Monthly Archives: December 2014

Time to act on your year-end charitable donations

Additional Donations Can Save on Taxes

David Reape HighRes-08Are you still considering a year-end donation to your favorite charity? If so, consider donating publically traded appreciated stock held more than a year to receive a double benefit on your taxes. First, you will get a charitable donation on your personal taxes equal to the fair market of the stock. Secondly, you will avoid paying capital gains tax on the net appreciation of the long term stock by making the donation to a public charity. If you are still thinking about it, the time to act is now. Stock transfers typically take a few days to execute for the brokers so make sure you give them plenty of time to complete the transaction before year end. Also, the charities will appreciate a quick phone call or email to let them know what stocks you are sending them so they can watch for the transfer. Lastly, always check with your tax advisor to make sure you are maximizing your tax deduction.

If you have questions about timing of donations or would like assistance in determining how to make the most of your timing, the tax professionals at Ciuni & Panichi can help you start planning now.  For more information, or on tax reporting requirements, please contact David Reape at 216.831.7171 or dreape@cp-advisors.com.

You may also be interested in:

College Tax Breaks Help Save You Money

Tax Deduction:  Is My Elderly Parent a Dependent?

Internal Control Framework Changes: The impact to your company

The new COSO framework doesn’t impact me.  Does it?

There has been a lot of buzz recently and rightfully so about the changes made to the internal control framework as we currently know it.  On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released an updated version of its Internal Control—Integrated Framework.  COSO will consider the 1992 Internal Control—Integrated Framework as having been superseded by the 2013 framework after December 15, 2014.

changesIf you work for a public company, you may know that Sarbanes-Oxley Act (SOX) Section 404 requires management to select an internal control framework and then assess and report on the design and operating effectiveness of their internal controls annually.  The majority of U.S. publicly-traded companies have adopted COSO’s 1992 framework to do this, and therefore, will be required to adhere to the new COSO framework.

So why should I care about COSO’s new framework if I don’t work for a public company?

Well, in the spirit of continuous improvement, organizations should continually reassess their system of internal control to identify opportunities to improve the efficiency and effectiveness of that system.

Let’s also think about the many changes occurring since 1992 that have significantly increased business risk, resulting in a much greater need for accountability, oversight, and competence than ever before.  This need extends from the board of directors, all the way down to the entry level staff employees just beginning their careers.

Markets continue to globalize; business models have changed significantly; the complexity and pace of change surrounding rules, regulations, and standards have intensified the demands on organizations; and last, but definitely not least, our reliance on evolving technology continues to grow.

Finally, let’s not forget about some of the large-scale internal control breakdowns of recent history, such as Enron, WorldCom, Quest Communication, and Cendant.   These breakdowns have taught us all valuable lessons around a number of items, such as the effects of management override, ineffective board or audit committee oversight, lack of segregation of duties, conflicts of interest,  poor or nonexistent transparency displayed by key officials, and unbalanced compensation structures.

So, the introduction of this new COSO framework gives you the perfect excuse to reassess your organization’s system of internal control.  Need more, let’s move on.

The 1992 COSO framework introduced 17 relevant principles associated with the five components of internal control, but did this conceptually.  The new COSO framework not only codifies the 17 underlying principles, it streamlines the original framework; increases the focus on operations, non-external financial reporting. and compliance objectives; and enhances usability.

As COSO has explained, the 17 principles remain broad as they are intended to apply to for-profit companies (including those that are privately held), non-profit entities, governmental entities, and other organizations.  COSO has also included points of focus within each of the 17 principles.   These points of focus represent important characteristics associated with each principle and provide helpful guidance to assist management in designing, implementing, and assessing whether the relevant principles are present and relevant.

COSO believes this framework will provide organizations significant benefits, such as increased confidence that controls mitigate risks to acceptable levels and reliable information supporting sound decision making.  The time is now to take a look at the new and improved COSO framework and consider how it can create value for your organization, regardless of how mature your organization’s system of internal control may be.

For more information contact Reggie Novak at 216-831-7171 or rnovak@cp-advisors.com.

Reggie is a Senior Manager in the Audit and Accounting Services Group.  As a Certified Fraud Examiner, Mr. Novak can assist you with prevention services including recommending internal controls and other measures to be implemented to prevent theft or misappropriation.  If fraud is suspected he can investigate and present his findings and recommendations.

