Category: News

IRS Announces 2013 Mileage Rates

On November 21, 2012, the IRS announced the standard mileage rates for 2013. Taxpayers can use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2013, the standard mileage rates are:

• For business use of an automobile increases to 56 1/2 cents per mile.
• For medical or moving expenses, it is 24 cents per mile.
• For services to charitable organizations, the rate is 14 cents per mile.

Instead of using the standard mileage rates, taxpayers can use their actual costs but must maintain adequate records and be able to substantiate their expenses.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

Please let us know if you have any questions.

Stephen Eldridge Appointed to the Tennessee State Board of Accountancy

Tennessee Governor Bill Haslam has appointed Stephen Eldridge, CPA, CISA, CITP, CGEIT, CRISC, to a three-year term as a member of the Tennessee State Board of Accountancy. Eldridge is a partner at Alexander Thompson Arnold CPAs.

The Tennessee State Board of Accountancy is part of the Department of Commerce and Insurance, which works to protect consumers while ensuring fair competition for industries and professionals who do business in Tennessee.

As a partner with ATA, Eldridge provides tax, accounting and auditing services with a special focus on healthcare, utility systems and the effectiveness of information systems. He has performed more than 60 SSAE 16/SAS 70 engagements throughout the Southeast and has earned the industry%u2019s highest certifications. To serve his clients better, he is active with the American Institute of Certified Public Accounts and the Tennessee Society of Certified Public Accountants, which includes serving on the TSCPA%u2019s legislative committee, as the past president, vice-president and secretary/treasurer of the West Tennessee chapter, and on the Educational Memorial Foundation.

A graduate of the Union University, Eldridge is dedicated to making a difference in his community. He currently serves on the Youth Town of Tennessee Board of Directors, Union University%u2019s McAfee School of Business Administration Advisory Board, Youth Life Board of Directors, First Tennessee Bank Advisory Board and the City of Jackson Industrial Development Board. He is also a graduate of Leadership Jackson, a Paul Harris Fellow and a past board member for the Jackson Rotary Club. He and his wife Lolly have two daughters and are members of Fellowship Bible Church in Jackson.

Alexander Thompson Arnold PLLC is a regional accounting firm that offers its clients the resources and expertise of a large firm and the personalized service of a small firm. The firm has 15 partners and approximately 130 staff members and offers a complete range of accounting, auditing, tax, and consulting services to a diverse portfolio of clients. Its offices are located in Dyersburg, Henderson, Jackson, Martin, McKenzie, Milan, Paris, Trenton and Union City, Tennessee and Murray, Kentucky. Each office reflects the community it serves and gives exceptional personal attention to its clients.

HEALTHCARE COST REPORTING REQUIRED ON W-2S

Beginning with the W-2s issued in January 2013 (i.e., W-2s issued for the 2012 calendar year), large employers must report to employees the cost of their employer-sponsored group health plan coverage on the employee’s W-2 in box 12. This reporting to the IRS is for informational purposes only and is intended to communicate the cost of health care coverage to employees.

This new requirement applies to all employers who issue 250 or more W-2s and who provide applicable employer-sponsored health plan coverage during the calendar year. This includes private sector employers, federal, state and local governmental entities, churches and other religious organizations. Employers who currently issue fewer than 250 W-2s should not be surprised if that number is lowered in the future.

If this applies to your business, you will probably have questions about reporting this properly. The team at ATA is more than happy to answer your questions and help you navigate this new requirement. Call us at any time.

South Carolina Taxpayer Info Hacked

So you can take steps to protect yourself and your business, you need to know that the South Carolina Department of Revenue computer systems have been hacked.  The hacker stole information including 3.6 million. Social Security numbers and nearly 400,000 credit and debit card numbers. Investigators are still trying to determine what other information might have been stolen and from what types of returns. Officials said they have beefed up data security and are continuing an investigation.

South Carolina is offering free credit monitoring and identity protection to all affected taxpayers. Anyone who filed a South Carolina tax return since 1998 can call 1-866-578-5422 to learn whether they are affected and, if so, enroll in the protection. On the web, taxpayers can go to protectmyid.com/scdor and use the authorization code scdor123. The service includes a free credit report; daily monitoring of all three major credit bureaus, with alerts of any suspicious activity; and $1 million in insurance against identity theft.

Click here to read the SCDOR press release about the cyber attack.

Identity Theft Information Links

Identity Theft Resource Center, Nonprofit Organization

Federal Trade Commission Identity Theft Web Site

Tennessee Department of Revenue Announces New Filing and Payment Requirements

The Tennessee Department of Revenue recently announced new filing and payment requirements that may effect you and your business.

