Make plans now to join us for this informative seminar exploring key updates on accounting and tax issues. Join in discussions specific to your business challenges while learning ways to help maximize tax savings and effectively manage operations. This seminar highlights timely updates and provides key takeaways on hot topics relevant to both public and private companies.

Tuesday, June 19, 2012

• Louisville Marriott Downtown
• 280 West Jefferson
• Louisville, Kentucky 40202
• 5 Hours of CPE credit

Topics

• Accounting & Reporting Matters
• Federal & State Tax Updates
• Other Issues Relating to Your Business

Agenda

• 8:00am—8:30am / Registration/Breakfast
• 8:30am—12:30pm / Seminar
• 12:30pm—1:30pm / Lunch and Guest Speaker

Registration information will be coming soon.

CONTACT:     Gwen Spears @ gspears [at] rodefermoss [dot] com or 812.981.3429

The newly named partners are Sandi Oakley and Rickey Luttrell, both of whom work in Rodefer Moss’s Knoxville office.

“We have offices in three states and serve clients with businesses ranging from several million dollars to over $1 billion,” said Jimmy Rodefer, chief executive officer of Rodefer Moss. “Our partners are our leaders and our mentors to younger staff members. Rickey and Sandi are exceptional, accomplished professionals. We’re delighted they are on our leadership team.”

Sandi Oakley joined Rodefer Moss in 2002. She earned her Bachelor of Science degree in accounting in 1994 from the University of Tennessee.

Oakley

Oakley principally works with on accounting needs of private companies, manufacturers and commercial real estate. Her areas of accounting concentration are tax planning and national and international taxation.

She is a member of American Institute of Certified Public Accountants and the Tennessee Society of Certified Public Accountants.

Sandi lives in Knoxville with her sons Chris and Alec.

Luttrell

Rickey Luttrell joins the partnership at age 31. His rise has been rapid since joining the firm in 2008 as audit manager of the Knoxville office. In 2010 Luttrell was named a principal, and in June 2011 he received certification to conduct peer reviews.

He earned his Bachelor of Science of accounting degree in 2003 from Carson-Newman, where he played baseball and was named to the Verizon All-Academic Team. In college he was a member of Pi Gamma Mu Social Science Honors Society.

Luttrell is a member of the American Institute of Certified Public Accountants, the Association of Certified Fraud Examiners and the Downtown Knoxville Rotary Club.

He attends Clear Springs Baptist Church in Corryton. He and his wife, Kristin, live in Knoxville with their sons, Hudson and Griffin.

In a surprising move, the Tennessee legislature has repealed Tennessee gift taxes, effective for gifts made on or after January 1, 2012. This is welcome news for a lot of our clients who plan to make up to a $5.12 million gift later this year. Our clients have been considering various ways to make their gifts without paying Tennessee gift tax. They will no longer have to worry about the gift tax.

Some of our clients knew that a change in the gift tax might occur later this year and have made large loans to their children. These clients will now consider forgiving the loans or giving other assets to their children.

Tennessee’s repeal of its gift tax leaves Connecticut as the only state that charges gift taxes.

The fiscal note for this bill estimated that it will cost the state approximately $15 million per year in revenue. I am sure that the revenue loss for 2012 will be a significantly higher amount due to the window of opportunity for making tax-free gifts at the federal level. Read more here.

 If you have questions, or need more information, we can help!

 Tim Van Cleve   – 615.370.3663  – tvancleve [at] rodefermoss [dot] com

Tchouta

Romual Eloge Tchouta (“Romy”), a Cameroon native whose shot-in-the-dark email to an East Tennessee State University professor who once taught in his country led to his earning two master’s degrees from ETSU, has joined Rodefer Moss & Co, PLLC as an associate.

Tchouta, 26, was majoring in mathematics and minoring in computer science at the University of Buea, Cameroon’s only English-language university, when he wrote an email to Dr. Janice Huang. Huang taught at the University of Buea while on a 2001 sabbatical.

Dr. Huang (who has since retired) answered Tchouta’s email, telling him that because of his high academic standing she was confident he would be accepted at ETSU.

“I grew up in a family of five where education and hard work were fundamental,” Tchouta said. “Both of my parents lost their fathers at a young age, so they didn’t have the financial support to go on to college.

