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FASB Task Force Tackles Cloud Computing Costs

Published on February 21, 2018

The Financial Accounting Standards Board’s Emerging Issues Task Force plans to propose new rules for how to deal with cloud computing service costs. 

At a meeting last week, the EITF discussed how to account for implementation, setup, and other upfront costs incurred in cloud computing arrangements that are service contracts. They decided to propose an accounting standards update that will be issued in the next few weeks about the topic. 

Under the proposed guidance, a customer in such service contracts would look to the existing guidance on internal-use software to determine which implementation costs to recognize as an asset. The EITF members also decided that implementation costs that are recognized as an asset should be expensed over the term of the hosting arrangement. The term of the hosting arrangement would be the non-cancellable period of the arrangement along with certain periods covered by options to renew (or not to terminate) the arrangement. 

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Beware W2 Phishing Again This Year

Published on February 21, 2018

Tax authorities warn employers again this year about a W-2 phishing scam that victimized organizations — and thousands of employees — last year. 

During the last two tax seasons, cyber-crooks conned payroll personnel or those with access to payroll information into disclosing sensitive information for entire workforces from small and large businesses to public schools and universities, hospitals, tribal governments and charities. 

Cybercriminals pinpoint chief operating officer, school executives or others in authority. Fraudsters pose as execs to e-mail payroll personnel, requesting copies of W-2s for all employees. Criminals use that information to file fake returns or sell it on the Dark Net. The scam may open with a friendly exchange before the fraudster asks for W-2 information. In several cases, fraudsters who acquired the information immediately followed up with a request for a wire transfer. 

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Top Five Ways Tax Reform Impacts Dairy Industry

Published on February 21, 2018

We have just witnessed the most sweeping change in tax law since 1986. It is too early to make dramatic changes to your farm operation in response to the new tax code, but dairy producers should understand several changes that could affect their operations. 

Under the new tax law, if a dairy farm sells all of its product to a non-cooperative, the farm will qualify for a tentative deduction equal to 20 percent of net farm income. This deduction may be limited if the farmer’s taxable income is more than $315,000 (married filing joint or $157,500 single). In that case, the limit will be the greater of:

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IRS Announces 2018 Pension Contribution Limits Under Tax Reform Act

Published on February 21, 2018

The IRS announced that the 2018 dollar limitations on retirement plan contributions, outlined in IR-2017-177 and Notice 2017-64, were unchanged by P.L. 115-97, known as the Tax Cuts and Jobs Act (IR-2018-19). Although the new law made changes to the method of calculating cost-of-living increases, after applying the new methods, the contribution limits are unchanged from the ones announced in 2017. 

Therefore, the limit on elective deferral for contributions to Sec. 401(k) plans, Sec. 403(b) plans, most Sec. 457 plans, and the federal government’s Thrift Savings Plan increased from $18,000 in 2017 to $18,500 for 2018. However, the catch-up contribution limit for those 50 and older remains $6,000. Most other inflation-adjusted amounts related to pensions increased from 2017 to 2018. 

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Work-life balance' top priority for millennials, global survey finds

Published on January 29, 2018

A new global survey via professional services network World Services Group found that among young professionals in North America (as well as the rest of the world), work-life balance was the biggest priority in their professional lives, beating out wealth and leadership opportunities. 

The Generation Now Survey, which polled over 1,500 young professionals across 84 of the World Services Group's professional service firms, sought to dig deeper into the millennial workforce and find out what made a "generation that many understand to be different from those that have gone before it" tick. 

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When the New Corporate Tax Rate Kicks in: A Primer

Published on January 29, 2018

The lower corporate tax rate under the new tax law spurred some confusion for corporations whose taxable years don’t begin on January 1. 

Tax professionals have been practically unanimous in their expectations for guidance from the Treasury Department on how to interpret and follow the new tax law. But on this issue — application of the new corporate rate to companies with a non-calendar taxable year — they shouldn’t have to wait at all, as the answer lies in Section 15 of the Internal Revenue Code.

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7 proposed changes to the auditor's report

Published on January 29, 2018

An auditor’s report gives lenders confidence that financial statements are free of material misstatement. But does the auditor’s report really tell the story of what the auditor did to gain assurance about the financial statements? Thanks to proposed changes to the auditor’s report, readers will gain a better understanding of what the auditor did and observed. 

The AICPA Auditing Standards Board (ASB) has released a set of exposure drafts  aimed at enhancing the relevance and usefulness of the auditor’s report.

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New tax withholding tables are issued

Published on January 29, 2018

The IRS issued new income tax withholding tables that reflect new tax rates and other changes for individuals implemented by P.L. 115-97, known as the Tax Cuts and Jobs Act, enacted Dec. 22 (Notice 1036). Employers should use the updated withholding rules for 2018, putting them into effect as soon as possible but no later than Feb. 15, the IRS said. Until then, employers should continue to use the 2017 withholding tables. 

The IRS noted that many employees should begin to see their take-home pay increase in February depending on how quickly their employers implement the new tables and whether they are paid weekly, biweekly, or monthly. The new withholding tables are designed to work with Forms W-4, Employee’s Withholding Allowance Certificate, that employees already have on file, so employees do not have to fill out new ones at this time. The IRS plans on issuing a new Form W-4 in the near future. It is also working on revising the withholding tax calculator available on its website, which it expects will be finished by the end of February. 

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Taking Clients to Ballgames? Tax Law Change Makes It Costlier

Published on January 29, 2018

Businesses—especially smaller firms—may scale back on treating clients to major league baseball games, golf outings and the like after Congress and President Donald Trump ended a tax break for such entertainment. 

The tax overhaul that Trump signed Dec. 22 eliminated a 50 percent deduction for business-related expenses for “entertainment, amusement or recreation.” Suddenly, luxury boxes at stadiums and arenas—along with theater and concert tickets—will be more costly for firms that use them to woo clients. 

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How The Tax Bill Affects Coops

Published on January 29, 2018

By the time you read this post, it is likely that President Trump has already signed the new Tax Act. Today’s post has been prepared by Rebecca Smith.  She is our director of tax for cooperatives.  This post if fairly long, but we want to get the information to our cooperative clients.  We would strongly suggest talking the tax bill over with your tax advisor now since there may be some actions needed before year-end.  

Tax Reform overall appears to be a win for cooperatives as well as their patrons.  A key change is the repeal of the Section 199 deduction which many cooperatives and their patrons have benefited from since its inception in January 2005. For cooperatives that currently benefit from the deduction and/or pass it through to patrons please consult your tax advisor prior to December 31st to discuss the implications. 

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