HIRE Act is Good News for Expanding Businesses

Deidra Thomas, CPA, Tax Supervisor 

What does the 2010 Hiring Incentives to Restore Employment (HIRE) Act mean for you?  The Act provides tax incentives for hiring unemployed individuals and extends certain business deductions. So, for business owners, that is good news. 

The #1 highlight of the hiring incentitives is payroll tax forgiveness for employers.  For every qualified worker hired between February 3, 2010 and January 1, 2011, the employer is exempted from paying the 6.2% Social Security tax for that particular employee.  A qualified employee is an individual that was unemployed for at least 60 days prior to their start date.  Family members of the employer do not qualify and current employees cannot be replaced unless they leave the job voluntarily or are terminated for cause. 

In addition to payroll tax forgiveness, an income tax credit is available for retaining qualified workers.  The workers have to meet the same criteria for payroll tax forgiveness to qualify employers for the credit.  Employers can take the lesser of $1,000 or 6.2% of the wages paid to the employee during the required 52 week period of employment.  Read more

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How Do You Evaluate the Performance of Your Practice?

Brian D. Meyers, CPA, Health Care Consultant 

One way to do this is to use key performance indicators (KPIs).  KPIs are those benchmarks or statistics that are most important for management to monitor.  While you can adopt KPIs for every facet of your healthcare operation, let’s focus on accounts receivable indicators. 

Every organization will not have the same KPIs.  This is due to the fact that management of one practice may want to know one thing while another practice wants to track something else.  For A/R purposes, though, the indicators tracked should be pretty similar.  For example, most organizations track: 

• Days Receivable Outstanding (DRO)
• DRO > 90 days
• DRO < 30 days
• Net Collection Ratio
• Bad Debt as % of Total Charges 

In addition, many practices track lag days between date of service and date of charge entry, gross collection percentage, and rejection/denials by payer.  Read more

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Taking a Walk on the Audit Side

Marcelle H. Piglia, Forensics and Valuation Analyst

The Forensic and Valuation wing of the 14^th floor is usually pretty calm and quiet. Outside of running into someone on the elevator or in the lunch room, I don’t get much interaction with people outside of my department. Busy season 2010 changed that for me: I had the opportunity to work as an associate in the audit department. Not only did I work with auditors at all different levels within the firm, I even had a tax senior sit in my office one day to discuss financials with me! That may be the normal course of business for other employees of AMD, but I found it to be a fairly exciting experience. Even more exciting, I worked with a tax partner, an audit manager, and our HR assistant on a litigation project involving salary research for the past 8 years.

Besides the interaction with my AMD brethren, my time as an auditor also gave me the opportunity to refine some skills that are essential to the projects I work on as a forensic and valuation analyst. The purposes for audits and forensic accounting engagements are different, but similar skills are needed in order properly execute each. Footing and cross-footing, tracing, vouching and re-calculating are some of the skills necessary in order to do an audit. Likewise, these skills are also necessary for forensic accounting and litigation support engagements. Now when I come across a bank reconciliation during a project in my department, it’s almost second nature to foot it and tie it to the bank statement. I sometimes get teased by my co-workers when they see my little tick marks all over the page, but that certainly is not a bad thing.

Although I don’t think I’ll be switching over to the audit department permanently, I truly enjoyed the few months I spent over there. The relationships and the skills I developed will be useful throughout the rest of my career. If you’re ever given the chance to work for another department within your firm, do it, even if it’s just temporary. You never know what you might learn!

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Has Estate Planning Gone to the Dogs?

Erin E. Prest, CPA/PFS 

At first I thought I had misread the subject line of the email I received.  It was from the AICPA, an organization that I respect as a CPA.  The email was touting the “New Guide to Legal Planning for Pet Care.”  Recent changes in estate law have changed the legal status of a pet to property, affording them better legal rights and protection.  Drafting legal documents to protect the welfare of pets is apparently becoming the new trend.  Those that treat their pets like family (or better) will now be able to legally set up trusts to ensure Fido maintains his current standard of living.  I’m sure this could also lead to some surprised heirs who find out they’re getting less than the pets. 

