furthermore, the Board decided it would be permitted for NFPs to present interim financial statements in the year of adoption as they did prior to the amendment, however, subsequent restatement of the financial statements at year-end would be required on a retrospective basis.

The Board also discussed the application of the consolidation process for not-for-profit entities that are a general partner in a for-profit limited partnership. A result of these discussions is still forthcoming, however, they have decided to reinstate the current guidance that existed in Subtopic 910-20, Consolidation- Control of Partnerships and Similar Entities, and included it within Subtopic 958-810, Not-For-Profit Entities- Consolidation.

To conclude, however long it may be before these amendments become effective- it is always prudent to plan ahead in order to maintain forward longevity in the competitive business environment for not-for-profits.

If you have additional questions about these differences, please contact our office.  We would appreciate the opportunity to share with you the impact to your organization and ways to prepare for the upcoming changes.

Josh ([email protected]) is an audit staff working primarily with not-for-profits and healthcare organizations.

 

Refer to this site for additional updates.

The Big Impact of Big Data

by Rebecca LunnSmall Business Accounting

In recent years, there has been a buzz around the term “big data.” As SAS describes, “big data is a term that describes the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis.” With the influx of technology and increasingly complex ways to collect and analyze data, understanding big data is becoming essential to business.

We see examples of big data every day, such as personalized coupons at the checkout counter or ad placement on social media. However, it is much easier to visualize how a financial or retail business can use big data, as compared to a nonprofit. Nonprofits may not have the same volume of data as corporations, but these organizations can still take advantage of the big impact of big data.

Marketing: With the introduction of new technology, the marketing strategy of organizations has transformed. By collecting data about website visits, email subscribers and social media likes, nonprofits can analyze their audience. Using this data, the organization can tailor posts to include topics which interest their audience, leading to increased sharing of information and awareness of the organization’s mission.

Development: In addition to marketing uses, social media can also be used to encourage donations. With the increased sharing of information mentioned above, comes the possibility of increased support. Similar to email subscribers, organizations should maintain a database of donor demographics. This information can be used to make an appeal for funds on a more personal level. In addition, the organization can send individual donors information about events or fundraisers that might specifically interest them, rather than a mass mailing with higher costs.

Programs: The primary focus of most nonprofits is their programs, which have a direct impact on the community. On a periodic basis, organizations should collect data related to program growth and clients served. This can assist the organization in allocating sometimes scarce resources, such as funds and employees, for maximum impact.

Langdon & Company LLP has in place a team of professionals that specialize in working with nonprofit organizations.  Please contact our office for additional information on how we can assist you.

Rebecca ([email protected]) is an audit senior in our firm.  She works closely with the audit staff in the areas of healthcare and nonprofits.

Small Business in North Carolina

by Russell Barker18th

Did you know there are approximately 833k small businesses in North Carolina?  That’s a pretty big number.  Why we are talking about this now? It is tax season and companies and individuals are gathering their information in order to either prepare or have their accountants their tax returns. You may or may not understand the process to get your tax returns accurately prepared and timely filed. I wanted to give you some guidelines to help.

Some people might think that gathering all their personal information and getting some of the business information is all you have to do.  The reality is that your first objective is to have your business’ books completed accurately.  You should ensure that all the bank accounts (including credit cards and loans) are updated and reconciled.  Be certain to capture any supplies or equipment  purchased near year-end in your books.  This will ensure that you obtain the proper expense and depreciation deductions you are entitled to.

The reason to get your company books in order first is because most small business (sole proprietor, Sub-S, Partnership, LLP, LLC) income will flow into your personal return.  It is important that you or  your tax preparer has all the proper information to complete both. Delays in the business returns will cause delays in having your personal returns processed.

This is just a quick reminder for you to think about so you can prepare all supporting documentation and have it ready for your tax preparer.

Remember 2015 taxes are due April 18th! Contact Langdon & Company LLP for help in getting 2015 tax return prepared or extended.

