Heritage Advisors and Kennedy, Ehrler and Associates, LLC Announces Company Merger

Heritage Advisors and Kennedy, Ehrler and Associates, LLC Announces Company Merger

Feb. 23, 2016PRLogPHOENIX, Ariz. – PHOENIX, Ariz. – Heritage Advisors, LLC in Phoenix, Arizona continues to change the market place with their multidisciplinary approach. In a continued effort to do so, they take pride in announcing the recent merger with Kennedy, Ehrler and Associates, LLC.

The merger allows Heritage Advisors & Kennedy, Ehrler and Associates LLC to expand their current tax operations while deliver a multifamily office experience.

About Heritage Advisors.  Heritage combines tax, law, wealth management and insurance practices to provide a specialized family office experience. Tax services include tax planning, accounting services, restructuring, business valuation, international, mergers & acquisitions and sales.

Heritage offers some of the most innovative and cutting edge strategies in the industry, often reaching well beyond the natural limitations of any singular professional working in isolation.

About Kennedy, Ehrler and Associates, LLC.  Kennedy, Ehrler and Associates are a full service C.P.A. firm, with an emphasis on individual, professional, and small business clients. From bookkeeping and accounting services to reviewed financial statements, projections, tax preparation of all kinds, cash-flow analysis, lease-buy comparisons, investment analysis, retirement and estate planning, Kennedy/Ehrler can provide the tools to allow you to make informed decisions about your personal and business finances.

The team utilizes their extensive knowledge, expertise and experience to maximize productivity.  This concept allows a more personal understanding of your industry.

Contact
Rikay Eyman, Heritage Advisors: 602-569-9959
Michael Frost, Heritage Advisors: 602-569-9959
***@heritageadvisorsllc.com
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Heritage Advisors acquires Minyard & Co., P.C.

Heritage Advisors acquires Minyard & Co., P.C.

October 1st 2014 – PHOENIX, Ariz. – Heritage Advisors, LLC in Phoenix, Arizona makes strides to make their mark on the financial sector. They take pride in announcing the recent acquisition of  the Phoenix based accounting firm Minyard & Co., P.C.

The acquisition provides enhanced services to both the Heritage & Minyard clients. Heritage clients will gain the tax and accounting expertise of the seasoned Minyard staff, whereas the Minyard clients will be introduced to the cutting edge Heritages multi-discipline approach.

About Heritage Advisors.  Heritage combines tax, law, wealth management and insurance practices to provide an all encompassing client experience. Heritage offers some of the most innovative strategies in the industry, often reaching well beyond the natural limitations of any singular professional working in isolation.

About Minyard & Co., P.C.  – Minyard & Co., P.C. is a boutique tax and accounting firm that has always sought to provide it’s clients with full service capabilities. In a continuation of expanding those service capabilities, Minyard & Co. is  proud to have joined with Heritage Advisors, a multi-disciplinary practice of tax, law and wealth management services. The addition will provide enhanced accounting, trust, estate, tax, investment, insurance and wealth management to our clients.

CONTACT 

Rikay Eyman, Heritage Advisors: 602-569-9959

Michael Frost, Heritage Advisors: 602-569-9959

 

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4 Common Estate Planning Mistakes

Estate planning is one of the most neglected aspects of the average American’s financial strategy. Obviously, accepting one’s mortality is one of the biggest obstacles to estate planning. No one looks forward to planning for the future of their assets after they pass. In addition, an unfortunate number of people postpone estate planning, believing they have plenty of time to prepare, but postponement can significantly impact their options. Between dread and misconception, it is little wonder that half of Americans lack a will and even fewer have an estate plan at all. We’ve selected some common estate planning mistakes to avoid in order to best provide for those you leave behind.

Wishes Not Documented

Estate planning goes beyond the allocation of assets, the creation of a will is vital to ensuring a person’s wishes are clearly documented and enforceable. A will not only protects survivors from the possibility of probate, but clearly defines beneficiaries, helping to eliminate possible bitterness and uncertainty. Aside from financial considerations, a will is also vital to account for the care of any surviving children. Anyone not wishing to leave these decisions up to the state should consider having a will written up.

