Bell and Company CPAs and Business Advisors Trucking Blog

Daily Poll Summary

noreply@blogger.com (Bell and Company) — Thu, 02 Feb 2012 07:39:29 PST

In tax planning for 2012 and 13, below polls would indicate higher tax rates in 2013 on capital gains and dividends from 15% to 20%, and individual rates with the Bush tax rate expiration at the end of this tax year. The assumption is that the Bush era tax cuts would probably not be renewed by a split democrat /republican house, senate, and incumbent presidency. One side note, the reversion to the Clinton era tax rates would increase all individual income tax rates from the lowest rate of 10% to 15% and highest rate of 35% to 39.6%. Definitely, planning opportunities this year! We look forward to working with you on these changes.

For more information please contact Richard Bell (501) 753-9700 or e-mail richard.bell@bellandcompany.net.

Daily Poll Summary, 1/27

Today's Post: A Look at Obama's Poll Numbers: http://www.nationalpolls.com/articles/20120127001-look-at-obama-numbers.html

2012 Matchup Polls

Michigan, EPIC MRA, 1/21 - 1/25: Obama 48, Romney 40
Michigan, EPIC MRA, 1/21 - 1/25: Obama 51, Gingrich 38
http://www.nationalpolls.com/2012/general-election/michigan.html

North Carolina, Civitas, 1/9 - 1/11: Obama 39, Romney 48
http://www.nationalpolls.com/2012/general-election/north-carolina.html

Pennsylvania, Franklin Marshall, 1/17 - 1/22: Obama 41, Romney 30
Pennsylvania, Franklin Marshall, 1/17 - 1/22: Obama 43, Santorum 30
http://www.nationalpolls.com/2012/general-election/pennsylvania.html

National, Rasmussen, 1/23 - 1/25: Obama 45, Romney 42
National, Rasmussen, 1/23 - 1/25: Obama 48, Gingrich 41
National, NBC WSJ, 1/22 - 1/24: Obama 47, Republican 42
National, NBC WSJ, 1/22 - 1/24: Obama 53, Santorum 38
National, NBC WSJ, 1/22 - 1/24: Obama 49, Romney 43
National, NBC WSJ, 1/22 - 1/24: Obama 55, Gingrich 37
http://www.nationalpolls.com/2012/general-election/national.html

Obama Approval Ratings

Florida, Quinnipiac, 1/19 - 1/23: Approve 46, Disapprove 52
Florida, Quinnipiac, 1/19 - 1/23: Approve 0, Disapprove 0
http://www.nationalpolls.com/obama/florida.html

Minnesota, PPP, 1/21 - 1/22: Approve 49, Disapprove 45
http://www.nationalpolls.com/obama/minnesota.html

Texas, Blum and Weprin Assoc, 1/21 - 1/24: Approve 41, Disapprove 50
http://www.nationalpolls.com/obama/texas.html

GOP Primary

Florida, TPM PollTracker Prediction, 1/27 - 1/27: Romney 39, Gingrich 30, Paul 11, Santorum 12
Florida, Nate Silver FiveThirtyEight Prediction, 1/27 - 1/27: Romney 41, Gingrich 34, Paul 10, Santorum 12
Florida, Quinnipiac, 1/24 - 1/26: Romney 38, Gingrich 29, Paul 14, Santorum 12
Florida, Sunshine State News, 1/24 - 1/26: Romney 40, Gingrich 31, Paul 9, Santorum 12
http://www.nationalpolls.com/florida.html

Michigan, EPIC MRA, 1/21 - 1/25: Romney 31, Gingrich 26, Paul 14, Santorum 10
http://www.nationalpolls.com/michigan.html

National, Gallup Tracking, 1/22 - 1/26: Romney 24, Gingrich 32, Paul 14, Santorum 13
National, NBC WSJ, 1/22 - 1/24: Romney 28, Gingrich 37, Paul 12, Santorum 18
http://www.nationalpolls.com/national.html

Cost Segregation

noreply@blogger.com (Bell and Company) — Mon, 30 Jan 2012 07:54:35 PST

Cost Segregation:

If you are in the process of buying or selling a company, you may want to review the recent tax case Peco Foods v. Commissioner, TC Memo 2012-18. This case dealt with a proposed reallocation of asset values by the purchaser from a broad classification and large dollar value allocation of asset types (e.g. 26 categories of class types) contained in the sales agreement, which was then followed by subsequent cost studies by the purchaser after closing. The subsequent cost segregation study allocated the 26 class groups into over 300 sub-asset groups; thus creating smaller, more specific groupings with shortened tax lives for depreciation purposes. The Tax Court ruled that the cost segregation study would be disregarded and the previously negotiated groupings contained in the sales agreement would be binding. This resulted in less annual depreciation deductions by the purchaser on the front end. What lesson is to be learned from this case? LOOK AT THE COST SEGREGATION STUDY PRIOR TO CLOSING, which should be followed by the negotiated acceptance by the buyer and seller to treat the study as acceptable by both sides and made part of the sales agreement . I would suggest, for example, that the 300 sub-asset groups be attached to Form 8594, which is an IRS form that reports the acquisition and sale by the respective parties in the year of sale. If you have questions, please contact Richard Bell, CPA 501.753.9700 or e-mail richard.bell@bellandcompany.net a link to a copy of the case is below.

Peco Foods V Commissioner Case

IRS New Proposed Regs on Capitalization

noreply@blogger.com (Bell and Company) — Thu, 26 Jan 2012 12:39:51 PST

The IRS has issued new proposed regs on capitalization vs. expensing of materials and supplies. I usually think about pens or pencils, paper, etc, as supplies and never considered a computer meeting the definition of materials and supplies, but computers are used as an example to explain one section of the proposed regs. The de minimis rule exception for capitalization can now apply to computer equipment. IIf you file a timely election on your tax return for 2012 and thereafter, and if you have a written policy in place for expensing such computer items under a certain dollar amount, for example- $500 per unit, then you may deduct the total purchase of computers for the year that meet your policy guideline of $500 or less per unit times the number of units purchased. This is subject to the upper limit of .1% times the gross sales of the business, or 2% of the total amount of depreciation and amortization claimed. For additional information, give Kelly Phillips, Pancho Espejo, or myself a call.

501.753.9700 Richard Bell, CPA

1099s

noreply@blogger.com (Bell and Company) — Thu, 19 Jan 2012 08:00:21 PST

The deadline for providing 1099’s to recipients is on January 31, we wanted to make you aware of some new questions that you have to answer on your tax returns. The IRS wants to make sure that you are following the rules on providing 1099’s to those who meet the reporting threshold. If you pay a non incorporated service provider at least $600 during the calendar year in the course of your business or farm activity, you are required to report those payments to them on a Form 1099. Attorneys are a special category of vendors, in that you are required to send them a 1099 for all payments.

The IRS is asking if you have made payments to a service provider that would require a Form 1099 to be filed. If you answer this question yes, they ask if you have filed the Form 1099 or are going to do so. If you have questions on 1099’s please give Jeff Lovelady a call 501.753.9700 or e-mail jeff.lovelady@bellandcompany.net.

Handheld Mobile Phone Ban for Drivers

noreply@blogger.com (Bell and Company) — Thu, 26 Jan 2012 12:41:27 PST

Effective January 3, 2012, the Federal Motor Carier Saftety Regulations will prohibit commerical drivers from using hand-held mobile phones while operating a truck.

Original Transportation Law Alert sent on December 15, 2011

Effective January 3, 2012, the Federal Motor Carrier Safety Regulations will prohibit commercial drivers from using hand-held mobile phones while operating a commercial truck or bus. Violations of the rule can result in fines of up to $2,750 to drivers and $11,000 to motor carriers. Habitually offending drivers of this new rule can be disqualified from operating a CMV. This ban can also create additional hurdles for accident liability claims.

As trucking company owners and drivers what are your thoughts on this new rule?

Volunteer Day

noreply@blogger.com (Bell and Company) — Wed, 21 Dec 2011 11:14:13 PST

So a couple of us went to volunteer for the Salvation Army Angel Tree Distribution and we just so happened got on the news attached is the link if you would like to view News Story.