Russell ([email protected]) is part of Langdon & Company’s Accounting Services department. He works primarily with doctor’s practices.

Changes in NC Behavioral Healthcare

by Rachel Owens

Consolidation of the state-funded management organizations has been officially declared!

Currently, there are eight LME/MCOs across North Carolina.  The consolidation will reduce the number of LME/MCOs down to four, by combining the catchment areas into contiguous regions.  The LME/MCO’s that are merging are: Smoky Mountain + Partners, Cardinal + CenterPoint, Trillium + Eastpointe, and Alliance + Sandhills. LME_MCO_ConsolidationMap

No timeline has been established for the transition, but the hope is that it will not take more than two years to implement.  The first merger will be between CenterPoint and Cardinal Innovations – somewhere between May 1 and June 30. This change affects each county from “Murphy to Manteo.”  Read more about the consolidation in Rose Hoban’s recent article in NC Health News .

Langdon & Company LLP is committed to assisting the mental health provider population in any way we can.  Please contact our office if you have questions on how these changes will affect your organization.

 

Why Sole Proprietors Should Incorporate

by Eric Murphy

proconFor many entrepreneurs, the biggest question they should ask themselves after deciding what kind of business they want to have is what kind of entity should the business be established as?  This is very important since the choice they make can have a long-term impact on their profitability and security.  This article will address some of the benefits of Incorporating a Sole Proprietorship into a subchapter S-Corporation.  While there are many rules and conditions that have to be considered, this general overview should explain why it is a beneficial choice for the solo entrepreneur.

When a person first begins a business without incorporating, they would report their income and expenses on Schedule C of their Individual tax return (Form 1040).  This form is used for Sole Proprietorships and reflects the business as an entity, inseparable from the individual.  Because of this lack of separation, any liability or risk to the business becomes a direct risk to the individual.  This means if the business incurs debt and defaults or is the defendant in a lawsuit, the individual’s personal assets can be pursued for settlement and there is no limit to the potential liability.

If the individual chose to incorporate instead, their income and expenses would be reported on a separate tax return known as Form 1120S.  This return reflects the business as an entity separate from the individual with the net profit or loss flowing to the individual who is a shareholder in the entity on Form K-1.  As a separate entity, the individual has the benefit of limited liability in the event of a lawsuit or in case of default on debt.  This liability is limited to the extent of their initial investment in the business and any appreciation on that investment.

Another big benefit of having an S-Corporation instead of a Sole Proprietorship is savings on taxes paid.  A sole proprietor must pay ordinary income tax as well as self-employment tax on all net income generated by the business.  The self-employment tax is assessed as a means of collecting what the individual would have had withheld for Social Security and Medicare taxes if they were working for someone else.  While of a portion of this tax is deductible, it can be a costly burden to the entrepreneur when the time comes to file their personal tax return.

With an S-Corporation, the individual still pays ordinary income tax on all the net income of the business, but they only pay it once at the shareholder level when they file their Form 1040.  There is no tax liability for the business itself.  Individuals are also exempt from self-employment tax when they operate under an S-Corporation.  The reason is, the entrepreneur should get paid a salary and be issued a W-2 from the business and that way they are paying Social Security and Medicare taxes from wages earned and those wages are deducted from the business’s net income.  The salary paid doesn’t need to be excessive, and the entrepreneur and can also take money out of the business as non-taxable distributions – provided the distributions don’t reduce their basis in the business below zero.  Otherwise, those excess distributions are subject to capital gains tax on the individual’s 1040.

If you’re a self-starter who plans to start their own business or has an existing business and wants to know all the details to determine if incorporation is the right path for you, contact Langdon & Company, LLP.  Our tax professionals can provide you all the help you need to incorporate your business, file your required tax returns, and setup payroll for your business and file required payroll reports.

Eric ([email protected]) is a Tax Senior at Langdon & Company, LLP.  He works on various types of returns ranging from non-profit corporations, to individuals, and partnerships.