 

Donations and Tax Deductions. How long do I have?

Want to save money on your tax bill?

Ciuni & Panichi is constantly looking for ways to assist you.  Our Tax Group is always available if you have any questions.

charityTo take a 2014 charitable donation deduction, your gift must be made by Dec. 31, 2014. According to the IRS, a donation generally is “made” at the time of its “unconditional delivery.” But what does this mean to you?  For example, is it the date you write a check or make an online gift via your credit card? Or is it the date the charity actually receives the funds?  Or even its perhaps the date the charity acknowledges your gift?

The delivery date depends in part on what you donate and how you donate it. Here are a few examples for common donations:

  • Check.  The date you mail it.
  • Credit card.  The date you make the charge.
  • Pay-by-phone account.  The date the financial institution pays the amount.
  • Stock certificate.  The date you mail the properly endorsed stock certificate to the charity.

There are many additional rules that apply to the charitable donation deduction, so please contact us if you have questions about the deductibility of a gift you’ve made or are considering making.  But act soon you don’t have much time left to make donations that will reduce your 2014 tax bill.

If you have questions about timing of donations or would like assistance in determining how to make the most of your timing, Ciuni & Panichi can help you start planning now.  For more information, or on tax reporting requirements, please contact David Reape at 216.831.7171 or dreape@cp-advisors.com.

You may also be interested in:

Worried About Tax Fraud – File Early

Tax Deduction:  Is My Elderly Parent a Dependent?

 
© 2014

Reduce Your 2014 Tax Bill with a New Car

Buying a business vehicle before the end of the year may reduce your tax bill.

CarIf you’re looking to reduce your 2014 tax bill, you may want to consider purchasing a business vehicle before the end of the year.  Business-related purchases of new or used vehicles may be eligible for Section 179 expensing, which allows you to expense, rather than depreciate over a period of years, some or all of the vehicle’s cost.

The normal Sec. 179 expensing limit generally applies to vehicles weighing more than 14,000 pounds.  The limit for 2014 is $25,000, and the break begins to phase out dollar-for-dollar when total asset acquisitions for the tax year exceed $200,000.  These amounts have dropped significantly from their 2013 levels.  But Congress may still revive higher Sec. 179 amounts for 2014, so watch for updates before you file.

Even when the normal Sec. 179 expensing limit is higher, a $25,000 limit applies to SUVs weighing more than 6,000 pounds but no more than 14,000 pounds.  Vehicles weighing 6,000 pounds or less are subject to the passenger automobile limits.  For 2014, the depreciation limit is $3,160.

Many additional rules and limits apply to these breaks.  So if you’re considering a business vehicle purchase, contact the experts in our tax department or Jim Komos at 216.831.7171 or jkomos@cp-advisors.com to learn what tax benefits you might enjoy if you make the purchase by Dec. 31.  Ciuni & Panichi, Inc. can help you start planning now.

You may also be interested in:

Save on your taxes by accelerating deductions

Donations and Tax Deductions.  How long do I have?

© 2014

Save on your taxes by accelerating deductions

Expenses and Your Tax Liability

401(k) 403(b) audit SSAESmart timing of deductible expenses can reduce your tax liability, and poor timing can unnecessarily increase it.  When you don’t expect to be subject to the alternative minimum tax (AMT) in the current year, accelerating deductible expenses into the current year typically is a good idea.  Why?  Because it will defer tax, which usually is beneficial.

One deductible expense you may be able to control is your property tax payment.  You can prepay (by Dec. 31) property taxes that relate to this year but that are due next year, and deduct the payment on your return for this year.  But you generally can’t prepay property taxes that relate to next year and deduct the payment on this year’s return.  Remember this may cause your future deduction to be lower.

Don’t forget that the income-based itemized deduction reduction returned last year.  Its impact should be taken into account when considering timing strategies.

Not sure whether you should prepay your property tax bill or what other deductions you might be able to accelerate into 2014?  Our expert Tax Department can help you determine what steps to take before year-end to reduce your 2014 tax bill.  If you have questions about timing deductible expenses or would like assistance in determining how to make the most of your timing, Ciuni & Panichi   can help you start planning now.

For more information, or on tax reporting requirements, please contact Jim Komos at 216.831.7171 or jkomos@cp-advisors.com.

Beware of Alternative Minimum Tax Triggers

Donations and Tax Deductions.  How long do I have?
© 2014