Tax Tip 2018 - 111

Wednesday, July 25, 2018

Courtesy of the IRS

Heard, McElroy & Vestal, LLC Joins Forces with Aliign, LLC to form Aliign Mineral Management, LLC

Friday, January 26, 2018
Heard, McElroy & Vestal, LLC, a top provider of business consulting, tax planning and preparation, audit and assurance, business valuation, and retirement plan services, is proud to announce that the firm has joined forces with Aliign, LLC to form a new subsidiary called Aliign Mineral Management, LLC, an oil & gas consulting firm that offers accounting and management expertise to royalty owners, working interest owners and operators. The merger, effective December 1, 2017, expands and enhances Heard, McElroy & Vestal's ability to provide top level services to businesses and individuals with oil and gas holdings. Read more...

Should Your Company Start a Retirement Plan?

Friday, January 05, 2018
Should your company start a retirement plan? After all, it is what profitable companies are often inclined to do. When deciding if this is an option that would benefit your company, there are several basic points to consider before offering a financial vehicle for your employees' retirement.  Read more...

Three Approaches to Deciding What Your Company is Worth

Friday, January 05, 2018
There are many reasons why a business owner would want to be able to determine the value of their business. This is achieved through a process called business valuation. The individual procedures and prescribed processes that go into a business valuation are complex, but the following information can help you gain a general idea of what it involves. Read more...

Capital Gain Rates/Loss Carryforwards

Friday, January 05, 2018
Analyzing the values of your capital assets could result in a multitude of tax savings. As many of you are aware, capital gains are taxed at different rates depending on the holding period of such assets. If you hold the capital asset one year or less, your capital gain or loss is short-term. If you hold the capital asset for more than one year before you dispose of the asset, your capital gain or loss is classified as long-term. Short-term capital gains are taxed at your ordinary income rater, which can be as high as 39.6 percent under our current tax system. However, the Trump/GOP Tax Reform Framework proposes a reduction in ordinary income tax rates. net capital gains, the amount by which your net long-term capital gain for the year exceeds your short-term capital loss for the year, are currently taxed at a maximum rate of 15 percent for taxpayers in the 25 to 35 percent ordinary income tax brackets. If you are in the 10 percent  or 15 percent ordinary income tax brackets, some or all of your net capital gain will be taxed at 0 percent. High-income taxpayers with taxable income exceeding $470,700 for married taxpayers filing jointly and $418,400, for single taxpayers are subject to a 20 percent rate on net capital gains. The Trump/GOP Tax Reform Framework also proposes a top rate of 15 percent on net capital gains. Lastly, a 3.8 percent tax on net investment income applies to taxpayers with modified adjusted gross income (MAGI) that exceeds $250,00 for joint returns and $200,000 for single taxpayers. For certain high-income taxpayers, the top net capital gains tax rate may be as high as 23.8 percent with the inclusion of the 3.8 percent net investment income tax.  Read more...

TAX CUTS AND JOBS ACT: Comparison Chart of Current Law vs. New Law

Friday, January 05, 2018
With the Tax Cuts and Jobs Act (TCJA) being passed by both the House and Senate and sent to President Trump on December 20, 2017, the United States will see the most significant tax reform in over 30 years. As with any tax reform, there will be a multitude of tax planning strategies to implement over the 2018 tax year. We are including a comparison chart for individuals and businesses that highlights the current law as of 2017 compared to the reform under the TCJA which will mostly take effect for tax years beginning January 1, 2018. Read more...

HMV in the Community - United Way's Day of Caring

Tuesday, May 30, 2017

HMV's Tax Department divided and conquered on Friday, May 12th for United Way's Day of Caring. This one day, community-wide volunteer event connected over 500 volunteers from more than 45 local companies with various nonprofit organizations. Our employees formed three teams and dispersed to their assigned locations after a pep rally breakfast hosted by United Way at the Horseshoe Riverdome. Throughout the morning, our volunteers completed landscaping and planting new flower beds at the Heart of Hope Ministry, cleaning out and replanting the existing flower beds at the Girl Scouts of Louisiana - Pines to the Gulf, and sorting hundreds of food donations at the Food Bank of Northwest Louisiana. Our teams reconnected for a late lunch and shared their uplifting experience with peers. Read more...

