Florida surety assoc presentation 5-11-2010
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Florida surety assoc presentation 5-11-2010 Florida surety assoc presentation 5-11-2010 Presentation Transcript

  • Tax Legislation Update HIRE Act Florida Surety Association May 11, 2010 Jill Kling, Manager LarsonAllen Construction and Real Estate Group
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • Accounting Standards Update Florida Surety Association May 11, 2010 John Reed, Principal LarsonAllen Construction and Real Estate Group
  • Financial Statement Changes
    • New Standards in Effect for 2009 Year End Financial Statements
    • New Standards in Effect for 2010 Financial Statements
    • Potential Upcoming Changes
  • 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
  • Sample Income Tax Uncertainties Adoption Sample Note
  • Subsequent Event Consideration Sample Note
  • Fair Value Measurements Example
  • 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
  • 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