Today President Trump signed into legislation H.R. 1892 which ended the government shutdown earlier this morning. Included in the legislation are a number of tax extenders and new tax provisions – more notably the extension of the Federal Empowerment Zone Employment Credit and the Federal Indian Employment Credit and the introduction of the Employee Retention Credit for Employers Affected by California Wildfires.
Manufacturing and distribution companies are being challenged today, both domestically and globally, by growth in the industry and competition. Companies are scrambling to deliver quality products and service to meet customer needs and demands. Faced with rising operating costs and increasing minimum wage rates, it can be difficult for manufacturers to stay profitable without comprising the quality of their products or compromising employee retention and morale. Fortunately, there are tax incentives programs offered on the federal and state level that include targeted employment incentives (like the Federal Work Opportunity Tax Credit), state employment-based incentives and training-based incentives that can be advantageous to manufacturers.
A new credit has been introduced to an already sizable list of credits offered by the State of GA. The Georgia Qualified Parolee Jobs Tax Credit, effective January 1, 2017 – December 31, 2019, is an income tax credit available to employers who hire individuals who have recently been granted parole.
Hotels are faced with rising operating costs including increased taxes, escalating minimum wage rates and high employee turnover. It can be difficult for hotels to stay profitable without compromising guest satisfaction. Taking advantage of various tax savings programs including targeted employment incentives (like the Federal Work Opportunity Tax Credit), state employment based incentives and training based incentives may help boost your hotel’s bottom line by offsetting the costs of some of the most prevalent offenders such as increased taxes, escalating minimum wage rates and high employee turnover.
The landscape of cost segregation and depreciating fixed assets is vast, complex and constantly changing, due to governmental regulations. Cost segregation studies (and the subsequent work involved) require expertise in both tax guidance, construction and facilities engineering – this isn’t something you should expect your CPAs or clients to grasp without some level of guidance.
And yet, the “new normal” for CPA firms today is centered squarely within a client centric environment with the challenge of fulfilling traditional core accounting services, while also providing knowledge, information and services to capture every allowable tax benefit.
An outsourced tax consultant offers CPA firms guidance in areas of tax credits and incentives where your accountants may not be knowledgeable enough. Typically, this is a partnership that’s ongoing and facilitates a sustained approach to maximizing tax savings for your clients.
However, a tax consultant could play an even more important role within your firm.
If your CPAs are currently helping clients apply for business incentives, it’s not uncommon for something to go wrong in the process. Capturing credits is extremely complex, and one little slip up could cost a client thousands of dollars in tax savings.
As the owner of a CPA firm, you know you need more efficient workflows to meet client demand for improved tax return outcomes. Helping clients navigate the complex world of tax credits and incentives ensures maximized tax savings (which improves the outcome of their tax return).
The right tax credit software system enables you to house all of your client projects and information in one place. With a singular standard for organizing your client project information, you encourage a collaborative environment with high visibility into client projects.
Your clients appreciate and need your CPAs to take interest in the financial health. Your CPA firm should be in the business of better serving your clients – clients who are looking for a solid process for identifying opportunities to save on tax costs and generate revenue.
Obviously, your CPAs are mostly consumed with their core tax responsibilities. You couldn’t possibly expect them to know every detail of every possible tax savings opportunity out there, or to manage the complex process of capturing credits without the right tools.Taking a proactive role in understanding the changes and challenges your clients face is the first step in securing them available tax credits and incentives. By partnering with an outsourced tax consultant, however, you receive both the tools and the tax expertise to easily achieve clients’ financial goals.
A CPA firm had a client with an unexpected state tax liability. The firm was unsure of how to handle this delicate matter with the client, especially in terms of how to minimize the liability by utilizing available tax credits the client may qualify for.
The CPA firm had already advised the client on the amount of their estimated tax payment and were concerned about communicating this unexpected bad news. The tax liability could have resulted in underpayment tax penalties.
Volkswagen’s (VW) recent emissions-rigging scandal has its proverbial foot firmly rooted in the automaker’s use of a federal tax credit (the advanced lean-burn technology motor vehicle credit) intended for fuel-efficient cars.
On the heel of certain allegations came an admission from VW that they installed “defeat devices” in nearly 500,000 diesel vehicles in the U.S. that emit far more exhaust pollution than is legal. The automaker had installed the devices on as many as 11 million vehicles worldwide between 2009 through 2015.
The Burden Of Responsibility
With the use of defeat devices, this raises the question of whether VW made false claims to the U.S. government, certifying that certain car models met emissions standards needed to claim the $1,300-per-vehicle tax credit. The automaker could face penalties of up to $18 billion from the Environmental Protection Agency (EPA).