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It's Crunch Time for Private Companies on Revenue Recognition

Published on November 19, 2018

It’s understandable that FASB’s new revenue recognition standard might not be top-of-mind for private company finance personnel despite the impending effective date. 

The standard takes effect for private companies for annual reporting periods beginning after Dec. 15, 2018, and interim periods within fiscal years beginning after Dec. 15, 2019. So effectively, private companies must adopt by the 2019 year end.

That doesn’t give them much time to work on implementation, but it’s still easy for them to overlook the importance of this new standard.  In this case, it may be tempting to give minimal attention to the implementation because the timing and amount of revenue that companies report under the new standard may not be much different from the previous numbers. 

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Auditors See Challenges in New Leasing Standard

Published on November 19, 2018

The new lease accounting standard that takes effect for public companies next year poses obstacles for the audit firms that have begun implementing it for their clients. 

The leases standard, which was jointly developed by the Financial Accounting Standards Board and the International Accounting Standards Board but has some differences under U.S. GAAP and International Financial Reporting Standards, will put operating leases on the balance sheet of many companies for the first time. 

A new survey from the lease accounting software company LeaseCrunch polled auditors from 77 different CPA firms in the U.S. about the upcoming changes. Of those auditors who have started conversations with clients about the new lease accounting requirements, the number one problem is determining which practical expedients should be applied (21 percent), followed by book vs. tax implications (17 percent), determining the incremental borrowing rate (14 percent) and accounting for operating leases (11 percent).  

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Social Security Wage Base Set for 2019

Published on November 19, 2018

The Social Security Administration (SSA) announced that the maximum amount of wages subject to the old age, survivors, and disability insurance (OASDI) tax will increase to $132,900 for 2019. The OASDI tax rate is 6.2%, so an employee with wages up to or above the maximum in 2019 would pay $8,239.80 in tax and the employer would pay an equal amount. Self-employed individuals pay tax at a 12.4% rate up to the limit. The 2018 wage base is $128,400, for a $7,960.80 maximum amount of OASDI tax. 

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What You Should Know About The 2018 W-2, 1099 & 1095 Filing Season

Published on November 19, 2018

Businesses are gearing up for a busy W-2, 1099 & 1095 filing season in the months ahead, navigating through an accelerated reporting season and getting re-acquainted with specific state and federal requirements. 

Deadlines & Timing

For 2019, the PATH (Protecting Americans from Tax Hikes) Act requires businesses to file W-2, 1099 and 1095 forms before the January 31 deadline. In previous years, the IRS has provided leniency to businesses filing 1095 (Affordable Care Act) forms, but at this time IRS has yet to announce an automatic extension. Therefore, don’t expect the IRS to extend the ACA filing deadline this year just because they have in the past. Be prepared to file your forms before the January 31 recipient deadline to remain in compliance and avoid potential fines. 

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Inflation Adjustments and Tax Tables Issued for 2019

Published on November 19, 2018

The IRS issued the 2019 annual inflation adjustments for many tax provisions as well as the 2019 tax rate tables for individuals and estates and trusts (Rev. Proc. 2018-57). These adjusted amounts will be used to prepare tax year 2019 returns in 2020. 

Many amounts are increasing for inflation in 2019. The standard deduction will increase to $24,400 for married individuals filing joint returns or surviving spouses, $18,350 for heads of household, and $12,200 for unmarried individuals (other than surviving spouses) and married individuals filing separate returns. 

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If You Think What You Do On Your Work Computer Is Private, Think Again

Published on October 22, 2018

It's possible you could be kissing that bonus goodbye.

Just as your digital imprint can snarl up your job hunt, what you do at work can impact your professional persona.

Most employees know they shouldn't be spending much time at work sending personal emails or shopping on Amazon.

Those who think of it may take the trouble to clear their browsing history, according to a survey by Simply Hired, a job-search site. But that may not do as much to protect privacy as employees think.

Some two-thirds of companies monitor employees for e-mail infractions, and half have fired workers for those infractions, according to the Society for Human Resource Management.

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The Potential of Blockchain: What Accounting Execs Need to Know

Published on October 22, 2018

In its 2017 Hype Cycle for Emerging Technologies, Gartner estimates it will take five to 10 years before there's mainstream adoption of blockchain. However, major players in the financial services industry are already seeing benefits from the technology, using blockchain as a game-changing “trust protocol” for financial transactions and keep pace with regulatory processes.

In addition, many companies are starting to work with blockchain technology along their supply chain to control sourcing together with their OEM partners. Regulatory agencies are tapping into the prospective use of blockchain to better understand revenue and cost streams of taxpaying companies. This increase in adoption has pushed accounting and finance executives to look at blockchain as a potential technology disruptor in their space, recognizing that there are several key business benefits to leveraging the technology.

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New Relief for Drought-Stricken Farmers, Ranchers: IRS

Published on October 22, 2018

Farmers and ranchers who were forced to sell livestock due to drought may get extra time to replace the livestock and defer tax on gains from the sales, according to the Internal Revenue Service. 

The one-year extension gives eligible farmers and ranchers until the end of the tax year after the first drought-free year to replace the sold livestock. The farmer or rancher must be in an applicable region -- a county designated as eligible for federal assistance, or a county contiguous to an eligible county. 

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IRS Pushes Back Major W-4 Changes Until 2020

Published on October 22, 2018

The Treasury Department said the Internal Revenue Service would push back implementation of a redesigned Form W-4 to tax year 2020, allowing the agency to keep working on a new approach to the employee withholding form. 

The IRS released a draft version of a new Form W-4, "Employee’s Withholding Allowance Certificate," earlier this year in the wake of the Tax Cuts and Jobs Act, but it received heavy criticism from groups like the American Institute of CPAs and the National Association of Enrolled Agents, which said it raised privacy concerns, created a substantial risk of under withholding, and would require taxpayers to forecast a number of tax-related items that are traditionally difficult to predict. 

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IRS Updates Per Diem Rates for Business Travel Expenses

Published on October 22, 2018

The Internal Revenue Service issued its annual notice describing the daily rates that taxpayers can use for lodging, meals and incidental expenses when traveling for business. 

Notice 2018-77 announces the special per diem rates, effective Oct. 1, 2018, that taxpayers may use to substantiate the amount of expenses for lodging, meals and incidental expenses when traveling away from home. The notice also provides the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method. 

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