Life Insurance Coverage

Having an adequate life insurance policy is vital to the financial future of all families. Lower income families should at least pursue term insurance coverage to replace lost wages in the event of a death. More wealthy families may need the proceeds from insurance to provide liquidity upon the death of the insured.

While a life insurance policy cannot fill the void of losing a loved one, a lack of insurance can make an unthinkable situation impossible to recover from.

Neglecting an Estate Plan

Over the course of time there are several factors that can directly impact the need and scope of an estate plan. Wills should be edited as soon as reasonably possible to account for major life events such as a birth, divorce or a newly blended family. A testator of a will should also remain sensitive to any major factors in the lives of guardians, beneficiaries, or executors that may alter the roles within the will. It’s also extremely important to make sure that beneficiaries named in a will match any trusts left to those parties.

Changing tax laws can also have a dramatic impact on a family’s estate plan. Though estate planning has received some much needed stability in recent years, tax law is still subject to the whim of legislators, and can change from year to year. Due to the complexity of these laws, we encourage you to partner with a professional estate planner to revisit or establish an up to date tax strategy.

Not Gifting Assets Before Death

People looking to reduce their taxable estate should consider gifting assets to family and friends each year, as long as they do so within the gift tax exclusion limit. This is not only an excellent way to reduce the tax burden of your estate after passing, it also helps to establish your beneficiaries’ financial responsibility.

No one looks forward to addressing what happens when they pass, but it’s an issue we all must face. Due to the complexity of estate planning, we encourage you to partner with an estate planning advisor to avoid some costly mistakes.

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How Does Portability Fit Into Your Estate Plan?

In recent past, the waters of estate and gift taxes have been made murky by legislative uncertainty. Thankfully, the American Taxpayer Relief Act of 2012 (ATRA) served to bring some clarity and permanence to the estate planning landscape. This provides an ideal opportunity for families to revisit their estate plans.

The ATRA made permanent changes to the federal transfer tax system, exemption rates are currently 5.34 million (10.68 if married) and a top tax rate of 40%. ATRA also made permanent the popular portability provision, at which we’ll take a closer look.

How Does Portability Work?

In simplest terms, portability allows the first spouse to die to transfer his or her unused estate tax exclusion amount to the surviving spouse, who can then use it for their gift or estate tax purposes. Now that we’ve defined portability, let’s look at how it works.

Under portability, a surviving spouse can use the deceased spousal unused exemption amount to make lifetime gifts or to shelter bequests at death. This provides an alternative to the traditional estate planning for wealthy married couples in which a credit shelter trust, or a bypass trust is set up to utilize the deceased’s unused exemptions. This effectively gives the surviving spouse full control of the unused exemption amount, including who gets the benefit of the exemption amount.

Details to Consider

There are a few limitations to portability that impact your overall estate plan, and should be considered.

  • Portability does not impact state taxes ~ There are 19 states that impose an estate/inheritance tax. These taxes are separate from federal taxes, hence portability doesn’t effect them.
  • Portability does not control bequests ~ While portability allows a married to leave 10.68 million to their heirs without incurring federal estate taxes, couples should still include traditional strategies to control how and when their heirs receive the assets.
  • Portability does not cover asset appreciation ~​ Any appreciation on a deceased spouses assets are added to the estate of the surviving spouse. If this  amount exceeds the surviving spouses estate exculsions, tax will be due on the difference.
  • Generation skipping transfer is not portable ~ Portability doesn’t apply to GST exemptions, any unused portion will not transfer to a surviving spouse.

The Importance of Balance

Though recent legislation has brought stability to estate planning, it’s done little to lessen the complexity. While portability is a popular provision, it is best utilized within a diverse and flexible estate plan. Whether you choose to partner with us or another professional estate planner, we strongly recommend seeking guidance to balance portability with traditional strategies to best protect your estate.