New Registration Requirements for 990-N postcard Filers

by Kendall TysonIRS_logo-233x300

Effective February 29, 2016, the IRS will launch a new website for submitting Form 990-N filings.  Most organizations exempt from income tax under section 501(a) must file an annual information return or submit an annual electronic notice (990-N).  An organization that normally has gross receipts of $50,000 or less must file the 990-N if it chooses not to file Form 990 or Form 990-EZ.

Previously all 990-N filings were completed and filed through the Urban Institute Form 990-N submission website.  However, their website will permanently close on February 28, 2016.  Per the Urban Institute website, “any Form 990-N filings in the Urban Institute system  that have not been completed and submitted by 11:59 pm (eastern) on February 28, 2016, will be lost and will not be submitted to the IRS.  Those Form 990-N filings will need to be entered into the new IRS system beginning February 29, 2106.”

Beginning on February 29, 2016, all 990-N users will need to complete a one-time registration with the IRS before they can complete the 990-N filing.  Form 990-N is due every year by the 15th day of the 5th month after the close of an organization tax year.  There is no paper form for the filing, and all 990-N filings must be completed and filed electronically.

All 990-N filers should plan their filings according to the new website and registration requirements in order to avoid any unexpected delays in completing their annual filing.  Langdon & Company LLP will be happy to help deal with this regulatory change.  Please contact our office for additional information.

Kendall ([email protected]) is a Manager in our Tax practice.  She focuses on various corporate clients and their industry-specific issues.

Have you received all of the tax forms you expected?

by Cody Taylor

As we’re into February you should have received most if not all of the tax documents related to preparing your 2015 tax returns.  This article in Forbes explains when various tax forms are due to you.  What if you are missing some forms you were expecting?

It’s important to note that some forms may not be received in time to prepare your tax returns on time and you may require an extension as a result.  The most common scenario is if you receive a Schedule K-1 from a pass-through entity.  These entities have to file their tax returns before issuing you a Schedule K-1 which may not happen right away.  As the article also says- your best course of action is to contact the K-1 issuer and find out when they expect the tax returns to be completed so you can plan your own tax filings accordingly.tax forms

If you haven’t received expected W-2s, 1099s or other forms that should have been received by now you have a few options available.  The first and most obvious is to look back through any mail you have sitting around and to check your emails to see if you missed anything.  We’ve all missed something the first time through only to have to document be sitting right there the whole time.  However if the forms really are missing here are a few steps you can take as outlined here and summarized below.

  1. Contact the issuer – They may have simply mailed it to the wrong address, maybe you moved or your form got lost in the mail. Most issuers will be happy to send you a new copy, but keep in mind if they tell you it was sent and you did not receive it make sure to check that they have the correct address on file for you.
  2. Employer or Issuer has moved or closed – Still try to contact them. The income they paid you still should be reported on your tax returns and if they issued W-2s or 1099s in your Social Security number that are not reported on your tax returns the IRS will almost assuredly contact you about it.
  3. Still no forms by February 14th – If you are unable to resolve the missing information through the previous steps you can contact the IRS starting February 15th regarding missing forms. Try to have your address, phone number, Social Security Number, dates of employment, earnings estimate and federal withholdings amount on hand when you call the IRS.  Your most recent pay stub is a good place to get this information.  The IRS phone number is 1-800-829-1040 and I recommend trying to call first thing in the morning when the wait times are often shorter.
  4. Patience – The IRS will then contact the issuer to send you replacement forms but this is done through the mail and is usually not a fast process.

The good news is most of the time the issue of missing forms can be resolved rather painlessly, but if you find yourself missing important tax documents as it gets closer to filing time follow the above steps and contact the IRS, if necessary.

Cody ([email protected]) is a member of our tax staff at Langdon & Company LLP.  He works with various types of clients on tax matters year-round.  Please contact us to get more information on how we can help make your 2015 tax season, a smooth one.