The following requirements begin on January 1, 2013:

• For the purposes of Tennessee corporate income tax,all returns that are prepared using computer software must be filed electronically. We gladly provide this electronic filing service for you.
• The Department of Revenue is lowering the sales tax electronic filing threshold to $500. All sales tax taxpayers with an average tax liability of $500 or more must file their sales and use tax returns electronically. Again, we will file it for you.
• All related tax and estimated tax payments must be made by electronic funds transfer (EFT). Ideally, this should be set up in advance. We can set the EFT up for you; if you need help setting this up, please call us at your earliest convenience.

These new requirements will permit the State to process returns and payments in a more timely and efficient fashion at a cost savings to the state. If you have questions or need more information, please call us. We would be happy to talk with you at any time.

Why you may want to incur medical expenses before year-end

Currently, if your eligible medical expenses exceed 7.5% of your adjusted gross income (AGI), you can deduct the excess amount. But in 2013, the 2010 health care act increases this “floor” to 10% for taxpayers under age 65.

Eligible expenses can include health insurance premiums, medical and dental services and prescription drugs. Expenses that are reimbursed (or reimbursable) by insurance or paid through a tax-advantaged health care account (such as a Flexible Spending Account or a Health Savings Account) aren’t eligible.

To potentially be able to deduct more health care costs, consider “bunching” nonurgent medical procedures and other controllable expenses into alternating years. For example, if your year-to-date medical expenses already exceed 7.5% of your projected 2012 AGI and you’re anticipating elective surgery or major dental work in early 2013, you could instead schedule it for this year. Or you could stock up on prescription meds (to the extent allowed) and buy new contact lenses or glasses before year end. Bunching expenses into 2012 may be especially beneficial because of the scheduled floor increase. But keep in mind that, for alternative minimum tax purposes, the 10% floor already applies. Also, if tax rates go up in 2013 as scheduled, your deductions might be more powerful then. Finally, be aware that the floor increase could be repealed by Congress.

For more ideas with year-end tax strategies, call today!

ATA Invests $25,000 in Local Library

Alexander Thompson Arnold CPAs has taken a bold stand for education in Dyer County by making a $25,000 gift to the McIver’s Grant Public Library Renovation Project.

The firm has pledged $5,000 each year for five years to help with the renovation of the library’s new building. Not only does the gift support literacy in the community, it also supports the efforts to keep Downtown Dyersburg beautiful and enables Dyer County to be competitive in recruiting more jobs to the area.

“ATA believes that success in life begins with a foundation strong in reading and math skills, and the public library plays a critical role in making this a reality in our community,” said Steve Carmichael, ATA’s Senior Partner in Dyersburg. “With our deep commitment and this investment, we are helping Dyer County residents have access to learning and enrichment tools for generations to come. We are proud to make this investment in the future of our community.

In 1946, the firm was founded in Dyersburg by William P. Alexander, Jr. when he returned from World War II. Shortly after opening his practice, the local library moved to the Dyersburg Women’s Club on the corner of Masonic and Mill streets, only a block from ATA’s office at 185 North Church Street. Through the years, Alexander Thompson Arnold CPAs has grown to become the sixth largest accounting firm in Tennessee, and the McIver’s Grant Public Library has grown into a hub for information.

You can help the library to provide services to the residents of the West Tennessee area and invest in Dyer County’s future. Mail your donation to McIver’s Grant Public Library, P O Box 1077, Dyersburg, TN 38025.

Do you want to learn more about ATAs Community Involvement?  Click here.

Supreme Court Upholds Health Care Law, Impacting Businesses and Individuals — and Their Taxes

On June 28 the U.S. Supreme Court, in a much-anticipated ruling, generally upheld the Patient Protection and Affordable Care Act of 2010. The decision has far-reaching implications, many of which will financially impact businesses and individuals.

The main provision at issue was whether it was constitutional for the act to require that, starting in 2014, most Americans have a basic level of health insurance or pay a penalty. In a 5-4 decision, the Court found that the provision was constitutional within Congress’s power under the taxing clause.

The decision means that, generally, without congressional action, the provisions of the health care act that already have gone into effect will stand, and the provisions that are scheduled to go into effect in future years will, indeed, go into effect.

Some key provisions affecting businesses include the following:

Tax credits for certain small businesses that provide health care coverage to employees. This provision went into effect in 2010 and is available through 2013.

Penalties for failing to provide health care coverage. These are scheduled to go into effect in 2014.

Various requirements related to the scope of health care coverage provided. Examples include coverage of employees’ young adult children and limits on waiting periods for coverage under a group policy. Some went into effect in 2010; others are scheduled to go into effect in 2014.