The emphasis on pets is echoed in recent articles about PurinaCare, a pet health insurance provider.  PurinaCare’s pet insurance is now available as a group benefit that employers can offer to employees.  The insurance group has also just expanded their insurance coverage to two more states so it must be catching on. 

As a member of our Wealth Management group, I’m always looking for more ways to help our clients plan for the future.  All jokes aside about the current lack of estate planning reform, it seems that traditional insurance and estate planning have now really gone to the dogs (and cats).  

While we’re on the subject, don’t forget to update your wills and account beneficiaries for the non-animals in your life.  Many times, wills and other important documents aren’t frequently updated which can lead to unintended results when your estate is distributed.  Check up on your wills, trust documents, durable powers of attorney, and beneficiaries of life insurance policies, retirement plans and other accounts.  This review is especially important if you’ve had any significant changes in the family through births, deaths, marriages or divorces.  Make sure your assets are going to those you intend to inherit your wealth….otherwise, you could be in the doghouse!

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How to Successfully Transition to a New Company…

Jeremy M. Vinson, CPA, Audit Senior

Last year I made a big move from the sunny beaches of Florida to the baseball crazed city of Saint Louis. As part of my move, I was leaving an accounting firm that I had been with for three years; a place where I was comfortable, knew everyone in my office, and was familiar with the area. I came to a new firm, new town, and new all-around environment. Nine months later, I can tell that I have made a successful transition.

Here are a few tips for helping you to make a successful transition from one place of employment to another:

• 1. Ask - During the first week, take the initiative to sit down with your boss and directly ask about the expectations of your position. I did this with my audit partner. That way we were both clear on what my responsibilities were as a senior auditor in this particular firm. Asking is the best way to ensure you don’t miss something important because of a lack of communication.
• 2. Take Advantage of Lunch - When a group is going to lunch and invites you, go! If no one is going out, invite someone to eat with you. Getting to know your new team is essential to getting a good start.
• 3. Reach Out - If you will be managing others. According to John Maxwell in his book The 21 Irrefutable Laws of Leadership, a leader builds communication and trust with those they are in charge of. Leadership is influence; without influence you will not be a successful leader in your new team.

These are just a few things I did that helped make my transition a successful one, and I know they will help you with yours.

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What did you do for Memorial Day Weekend?

Memorial Day weekend generally marks the unofficial start of summer.  For many people it means opening pools, attending barbeques, and spending time with family and friends.  For AMD Senior Millie (Onyango) Tutlam, this Memorial Day weekend held a much greater meaning; it marked her first Memorial Day as an American citizen. 

Last Friday in front of family, friends, and 16 AMD co-workers, Millie took her United States Oath of Allegiance as part of her Naturalization Ceremony at the Thomas F. Eagleton United States Courthouse in downtown St. Louis.  Those lucky enough to attend the ceremony witnessed Millie achieve yet another milestone in the “short” 10 years since she moved to the United States from Kenya.  Since moving to the U.S. in 2000, Millie has earned both her Bachelors and Masters degrees in Accounting as well as earning her CPA designation. 

Although Millie has only been “officially” an American for a few days, she has always been a role model for both American born citizens and recent immigrants.  In her free time Millie is a frequent volunteer with GenNext and Volunteer Lawyers and Accountants for the Arts and  serves as treasurer of the Pan-African Organization for Health, Education, and Research.  She is active in the accounting profession through her involvement with the Missouri Society of Certified Public Accountants. 

There is no doubt that this Memorial Day weekend was one that Millie will never forget. 

For those wanting to Congratulate Millie on her proud accomplishment, please feel free to e-mail her at mtutlam@amdcpa.com.

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Does your Company have an Intranet and a Defined Benefit Pension Plan? If so, read on …

Dennis Purkis, CPA, Audit Manager 

Sponsors of defined benefit pension plans are now required to post information from Form 5500 on their Company Intranet.  If you don’t have an Intranet, you are not required to create one.  But, if you use an Intranet for any type of employee communication, you must comply. 

Required by the Pension Protection Act of 2006, this is effective for the 2008 Form 5500 and all subsequent years. 

