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Volume 1 Issue 3, March 2009


2009 Recovery Act Contains Numerous Tax Incentives

On February 17, President Obama signed the massive economic stimulus package, the American Recovery and Reinvestment Act of 2009. As I’m sure you have heard, the new law weighs in at nearly $800 billion. Roughly one-third is comprised of tax incentives for individuals and businesses. Congress made many of the tax incentives retroactive to January 1, 2009.

The tax incentives in the stimulus package can be broken down into two broad categories: individuals and business. Here, we take a look at both.

Individual Incentives
Business Incentives
 

Risk Management in Tight Credit Markets
Gerry Hedgcock, CPA
Heard, McElroy & Vestal, LLC

Suppose your banker called you this morning and said, “Joe, the home office on the East Coast has decided that it will no longer make loans to businesses in your industry; you will need to find alternative financing when your loan is up for renewal next month.”

After you pick yourself up from the floor and take a mild sedative you begin asking yourself what the next step should be. This scenario is being played out across the country as lenders begin to manage their own risk.

Let’s review a few proactive steps a business can take to beat the tight credit markets and problems that might arise. Read Full Article
 

Department of Labor Expands Enforcement of Delinquent Contributions
Angela Vascoe
Retirement Services Specialist
Heard, McElroy & Vestal, LLC

Recent Department of Labor (DOL) investigations have resulted in the issuance of a Field Assistance Bulletin (FAB) 2008-01 which explains the DOL’s position regarding the fiduciary responsibility for the collection of delinquent contributions to retirement plans. Read Full Article


Executive Seminar Series Kicks Off

2009 marks the fourth year of HMV’s CPA’s In Industry Executive Seminar Series, a group of discussions designed to give owners, CFO’s, and CPA’s in industry up-to-date information on issues that affect their company. Many important and timely topics have been covered in the Series over the past three years and this year is proving to be no different.

The first seminar of 2009 took place Thursday, February 19, with a focus on Risk Management. A packed house listened to John Peak, JPMorgan Chase bank president in Shreveport/Bossier City, discuss how banks view lending in the current economy and what they are looking for when determining business loans and pricing. Ben Woods, Robert Dean, and John Schmidt of HMV followed with discussions on how businesses can maximize return while lowering risk, capital restructuring and highlights of the new stimulus bill signed only two days before.

Two more seminars are scheduled for 2009.
Thursday, June 18
Annual Business Checkup
Thursday, October 29
Accounting and Tax Forecast – Looking Ahead to 2010

For more details and how to register, click here.
 

HMV Welcomes Two New Employees

KERI COLVIN
Keri joins our Shreveport location in the tax department. She recently earned her Master of Professional Accountancy from Louisiana Tech where she also received her Bachelor of Science in Accounting. Keri interned with the firm last summer.

MICHAEL FULCO
After interning with the firm this fall, Michael accepted a position in our Shreveport location tax department. Michael received a Bachelor of Business Administration from the University of Louisiana Monroe and is currently working on his Master of Business Administration at Louisiana State University Shreveport.

We are excited to have both Keri and Michael back with the firm as official Heard, McElroy & Vestal employees.

In This Issue...
2009 Recovery Act
Risk Management
Delinquent Contributions
Seminar Series Kicks Off
HMV Welcomes Employees
Time to Transfer Wealth?
Roth IRA Conversions in 2010



Timely Tidbits...

Making Work Pay
New federal income tax withholding tables, part of the 2009 Recovery Act's Making Work Pay credit, go into effect April 1, 2009. Employers need to be sure their payroll software is updated with the new rates or if calculating checks by hand, be sure to use the newly issues tax tables.

NOL Relief
Also under the Recovery Act, small businesses may elect to carry back 2009 net operating losses (NOL) as much as five years. Some elections must be made by April 17, 2009, so you may want to act quickly if you want to take of advantage of the NOL relief.

New Form 941
The IRS just released a new Form 941 with room to report COBRA subsidy payments required by the 2009 Recovery Act. Employers must use this new Form 941 beginning with first quarter 2009 filings - even if your company hasn't made any COBRA payments.

You can read more about these items in this newsletter's featured article covering the 2009 Recovery Act tax incentives.


Food For Thought:
Now May Be the Time to Transfer Wealth
Believe it or not, there is a silver lining to our economic woes.

Several factors have come together to produce what we at HMV have termed, The Perfect Storm. We are experiencing historically low interest rates and asset values and income tax rates are low. This Perfect Storm provides wonderful opportunities to transfer wealth to/from other family members and businesses, through the sale or gift of assets, at very attractive costs.

Also, Congress has introduced a bill that if passed, would eliminate business valuation discounts upon enactment. You may need to act soon before conditions change, and the window of such favorable opportunity closes.

 
Looking Ahead:
IRA Conversions in 2010
 
As set forth in the May 2006 Tax Incentive Prevention and Reconciliation Act (TIPRA), in 2010 all Americans will qualify for a Roth IRA conversion regardless of their income. Previously, taxpayers with a modified adjusted gross income of $100,000 or more were not allowed to convert traditional IRAs to a Roth IRA.
In addition, individuals who choose to make a Roth IRA conversion in 2010 will be given the option to pay all conversion taxes in 2010 or average the taxes owed over the years 2011 and 2012.
 
Low asset values may also be advantageous for those considering a Roth IRA conversion. When you convert a traditional IRA to a Roth IRA, you pay income tax on the amount you choose to convert. The lower the value of the asset you are converting, the less you will owe in taxes on the conversion.
 
Now is a good time to look ahead and determine if a Roth IRA conversion is beneficial to you and your situation. If so, you must also consider how much you should convert and when you should do it.
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