“However, my parents made sure that my siblings (Willy, 29 and Daniella, 30) and I had all the educational materials that we needed to excel in school. My dad always stressed that education was the safest way for me to succeed.”

In 2005, Tchouta was awarded the Cameroon Prime Minister’s Prize as the University of Buea’s outstanding student in mathematics and computer science. He also received the Thomas and Janice Huang Scholarship to attend East Tennessee. Tchouta arrived in the U.S. in 2006, and enrolled at ETSU. At ETSU, he earned his master’s degree in mathematics in 2008 in accountancy in 2011.

“Romy is a talented accounting professional with a determination to succeed,” said Curtis Morrison, partner in charge of Rodefer Moss’ Greeneville office. “It’s difficult enough for someone to relocate to another country. Romy not only overcame all challenges, he was exceptionally successful academically and he’s making a great life for himself in Tennessee. He is a valuable addition to Rodefer Moss.”

A lifelong soccer player, Tchouta is team captain of TennPro FC, a traveling soccer team based in Johnson City.

“I am happy to be working with Rodefer Moss,” Tchouta says. “It is a good fit, and a blessing.”

Tchouta and his wife, Rebekah, were married in 2011. They live in Johnson City and are planning a trip to Cameroon so Romy can see his family members. Aside from his mother, who came to the U.S. for Romy and Rebekah’s wedding, he has not seen his other family members in six years, “but I talk to them weekly by phone.”

-END-

Rodefer Moss & Co, PLLC is one of Tennessee’s largest accounting firms with offices in Greeneville, Kingsport, Knoxville and Nashville. The firm also has offices in Kentucky and Indiana. Visit www.rodefermoss.com for more information. Within the Rodefer Moss family of companies are EPayroll Resource Group, a payroll service headquartered in Greeneville, TN (www.epayrollresourcegroup.com) ; ASAP, LLC, which provides small and medium-sized companies with marketing, staffing, and bookkeeping services (www.asapmakestime.com); and RM Wolff, LLC, a business valuation firm (www.rmwolff.com).

Medical device manufacturer DeRoyal Industries has opened a sales and marketing office in Ireland as the Knoxville-based company looks to grow its international business. The Dublin office, which will operate as DeRoyal Global Healthcare Solutions Limited, gives DeRoyal the ability to better service its European customers, whose orders are now being processed through the Irish company. That means DeRoyal will be able to accept orders and invoice them in Euros or U.S. Dollars.

To read the entire article, visit the Knoxville News Sentinel.

There aren’t enough words to describe the heartfelt appreciation for the loyal service Joyce has provided Rodefer Moss and its affiliates over the last three decades, so we humbly say “Thank you, Joyce!”

This Year’s Deadline is April 17

Taxpayers have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due, the IRS announced. That’s because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls on Monday, April 16.

According to federal law, District of Columbia holidays affect tax deadlines in the same way that federal holidays do. Therefore, taxpayers nationwide will have two extra days to file this year. If you request a filing extension, you have until Monday, October 15 to file your return.

Filing Issues for Business Owners

First-Year Bonus Depreciation - For qualifying new (not used) assets that were placed in service (hooked up and ready for use) in your unincorporated business by December 31, 2011, you can write off the entire cost in 2011 thanks to the 100 percent first-year bonus depreciation break. Qualifying assets include most software, vehicles, and equipment. To claim the deduction, an IRS form must be filed with your Form 1040.

Liberalized Section 179 Deductions - For tax years beginning in 2011, eligible unincorporated businesses and S corporations can immediately write off up to $500,000 of qualifying new and used assets — including most software, certain “heavy” vehicles, most equipment, and up to $250,000 of qualifying real estate improvements. This is thanks to the Section 179 first-year depreciation break. Assets must be placed in service (hooked up and ready for business use) by the end of the tax year beginning in 2011 to be eligible for the liberalized Section 179 deduction rules. Again, an IRS form must be completed.