Recently published Letter from Jeff Lovelady in Transport Topics

noreply@blogger.com (Bell and Company) — Thu, 08 Dec 2011 12:28:38 PST

Updated: 11/28/2011 8:00:00 AM Letters: Taxes, Speed Limiting These Letters to the Editor appear in the Nov. 28 print edition of Transport Topics. Click here to subscribe today. Taxes Your Oct. 31 “Analysis” from The Associated Press, which was headlined “Small Business Tax Deduction to Shrink, Showing Importance of Year-End Planning” (p. 7), stated: “The maximum that can be deducted under the two deductions combined is $2 million.” If that refers to the section 179 deduction and the bonus depreciation deduction, the information is not accurate. There is no limit on bonus depreciation. The limit only applies to section 179, and the amount that can be deducted is $500,000 — and then it is limited dollar-for-dollar for every dollar the purchases for the year exceed $2 million. For example, if a company buys $2.2 million worth of trucks— assuming no trade-in — the company can take a $2.2 million bonus depreciation deduction, assuming the transaction meets all the requirements. If the company elects not to take bonus depreciation, then it can take a section 179 for $300,000 ($2.2 million minus $2 million limit equals $200,000, and $500,000 minus $200,000 equals $300,000) and then take the MACRS (modified accelerated cost-recovery system) three-year deprecation amount on the remaining $1.9 million. Also, keep in mind that if a company can enter into a binding contract, it can take 100% bonus depreciation on the equipment in 2012, as long as it either (1) has paid for the equipment if it is a cashbasis taxpayer or (2) has secured financing and recorded the liability if it is an accrual-basis taxpayer. So, if it is an accrual-basis taxpayer: Book the asset and the liability prior to Dec. 31, 2011, put the asset into service in 2012 and take 100% bonus depreciation on the asset in 2012. This is not available if it has followed the proper procedures in securing a contract to build or has paid for the equipment in 2011. This is only available to transportation assets and other qualified long-lived property. As always, consult your own advisers should you have questions. Jeff Lovelady CPA Bell & Company, Pa. North Little Rock, Ark.

Personal Use of Company Auto

noreply@blogger.com (Bell and Company) — Fri, 02 Dec 2011 08:28:47 PST

Did you know if you use a company vehicle for personal use, that benefit is taxable compensation to you? The IRS requires that personal use of a company automobile be calculated for each person receiving the benefit. The calculation is based on the personal mileage compared to business mileage, a personal gas factor of 5.5 cents per personal mile, and the IRS guidelines for the annual lease value of employer-provided vehicles. Recent IRS audit information shows that personal use of company auto generally is found to be in the 20% to 30% range. Business mileage does not include commuting miles, so these need to be included in the personal use percent. Adequate records, such as mileage logs, must be kept to support business use. Any personal use is added to the employee’s W2 by issuing the employee a salary check. The employee will have Social Security and Medicare taxes withheld from the gross amount of personal use. Federal and state taxes are not required, but the employer may choose to withhold federal and state taxes. The employer is responsible for matching the Social Security and Medicare taxes and remitting any federal or state withholding on the personal use. If the employer does not withhold the income taxes, you will need to notify the employees so they can adjust any personal tax estimates for the consequences of the personal use. For more information on this topic contact Bethany Pusifull. Bethany.pursifull@bellandocmpany.net or call her 501.753.9700.

noreply@blogger.com (Bell and Company) — Mon, 14 Nov 2011 08:51:21 PST

November 11, 2011 Richard Bell recently attended the NASTC conference in Nashivlle, TN. While attended conference he was on the Dave Nemo show which airs on Road Dog XM Radio Station.

2290

noreply@blogger.com (Bell and Company) — Wed, 19 Oct 2011 12:57:06 PDT

Updated as of September 28, 2011 Congress has passed and the President has signed an extension of the Heavy Highway Vehicle Use tax through September 30, 2012. By November 30, 2011, taxpayers will be required to file Form 2290 for vehicles first used in July, August, September and October 2011. Although the Form 2290 is expected to be available in late October, the IRS will not provide a stamped (receipted) Schedule 1 until November 1, 2011. In the meantime, you can still pay your 2010 excise tax, get your 2011 tags and register your new or used vehicle.

2011 Trip to Arlington

noreply@blogger.com (Bell and Company) — Thu, 06 Oct 2011 07:17:01 PDT

We recently traveled to Arlington Texas to attend the Arkansas Society of CPA's Annual Banquet and received the 2011 Firm Public Service Award. It was an honor to be selected by the Arkanasas State Society as the State's Winner.

