Zinner Business Blog

Howard J. Kass, CPA and Lesley A. Keller, CPA, MT of Zinner & Co. LLP will be the firm representatives to attend The InternationalAccounting Group’s (TIAG®) conference on May 7-9, where members from all over the world will meet to discuss important issues to the accounting profession.

Keller, the Senior Tax Manager for Zinner & Co., will be giving a presentation entitled “U.S. Filing Requirements on Foreign Accounts: Are Your Clients at Risk?” during the conference.

Among the other topics will be management and business development issues, including online and social media presence optimization, and a panel discussion titled Fraud Protection and Detection.  Experts from the United States Federal Bureau of Investigation (FBI), TIAG accounting firms and a lawyer fromTIAG’s sister legal alliance, TAGLaw®, will discuss experiences they have had in how businesses can prevent fraud and how, after the fact, they can recover funds wrongfully taken.

“Given the fallout from the Madoff scandal and other high profile cases, it clear that firms need to be vigilant about uncovering the many ways unethical business people will try to deceive their clients,” saidTIAG’s President, Bob Sattin, “and we are pleased to have a member of the Federal Bureau of Investigation, as well as our experienced TIAG and TAGLaw members, show us how accountants can find and protect their clients from fraud.”

TIAG (The International Accounting Group), founded in January 2003, is an international alliance of independent, high-quality accounting firms. The alliance has established a global presence and now has a membership of more than 100 firms in over 60 countries.

TIAG members are highly-respected, value-driven accounting firms with local market knowledge and expertise. Members are carefully chosen based on their reputation and record and on recommendations from existing members. Members undergo a rigorous screening process prior to invitation to the alliance, and are ultimately reviewed and approved by the TIAG Advisory Board. For more information visit www.TIAGnet.com.

Posted by: Mary Ann Mezacapa

The Ohio Department of Taxation’s business eForms for sales & use taxes will be discontinued March 31, 2012. The last form available for semi-annual or quarterly filers will be the period ending December 31, 2011 that is due on or before January 23, 2012. The last form available for monthly filers will be the period ending February 29, 2012 that is due on or before March 23, 2012.

Sales and use tax returns can continue to be filed on the Ohio Business Gateway (OBG) by visiting business.ohio.gov. Single county vendors (accounts where the first two digits are 01 through 88), may also use the Telefile system by calling 1-800-697-0440.

We encourage you to make the transition from eForms to OBG or TeleFile sooner than later to avoid any delays in response time, if assistance is needed. Please click here for additional self help tools for OBG.

Posted by: Howard J. Kass, CPA

Congratulations to Tina Myers for achieving the designation of an Accredited Estate Planner® (AEP®) by the National Association of Estate Planners & Councils!

The Accredited Estate Planner® (AEP®) designation is a graduate level specialization in estate planning, obtained in addition to already recognized professional credentials within the various disciplines of estate planning.  It is awarded by the National Association of Estate Planners & Councils (NAEPC) to recognize estate planning professionals who meet stringent requirements of experience, knowledge, education, professional reputation, and character.

The National Association of Estate Planners & Councils (NAEPC) is a national organization of professional estate planners and affiliated local Estate Planning Councils focused on establishing and monitoring the highest professional and educational standards.  NAEPC fosters public awareness of the quality services rendered by professionals who meet these standards.  NAEPC builds a team approach involving cross-professional disciplines to better serve the public’s need in estate planning.

All of us here at Zinner & Co. are proud of Tina for attaining this designation.

Posted by: Courtney Ockenden, CPA

Starting in January 2012, businesses that accept credit and debit cards when making sales to customers may receive a new IRS tax form 1099-K from their credit card processing companies. Form 1099-K, Merchant and Third Party Network Payments, will include gross reportable revenues, as well as a monthly breakdown of the processor’s transactions for the 2011 calendar year.

This new form was created as part of the Housing and Economic Recovery Act of 2008 to increase compliance in reporting sales income by merchants and as an on-going government effort to increase the collection of income tax. Because the IRS will also receive a copy of the Form 1099-Ks reported to you, it will aid the IRS in matching whether or not businesses are reporting correct revenue figures on their tax returns.

However, not every merchant will receive a form 1099-K; only those who generated either a minimum of 200 transactions or $20,000 or more in sales.

While you may begin to receive 2011 Form 1099-Ks in the mail, the IRS has deferred the requirement to separately report the merchant revenues on 2011 tax returns. This will however become a requirement starting with the 2012 tax returns.

For more information on the new Form 1099-K and how it relates to your tax return, feel free to contact Zinner & Co.

Posted by: Mary Ann Mezacapa, QB ProAdvisor

Posted by: Mary Ann Mezacapa, QuickBooks ProAdvisor

Live technical support and add-on business services such as payroll, credit card processing, QuickBooks Email, and online banking will be discontinued for QuickBooks for Windows 2009, QuickBooks 2009 for Mac, and a few other products as of May 31, 2012.

QuickBooks is committed to developing easy, straightforward financial tools that help you today and grow with you tomorrow. But it’s a balancing act – making QuickBooks better and easier to use while still supporting older versions. So they offer support for the current version of QuickBooks and the two previous versions.

