Florida surety assoc presentation 5-11-2010
Transcript of Florida surety assoc presentation 5-11-2010
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Tax Legislation UpdateHIRE Act
Florida Surety Association
May 11, 2010
Jill Kling, ManagerLarsonAllen Construction and Real Estate Group
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HIRE Act
• Hiring Incentives to Restore Employment Act of 2010
• Signed into law on March 18, 2010
• Objective: To help stimulate the hiring of workers by the private sector
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Major Provisions of the Act
• Payroll Tax Holiday for hiring Unemployed Workers
• Tax Credit for Retaining Workers
• One-year extension of the small business expensing under Section 179
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Payroll Tax Holiday
• FICA imposes two taxes– OASDI (Old Age Survivors Disability Tax)
◊ 6.2% Tax Rate on wages up to $106,800
– HI (Medicare Hospital Insurance)◊ 1.45% Tax Rate on all wages
• Payroll Tax Holiday– Provides relief for the employer share of OASDI taxes– Wages paid from March 19, 2010 through December
31, 2010 to qualified individuals– Maximum tax forgiven = $6,621 per employee
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Eligibility for Payroll Tax Holiday
• Qualified Employer
– Any employer other than the federal or state government
– Includes non-profit organizations
– Note: Does not effect the self employment tax paid by self employed individuals
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Eligibility for Payroll Tax Holiday
• Qualified individual is anyone who:– Begins employment after Feb 3, 2010 and before Jan
1, 2011– Certifies by signed affidavit that they have not been
employed for more than 40 hours during the 60-day period ending on the date the individual begins employment
– Does not replace another employee unless:◊ Employee left voluntarily◊ Employee left for cause
– Can not be related to the employer
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Tax Credit for Retaining Workers
• Up to $1,000 Tax Credit for retaining qualified workers
• Qualified workers include:– An employee of the taxpayer who has worked 52
consecutive weeks; AND
– Whose wages for the last 26 weeks of employment equaled at least 80% of the wages for the first 26 weeks
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Tax Credit Example
ABC Corp hires Earl on February 15, 2010. The 52-week work requirement is satisfied in the 2011 year if Earl works for ABC until February 14, 2011. Earl’s wages for the 52-week consecutive period are $30,000. ABC will be able to claim a $1,000 credit for Earl on their 2011 tax return.
• Note: the credit is the maximum of $1,000 or 6.2% of the wages paid during the 52-week period
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Small Business Expensing Extended
• Increased Section 179 election available through 2011
• Up to $250,000 in qualified purchases may be expensed– Amount was $134,000 before HIRE legislation
enacted
• Ability to expense assets are reduced once purchases exceed $800,000
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Accounting Standards UpdateFlorida Surety Association
May 11, 2010
John Reed, PrincipalLarsonAllen Construction and Real Estate Group
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Financial Statement Changes
• New Standards in Effect for 2009 Year End Financial Statements
• New Standards in Effect for 2010 Financial Statements
• Potential Upcoming Changes
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New Standards in Effect for 2009 Year End Financial Statements
• FASB Codification Structure Replaces GAAP Hierarchy July 1, 2009 (Topics, Subtopics, Sections, Paragraphs)
• Codification Topic 740 (FIN 48) Income Tax Uncertainties
• Codification Topic 855 Subsequent Events– Type 1 Recognized Subsequent Events – Type 2 Nonrecognized Subsequent Events– Disclosure of consideration of when statements were
issued or were available to be issued
• Codification Topic 820-10 (SFAS 157) Fair Value Measurements – Updated Disclosures
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Sample Income Tax Uncertainties Adoption Sample Note
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Subsequent Event Consideration Sample Note
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Fair Value Measurements Example
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New Standards in Effect for 2010 Year End Financial Statements
• Codification Topic Consolidation of Variable Interest Entities (VIEs) (FAS 166/FIN 46(R))– Standards now based on control of entity. Fewer
VIEs need to be consolidated compared to prior standards
• Statements on Standards for Accounting and Review Services (SSARS) Number 19– Accountant can now explain why they aren’t
independent in a compilation engagement– Reviews can not be performed if not independent
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Potential New Accounting Pronouncements to Watch For
• New Lease Accounting Rules – Operating lease assets and liabilities would be booked and treated the same as capital leases
• Ongoing movement to converge Generally Accepted Accounting Principles (GAAP) with International Financial Reporting Standards (IFRS)– Effect on revenue recognition of long-term contracts
• Big GAAP / Little GAAP