MCB Accounting Blog

May 15th is the deadline for all calendar year exempt organizations file Forms 990, 990-PF and 990-T.
 
Before you mail any check to the Internal Revenue Service, be sure to complete the following:

• "Note the reason for the payment, the form number and the year of the return for which the check is being sent. For example, "balance due on Form 1040 for 2009."
• "Include your social security number or your employer identification number if you operate as a business.
• "Make all checks payable to the U.S. Treasury.

The May 21, 2012 compliance deadline for pool and spa lifts is less than two weeks away and there is no indication from the Department of Justice (DOJ) that it will extend the deadline.  The American Hotel and Lodging Association (AH&LA) has filed a letter with DOJ urging an immediate response and noting that its members need clarity on what types of lifts are acceptable and time to comply.

On Thursday, May 10, 2012, the House of Representatives passed the Commerce, Justice, Science Appropriations Bill, which includes an AH&LA-supported amendment prohibiting DOJ from enforcing permanent pool lift restrictions for one year. The legislation needs to pass the Senate and be signed by the President.

Meanwhile, Senator Lindsay Graham (R-S.C.) recently introduced S. 2390, the Pool SAFE Act, which would allow portable lifts as an acceptable means of providing pool and spa entry, sharing of lifts between multiple pools at a facility and a one-year compliance deadline. The House companion bill, H.R. 4256, was introduced by Congressman Mick Mulvaney (R.-S.C.).

MCB has over 35 years of hospitality accounting experience providing audit, tax, accounting, due diligence and employee benefit plan audit services.  Contact an MCB Adviser today at info@mcb-cpa.com or call 703.218.3600 to discuss your hotel accounting and tax needs or to receive a proposal for your next financial statement audit.

File Form 941 for the first quarter of 2012.  This due date applies for calendar year taxpayers and only if you deposited the tax for the quarter in full and on time.

Note:  If you are a Fiscal Year Taxpayer, you should calculate your quarterly due dates based on your fiscal year end date. 

The Obama administration has released the National Travel and Tourism Strategy from the Task Force on Travel and Competetiveness, marking the first time a President has made travel and tourism a national priority.  The Strategy expands the government's efforts to market the United States as a destination; sets a goal of increasing American jobs by attracting and welcoming 100 million international visitors annually by the end of 2021, more than a 50 percent increase over the number expected in 2012; and expanding the Visa Waiver Program, improving visa processing, expanding the trusted traveler program and improving screening processes at airports and using grants to improve transportation infrastructure.

Click here to view the complete National Travel and Tourism Strategy.

MCB has over 35 years of hospitality accounting experience providing audit, tax, accounting, due diligence and employee benefit plan audit services.  Contact an MCB Adviser today at info@mcb-cpa.com or call 703.218.3600 to discuss your hotel accounting and tax needs or to receive a proposal for your next financial statement audit.

Here are seven tax-free benefits that keep cash in employees' pockets and may provide attractive deductibles for employers.

1. Frequent flyer miles.  Employees who fly on business can earn miles tax-free when they pay with a personal credit card for reimbursed corporate travel. When used as a rebate, the IRS permits employees to exclude frequent flyer benefits from taxable compensation.
2. Non-cash awards and prizes.  The IRS allows employees to exclude three types of non-cash awards from employers.  Certain employee achievement awards that are a part of a "meaningful presentation" are tax-free as long as the gift does not appear to be disguised wages. Certain prizes or awards transferred to charities are tax-exempt, as are "de minimis awards and prizes," which are not cash or cash equivalent, of nominal value and provided infrequently.
3. Cell phones. Tax-free treatment of cell phones is applicable in cases where employers provide cell phones to employees or where employers reimburse their employees for the business use of personal cell phones without burdensome recordkeeping requirements.
4. Meals and lodging on employer premises.  Meals are excludable from employee wages if they are provided on an employer's business premises and for the employer's convenience. Lodging also can be tax-free for employees if it is provided at the worksite, for the employer's convenience and is a condition of employment.
5. Commuter benefits and free parking. Employers can contribute $125 per month tax-free for public transportation, $240 per month for qualified parking or $365 per month for both public transportation and qualified parking.
6. Dependent care assistance.  Generally, an employee can exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year.  The exclusion cannot be more than the smaller of the earned income of either the employee or the employee's spouse.
7. Qualified educational assistance. Tuition or educational expenses paid by an employer for an employee under an educational assistance plan are excludable from employee wages if certain IRS requirements are met. An employee cannot receive more than $5,250 per calendar year from his or her employer.

Click here to view the complete AccountingToday.com article.

Contact an MCB Tax Adviser at 703.218.3600 and start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

If you are starting a business and don't have your heart set on a particular state for personal or business reasons, taxes may be a consideration.  They also can make or break a deal for some entrepreneurs.

The Small Business and Entrepreneurship Council recently unveiled its Business Tax Index, which identifies state tax systems best and least suited for small businesses. The ranking looks at 18 different tax measures and combines those into a single score for comparison. Among the taxes included are income, capital gains, property, death /inheritance, unemployment, and various consumption-based taxes, including state tax and diesel levies.

The top 15 tax-friendly states for starting a small business are as follows:  1. South Dakota, 2. Texas, 3. Nevada, 4. Wyoming, 5. Washington, 6. Florida, 7. Alaska, 8. Alabama, 9. Ohio,  10. Colorado,  11. Mississippi, 12. Michigan,  13. South Carolina,  14. Tennessee, and 15.  Missouri.

The 15 worst state tax systems are:  37. Nebraska, 38. North Carolina, 39. Illinois, 40. Oregon, 41. Rhode Island, 42. Connecticut, 43. Hawaii, 44. Vermont, 45. California, 46. Maine, 47. Iowa, 48. New York,  49. New Jersey, 50. Minnesota, and 51. District of Columbia.