What service discontinuation means:   Products affected by service discontinuation as of May 31, 2012, are listed in the table below. If you don’t make use of live technical support or any of our add-on services, and are happy with your current version of QuickBooks, you can continue to use it.

If you are using a product affected by service discontinuation and want to maintain access to live technical support and add-on services, you’ll need to upgrade to the latest version of QuickBooks as soon as possible.

Affected Services

Upgrade as soon as possible to retain access to the following add-on services and live support:

QuickBooks Pro, Premier, and Simple Start 2009 and QuickBooks Enterprise Solutions 9

• QuickBooks Payroll services
• Credit Card Processing
• Bill Pay
• Billing Solution (formerly QuickBooks Online Billing)
• Online Banking
• QuickBooks Email
• Third-party products
• Enterprise Solutions Full Service Plan (FSP)

• Live technical support and Online Backup

• QuickBooks for Mac 2009

• Online Banking
• Live technical support

• Credit Card Processing Kit 2009

• Merchant Service
• Online Banking
• Billing Solution

• Live technical support

• Invoice Manager 2009

• Merchant Service
• Billing Solution

• Live technical support

• Technical support plans—All QuickBooks products

• Support for installation, upgrades, error messages, and product defects
• Active QuickBooks Care Protection Plan with automatic renewal
• Live telephone support on a pay-per-use basis

Posted by Tina Myers, CPA, MTax

In a recent case, Turner, T.C Memo. 2011-209, the Tax Court ruled that formal notice of the withdrawal power is not required.  The result of this Tax Court case is that, if a notice requirement is not satisfied regarding a particular transfer to a trust, the taxpayer now has an argument that such notice is not required and the annual exclusions claimed were valid.

But, hold on…the IRS may still continue to argue that notice is required for a transfer to a trust subject to a withdrawal power to be eligible for the gift tax annual exclusion.  The safe course of action for our clients to continue to give notice to the trust beneficiaries if they are claiming a gift tax annual exclusion.

Posted by Tina Myers, CPA, MTax

Answer: The reporting of Trustee fees by a trust on a Form 1099-Misc is not required.  The 1099-Misc is for payment of services performed in a trade or business by people not treated as employees.  Trusts and estates are generally not treated as a “trade or business” and non-professional trustees are serving in a capacity that does not rise to the level of a “trade or business” activity for that individual.  Therefore, we generally do not issue 1099s for executor or trustee fees.

Posted by: Carly Asher

Did you know if you or someone you know withdrawals from a 529 Savings Plan (College Savings Plan) and does not use it for education purposes it is still possible to avoid federal and state penalties?

YES! If the beneficiary is receiving a tax-free scholarship, Pell grants, or tuition discounts, you are able to reduce your 529 by the amount received without incurring the 10% penalty on your federal return. In addition, you do not have to add back any prior deductions you may have taken in previous years on the Ohio return!

Our client’s daughter received a full-ride scholarship for hockey, yet her mother had saved $17,000 in a 529 savings plan for her college tuition. She then decided to use the money for other expenses instead. By finding out more about her daughter’s scenario we were able to save the client $14,000 in add-back income on her Ohio return due to deductions she took in prior years and $551 in penalties on her federal return!

Posted by: Andrea Sheets, CPA

Diversification is the cornerstone of a solid investment portfolio.  Until the mid 1990’s, when stocks started producing extraordinary profits, most investment advisors recommended a balanced portfolio with a mixture of stocks, bonds, and precious metals.  Stocks provided the opportunity for growth, bonds produced income and precious metals protected against inflation and financial chaos because gold and silver prices have typically enjoyed an inverse pricing relationship, when compared to stock prices over the long run.

The Internal Revenue Code (Code) treats an investment in any precious metal or coin as the acquisition of a collectible item.  Therefore, under the Code, if an IRA entered into a transaction to purchase such collectibles, the transaction would be characterized as a taxable distribution, followed by the investment in the precious metals or coins.  However, there is an exception contained in the Code.

IRAs may invest in certain gold, silver and platinum coins and bullion that meet certain fineness standards, but keep in mind that the IRA trustee or custodian must hold title to the investments of the IRA, and the IRA must be a self-directed IRA.  In the case of precious metals and coins, the custodian would literally need to store the investment. Therefore, an added issue of practicality exists with these types of accounts.  Be aware that there are IRA custodians who are willing to set up self-directed IRAs for those who want them and facilitate the physical transfer and storage of precious metal assets.  However, these types of custodians are few in number and it is extremely important to exercise proper due diligence in choosing the trustee.  Not to worry, there are other ways!

An IRA can purchase shares of an exchange traded fund that tracks the value of a particular precious metal.  In such a case, the physical ownership and storage issue is avoided.  There are also several mutual funds that invest in precious metals and an IRA may also purchase common stock shares in publicly traded mining companies.

As mentioned above, diversification is extremely important to any investment portfolio and an IRA is no different.  Before embarking on any investment, including those discussed here, make sure the proposed investment is in keeping with your overall investment goals.  With any investment, due diligence is always recommended and it is important to review any fund’s prospectus’ tax section, if as an investor there are doubts about a fund’s ownership of a particular precious metal.