IRS Fresh Start for Employers

noreply@blogger.com (Bell and Company) — Thu, 06 Oct 2011 07:10:19 PDT

The IRS announced an opportunity for a fresh start for employers on the much debated classification of contract laborers as employees. Procedures outlined in IRS Announcement 2011-64 offer business owners a window of opportunity to voluntarily reclassify contract laborers as employees within certain guidelines. This voluntary reclassification, called the Voluntary Classification Settlement Program (VCSP), allows eligible employers to reclassify contract laborers as employees on a forward looking basis with only minimal federal, social security, and Medicare tax exposure for past liability periods (note, however, that state withholding and workman’s compensation authorities are not bound to this program). The IRS, in previous publications, has announced an expected increase in the number of audits in this area due to non-compliance and wants to give employers a chance to change any misclassifications they may be aware of. To be eligible, the employer must have treated the workers or group of workers consistently as independent contractors and issued 1099-Misc forms for services performed during the last three years. An employer under IRS or DOL audit is not eligible even if it otherwise would have met the conditions set forth. If an employer has been previously audited and has continued to comply with the conditions of that audit, the employer will be eligible for the program. The application is made on form 8952. On this form, the federal tax and social security withholdings are calculated by taking the 1099-MISC income for the entire group of laborers who are being reclassified as employees, multiplying that number by a pre-determined factor (10.68% for 2010 and 10.28% for 2011 for laborers under the social security wage base threshold amount), the product of which is multiplied by 10%. There are no penalties or interest assessed on the result of this calculation, but the employer agrees to treat the workers as employees on a prospective basis and a six year statute of limitations instead of three. Please contact Kelly Phillips or Nell Sterling at (501) 753-9700 if you have questions regarding the calculation and how it may benefit you. Bell & Company can help you apply for the program through the IRS. WARNING: Carefully think through the reclassification process for 2011 and into the future. For instance, consider the impact upon the 50 person employee rule (base measurement used by the health care reform to be effective in 2014), matching payroll taxes, etc. Also, be aware - this fresh start opportunity has not been adopted by the State of Arkansas for unemployment and state withholding purposes. One should carefully consider the implication of these additional taxes when evaluating the reclassification process.

When is it Safe to Shred Tax Records?

noreply@blogger.com (Bell and Company) — Tue, 04 Oct 2011 12:48:12 PDT

By George Wong, CPA Have you ever asked yourself: “When can I delete old bookkeeping files and tax files on my computer?” or “Why can’t I get rid of these old tax records that are cluttering up my house?” These are good questions! In this article, I will discuss when it is and when it is not appropriate to shred or erase (if kept on your computer) your tax records and files according to the Internal Revenue Service (IRS) guidelines. As you may already know, the main purpose of keeping your prior year tax records is to have documentation if the IRS audits your tax return. Having tax receipts is your main defense in proving your deductions during audit. Generally, a three year statute of limitations exists after the original date the return is filed or due, whichever is later, for all returns. Basically, the IRS can audit your tax returns filed three years ago. Therefore, you should generally keep your tax records for at least three years. In special circumstances, the IRS may go back 6 years if the taxpayer omits from gross income an amount in excess of 25% of the amount of gross income reported on the originally filed tax return. This statute of limitations begins from the date the original tax return was filed. In an extreme case where either the taxpayer filed a false or fraudulent tax return, the taxpayer is willfully attempting to evade taxes, or the taxpayer does not file a tax return, the IRS may assess taxes. In addition, if a fraudulent tax return was filed, the IRS can impose additional taxes at any time, without regard to statutes of limitations, although the burden of proof falls on the government to prove fraud by the taxpayer. Hopefully in this case, you kept all of your tax records from the beginning of time. When in doubt, keep all your tax receipts, records, and tax returns. It is also a good idea to hire a Certified Public Accountant or tax advisor to represent you in an audit by the IRS or state taxing authority. For more information please send e-mail to george.wong@bellandcompany.net.

Medical Expenses

noreply@blogger.com (Bell and Company) — Wed, 28 Sep 2011 08:48:45 PDT

If you itemize your deductions on Form 1040, Schedule A, you may be able to deduct medical expenses. Here are some things to keep in mind:

• You may deduct the amount of medical expenses that exceed 7.5% of your adjusted gross income. Starting in 2013 as part of the new health care law, the threshold will increase to 10%.
• You can only deduct medical expenses you actually paid during the year, minus any reimbursements.
• You can deduct expenses you pay for yourself, spouse, and dependents. If you’re divorced or separated, each parent can deduct the medical expenses he or she actually pays for a child, even if the child is not claimed as a dependent.
• You can deduct transportation and traveling costs to a health care facility. Transportation costs include mileage, tolls, and parking fees.
• Lodging is deductible if the trip is primarily for and essential to medical care. Lodging expenses for a person accompanying the individual seeking medical care is also deductible, but meals are not deductible. The deduction is limited to $50 per night per individual.
• Distributions from Health Savings Accounts and withdrawals from Flexible Spending Arrangements may be tax free if you pay qualified medical expenses with the proceeds.
• Medical expenses are those that are for the prevention or alleviation of a physical or mental defect or illness. This includes payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or treatment affecting any structure of the body. The following types do qualify:
o You can deduct the costs of health insurance, dental insurance, long-term care, and long-term care insurance.
o Medicines prescribed by a medical professional. Insulin does not need a prescription, but is deductible.
o Costs for medical devices, equipment, and supplies, such as eyeglasses and wheelchairs, as prescribed by a medical professional.
o Co-pays for doctors, dental visits, and eye exams qualify as medical expenses.
o Weight-loss programs are only deductible if it is prescribed by a physician to treat a specific disease. You can include the cost of special food only if the food does not satisfy normal nutritional needs, the food alleviates or treats an illness, and a physician confirmed the need for the food.
The following types do not qualify:
o Over the counter medicines and treatments, nutritional supplements, vitamins, and first aid supplies do not qualify unless specifically prescribed by a medical professional. Medications obtained from another country cannot be deducted as medical expenses.
o Medical marijuana or other controlled substances are not deductible as medical expenses, even if your state allows it.
o Gym memberships, teeth whitening, and cosmetic surgery that is only cosmetic in nature is not deductible.

Emergency Preparedness

noreply@blogger.com (Bell and Company) — Wed, 28 Sep 2011 08:41:37 PDT

An ounce of prevention is worth a pound of cure – emergency preparedness for small businesses

Small business owners are some of the busiest people in America, so it’s easy to just look at the most pressing, immediate business concerns. But as natural and man-made disasters seem to be happening with increased regularity, it seems it’s just a matter of time before a disaster comes knocking on your door. FEMA publishes a guide to help businesses prepare for emergencies. For a copy of the full guide, visit http://www.fema.gov/pdf/business/guide/bizindst.pdf. Below is a summary of their approach.

There are four steps in the planning process:

1. Establish a planning team
a. Form the team – the size of the team will depend on the needs, size, and resources of your company
b. Establish authority – demonstrate owner’s commitment and promote an atmosphere of cooperation by giving the planning team authority to take the necessary steps to implement an emergency plan
c. Issue a mission statement – your statement should define the purpose of the plan, indicate it will involve the whole organization, and define the authority and structure of the planning group
d. Establish a schedule and budget – establish a work schedule, planning deadlines, and an initial budget
2. Analyze capabilities and hazards
a. Where do you stand right now?
i. Review internal plans and policies
ii. Meet with outside groups, such as a community emergency management office, the fire or police department, and telephone and utility companies
iii. Identify codes and regulations, such as occupational safety and health regulations, environmental regulations, fire codes, seismic safety codes, and zoning regulations
iv. Identify critical products, services, and operations to assess the impact of potential emergencies and to determine the need for backup systems
v. Identify internal resources and capabilities that could be needed in an emergency, including personnel, equipment, facilities, and backup systems
vi. Identify external resources that could be needed in an emergency, such as the fire department, local and state police, utilities, insurance carriers, and community service organizations
vii. Meet with your insurance carriers to review all policies
b. Conduct a vulnerability analysis
i. List potential emergencies
ii. Estimate the probability of each emergency’s occurrence
iii. Analyze the potential human impact of each emergency – the possibility of death or injury
iv. Assess the potential property impact, including cost to replace, cost to set up temporary replacement, and cost to repair
v. Assess the potential business impact, or the potential loss of market share, including business interruption, employees unable to report to work, customer unable to reach facility, and interruption of product distribution
vi. Assess internal and external resources and your ability to respond
3. Develop the plan
a. Your plan should include the following components
i. An executive summary that gives a brief overview of the purpose of the plan, the facility’s emergency management policy, authorities and responsibilities of key personnel, the types of emergencies that could occur, and where response operations will be managed
ii. Briefly describe the plan’s approach to the core elements of emergency management
iii. Spell out how the company will respond to emergencies
iv. Include documents that could be included in an emergency, like call lists, maps, etc.
b. The development process
i. Identify challenges and prioritize activities
ii. Write the plan
iii. Establish a training schedule
iv. Meet periodically with local government agencies and community organizations
v. Review the plan, conduct training, and revise the plan as necessary
vi. Get final approval from senior management
vii. Distribute the plan to key personnel
4. Implement the plan
a. Integrate the plan into company operations – test how completely the plan has been integrated
b. Conduct training – training activities can include:
i. Orientation and education sessions
ii. Tabletop exercises
iii. Walk-through drill
iv. Functional drills
v. Evacuation drill
vi. Full-scale exercise
c. Evaluate and modify the plan – conduct a formal audit of the plan at least once a year