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Intro to an IRS Offer in Compromise

If you are a taxpayer finding yourself unable to meet your full tax liability, or believe doing so will cause a financial hardship, filing an Offer in Compromise (OIC) with the IRS may be an option. However, before filing an OIC, it’s important to know what it is, how the process works, and if you qualify.

What is an OIC?

In simplest terms, an OIC is an agreement between a taxpayer and the IRS that settles their tax liability for less than the full amount owed. Though we would all love to have less tax liability, very few taxpayers qualify. The approval of an OIC is based on the IRS’s determination as to whether they can reasonably expect to collect in full, either as a lump sum or through a payment agreement.

When the IRS calculates a taxpayer’s reasonable collection potential, they examine one year’s future income for offers paid in five months, and two years future income for offers paid in 6 to 24 months. All offers must be paid in full within 24 months of acceptance. A taxpayer should be aware of all IRS payment options before considering an OIC.

It bears mentioning that there is no legal right to have a tax debt reduced, it’s up to the discretion of the IRS. Currently only about 25% of OICs submitted were accepted by the IRS. You do have the right to take a rejection to the IRS Appeals Board.

Who Qualifies For an OIC?

Before filing an OIC, a taxpayer should determine if they qualify. There are several conditions that must be met before a taxpayer is qualified to have an OIC considered by the IRS. The IRS must establish that there is some doubt as to whether they can collect, this is called doubt as to collectibility, or that collection would create undue financial hardship. In order to qualify, a taxpayer must also be current with all filing and payment requirements, and cannot be in open bankruptcy proceedings.

Taxpayers can use the IRS’s online Offer in Compromise Pre-Qualifier(link is external) to determine eligibility.

How Does The Process Work

The process for submitting an OIC begins with completing IRS form 656, Offer in Compromise. Form 656 must be mailed with an application fee of $150 attached. In addition to form 656, a Collection Information Statement (form 433-A) must be submitted. If married, the IRS may also request your spouse’s data be included on form 433-A. Be warned, this is only the first step in a long, complex, and arduous process. Due to the difficulty of having an OIC considered, we strongly recommend consulting a tax advisor before filing.

Why Seek Help?

After all necessary forms are submitted, the IRS will request a multitude of financial documentation, everything from pay stubs to vehicle registrations will be expected. This often results in taxpayers submitting box loads of  records for the IRS to review, any overlooked (or lost) documents can result in rejection of an offer.

If an OIC is rejected, any information given by the IRS can be utilized to ramp up it’s collection efforts against a taxpayer. In addition, interest continues on the full tax debt throughout the review process. It’s because of these factors (coupled with the IRS’s 75% rejection rate) that it makes sense for a taxpayer to be certain of acceptance before submitting an OIC.

Whether you choose Minyard or another firm, a CPA can establish your likelihood of  IRS acceptance, before investing the considerable time and cost of an OIC review. Once establishing a reasonable certainty of success, a CPA will then help to determine an amount to offer, file all forms, and ensure all supporting documentation is properly submitted. In short, a tax professional can be the difference between IRS acceptance and the nightmare of a rejected OIC.

If you’re a taxpayer finding yourself in trouble with the IRS, please contact us. We can analyze your situation, and help determine if an OIC is your best course of action.

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Partnership Form 1065 Stiff Penalties for Late Filing

Late Filing of Return

A penalty is assessed against the partnership if it is required to file a partnership return and it (a) fails to file the return by the due date, including extensions or (b) files a return that fails to show all the information required, unless such failure is due to reasonable cause. The penalty is $195 for each month or part of a month (for a maximum of 12 months) the failure continues, multiplied by the total number of persons who were partners in the partnership during any part of the partnership’s tax year for which the return is due. (So, if you have 5 partners you will be charged $975 for each month the return is not filed.) If the partnership receives a notice about a penalty after it files the return, the partnership may send the IRS an explanation and the Service will determine if the explanation meets reasonable-cause criteria. Do not attach an explanation when filing the return.