And, here are some key provisions affecting individuals:

Higher Medicare taxes for high-income taxpayers. Starting in 2013, taxpayers with earned income in excess of certain limits will pay an additional 0.9% Medicare tax on the excess. In addition, taxpayers will pay a new, 3.8% Medicare tax on unearned income, such as interest, dividends, rents, royalties and certain capital gains, to the extent that their modified adjusted gross income exceeds certain thresholds.

Increase in medical expense deduction floor. Starting in 2013, the act raises the threshold for deducting unreimbursed medical expenses from 7.5% to 10% of adjusted gross income.

Changes to Flexible Spending Accounts (FSAs) for health care. Starting in 2011, tax-free FSA distributions could no longer be used to pay for unprescribed over-the-counter medicine. Starting in 2013, annual contributions to FSAs for medical expenses will be limited.

If you’d like to learn more about how the Supreme Court’s decision might affect your business’s finances or your own, please contact us. We can help businesses determine what, if any, changes they may be required to make — or may want to make — to the health coverage they offer in light of the decision. And we can help individuals determine the impact on their taxes and whether there are any tax planning strategies they should consider implementing this year.

ATA Partner Art Sparks Named Treasurer of State CPA Society

Arthur L. Sparks Jr.,CPA, of Union City, was recently elected treasurer of the Tennessee Society of Certified Public Accountants (TSCPA), the professional association for more than 9,000 CPAs residing and practicing in Tennessee. Sparks’ term began on June 13 at TSCPA’s 82nd Annual Convention and Leadership Conference.

Sparks is a partner with Alexander Thompson Arnold PLLC. He has been a member of TSCPA for 33 years, holding various leadership positions within the society, including service on the Finance Committee, TSCPA Council and as chair of the Peer Review Committee.

As treasurer, Sparks will serve on the TSCPA Board of Directors and Council, which is the governing body of the association and establishes policy for all society activities. He will also concurrently serve as a member of the Board of Trustees of TSCPA’s Educational & Memorial Foundation, which provides comprehensive continuing education for CPAs and awards academic scholarships to deserving accounting students attending Tennessee’s colleges and universities.

For over 30 years, Sparks has dedicated his life to providing quality accounting services.  He has been a partner with Alexander Thompson Arnold CPAs since 1980, where his practice focuses on auditing and quality control systems.  He is a former board member for the State Board of Accountancy; is an active member of the American Institute of CPAs where he has served as a Peer Review board member and chairman of the Oversight Task Force; and has also served in all offices of the West Tennessee Chapter of TSCPA.

Members of TSCPA work in all areas of accounting including public accounting, education, government, business and industry. TSCPA is headquartered in Brentwood, Tenn.

Alexander Thompson Arnold PLLC is a regional accounting firm that offers its clients the resources and expertise of a large firm and the personalized service of a small firm. The firm has 15 partners and approximately 140 staff members and offers a complete range of accounting, auditing, tax, and consulting services to a diverse portfolio of clients. Its offices are located in Dyersburg, Henderson, Jackson, Martin, McKenzie, Milan, Paris, Trenton and Union City, Tennessee and Murray, Kentucky. Each office reflects the community it serves and gives exceptional personal attention to its clients.

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Don Engelhardt, CPA joins ATA Team

Alexander Thompson Arnold CPAs is proud to announce that Don Engelhardt, CPA has joined its team. He is a principal in the firm’s Dyersburg, Tennessee office.

“During his 24 years in the accounting field, Don has demonstrated his hard work ethic and high professional standards. Both qualities complement ATA’s client-centered, excellence-driven focus,” said Al Creswell, CPA and chief manager for Alexander Thompson Arnold PLLC. “We are proud to have Don on our team.”

Engelhardt has worked hard in the accounting industry and has earned professional respect in the region. His practice focuses on governmental audits, for-profit audits, and individual and business tax, and his experience includes compilation and reviews, SSAE 16/SAS 70 internal control audits, cost analysis and business consulting. A graduate of Southeast Missouri State University, Engelhardt is a member of the Tennessee Society of CPAs and the American Institute of CPAs.

A native of Caruthersville, Missouri, Don and his wife Carrie have two children: Pressli and Jack. He enjoys spending time with his family and playing golf. He is a member of First Christian Church in Dyersburg, is active with the Dyersburg Chamber of Commerce and serves on Christ Classical Academy’s finance committee.

Alexander Thompson Arnold PLLC is a regional accounting firm that offers its clients the resources and expertise of a large firm and the personalized service of a small firm. The firm has 15 partners and approximately 140 staff members and offers a complete range of accounting, auditing, tax, and consulting services to a diverse portfolio of clients. Its offices are located in Dyersburg, Henderson, Jackson, Martin, McKenzie, Milan, Paris, Trenton and Union City, Tennessee and Murray, Kentucky. Each office reflects the community it serves and gives exceptional personal attention to its clients.

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