Jeff Lovelady's letter published in Transport Topics

noreply@blogger.com (Bell and Company) — Wed, 21 Sep 2011 06:32:10 PDT

These Letters to the Editor appear in the Sept. 19 print edition of Transport Topics. Click here to subscribe today.

EOBR Rule

This is in reference to the editorial “Fixing the EOBR Rule” (9-5, p. 4).

What we need to fix the electronic onboard recorder rule — and many other inane decisions by activist jurists — is a little real-world common sense.

Obviously, the plaintiffs went venue shopping and selected the 7th U.S. Circuit Court of Appeals for a reason. Why would you file there instead of Washington, where the Federal Motor Carrier Safety Administration and Congress reside and the rule originated?

Who defended this suit anyway? Of all the reasons to attack it they chose “harassment,” and the defense attorneys couldn’t refute it?

How is a device that accurately records a drivers’ hours more likely to be used to harass them than the current system, which we all know is manipulated daily by drivers themselves in order to maximize driving hours, miles and pay?

How is it that a lawyer couldn’t make that case to a panel of learned jurists? Harassment? That’s the best they could come up with? Harassment?

Surely the world has gone completely mad. Inept lawyers or idiot jurists — we are doomed. Common sense has left the building.

Kevin Mullen
Director, Safety
ADS Logistics Co. LLC
Area Transportation
Chesterton Ind.

Like/Kind Convoy

I was reading the Opinion column in the Sept. 5 issue of TT (“The 1031-LKE Cash-Flow Convoy,” p. 5) and noted that the cash savings on the taxes does not work in 2011 because you can take advantage of the 100% bonus depreciation and, in doing so, the net reduction in the taxable income for a Like/Kind Exchange Program transaction is the same as it would be if you did not elect to use the LKE method.

I thought it would be a good idea to point this out to your readers, especially if they are thinking that they are going to get some extra cash by taking advantage of a 1031 exchange. It would actually cost them money to do the LKE as the 1031 exchange agents charge a fee for this transaction.

Check us out on our website, so you know I am not some nut who does not know what he is talking about.

We have had this question asked and have done some tax projections, etc., to come to this conclusion. Also, our firm has a niche in working with trucking companies.

Assume that you buy 100 trucks as you would in an LKE, and assume they are still $100,000 each — so your basis is $10 million again. Your deduction without an LKE is $10 million, and you claim the $2.5 million as gain on sale of assets. With the LKE you have to reduce your basis in the new assets by the $2.5 million so you only take the 100% bonus on the $7.5 million.

As you can see, the net reduction in taxable income in either the LKE or straight sale is the same — $7.5 million — so there are no tax savings on the transaction.

This only works in 2011. Who knows what is going to happen for 2012?

I enjoy reading your magazine. Thank you for your commitment to the trucking industry.

Jeff Lovelady, CPA
Principal
Bell and Co.
North Little Rock, Ark.

Editor’s Note: We offered the authors of the Sept. 5 Opinion column a chance to respond to the letter above. Their response follows:

The previous commenter makes some important points regarding 100% bonus depreciation and its known applicability for the year 2011. However, as a Qualified Intermediary, we have been diligent in approaching the marketplace to offer solutions for this year and beyond.

LKE strategies are typically long term, reaching out many years into the future. Currently, at the federal level, 100% bonus has proven to offset recognized gains in a way that reduces/eliminates federal tax burdens, but a high number of states have effectively “decoupled” from federal bonus treatment, making the state tax impact a significant one. Additional considerations (for 2011), beyond decoupling, include:

• State net operating loss considerations.

• Federal Alternative Minimum Tax considerations for individual owners of S-corporations and partnerships.

