In early 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) on leases. ASC 842 brought huge changes to public and non-public companies. The purpose of these changes was to enhance the financial statement disclosure and visibility into the leasing obligations, because prior to ASC 842 most leases were not reflected on the balance sheet. The new lease standard requires companies to report right-of-use (ROU) assets and liabilities for almost all leases onto the balance sheet, which is estimated at trillions of dollars! With ASC 842, most leases are now required to be recorded on the balance sheet, which has added some complexities for lessee and lessor financial statement reporting and Read More...
Ask the Experts – Data Analytics
Ask The Experts Segment On April 7th, 2022, Joel Gratz, Managing Partner here at Christianson, and Dustin Kotrba, Partner, joined Bill Dean on KWLM during the "Ask the Experts" segment. This month, Joel, Dustin, and Bill took a minute to chat a little about data analytics. Listen Here! Read More...
Tips to Make Succession Planning a Success
What is succession planning? Succession planning is a process that involves careful replacement planning and strategy to pass on important leadership roles and responsibilities. Businesses often perform this succession planning function for their key management personnel. It is used to identify and develop new potential leaders who can fill those “big shoes” when the leadership role becomes available. Many have the notion that succession planning is only for large companies that have CEO, CFO, COO, and CTO titles. This can be applied to various businesses of all sizes, including small family businesses, including farming and agriculture, where this is used to transition ownership and responsibilities to the next generation. Here are some Read More...
Eligible Businesses: Claim The Employee Retention Tax Credit
The Employee Retention Tax Credit (ERTC) is a valuable tax break that was extended and modified by the American Rescue Plan Act (ARPA), enacted in March of 2021. Here’s a rundown of the rules. Background Back in March of 2020, Congress originally enacted the ERTC in the CARES Act to encourage employers to hire and retain employees during the pandemic. At that time, the ERTC applied to wages paid after March 12, 2020, and before January 1, 2021. However, Congress later modified and extended the ERTC to apply to wages paid before July 1, 2021. The ARPA again extended and modified the ERTC to apply to wages paid after June 30, 2021, and before January 1, 2022. Thus, an eligible employer can claim the refundable ERTC against “applicable Read More...
There’s Currently a “Stepped-Up Basis” If You Inherit Property — But Will It Last??
If you’re planning your estate, or you’ve recently inherited assets, you may be unsure of the “cost” (or “basis”) for tax purposes. The current rules Under the current fair market value basis rules (also known as the “step-up and step-down” rules), an heir receives a basis in inherited property equal to its date-of-death value. So, for example, if your grandmother bought stock in 1935 for $500 and it’s worth $1 million at her death, the basis is stepped up to $1 million in the hands of your grandmother’s heirs — and all of that gain escapes federal income tax. The fair market value basis rules apply to inherited property that’s includible in the deceased’s gross estate, and those rules also apply to property inherited from foreign Read More...
IRS Audits May Be Increasing, So Be Prepared
The IRS just released its audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them. Latest statistics Overall, just 0.5% of individual tax returns were audited in 2020. However, as in the past, those with higher incomes were audited at higher rates. For example, in 2020, 2.2% of taxpayers with adjusted gross incomes (AGIs) of between $1 million and $5 million were audited. Among the richest taxpayers, those with AGIs of $10 million and more, 7% of returns were audited in 2020. These are among the lowest percentages of audits Read More...
Single Audit Considerations: preparing for your post-pandemic federal compliance audit
Many organizations received significant funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, either directly from the U.S. Department of Treasury or through another entity, such as their state or county. In either case, the funds originate from the federal government, which means there are certain requirements that recipients must follow. Entities that expend $750,000 or more in federal funds in a given fiscal year are required to obtain a single audit, a type of audit governed by OMB through a set of rules known as “Uniform Guidance”. Because of the amount of federal grants available for pandemic relief in the past year, entities may require a single audit for the first time this year. Keep in mind that Read More...
The SECURE Act Brings Retirement Plan Changes
On December 20, 2019, President Trump signed a year-end spending package that included the long-awaited Setting Every Community Up for Retirement Enhancement Act (the “SECURE Act”), ushering in the most sweeping reform to retirement saving in the U.S. since the Pension Protection Act of 2006. The SECURE Act became effective on January 1, 2020, and it will inevitably affect many retirement savers, for better or worse. This act could have wide-ranging effects on the retirement planning landscape in the United States and here are a few of the most significant provisions that you should be aware of: Small Employer Credits to Expand Under the previous law, employers with 100 or fewer employees were entitled to an annual tax credit of up Read More...
More Pandemic Assistance for Dairy Farmers, Biofuel Producers, and Livestock Producers
The USDA is continuing its rollout of aid to segments of the agriculture industry impacted by the COVID-19 pandemic. Last month, Agriculture Secretary Tom Vilsack announced additional aid to agricultural producers and businesses as part of the USDA Pandemic Assistance for Producers initiative. Since January, USDA has allocated $11 billion to producers, as well as food and ag businesses. The USDA is committed to providing financial assistance to producers and critical agricultural businesses, especially those left out or underserved by previous COVID aid, this new round of funds will focus on several gaps and disparities in previous rounds of aid. These investments through USDA Pandemic Assistance will help our food, agriculture and Read More...
American Family Plan Child Tax Credit Monthly Payments
There have been important changes to the Child Tax Credit that will help many families this summer. The American Rescue Plan ACT of 2021 expands the Child Tax Credit for tax year 2021 only, the legislation not only temporarily increases the amount each parent will receive, from $2,000 to $3,600 for children under 6 and $3,000 for children 6 and up, it also made the credit fully refundable and turned half of the credit into the advanced payments. The monthly direct payments will begin starting this upcoming July 15. These payments are not an extra monthly payment, but rather a reduction of how much child tax credit parents will receive when they file their 2021 tax return. This monthly payment is simply an “advance” on what you would Read More...