Click here to view the complete Portfolio.com article.

Contact an MCB Tax Adviser at 703.218.3600 and start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

Hoteliers are finding difficulty controlling rates because they face a different market mix than that of 2007, when profits were peaking, according to Greg Cross, Hyatt Hotels' senior vice president of revenue management, in a recent HotelNewsNow.com article.

Cross has been tasked with taking the hotel ownership, management and franchising company's revenue management strategies to the next level. He has said that revenue management is simply an evolution of  "what hoteliers called 'hotel management' 30 years ago--finding the balance of occupancy and rate."

Cross said technology can help revenue managers see opportunities further in advance and pull together myriad reports and data quicker than ever before.

Cross also addressed a number of hot-button issues affecting hotel revenue managers:

• Occupancy or Rate? Occupancy has returned, but pricing power has not returned to all markets. The market mix is different now than it was in 2007, when profits were at their peak. In addition, wholesale businesses continue to diminish pricing power.
• Shifting Channel Mix: Cross said Hyatt uses technology to better understand where demand is coming from at any particular time. This helps them place inventory. High-quality data makes forecasting easier and improves decision making.
• New OTA Sites: New online travel agencies do not yet play a role in Hyatt's distribution strategy. Some of the more recently introduced channels such as Groupon were tested, but they do not play much of a role either.
• Corporate Directives: Over the past few years, Hyatt has changed its corporate revenue management structure. While there used to be more directives from corporate, executives now understand that revenue management processes belong at the hotel level.

Click here to view the complete HotelNewsNow.com article.

MCB has over 35 years of Hotel Accounting experience. Contact an MCB Adviser today at info@mcb-cpa.com or call 703.218.3600 to discuss your hotel accounting and tax needs or to receive a proposal for your next financial statement audit. Join us at the 1st Annual BisNow Lodging Investment Summit May 9-10 in Washington, DC.

The House has approved Republican-backed legislation to provide a tax cut of up to 20% for one year to businesses with fewer than 500 employees.  While the bill is aimed at small businesses, Democratic lawmakers have complained that most of the benefits would go to much larger companies. The bill is not expected to go far in the Democratic-controlled Senated.

Under the legislation, which is known as the Small Business Tax Cut Act, businesses with fewer than 500 employees would be eligible for a 20% deduction on their domestic business activities income, restricted to half of the amount of wages paid to employees.

Democratic lawmakers are backing an alternative that extends a tax break on equipment purchases for another year, but that was defeated by a vote of 236-175. Democrats also plan to schedule a vote on a bill combining the bonus depreciation extension with a tax break for new hires in the coming weeks.

Click here to view the complete WebCPA.com article

Contact us today with your audit, accounting and tax needs at 703.218.3600 or email info@mcb-cpa.com and start building a relationship with a CPA firm who strives to earn your RESPECT and CONFIDENCE as a TRUSTED business adviser.

Believe it or not, the federal Department of Labor (DOL) does not require that an investigator announce the scheduling of a wage & hour investigation. An investigator has sufficient latitude to initiate unannounced wage & hour investigations to directly observe normal business operations and obtain information.

The following are some strategies to prevent such an investigation:

1. Avoid unfair compensation practices.  Compensate employees consistently. If pay practices are consistent, complaints are less likely to arise, and you will be in a better position if DOL does launch a wage & hour investigation.
2. Understand the regulations. Understand the Fair Labor Standards Act (FLSA). It is the law, and failing to follow it could subject you to litigation or a DOL audit.
3. Train managers thoroughly. Managers should understand the FLSA and follow it.
4. Analyze both state and federal law.  Determine whether your state's wage & hour laws conflict with the federal law, then follow the law that is the most beneficial to the employee.
5. Pay past overtime due. If it is determined that an employee is wrongly classified as exempt, you should determine how many overtime hours the employee has worked in the past two years , then pay him or her the overtime due.  You should have the employee sign a release freeing you from further liability.
6. Follow child labor laws.  You must determine a minor's age and set his or her job duties and work schedules accordingly.  You must also file the minor's age certificate and keep it as long as the minor is employed.
7. Pay interns, unless they meet a strict test. Internship in the for-profit, private sector will most often be viewed as employment by the DOL, unless a strict test is met. Interns who qualify as employees rather than trainees must be paid at least the minimum wage and overtime for hours worked over 40 in a workweek.
8. Respond to internal complaints quickly.  If an employee files a wage & hour complaint internally, you should take it seriously.  You may be able to prevent an investigation by addressing an employee's initial internal complaint.
9. Seek compliance assistance from DOL.  Compliance tools and information are available on DOL's website.
10. Conduct a self-audit. Hire an attorney to audit your company or do it yourself before DOL initiates an investigation.  An audit can help ensure compliance. Review job descriptions to make sure they are accurate and reflect the jobs performed and the skills needed. Review actual job duties to ensure that they still fall within the administrative, executive, professional, computer, or outside sales exemptions. Make sure overtime for nonexempt employees has been properly calculated. Make sure the required posters have been hung in the appropriate places.

In addition, be sure that records are complete, accurate and unambiguous.  Pay records for every employee for each pay period should be maintained for three years.

If violations are found, you may owe back pay, face penalties and be instructed by DOL to make changes in your employment practices.

Click here to view the complete HRnewsWatch.com article.

MCB has over 35 years of hospitality accounting experience providing audit, tax, accounting, due diligence and employee benefit plan audit services.  Contact an MCB Adviser today at info@mcb-cpa.com or call 703.218.3600 to discuss your hotel accounting and tax needs or to receive a proposal for your next financial statement audit.