January, 2016 | RKL LLP
Posted on: January 27th, 2016

Local CPA Firm Announces New Hire in Lancaster Office

Francis D. Morris, CPA/ABV, CFFPRESS RELEASE

LANCASTER, PA (January 27, 2016) – Reinsel Kuntz Lesher LLP (RKL), Certified Public Accountants and Consultants, today announced that Francis D. Morris, CPA/ABV, CFF, has joined the firm as a Manager in its Business Consulting Services Group.

Working from the firm’s Lancaster office, Morris will provide business valuation, litigation support and general business consulting services to a variety of clients and industry groups.

Morris brings to RKL over 15 years of public accounting experience, with a focus in business valuation, litigation support and income tax engagements. He has prepared business valuations for use in transactional engagements, shareholder disputes, matrimonial dissolutions and estate and gift matters. He has developed calculations for use in personal injury, wrongful termination, and lost profits engagements, in addition to providing expert testimony in marital support hearings and personal injury engagements.

Morris holds a B.S. in Accounting from West Chester University. He is a member of the American Institute of Certified Public Accountants and the Pennsylvanian Institute of Certified Public Accountants (PICPA), serving on the PICPA Business Valuation and Divorce committees. Morris also serves as treasurer for various community benefit organizations. He resides in Strasburg with his wife and their two children.

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Posted on: January 21st, 2016

State Tax Update: PA Department of Revenue Raises Burden of Proof for Expense Deductions

PA Department of Revenue more info required to support business expense tax deductions Pennsylvania Department of Revenue (DOR) Secretary Eileen McNulty confirmed earlier this month in a letter to state legislative leaders that the DOR has formalized into policy its supporting documentation requirements for all business expenses claimed on personal income tax returns.

Business Expenses in Pennsylvania

Examples of unreimbursed business expenses that can be deducted on Pennsylvania state income tax include:

  • Work clothes
  • Small tools and supplies
  • Travel and mileage
  • Meals
  • Educational expenses
  • Moving expenses into PA

DOR Increasing Scrutiny

The policy announcement is the latest chapter in ongoing efforts by the DOR to increase scrutiny and documentation of unreimbursed business expense deductions. Additionally, Secretary McNulty announced in her letter that the DOR would broaden its review of such deductions to include examination of PA-40 Schedule C expenses (profit or loss from business or profession).

DOR’s actions over the past year regarding these deductions have caused consternation and headaches for practitioners and taxpayers alike. So what does this mean for your state tax filings?

New Methods to Justify Deductions

Under this new policy, the DOR will accept one of three forms of documentation to demonstrate that a taxpayer’s employer requires unreimbursed business expenses. One of the below items must be submitted with the originally filed tax return to support these deductions:

  1. A letter from the employer
  2. A copy of the employer’s employee expense reimbursement policy
  3. A signed (and notarized) affidavit

More Supporting Documentation May Be Required

In addition to the above forms, however, the DOR also indicated that it might request additional information to justify expenses the department believes may have been erroneously reported or not sufficiently substantiated.

Due to this higher level of scrutiny and review these deductions now trigger, RKL recommends that taxpayers submitting these expenses be hyper-vigilant when it comes to retaining documentation. Taxpayers will benefit from erring on the side of over retention of receipts, paperwork, emails, and any other proof of authorization or accumulation of expenses.

 

This is just the latest change in a constantly shifting tax landscape, and your RKL advisor is here to help. Our tax professionals can help clients compile the additional documentation and guide them through best practices for record retention. Contact one of our local offices today with any questions.

frank tobias PA state taxesContributed by Frank J. Tobias, CGFM, Principal in RKL’s Tax Services Group. He specializes in the area of multi-state planning and compliance, with extensive experience in all areas of Pennsylvania taxation.

 

 

Working Capital blog disclaimer

Posted on: January 19th, 2016

Mergers & Acquisitions 101: Preparing to Sell Your Business

Word cloudConsidering selling your business? Before stepping into the world of mergers and acquisitions, there are several preliminary tasks that can give business owners a competitive advantage. Going into the sale process armed with accurate and clear information about your business allows you to proceed from a position of strength.

Here are some steps to help you assess the attractiveness of your business to potential buyers.

1. Review financial performance.

It is important to look back before moving ahead with a sale. Take a look at your past financial statements and recast them to remove non-essential, non-recurring or unusual expenses. This gives you a standardized and organized way to examine the operational results, recent trends, historical data and cash flow generated from operations. Any potential buyer will conduct this type of analysis, so getting a sense ahead of time of your business’ “value proposition” can be an advantage going into the marketplace.

An experienced business valuation professional can help by standardizing this information in a clear and efficient manner, as well as identifying trends or other relevant information to provide deeper insight into the appraisal. Leveraging an outside expert also brings the benefit of a “fresh set of eyes,” which is critical to an honest and thorough evaluation of any business.