Plan sponsors must post basic plan information and actuarial information. To date, no specific regulations have been issued regarding the date information must be posted by and whether notice must be given to employees regarding the information.  However, plan sponsors must comply in the interim until regulations are issued. 

If you need more information, our Employee Benefit Plan Group can help.

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The CPA Exam and You

Lesley Larsen, CPA, Audit Associate 

For most people, college graduation means no more late night study sessions and a lot more free time.   That’s not the case if you’re entering the world of public accounting.  You go from college exams to the CPA exam.  Many people, like me, start the process of studying for the exam, unsure of what to expect and full of questions.  I recently passed the last of four parts of that exam, and am looking very forward to a summer with that is study free. Here are my tips:   

Studying: It’s important to allow yourself enough time to complete the study program you choose and then go back and refine the areas you’re weakest in.  Everyone has different ways of studying but the most important strategy is just studying.  If you put in the time you’ll see results. 

Sequence of Exams: Some people take the section they believe will be the hardest first because they’re more diligent about studying for the first test versus the last.  Others want to take a section they feel they have a better chance of passing first so at least one section would be out of the way.   Whichever way you think about it, it’s important to choose the best strategy for you. 

Changes to the Exam: Starting in 2011, the CPA exam will start testing on International Financial Reporting Standards (IFRS).  If you can, it would be a good idea to take a class on IFRS while you’re still in school.  Also, three of the four sections of the exam currently have a written portion; starting in 2011 only one section will have a written portion.  

The stress of the exam can become overwhelming so it’s important to remember to also make time for yourself during your studies.  The occasional night out with your friends won’t keep you from passing so study hard and you’ll soon be on your way to a CPA.

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EFAST2 Electronic Filing System. If You File on Due Date … It Might Be Late!

Summer Young, CPA, Audit Senior

In the past, employee benefit plans could choose to submit Form 5500 series filings either on paper or electronically using the ERISA Filing Acceptance System (EFAST).  That has changed; think electronic. Beginning January 1, 2010, no paper filings of any kind will be accepted, except for timely filed 2008 plan year filings. Regulation 29 CFR 2520.104a-2 from the Department of Labor (DOL) now requires electronic filing for all filers for plan years beginning on or before January 1, 2009. 

To comply with these regulations and to streamline the ERISA filing process, go to the DOL’s new web-based electronic filing system known as EFAST2.  Please note that EFAST2 is a completely separate system from EFAST. So, even if you are registered with EFAST, you will need to register for and obtain new electronic credentials under EFAST2. 

Now you’re thinking, submitting electronically is a faster method.  How can I be late? You can’t leave your submission to the deadline date, you should submit at least a day in advance. That’s because registration and file submission can take up to 24 hours.  Registering and/or filing on the return/report due date may not be considered a timely submission by the DOL and IRS in 2010. 

Log on to www.efast.dol.gov for more information on EFAST2 where you will find frequently asked questions and an EFAST2 user guide and tutorial. Want to make sure you are on time?  Our Employee Benefit Plan Group will help ensure your reporting needs are met well in advance of the due date!

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Companies & Individuals Beware. Now the States are Coming!

Chad Gall, CPA, Tax Supervisor

Nexus in general means a connection. The term nexus is used in tax law to describe a situation in which a business has a “nexus” or presence in a state and is thus subject to state income taxes and to sales taxes for sales within that state. Nexus describes the amount of business activity that must be present before a state can tax an individual or business’ income. If a taxpayer has nexus in a particular state, the taxpayer must pay and collect/remit taxes in that state. 

Nexus is determined differently for income taxes and for sales tax purposes. Generally, nexus is created for income tax purposes if an individual or business derives income from sources within the state, owns or leases property in the state, employs personnel in the state in activities that exceed “mere solicitation,” or has capital or property in the state. The requirements vary from state to state. 

Nexus is determined differently for sales tax purposes. Here are a few examples in which a business may have sales tax nexus in a state: 

• If the business has a physical location in the state
• If there are resident employees working in the state
• If the business has property (including intangible property) in the state.
• If there are employees who regularly solicit business in the state.  Read more
  
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