Scharf Pera & Co., PLLC merges with Brian Boswell CPA, PLLC

Scharf Pera & Co., PLLC can be found in this week’s Charlotte Business Journal in an article about our recent merger with Brian Boswell CPA, PLLC.

Check out the article for more info, and also see below for the text of a letter sent out to our clients announcing the move.

We are pleased to announce the merger of Scharf Pera & Co., PLLC with the firm of Brian Boswell CPA, PLLC effective January 1, 2016.   We will continue to practice as Scharf Pera & Co., PLLC at our office located at 4600 Park Road, Suite 112, Charlotte, NC. We welcome Brian and his staff to our “family”.

Brian is originally from California and graduated from California State University – Sacramento and previously worked with GreerWalker LLP, Deloitte & Touche, and Peter Bell CPA before starting his own firm in 2010. Brian specializes in income tax compliance and planning for businesses and individuals. Throughout his career he has consulted with entrepreneurs and business professionals to proactively provide general business advice and guidance on various complex tax situations.

Thanks to clients and friends like you, Scharf Pera & Co., PLLC has had the opportunity to provide professional tax, accounting and auditing services in the Charlotte area since 1977. We are always here to answer your questions and provide guidance and advice. We appreciate your support as we continue to grow and strive to improve our client service to you.

All of us at Scharf Pera & Co., PLLC thank you for your business and wish you a happy and prosperous 2016!

New law allows revocation of passports for delinquent taxpayers

On December 4, President Obama signed into law the Fixing America’s Surface Transportation (FAST) Act. While the main purpose of the legislation is to provide funding through 2020 for highways and other transportation projects, the bill also contains several new provisions designed to recover unpaid taxes, including requirements that the Internal Revenue Service (IRS) use private debt collection agencies and that the U.S. State Department refrain from issuing or renewing passports for certain taxpayers with outstanding tax debts in excess of $50,000.

For more information, visit our “Tax Guide Online” website and click on the “What’s New” button, where we provide details about this update.

We encourage you to visit our website today and often throughout the year. If you have questions on these or other topics, please contact us. We look forward to hearing from you!

Two year end tax updates

First, the IRS has released mileage rates for 2016. The business rate has decreased from 57.5 cents to 54 cents; the moving and medical rate is decreasing from 23 to 19; and the charitable rate will stay at 14 cents.

Second, Congress has come to an agreement on a tax extenders bill. While Congress waiting until the end of the year to pass this bill is nothing new, there’s some good news this time around: many provisions will be renewed for multiple years, and a few (including the increased Section 179 deduction) will be made permanent. It’s important to note that this isn’t a done deal, but many Hill watchers expect the bill to be passed in its present form.

IRS provides tips about vacation homes and other rentals

In a recent summertime tax tip, the IRS provides a quick primer on rental income and expenses, with an emphasis on rules for vacation homes.

The amount of income and expenses that can be claimed depend on many factors, including whether the property is used as a home, how many total days the property is rented, and how often the property is used for personal use vs. rented to other people.

Check out the IRS article for more information. The reporting of rental income and expenses can get complicated. If you have any questions, don’t hesitate to give us a call to review the income tax reporting for your vacation rental or second home.

FASB delays new revenue recognition standard by one year

In a move that had been in the works for a while, the Financial Accounting Standards Board (FASB) officially voted to delay its new revenue recognition standard by one year.

Financial statement preparers had complained that there was not enough time to implement some of the changes required by the new standards. Challenges cited by the Journal of Accountancy article linked above include the delayed issuance of the standard (it had been delayed several times before being issued in May 2014), the timing of the proposed changes, a lack of available IT solutions, and difficulty implementing internal controls amid the uncertainty.

Public companies as well as some employee benefit plans and not-for-profit organizations now must use the new revenue recognition rules for annual periods beginning on or after December 15, 2017. For a company reporting on the calendar year, this means 2018 will be the first year for which this is effective. All other entities must apply the new guidance one year later.

We’ve had our eyes on this issue throughout its evolution and will continue to keep you posted. If you have any questions about how this new standard might affect you, give us a call to see how we can help.

Gather donation records while you can still find them!

Since June 30th is the end of the fiscal year for many non-profits, you probably got a lot of mail and e-mail about donating to these organizations over the last month or so. If you took the opportunity to donate to some of your favorite causes over the past few weeks, now is a great time to get all of your receipts and paperwork organized, while it’s fresh and easy to find. After the new year, instead of scrambling to find documentation, it’ll all be filed away and you’ll have one less thing to worry about come tax time. (Many of the headaches we see simply arise from lost or missing paperwork, so trust us on this one!)

For more tips on donating to non-profits and how they relate to your taxes, see our blog post from earlier this year.

Many taxpayers with foreign assets face June deadlines

The IRS is reminding taxpayers with foreign assets that they may be subject to a pair of June deadlines.