2. Develop forward-looking financial projections.

Once you’ve established your business’ history, it’s time to look ahead. Fleshing out financial projections based on the current status of operations will give you (and buyers) a sense of what to expect after the purchase. It’s important, however, to document the key assumptions you used in developing the projections and be sure to present all the information in standardized format.

3. Gather relevant industry and market activity data.

We all know that businesses don’t exist in a vacuum, so it’s also critical to understand what is happening in your industry. Researching recent activity and trends in the marketplace can help you find out what buyers are paying for similar businesses, who is in acquisition mode, and if there are any other potential interested parties you should be considering. All of this information and data is useful intelligence that can help shape your game plan for a potential sale.

Carrying out the research tasks above will leave you fully prepared for meetings with potential buyers. Knowing what to say and what not to mention, deciding what information to provide and in what format and making a good first impression are essential to maximizing the deal price. After all, when preparing your business for sale, knowledge most definitely is power.

RKL’s team of business consulting professionals can provide transaction advisory services to prepare your business for sale. Contact one of our local offices today to get started.

John S. Stoner, CPA, CVAContributed by John S. Stoner, CPA, CVA, partner and leader of RKL’s Business Consulting Services Group in the Lancaster office. John provides a wide range of business consulting services, including business valuation, financial analysis, litigation support, merger/acquisition assistance and business succession planning.

 

 

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Posted on: January 12th, 2016

Key Federal Filing Requirements for Health & Welfare Benefit Plans

Benefits ConceptThe landscape of health insurance is ever changing, so it is essential that employers be aware of the numerous federal filing requirements related to health and welfare benefit plans they provide to their employees. The differences in U.S. Department of Labor (DOL) basic reporting and possible audit requirements hinge upon whether a health and welfare benefit plan is considered “funded” or “unfunded.”

A funded plan is one that at any time during the plan year either (or a combination of both) occurred:

  1. Received contributions from active or former employees.
  2. Used a trust or separately maintained fund (including a voluntary employee beneficiary association (VEBA) trust described in Code Section 501(c)(9)) to hold plan assets or act as a conduit for the transfer of plan assets during the plan year.

An unfunded plan is one in which benefits are either (or a combination) of the following:

  1. Paid as needed solely from the general assets of the employer or employee organization that sponsors the plan.
  2. Provided exclusively through insurance contracts or policies, the premiums for which are paid directly to the licensed insurance carrier by the employer or employee organization from its general assets, or partly from its general assets and partly from contributions by its employees or members (which the employer or employee organization forwards to the insurance carrier within three months of receipt).

**Keep in mind that a welfare benefit plan with employee contributions that is associated with a Code Section 125 fringe benefit plan (i.e., a cafeteria plan) may file as an unfunded welfare benefit plan if it meets the requirements of DOL Technical Release 92-01.**

Any health and welfare benefit plan that covers 100 or more participants at the beginning of the plan year must file the Form 5500 each year, whether it is funded or unfunded. In addition, any funded health and welfare benefit plan with fewer than 100 participants at the beginning of the plan year must file an annual Form 5500.

As more and more employers look for ways to save on health costs for employees, many are turning to self-insured plans and options. Be aware, however, that depending on the structure of the plan’s self-insured benefits, it could change from an unfunded plan only requiring a Form 5500 each year if the number of participants is 100 or more, to a funded plan. Moving to a funded plan requires an annual Form 5500 regardless of the number of plan participants, and could trigger audit requirements if the plan is considered a large plan.

Although the costs of having an audit performed on a large funded plan likely will not outweigh the cost savings from changing to a funded plan, employers must be aware of the potential additional filing and audit requirements. Your RKL advisor can help you determine the filing requirements for your health and welfare benefit plan. Contact us today to get started.

Laura S. Rineer, CPAContributed by Laura S. Rineer, CPA, a supervisor in RKL’s Small Business Services Group. Laura specializes in helping small businesses from a wide variety of industries with financial statements, tax returns and related accounting and business needs. 

 

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Posted on: January 11th, 2016

RKL Promotes Tax Manager to Firm Principal

Ruthann J. Woll, CPAPRESS RELEASE

WYOMISSING, PA (January 6, 2016) – Reinsel Kuntz Lesher LLP (RKL), Certified Public Accountants and Consultants, today announced the promotion of Ruthann J. Woll, CPA, to the position of firm principal.

As a principal with RKL’s Tax Services Group, Woll is primarily responsible for overseeing the firm’s individual and not-for-profit tax planning and compliance. She is also a member of RKL’s Not-for-Profit Industry Group. Since joining RKL in 1997, Woll has accumulated significant experience providing tax planning services to not-for-profit organizations, institutions and individual clients.

Woll holds a B.S. in Economics and Business Administration from Ursinus College. She is a 2008 graduate of the Leadership Berks program at Alvernia University, and is an active member in several charitable organizations, including the American Cancer Society, the United Way of Berks County and Berks T1D Connection. Woll resides in Bernville with her husband and two children.