Reduced Self-Employment Tax Bill - For 2011 only, the Bush tax cut extension legislation included a reduction in the Social Security tax component of the self-employment (SE) tax from the normal 12.4 percent of net SE income to 10.4 percent. The Medicare tax component of the SE tax remained at the usual 2.9 percent rate. For 2011, the net SE income ceiling for the Social Security tax component of the SE tax was $106,800. Therefore, the SE tax rate on the first $106,800 of net 2011 SE income is 13.3 percent (10.4 percent for Social Security plus 2.9 percent for Medicare) versus the usual 15.3 percent. The maximum amount you can save from the Social Security tax reduction is $2,136 (2 percent times $106,800). The savings are reflected on Schedule SE, Self-Employment Tax, which must be filed with Form 1040.

Deduction for Self-Employment Tax Is Not Reduced - If you are self-employed, you can usually deduct exactly half of your SE tax bill on Form 1040. Due to the aforementioned reduction in the Social Security tax component of the SE tax, there’s a new drill for your 2011 return. Your SE tax deduction equals 57.51 percent of the SE tax amount, as long as that amount does not exceed $14,204. If your SE tax bill exceeds $14,204, you multiply the SE tax amount by 50 percent and then add $1,067. These calculations are made on Schedule SE. The effect is to allow you to claim an SE tax deduction equal to what your write-off would have been without the Social Security tax cut.

Capital Gains and Losses

If you made taxable sales of stocks, mutual fund shares, other securities, or other capital assets (such real estate) last year, a new form (Sales and Other Dispositions of Capital Assets) must be included with your return along with the familiar Schedule D (Capital Gains and Losses).

The reason for new Form 8949 is the fact that securities brokers must now report to sellers (like you) the basis of certain securities that were sold in taxable accounts in 2011. They must also tell you if the gains and losses from selling such securities were short-term or long-term. Previously, securities brokers had no such obligations.

The most notable types of securities covered by the expanded broker reporting rules are common stock that was acquired and sold in 2011 and mutual fund shares that were acquired and sold in 2011 if all the shares were acquired in a single block. If you sold a covered security in 2011, the basis of the security should be shown in Box 3 of the Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) that you should receive from your broker by no later than February 15. In Box 8, the broker should tell you if the gain or loss from the sale of the covered security was short-term or long-term.

If you sold a non-covered security in 2011, Box 6 of the 1099-B should be checked to indicate that the expanded broker reporting rules are not applicable. Non-covered securities include all common stock and mutual fund shares acquired before 2011, common stock acquired in 2011 via a dividend reinvestment plan, and mutual fund shares acquired in 2011 if you acquired several blocks on different dates. (In 2012 and 2013, additional categories of securities will be covered by the expanded broker reporting rules.)

On new Form 8949, you must segregate gains and losses from securities that are covered by the expanded broker reporting rules from gains and losses that are not covered.

Key Point: The expanded broker reporting rules do not affect sales of securities held in your IRA or other tax-favored retirement account, such as a 401(k) account. Gains and losses from sales in such accounts have no immediate impact on your tax situation and need not be reported on your return.

Deduction for Sales Taxes on Major Purchases (Vehicles, Boats, and More)

A couple years ago, you were allowed to claim a temporary write-off for state and local sales taxes on new (not used) vehicle purchases. The sales tax break for new vehicles expired at the end of 2009, but another potentially valuable sales tax break is still available to itemizers. That’s because you can choose to deduct general state and local sales taxes paid in 2011 instead of state and local income taxes. If you choose the sales tax deduction option, you can write off actual sales tax amounts on major 2011 purchases such as new or used motor vehicles (including motorcycles, motor homes, and RVs), new or used boats, new or used aircraft, and certain home additions and renovations. The sales tax deduction option was originally scheduled to expire at the end of 2010, but it was extended it through 2011.

You can also deduct sales taxes on other less expensive purchases. If you did not keep track of your actual sales tax expenditures (few people do), you can deduct a predetermined amount from IRS tables based on where you live. That’s on top of actual sales tax amounts from the types of major purchases listed earlier.

Key Point: Usually, the sales tax deduction option is only helpful to those who live in states that have no personal income taxes. However if you made one or more major purchases in 2011, the sales tax deduction option might be beneficial even if you don’t fit into that category.

For 2010 Roth Converters

If you converted a traditional IRA into a Roth account in 2010, the transaction was treated as a taxable liquidation of your traditional IRA followed by a contribution to the Roth account. As such, the conversion triggered taxable income equal to the difference between the value of the traditional IRA on the conversion date and your basis in the account from nondeductible contributions (if any). For 2010 conversions, you had the option of reporting half the conversion income on your 2011 Form 1040 and the other half on your 2012 return (instead of reporting 100 percent of the conversion income on your 2010 return).