• Ability to utilize used property as replacement property to maximize LKE and bonus benefit.

• Bonus depreciation sunset planning opportunities.

• Utilizing LKE service providers for fixed asset tax compliance and reporting.

• Time and resources needed to “de-institutionalize” a company’s LKE processes.

As you can see, there’s no easy answer and any current research efforts require a comprehensive analysis of all the relevant issues. And, planning around a nearly 100-year-old piece of tax law requires a constant eye on the future. So, for 2012 and beyond, serious tax planning should begin immediately, and LKEs should be part of that analysis. I believe the previous commentary put it best: “Who knows what is going to happen for 2012?”

Stephen Doherty
Director of National Accounts
Accruit LLC
Denver

Recent Article about Bell and Company

noreply@blogger.com (Bell and Company) — Thu, 08 Sep 2011 08:38:53 PDT

We were featured in the August 2011 - The TABloid by TAB Bank as a Vendor Spotlight wanted to share with everyone.

VENDOR SPOTLIGHT // August

Bell & Company
Certified Public Accountants and Business Advisors

Bell & Company is a diversified public accounting and business advisory firm located in North Little Rock, AR that serves a broad range of corporate clients including a sub-specialty in the transportation sector. Since the company began in 1982, they have worked diligently to build expertise in many segments of the accounting field. They provide a wide spectrum of accounting services for small and medium-sized businesses — from cash flow budgeting to counseling on the sale or purchase of a business.

Small and medium-sized business owners and financial officers often face a common challenge — limited access to expert oversight and advice from accounting and finance professionals who focus on and specialize in serving privately-held businesses. As a privately-held, family-owned business, Bell & Company is strongly committed to serving similar businesses.

Their experience in understanding and serving privately-held, family-owned businesses is deeply-rooted. Bell & Company takes great pride in possessing intricate knowledge of the specific issues these businesses face on a daily basis. They know that their success is determined by their client’s success. Therefore, they strive constantly to help their clients improve in operations, accounting and finance, revenue and profitability, decision-making, and efficiency.

Their current clients include businesses and organizations in a wide variety of industries (e.g., transportation, professional, manufacturing, wholesale, and not-for-profits) and ranging in size from $1 million to $250 million in revenue. Their clients know they can count on the team at Bell & Company to provide them with the most proactive, relevant advice that can increase the gross profits of their companies while helping them manage their tax liabilities.

To learn more about Bell & Company, visit www.bellandcompany.net, or call Jeff Lovelady, CPA or Brady Pipkin, CPA at 501-753-9700. //

1099s For Owner Operators

noreply@blogger.com (Bell and Company) — Mon, 22 Aug 2011 07:40:12 PDT

Save time and money this coming January by not preparing and filing unnecessary 1099’s for owner-operators. In general, payments exceeding $600 or more to any non-employee person in a taxable year for services performed must be reported to the IRS by submitting a Form 1099. Section 1.6041-3(d) of the Income Tax Regulations excludes freight payments from being reported on informational returns. What does this mean for you as a trucking company owner? If you have owner-operators, the payments to them are treated as “freight” payments and the issuance of 1099’s is not required. For more information on this topic please contact derick.fortenberry@bellandcompany.net or call Derick at 501.753.9700.

AFTA Truck Rodeo - 2011

noreply@blogger.com (Bell and Company) — Thu, 04 Aug 2011 12:42:07 PDT

We recently attended the AFTA Truck Rodeo held in Beebe Arkansas. We volunteered and help cook and serve hot dogs and drinks, to help raise money for the local fire departments. A good time was had by all that attended.

US/MEX Cross Border Trucking Agreement

noreply@blogger.com (Bell and Company) — Thu, 07 Jul 2011 10:51:42 PDT

Great link regarding US/MEX cross border trucking agreement that was just signed today. http://www.ttnews.com/articles/basetemplate.aspx?storyid=27071&utm_source=alert&utm_medium=newsletter&utm_campaign=newsletter

Doug Voss Research Project

noreply@blogger.com (Bell and Company) — Thu, 30 Jun 2011 15:14:26 PDT

Doug Voss, UCA Professor of Transportation , has an interesting research project this summer going on with his student class; which is dear to the hearts of our trucking clients. The theme will be : “ What are the profitability implications of EOBR’s for different size motor carriers?” If you are interested in being interviewed or providing input or opinion on this matter, please contact Doug thru his email address: voss@uca.edu.