Reporting of foreign assets and income has been a particular focus of the IRS over the past few years, and we urge any taxpayers with foreign assets and/or income to double check that they have met the requirements.

The Foreign Account Tax Compliance Act (FATCA) became law in 2010 and targets non-compliance by U.S. taxpayers with foreign accounts. Subject to this law, taxpayers with foreign assets over certain thresholds will have to file Form 8938 by June 15.

FBAR refers to Form 114, Report of Foreign Bank and Financial Accounts, that must be filed by June 30 with the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the Treasury Department. The form must be filed electronically and is only available online through the BSA E-FilingSystem website.

Head over to the IRS article for more information, and please don’t hesitate to give us a call with any questions.

Keep your tax records safe in the event of a disaster

With hurricane season starting this week, the IRS is reminding taxpayers to keep their tax records safe and giving tips on how to do it. Though Charlotte generally doesn’t bear the brunt of hurricanes, we think these tips are very important for all taxpayers, as there are a variety of incidents that could cause the loss of your financial and tax records.

The tips are fairly straightforward; most taxpayers can get the process done in an afternoon and protect themselves against some unnecessary headaches in the event of a disaster.

Head over to the IRS website for the article. And as always, feel free to give us a call to see how we can help!

Common pitfalls for small businesses

Nobody likes to talk about failure, but any entrepreneur knows it’s the elephant in the room. Starting your own business is an inherently risky venture, but startups need to address those risks as aggressively as possible. Jared Hecht at Inc. and Rhonda Abrams for Gannett each have lists of seven things entrepreneurs needs to look out for. The lists read very differently, but we noticed two strong similarities:

First, have a plan. Or better yet, multiple plans. Startups need to make sure that contingencies are thought out in advance to give a maximum chance of success. Of course, the most important one is the businesses plan. It can be a time consuming process but is critical to ensure the company has needed focus and direction. Another important one is a marketing plan. As Mr. Hecht succinctly puts it, “no matter how great your idea might be, no one can buy your product if they don’t know it exists.” But this doesn’t just include advertising; the sales and customer services processes shouldn’t be done on the fly either. Another good one to have is a cash flow plan. Often, startups, especially service-based ones, struggle with cash flow despite having plenty of sales because clients are slow to pay but the business has not yet built up its cash reserves.

Second, always be willing to ask for help. Ms. Abrams strongly recommends that a startup never hesitate to seek legal advice: “Often, a few hundred dollars spent on a lawyer at the beginning of a business or an important deal can save you thousands of dollars and loads of headaches later on.” Both also note that one way or another, you need to be willing to listen to customers and other employees rather than relying solely on your own desires for your product or service. After all, it is the customer that has to like your offering enough to pay money for it.

Of course, we would add to these lists that it’s important to get professional help with your finances. Payroll, bookkeeping, tax compliance, and financial statement preparation are all areas that can distract a small business from its core purpose, so if you need help in any of these areas, give us a call and find out how we can help!

Getting creative with funding your small business

Over the past few weeks, we’ve come across several articles talking about some less common but potentially useful ways which small businesses can obtain funding. In an environment where traditional small business loans are getting harder to come by, small business owners should know that there are a lot more options than visiting your local bank branch.

First, online lending is slowly but surely gaining favor for small loans. Among the factors cited in its growth are banks’ hesitancy to loan to small businesses and small business owners showing distaste for the often drawn out loan application process. Advantages of online lending include a faster application process and increased willingness to lend to small borrowers. Both articles note that the lack of regulation among these types of lenders can be both good and bad, as it lowers costs but also means there’s little oversight. It’s also important to note that, while some of these lenders offer products similar to traditional loans, there are a wide variety of business models, such as Kabbage, which allows businesses to borrow against their outstanding invoices. Read more at New York Times and Fortune.

Next up is Kickstarter. A lot of us already know about the virtues of crowdfunding (here’s a good primer in case you’re unfamiliar), but sites like Kickstarter are generally thought to be tools for very early stage companies trying to get their first product off the ground. However, the Wall Street Journal reports that companies who have had successful Kickstarter or Indiegogo campaigns are even more likely to be successful with each subsequent round. In addition to gaining the necessary funds, one entrepreneur argues that an even more powerful aspect of repeat crowdfunding is it allows companies to build a fan base in increasingly crowded retail markets.

Finally, Adam Aronson writes for Entrepreneur that more businesses should consider family offices for their funding needs. Family offices operate as private companies that manage investments for high net worth families. As Mr. Aronson notes, there are over 3,000 family offices in the United States and they generally have at least $100 million to invest. He also notes some of the advantages of obtaining financing from family offices, including great networking connections, increased patience, and a higher willingness to serve as mentors.

No matter which route you choose, always know we’re here to help with tax planning, financial statement preparation, and any other needs you have along the way!