FASB Proposes Clarifying the Definition of a Business

From Neikirk, Mahoney & Smith, the FASB is proposing clarifications to the definition of the business. This proposal is not because the FASB believes that the current definition is too narrow, but rather that it is too broad. They are concerned that this broad definition can lead to transactions being reported as acquisitions or disposals of businesses rather than assets.

"Clarifying the Definition of a Business, would require that under FASB’s definition, a business would include at least an input and a substantive process that together contribute to the ability to create outputs and would remove the evaluation of whether a market participant could replace any missing element."

You can check out the full article at the Journal of Accountancy.
You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.

AICPA Proposes Peer Review Standards Changes

From Neikirk, Mahoney & Smith, according to the Journal of Accountancy the AICPA has proposed changes to the peer review standards "to help audit firms increase their focus on the proper design and operating effectiveness of their systems of quality control."

The AICPA peer review program monitors the quality of reviewed firms’ accounting and auditing engagements and evaluates the systems under which those engagements are performed. Participation in the peer review program is mandatory for AICPA membership, and peer review is required for licensure in nearly every state.

For more details on the specific changes that have been proposed to the peer review standards, check out the full article at The Journal of Accountancy 

You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.

IRS Instructions for Requesting Copy of Fraudulent Returns

From Neikirk, Mahoney & Smith, the IRS has published the following instructions for requesting copy of fraudulent returns.

A victim of identity theft or a person authorized to obtain the identity theft victim’s tax information may request a redacted copy (one with some information blacked-out) of a fraudulent return that was filed and accepted by the IRS using the identity theft victim’s name and SSN. Due to federal privacy laws, the victim’s name and SSN must be listed as either the primary or secondary taxpayer on the fraudulent return; otherwise the IRS cannot disclose the return information. For this reason, the IRS cannot disclose return information to any person listed only as a dependent.
Partial or full redaction will protect additional possible victims on the return. However, there will be enough data for you to determine how your personal information was used.
To make the request, you will need to prepare a signed letter with the information described below and mail it and any additional documentation to the following address:

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

The IRS may return your request if it is missing the required information and/or documentation, or is made in a manner other than described in these instructions.

If you are the victim of identity theft requesting a copy of fraudulent returns, you will need to provide the following information and documentation:

• 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.”

If you are a person authorized to obtain the identity theft victim’s tax information however, you will need to provide quite a bit more documentation.

For more information on what that documentation is, you can see the full IRS article here.
You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.

Three Tax Considerations during Marketplace Open Enrollment

From Neikirk, Mahoney & Smith, the IRS has just published some tips on the health insurance marketplace. When you apply for assistance to help pay the premiums for health coverage through the Health Insurance Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim.  The Marketplace will use information you provide about your family composition, your projected household income, whether those that you are enrolling are eligible for other non-Marketplace coverage, and certain other information to estimate your credit.

Here are three things you should consider during the Health Insurance Marketplace Open Enrollment period:

1. Advance credit payments lower premiums - You can choose to have all, some, or none of your estimated credit paid in advance directly to your insurance company on your behalf to lower what you pay out-of-pocket for your monthly premiums.  These payments are called advance payments of the premium tax credit or advance credit payments.  If you do not get advance credit payments, you will be responsible for paying the full monthly premium.

2. A tax return may be required - If you received the benefit of advance credit payments, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit.  You must file an income tax return for this purpose even if you are otherwise not required to file a return.

3. Credit can be claimed at tax time - If you choose not to get advance credit payments, or get less than the full amount in advance, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. This will increase your refund or lower the amount of tax that you would otherwise owe.

For more information about open season enrollment, which runs through January 31, 2016, visit Healthcare.gov. You can also contact Neikirk, Mahoney & Smith PLLC at 502-896-2999, or through our website contact form.

Are You Underestimating Your Retirement Expenses?

From Neikirk, Mahoney & Smith, a recent AICPA survey revealed that over 50% of people underestimated their retirement expenses and the amount of money that they would need to be able to retire. According to the survey, the main cause for people having to change their retirement plans included overspending, health care costs, and poor estimates of retirement spending and income. According to the Journal of Accountancy, to increase clients’ confidence about investing, CPA financial planners who hold the PFS credential recommend that advisers take the following three steps.

1. Help clients create disciplined investing plans
2. Educate clients about the factors that cause volatility
3. Remind clients that stock market returns should be evaluated in terms of three-to-five-year cycles, not quarterly returns.

You can read more on this topic from this article at the Journal of Accountancy.

If you have any questions or concerns, contact Neikirk, Mahoney & Smith PLLC at 502-896-2999. You can also contact us through our website contact form.

U.S. Treasury Launches myRA Program

From Neikirk, Mahoney & Smith, the U.S. Department of the Treasury has just released this information on their new myRA program. The myRA (my Retirement Account) program is designed to help bridge America's retirement savings gap. This program is much needed because many Americans aren't making a large effort to put money into a savings account. A Survey in October by GOBankingRates found that 62% of Americans Have Under $1,000 in Savings. Luckily myRA has arrived to help us out, a simple, safe and affordable new savings option for those who don’t have access to a retirement savings plan at work. People can get information about myRA and sign up for an account at myRA.gov.

The program is now available nationwide with multiple ways for people to start saving:

• Paycheck. Set up automatic direct deposit contributions to myRA through an employer.
• Checking or savings account. Now savers can fund a myRA account directly by setting up recurring or one-time contributions from a checking or savings account.
• Federal tax refund. At tax time, direct all or a portion of a federal tax refund to myRA.

For more information about myRA or to sign up for an account, visit myRA. gov. If you have any questions or concerns, contact Neikirk, Mahoney & Smith PLLC at 502-896-2999. You can also contact us through our website contact form.

Understanding Your Form 1095-B, Health Coverage

From Neikirk, Mahoney & Smith, the IRS has just released the following information to help the public understand Form 1095-B.

"Form 1095-B, Health Coverage, is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore aren't liable for the individual shared responsibility payment.

Minimum essential coverage includes government-sponsored programs, eligible employer-sponsored plans, individual market plans, and other coverage the Department of Health and Human Services designates as minimum essential coverage.

By January 31, 2016, health coverage providers should furnish a copy of Form 1095-B, to you if you are identified as the “responsible individual” on the form.

The “responsible individual” is the person who, based on a relationship to the covered individuals, the primary name on the coverage, or some other circumstances, should receive the statement. Generally, the recipient should be the taxpayer who would be liable for the individual shared responsibility payment for the covered individuals. A recipient may be a parent if only minor children are covered individuals, a primary subscriber for insured coverage, an employee or former employee in the case of employer-sponsored coverage, a uniformed services sponsor for TRICARE, or another individual who should receive the statement. Health coverage providers may, but aren't required to, furnish a statement to more than one recipient.

The Form 1095-B sent to you may include  only the last four digits of your social security number or taxpayer identification number, replacing the first five digits with asterisks or Xs. In general, statements must be sent on paper by mail or hand delivered, unless you consent to receive the statement in an electronic format.  The consent ensures that you will be able to access the electronic statement. If mailed, the statement must be sent to your last known permanent address, or, if no permanent address is known, to your temporary address."

If you have any questions or concerns, contact Neikirk, Mahoney & Smith PLLC at 502-896-2999. You can also contact us through our website contact form.