Form 2290 Filing Delays for Tax Year 2011-2012

noreply@blogger.com (Bell and Company) — Thu, 30 Jun 2011 15:12:39 PDT

The federal highway use tax (FHUT) form and rules may be changing in the next few months. These changes may cause delays in the 2011-2012 Form 2290 filing season. The IRS is currently not accepting any paper or e-filed Form 2290’s. An announcement on the changes to the Form 2290 is expected once the legislation is finalized.

The problem from these delays is that the Form 2290 is typically required before you can get new tags. States will accept your Schedule 1 for the Form 2290 for the previous tax year (July 1, 2010 – June 30, 2011) as proof of payment so you can renew your tags.

The IRS has recommended that you do not send in old versions of the Form 2290 for your 2011-2012 FHUT. Any payment that is sent with old versions of Form 2290 will be applied to your tax account. No schedule 1 for the 2011-2012 tax year will be issued until the current Form 2290 is filed and all tax is paid. If an old form is filed, the IRS will issue a notice requesting a current form.

Please contact Brady Pipkin, CPA or Jeff Lovelady, CPA at 501.753.9700 for more information

Mileage Rates - Breaking News

noreply@blogger.com (Bell and Company) — Mon, 27 Jun 2011 07:20:17 PDT

Because of rising fuel costs, the Internal Revenue Service increased the standard mileage rate for business use of an automobile and for medical and moving expenses. The new optional standard mileage rates will apply to expenses incurred on or after July 1, 2011. The business rate will go up to 55.5 cents per mile.

Bell and Company Chosen for 2011 Public Service for Firms Award

noreply@blogger.com (Bell and Company) — Wed, 15 Jun 2011 12:26:03 PDT

I wanted to share that recently our firm was chosen for the Public Service for Firms Award by the Arkansas Society of CPAs.

Article in Newsletter

What Drives You?

noreply@blogger.com (Bell and Company) — Mon, 04 Apr 2011 09:15:03 PDT

I was at a bike race this weekend. This is not a bike race as in motocross, this is a bicycle race. Not just a little 10 mile course either, a 60 mile round trip trek across the Ouachita Mountains. Not a race for the faint of heart I can assure you. The furthest I have made it on this race is 30 miles. As these guys and girls were crossing the finish line, I started wondering, what drives them to go such a distance over some of the roughest terrain for biking just to cross a finish line, with no prize at the end? The first place finisher made it in 4 hours and 50 minutes. The last person to cross the line was at about 8 hours and 30 minutes. So 239 racers started and 189 finished. As a matter of fact, the person that finished 189 also had bib number 189, I thought that was interesting. So what drives em? Certainly not fame or money. What can cause people to dig to the deepest part of their physical and emotional beings to run this race and get squat for it? Why are some so disappointed when they do not reach the cutoff in time or have a mechanical breakdown that causes them to drop out of the race? Some collapsed at the finish line exhausted with muscle cramps from dehydration and fatigue. Some popped wheelies across the line later to find out that it was not such a good idea as their legs seized up as they stood there waiting on their finishing cards. Some crossed and kept going and probably could have done it again. When you are out on this type of race it is you and the trail, you reaching down into the depths of your soul and trying to talk yourself into not dropping out at the next checkpoint. Isn’t it like that in business sometimes? When times get tough, we have to talk our way through not just dropping out. No one knows what is really going on deep down inside because their tails are not on the line. With the uncertainty in the economy and the strife that is going on around the world, you as a business owner have to know what drives you. No one will care as much about your business as you do. No one will work any harder than you do. So what drives you to continue when times are tough? The hug from your kids or grandkids when you get home? The quick peck on the cheek you give your wife after a rough day? Money? If it were money, you would have been out of it a long time ago. Obligation? Fear of failure? What drives you when there is no prize at the end? I do not know how you would choose to answer this question, but for me, family and friends are what drives me. There is nothing more important to me in this world than my family and friends. They will always be there at the finish line waiting on you. So why do you do it, to show your family that you can, to show your kids that you can do anything? Guess what, your family will be there if you do not make the finish line, to them it is all about you, and to you it should be all about them. Also, pay if forward, be a part of something that is greater than yourself. What does this have to do with trucking you might ask, nothing, it has to do with life.

When times are tough, Keep Peddling!
By Jeff Lovelady, CPA