News Articles

Today’s article focuses on how the modification would impact cooperatives. As you will see below, essentially Section 199A for cooperatives reflects Section 199 as we have known it for years. 

Section 199A(g) is expected to be amended as follows:

Applies to taxpayers that are an agricultural or horticultural cooperative (no other types of cooperatives will qualify).

Deduction is 9% of the lesser of qualified production activities income (QPAI) or taxable income for the taxpayer’s taxable year. The deduction is further limited to 50% of W2 wages.

The NSAC Board has approved a scholarship program for members and family. Members, their children, grandchildren, step grandchildren and legal guardians are eligible to apply. The application is online and requires transcripts. Click here to review. We are excited to provide up to 10 scholarships in 2018. If you have questions contact the national office at (937) 222-6707 or email.

The best security available is a combination of password, multi-factor authentication and biometrics, such as fingerprint or facial recognition.

The US expert who wrote the standard for password security now says he was wrong - and it's time for a new way.

In 2003, Bill Burr was a technology manager for the US National Institute of Standards and Technology (NIST) when he was tasked with writing some brief guidelines for password security. He recommended that passwords have a minimum of eight characters with a mix of capitals, numbers and symbols, and be updated frequently.

In early 2016, the Financial Accounting Standards Board (FASB) issued the most significant change to financial reporting for leases in 40 years. For the first time, most operating leases will be reported on company balance sheets, requiring more complex calculations than previous guidance. With a deadline for compliance as of 2019, businesses across the United States are now working with their accounting departments to select the best lease accounting software. The selection and implementation process for software can be time consuming, and with the deadline for compliance quickly approaching, time is now critical for putting a new system in place. 

The IRS has completed updating its online withholding calculator that individual taxpayers can use to determine how many withholding allowances they should claim for 2018. The IRS also issued a new 2018 Form W-4, Employee's Withholding Allowance Certificate. The IRS had previously announced that taxpayers could use the old 2017 Form W-4, as modified in Notice 2018-14, until 30 days after the new form was issued.

The calculator and new Form W-4 are designed to implement changes made by P.L. 115-97, known as the Tax Cuts and Jobs Act, which increased the standard deduction, removed personal exemptions, increased the child tax credit, limited or discontinued certain deductions, and changed the tax rates and brackets, among many other changes.

The Financial Accounting Standards Board issued a proposed accounting standards update aimed at improving how to account for the costs of implementing cloud computing.

The proposed update would specifically clarify the accounting for implementation costs related to a cloud computing arrangement that is a service contract. It also would provide more disclosures of the implementation costs for internal-use software and cloud computing arrangements.

Back in 2015, FASB issued an accounting standards updateto help businesses account for the fees paid by a customer in a cloud computing or hosting arrangement, offering guidance on determining when the arrangement includes a software license. During the comment period and after the standard was issued, FASB received requests for further guidance on accounting for the costs of implementation activities in a cloud computing arrangement that’s a service contract. The existing guidance wasn’t explicit on that subject, so FASB has decided to propose an accounting standards update to clear up the differences in how the 2015 update was being used in practice.

In Rev. Proc. 2018-18, the IRS announced the new lower tax brackets for 2018 and a number of other new items affected by P.L. 115-97, known as the Tax Cuts and Jobs Act. It also issued inflation-adjusted amounts for many provisions that were unchanged by the Act, other than that the inflation adjustments now must be calculated using the chained consumer price index method, updating the numbers that were originally announced in Rev. Proc. 2017-58.

The tax act lowered the tax brackets that apply to individual taxpayers beginning in 2018 and effective through 2025. The new rates for married taxpayers filing jointly for 2018 are 10% on income not exceeding $19,050; 12% on income between $19,050 and $77,400; 22% between $77,400 and $165,000; 24% between $165,000 and $315,000; 32% between $315,000 and $400,000; 35% between $400,000 and $600,000; and 37% on income over $600,000. The revenue procedure also contains the figures for taxpayers claiming head-of-household status, unmarried individuals, married taxpayers filing separately, and estates and trusts.

The final guidance issued by the FASB on hedge accounting is intended to enable entities to better portray their risk management activities in their financial statements. The amendments expand the strategies that qualify for hedge accounting, change how many hedging relationships are presented in the financial statements and simplify the application of hedge accounting in certain situations. New or modified disclosures are required, primarily for fair value and cash flow hedges. For public business entities, the guidance is effective for annual periods beginning after 15 December 2018, and interim periods within those years. For all other entities, it is effective for annual periods beginning after 15 December 2019, and interim periods the following year. Early adoption is permitted in any interim or annual period.

Two trade groups representing farmer cooperatives and grain and feed producers have reached an agreement to resolve a technical problem in the Tax Cuts and Jobs Act, with the support of Republican leaders in Congress who hope to include the provision within a larger appropriations bill.

Section 199A of the tax law that Congress passed last December gave an advantage to farm cooperatives over corporate-owned feed producers such as Archer Daniels Midland, allowing farmers who sell their crops to agricultural co-ops to take advantage of the deduction for pass-through businesses so they can deduct 20 percent of their gross sales. However, if the farmers sell to a corporate-owned buyer, they can only deduct 20 percent of their net income, incentivizing them to bypass the corporations in favor of the co-ops. ADM and other corporate agribusinesses have lobbied for the so-called “grain glitch” to be fixed.

Thomas Kandel will be retiring from National Rural Utilities Cooperative Finance Corporation, (NRUCFC) effective March 30, 2018.

Tom served as Vice President and Chief Financial Officer, Southern Maryland Electric Cooperative from 1996-2006.

Having worked over 45 years in or associated with the electric utility industry, including investor-owned utilities (Columbus and Southern Ohio Electric Company, Madison Gas and Electric Company and American Electric Power) as well as public power utilities (Indiana Municipal Power Agency, Virgin Islands Water and Power Authority and Southern Maryland Electric Cooperative).