In other words, you could defer the tax hit from a 2010 conversion until 2011 and 2012. You could do the same 2011/2012 tax deferral with a qualified retirement plan distribution (from a 401(k) plan, a profit-sharing plan, and the like) that was rolled over into a Roth IRA in 2010 (another type of Roth conversion transaction).

If you took advantage of the 2011/2012 deferral option for a 2010 Roth conversion, part of the tax bill has come due because you must now report half the conversion income on your 2011 Form 1040. You will report the other half on your 2012 return.

Key Point: If you did a 2010 Roth conversion and did not take advantage of the 2011/2012 deferral option, no action is necessary with your 2011 return.

Energy-Efficient Home Improvement Credits

For 2011, you can potentially claim a federal income tax credit of up to $500 based on expenditures for qualified energy-efficient home improvements such as new windows, doors, insulation, roofs, and central air conditioners. If you claimed credits in earlier years, they are subtracted from the $500 limit. (For 2010, the maximum credit was a more-generous $1,500.)

If you spent money on more esoteric energy-efficient improvements, like a solar water heating system or geothermal heat pump, you can potentially claim a separate credit for up to 30 percent of the cost. To claim either of the credits, an additional form must be completed and included with your Form 1040.

Liberalized Adoption Credit

For 2011, the maximum adoption credit increased to $13,360 (up from $13,170 for 2010). In addition, the credit is 100 percent refundable (before 2010, it was nonrefundable). That means you’ll receive a check for any leftover adoption credit after your federal income tax bill has been reduced to zero. To claim the credit, Form 8839 (Qualified Adoption Expenses) must be completed and included with your Form 1040.

Homebuyer Credit Repayment Requirement

You may have to repay the credit claimed for a 2009 or 2010 home purchase with your 2011 Form 1040 if you stopped using the home as your principal residence in 2011. You generally must repay the lesser of the full amount of the credit or your gain on sale (if any).

If you have a loss, you don’t have to repay the credit. For purposes of the credit repayment requirement, a special gain/loss calculation is made. If the credit repayment requirement impacts you, a separate IRS form must be filed with your Form 1040. The credit repayment amount is treated as an addition to your tax bill.

If you have questions or need clarification on your personal or business tax return this year, we can help you at Rodefer Moss. Call us today!

The penalty for not filing the required 1099s is increasing up to a maximum of $250 per 1099 not filed with the IRS and an additional maximum of $250 per 1099 not given to payees, for a total of $500 per non-filed 1099.

Your 1099 filings should be distributed to the recipients by January 31, 2012.  As a reminder, any payments for services to anyone or a business that is not listed as a corporation, and has been paid $600 or more, should receive a 1099.  If they don’t have Inc. or Corporation in their name, you need to get a Form W-9 from those businesses or individuals.  For the most part, you should be issuing LLCs 1099s also.

NOTE:  For those of you paying for services performed in the Louisville/Metro area, you are required to complete the Form 1099-SF by indicating the total paid in non-employee compensation and exactly what portion was for services performed within Louisville/Metro Kentucky. 

Excerpt from IRS Publication 1099 MISC instructions:

Trade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d), farmers’ cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts. Payments by federal, state, or local government agencies are also reportable.

All Rodefer Moss offices will be closed December 23 & 26, 2011 and January 2, 2012 so that our team members may spend the holidays with their families. We wish all of our clients and friends a healthy and prosperous 2012!

Job Qualifications:

• Bachelor’s degree in Accounting
• CPA designation preferred
• 3-5 years of public accounting firm experience
• Good working knowledge of office technology software
• Good written and oral communication skills

At Rodefer Moss, the opportunity to grow is in your hands. Our salary and benefits package is extremely competitive. Our team members enjoy a reasonable work week, annual compensation reviews, a general paid time off program, and much more. If you are looking for a supportive, team-oriented organization where you can thrive, look no further.

To apply, please email your resume to Betsy Gray at bgray (@) rodefermoss (.) com, and indicate “Audit Senior Position” in the subject line. No phone calls, please.