Financial Abuse of the Elderly

Tuesday, May 30, 2017

According to a recent article by the AICPA, it is estimated that one in ten elderly people in North America have been victims of financial abuse.  This abuse has resulted in more than $2.9 billion in yearly financial losses.  Due to the changing demographics in North America, elder financial abuse is expected to intensify in the coming years.  By the year 2031, one in four people living in North America will be over 65 years old and will control 70 percent of the wealth in North America.  “Crime of the 21st century,” the “silver tsunami” and “the perfect storm” are some of the terms used to describe elder fraud.  Elder financial abuse is a serious problem and is growing at an alarming rate. ¹  With increasing wealth and decreasing cognitive ability, aging Americans are ripe targets for financial abuse.  Read more...

Pease Limitation

Friday, May 26, 2017
The Pease Limitation was enacted in 1991 and is names after Donald Pease, former Representative of Ohio. Its purpose was to limit certain itemized deductions of high income earners. Once your Adjusted Gross Income (AGI) crosses a specified dollar threshold, certain itemized deductions are phased out.

These deductions include charitable contributions, mortgage interest, state and local taxes, property taxes, and other miscellaneous itemized deductions, such as unreimbursed employee expenses and tax preparation fees. Investment interest, medical expenses, and casualty, theft, or gambling losses are itemizes deductions that are not subject to the Pease Limitation.

For 2017, individuals with AGI over $262,500 and joint filers with AGI over $313,800 would trigger the itemized deduction limitation. The income thresholds of $261,500 and $313,800 are adjusted annually for inflation. The limitation will be the lesser of the 3 percent of the AGI over the income thresholds or 80 percent of the itemized deductions allowed for the year. Below is an example of the Pease Limitation calculation:

Not-For-Profit Organizations - What to Provide Your CPA

Friday, May 26, 2017
Most tax exempt organizations have an annual filing requirement with the Internal Revenue Service. The amount of information your tax preparer will need depends on the organization's filing responsibility. A tax exempt organization is required to file one of the three types of informational returns, using either Form 990-N, Form 990-EZ, or Form 990.

Form 990-N may be filed if the organization averages $50,000 or less in gross receipts in the prior three consecutive tax years. Items needed to file a 990-N, also known as an e-Postcard include the EIN (Employer Identification Number), the legal name and address of the tax-exempt organization, the name and address of the principal officer, a website address (if applicable). Once this information has been provided, the 990-N can be filed online.

Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, may be filed if the organization has gross receipts less than $200,000 and total assets less than $500,000. A 990-EZ requires more information than the 990-N. For this level of reporting, most preparers will provide a questionnaire that should be completed. Some important information that needs to be provided includes:

  • Financial statements for the organization's fiscal year end.
  • Details of the organization's three largest program services.
  • Name and title of officers, directors, and trustees. If any have reportable compensation, please include their W-2 or 1099-MISC statement, along with the average hours per week devoted to their titled position.
  • Contributions given to the organization, directly or indirectly, including money, securities, or any other type of property that totals $5,000 or more for the tax year. The client will need to provide the contributor's name and address.
Form 990, Return of Organization Exempt from Income Tax, is filed if the organization has gross receipts greater than or equal to $200,000 or total assets greater than or equal to $500,000. To complete a 990, these larger tax-exempt organizations will need to provide all of the information mentioned for the 990-EZ, along with many more documents based on the organization's activities. A client's CPA will provide them with a questionnaire that is more in depth than the 990-EZ questionnaire. Based on the answers provided, the CPA may need additional information on fundraising, grants, investments, and more. Any questions the client may have should be directed to their CPA in order to make sure they complete the questionnaire thoroughly and correctly.

The 990-N, 990-EZ, and 990 have an original due date of the 15th day of the 5th month after the close of the client's tax year. For example, if the organization has a December 31st year end, its 2016 return would be due May 15, 2017. Only the 990-EZ and 990 can be extended for an additional 6 months from the initial filing deadline. For instance, if the organization's deadline was May 15, 2017, it would be able to be extended to November 15, 2017, if necessary. Failure to file the return on time will lead to daily penalties of $20 to $100, depending on the amount of the organization's gross receipts. Therefore, it is important that the client gets their information to the CPA in a timely manner.

In summary, the more complex your not-for-profit entity, the more information that is required to complete the appropriate version of Form 990. Providing the information to your CPA in a timely manner helps ensure that the board of directors will have a chance to review the 990 before filing the return and avoid assessment of penalties.

To learn more about Not-For-Profit Organization - What to Provide Your CPA, call Jennifer Hill at (318) 429-2048 or email For more information on the services available to you by Heard, McElroy & Vestal, LLC, call our Shreveport office at (318) 429-1525, our Monroe office at (318) 388-3108 or visit