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Posted on: January 6th, 2016

RKL’s Berman Named Chair of York County Economic Alliance

Doug Berman CPA RKLPRESS RELEASE

YORK, PA (January 6, 2016) – Reinsel Kuntz Lesher LLP (RKL), Certified Public Accountants and Consultants, is pleased to announce that Douglas L. Berman, CPA, has been named as the chair of the 2016-17 York County Economic Alliance (YCEA) Board of Directors.

Berman, who is Managing Partner of RKL’s York Office and leader of the firm’s Not-for-Profit Industry Group, has long been active with YCEA through his service as Board Member and most recently Vice Chair of the Board. Berman is also involved in multiple professional and civic organizations including the American and Pennsylvania Institutes of Certified Public Accountants, the United Way of York County and Leg Up Farm, Inc. He resides in York with his wife and two daughters.

As York County’s official chamber and economic development organization, YCEA’s mission is to lead economic growth, connect local businesses to resources and each other and advocate for business and the community to create a prosperous York County. For more information on YCEA, visit www.ycea-pa.org.

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Posted on: January 6th, 2016

Employers Now Have More Time to File 2015 Health Care Info Returns

IRS extends due dates for health care info returnsEmployers scrambling to send health care-related tax forms to their employees by February 1 now have more time to do so, according to an IRS announcement earlier this week.

The IRS has extended to March 31, 2016, the due date to send individuals the Forms 1095-B and 1095-C for 2015. Originally, the deadline to send these forms to individuals was February 1, 2016.

Employers will also have three more months to file these and other related forms with the IRS. If not filing electronically, Forms 1094-B, 1094-C, 1095-B and 1095-C must be sent to the IRS by May 31, 2016, instead of February 29, 2016. Employers who file these forms electronically must submit them to the IRS no later than June 30, 2016, rather than March 31, 2016.

These forms are required under two sections of the Affordable Care Act, 6055 and 6056, which collects annual information returns about coverage provided by employers and the health insurance the employer does or does not provide to employees.

Here is a breakdown of the forms and their new, extended deadlines:

  • Due to individuals by March 31, 2016:
    • 2015 Form 1095-B, Health Coverage
    • 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
  • Due to the IRS by May 31, 2016, if not filing electronically, and by June 30, 2016, if filing electronically:
    • 2015 Form 1094-B, Transmittal of Health Coverage Information Returns
    • 2015 Form 1095-B, Health Coverage
    • 2015 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
    • 2015 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Your RKL advisor can explain how these deadline changes affect you and help you prepare the necessary forms. Contact them directly or one of our local offices for assistance.

Ethel A.M. Nawrocki, CPAContributed by Ethel A.M. Nawrocki, CPA, a principal in RKL’s Tax Services Group. Ethel specializes in tax, accounting and consulting services for the manufacturing, wholesale, distribution, construction and real estate rental industries.

 

 

 

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Posted on: January 5th, 2016

Tax ID Theft Victims Now Able to Request Fraudulent Returns

IRS officeIt is every taxpayer’s worst fear: You file your tax return electronically well ahead of the deadline, only to receive the dreaded notice that your return was rejected by the IRS. Why? Because someone else used your Social Security Number, or that of your spouse or dependents, to file a tax return. Now you must go through the identity theft checklist: report it to the IRS and contact your bank, credit card companies and major credit bureaus to place a “fraud alert” on your credit records.

Until a few weeks ago, that was the limit of what you could do. For the first time, however, taxpayers can find out more information about this fraud. The IRS recently announced that victims of identity theft are now able to request copies of bogus tax returns filed under their names.

To comply with federal privacy laws, return information will only be disclosed to individuals listed as the primary or secondary taxpayer on the fraudulent return, and certain information will be redacted. The remaining information will allow you to see what information the identity thief may have about you, the victim, and your family.

Under the new IRS rules, the request for a copy of the fraudulent return must be submitted as a signed letter containing the following information:

  • Your name and SSN
  • Your mailing address
  • Tax year(s) of the fraudulent return(s) you are requesting
  • The following statement, with your signature beneath: “I declare that I am the taxpayer.”
  • A copy of government-issued ID (for example, driver’s license or passport)

The letter and additional information should be mailed to:

IRS
P.O Box 9039
Andover, MA 01810-0939

While there is not an exact fulfillment time due to a number of factors related to the fraud case, you can expect to receive IRS acknowledgement of your request within 30 days of receipt of the letter and within 90 days you should receive the return or follow-up correspondence from the IRS.

This is an important change to be aware of heading into tax season. RKL reminds all of its clients to be safe and secure when conducting online business and to take steps to protect home computer networks using the latest anti-virus and defense software. Should the worst-case scenario come to pass and your identity has been used to file a fraudulent return, your RKL advisor is ready to help you through the steps to claim a copy of the return or make the request on your behalf.

Chris A. Luppold, CPA, MBA, CGMAContributed by Chris A. Luppold, CPA, MBA, CGMA, a manager in RKL’s Tax Services Group. Chris has over 35 years experience in public accounting and provides services a wide range of areas including general business consulting, tax preparation, estate planning and tax planning for his clients.

 

 

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