Failure To Furnish Information Timely

For each failure to furnish Schedule K-1 to a partner when due and each failure to include on Schedule K-1 all the information required to be shown (or the inclusion of incorrect information), a $100 penalty may be imposed with respect to each Schedule K-1 for which a failure occurs. (So again, say you have 5 partners. This will be an additional $500 to add to the accumulated late filing penalty’s.) The maximum penalty is $1.5 million for all such failures during a calendar year. If the requirement to report correct information is intentionally disregarded, each $100 penalty is increased to $250 or, if greater, 10% of the aggregate amount of items required to be reported, and the $1.5 million maximum does not apply.

When To File

Generally, a domestic partnership must file Form 1065 by the 15th day of the 4th month following the date its tax year ended as shown at the top of Form 1065.

For partnerships that keep their records and books of account outside the United States and Puerto Rico, an extension of time to file and pay is granted to the 15th day of the 6th month following the close of the tax year. Do not file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, if the partnership is taking this 2-month extension of time to file and pay. Attach a statement to the partnership’s tax return stating that the partnership qualifies for the extension of time to file and pay. If the partnership is unable to file its return within the 2-month period, use Form 7004 to request an additional 3-month extension.

For further information call our office at 602-266-1060.

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IRS Videos Address Your Responsibility Under ACA

The IRS announced (on Monday) that they’ve released a number of new YouTube videos discussing the shared responsibility provision of the Affordable Care Act and a variety of tax return filing topics.  You can find the IRS YouTube channel here: https://www.youtube.com/user/irsvideos(link is external).

The video addressing the ACA features IRS Commisioner John Koskinen explaining who is affected by the individual shared responsibility provision, who must have health insurance or an exemption. He also discusses qualifying plans, the types of exemptions available, and what happens if you don’t have coverage or an exemption.

 

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IRS Webinar on Home Office Deduction

According to irs.gov, “the Internal Revenue Service will hold a free webinar this week designed to help individuals, especially owners of home-based businesses,  see if they  qualify for the home office deduction.”

Useful for small business owners, industries and organizations, this webinar will cover topics like requirements for qualifying for deductions, types of expenses you can deduct and the options (simplified and regular) for claiming the home office deduction. The webinar is scheduled for September 10, 2014.

Related webinars will cover the Affordable Care Act tax provisions for small business, families and individuals; Better business through better records. Here’s the link for more information:http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Webinars-…

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USES OF FINANCIAL REPORTS

Employees need these reports in making collective bargaining agreements with the management, in the case of labor unions or for individuals in discussing their compensation, promotion, and rankings. Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are used by investors and prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions.

Vendors who extend credit to a business require financial statements to assess the creditworthiness of the business.

Government also produces financial reports to stay accountable to the public and people. The rules for recording, measurement and presentation of government financial statements may be different from those required for business and even for non-profit organizations. The requirements for non-profit financial statements differ from those of a for profit institution and therefore, will not be discussed.

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FUNDAMENTAL ACCOUNTING

In order to prepare the financial statements, it is important to adhere to certain fundamental accounting concepts. Going Concern, unless there is evidence to the country, it is assumed that a business will continue to trade normally for the foreseeable future.

Accruals and Matching, revenue earned must be matched against expenditure when it was incurred Prudence, if there are two acceptable accounting procedures choose the one gives the less optimistic view of profitability and asset values. Consistency, similar items should be accorded similar accounting treatments. Entity, a business is an entity distinct from its owners. Money Measurement, accounts only deal with items to which monetary values can be attributed.

Helps existing and potential investors and creditors and other users to assess the amounts, timing, and uncertainty of prospective net cash inflows to the enterprise

Separate Valuation each asset or liability must be valued separately.
Materiality, only items material in amount or in their nature will affect the true and fair view given by a set of accounts. Historical Cost, tTransactions are recorded at the cost when they occurred. Realization, revenue and profits are recognized when realized. Duality, every transaction has two effects.

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