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May 10, 2012

Ben Watkins: Foundation Advocate

The following article was published in the Southwest Tennessee Community College Foundation 2010-2011 Annual Report

Few people know it, but Ben Watkins has been a fan of Southwest Tennessee Community College for almost 30 years. After graduation from Memphis State, now University of Memphis, Watkins took computer programming classes at the then State Technical Institute. Like many Memphians who attended Southwest then and now, he wanted to hone his skills. Watkins points out his wife took a similar path. “She took classes at Shelby State before moving on to finish her degree in education,” he says.

A native of Southeastern Missouri, Watkins moved to Memphis to be near his older brother Bill who had formed the company, Watkins and Watkins. Watkins graduated from the University of Memphis with a Bachelors’ of Business Administration and then began working in various corporations over the next 10 years including the meat processing industry as a cost accountant and regional controller. He eventually joined the management team of what is now Watkins Uiberall where he serves as the member in charge of the Health Care and the Pension Plan Administration divisions.

Watkins, a certified public accountant holds licenses in Alabama, Arkansas, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri and Tennessee specializing in health care accounting and is also a Certified Medical Practice Analyst (CMPA). “I’ve seen so many changes in health care over the last five years,” says Watkins, “especially in reimbursements. I believe what I do is very important for the business and ultimately the patient.”

He also believes strongly in the mission of Southwest Tennessee Community College where he has served as a board member for three consecutive terms. “I taught at Buena Vista University in Iowa for three years while my wife went to school. I found out fast that wasn’t my calling. However, I knew I still wanted to impact education in some way,” says Watkins. The small class size and one-on-one attention that Southwest students receive captured his attention. “So many of our students need a two-year transition. They need time as they prepare to move forward, or they need an opportunity to develop their skills. Southwest provides that ideal opportunity,” comments Watkins.

Actively involved as fund raiser and change agent, Watkins relates that his proudest moments come when he feels he’s made a difference. Watkins is currently the head of Southwest’s committee for the book scholarship fund and actively involved with the committee working with the Shelby County and Memphis City mayors to raise awareness of Southwest’s capacity to train workers for new industries. Watkins continually cheerleads on behalf of Southwest.

“My favorite moment is when we see first-hand how Southwest impacts the lives of students. I enjoy seeing how peoples’ lives are completely changed by a simple act of caring,” says Watkins. “Too often, we as a nation believe that our problems are too big to solve. All you have to do is come to Southwest, and witness how we are changing lives. We do it every time someone graduates or gets a technical certificate and is able to support their family. We do it every time we work with a company and train workers who otherwise wouldn’t have had a job. I love what I do here, and I love what a difference I can make.”

September 6, 2011

Member of Watkins Uiberall, PLLC Appointed as a Member of the Tennessee Board of Accountancy

William “Trey” Watkins, III, CPA, a Member of Watkins Uiberall, PLLC was recently appointed as a member of the Tennessee State Board of Accountancy.

“It’s an honor to be part of an organization that provides such great support and benefits to CPAs throughout Tennessee,” says Watkins. “I will use this opportunity to grow both on a personal and professional level.”

Watkins joined the member group of Watkins Uiberall, PLLC in 2009. As a member, he provides comprehensive audit preparation, compliance and consulting services. Watkins’ is responsible for the firm’s audit department, which includes scheduling staff members to projects and following up to ensure deadlines and goals are being met. He focuses his efforts within the construction industry, but also serves clients within the manufacturing, not-for-profit, government and brokerage industries.

Watkins is involved with many professional and community organizations. He serves in various leadership roles, including serving as treasurer of the Associated Builders and Contractors, West Tennessee Chapter, the University of Memphis Fogelman College of Business and Economics, the Su Casa Family Ministries and as a board member of the Neighborhood Christian Center. In addition, Watkins is a member of the American Institute of Certified Public Accountants (AICPA) and the Tennessee Society of CPAs (TSPCA). He graduated from the University of Memphis with a degree in Business Administration.

Watkins Uiberall has been providing reputable accounting and business consulting services in the Mid-South since 1971. As one of the largest locally-owned certified public accounting firms in Memphis, the firm employs over 60 individuals including 9 partners and 40 professionals. Through its affiliated companies, Plan Administration Consulting, LLC and Watkins Uiberall Healthcare Consulting Group, LLC, the firm goes beyond the traditional services of tax accounting and auditing by offering clients extended services such as retirement plan administration and healthcare-focused business advisory and consulting services. For more information on the firm, please visit www.wucpas.com.

July 8, 2011

Watkins Uiberall Supports Private Company GAAP

Help Watkins Uiberall support this very important legislation by sending a letter to the FAF. Click here for a widget to help you draft the letter.

January 3, 2011

Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

OVERVIEW

The recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” is a sweeping tax package that includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, a two-year “patch” of the alternative minimum tax (AMT), a two-percentage-point cut in employee-paid payroll taxes and in self-employment tax for 2011, new incentives to invest in machinery and equipment, and a host of retroactively resuscitated and extended tax breaks for individuals and businesses. Here's a look at the key elements of the package:

The current income tax rates will be retained for two years (2011 and 2012), with a top rate of 35% on ordinary income and 15% on qualified dividends and long-term capital gains.
Employees and self-employed workers will receive a reduction of two percentage points in Social Security tax in 2011, bringing the rate down from 6.2% to 4.2% for employees, and from 12.4% to 10.4% for the self-employed.
A two-year AMT “patch” for 2010 and 2011 provides a modest increase in AMT exemption amounts and allows personal nonrefundable credits to offset AMT as well as regular tax. Without the patch, an estimated 21 million additional taxpayers would have owed AMT for 2010.
Key tax credits for working families that were enacted or expanded in the American Recovery and Reinvestment Act of 2009 will be retained. Specifically, the new law extends the $1,000 child tax credit and maintains its expanded refundability for two years, extends rules expanding the earned income credit for larger families and married couples, and extends the higher education tax credit (the American Opportunity tax credit) and its partial refundability for two years.
Businesses can write off 100% of their new equipment and machinery purchases, effective for property placed in service after September 8, 2010 and through December 31, 2011. For property placed in service in 2012, the new law provides for 50% additional first-year depreciation.
Many of the “traditional” tax extenders are extended for two years, retroactively to 2010 and through the end of 2011. Among many others, the extended provisions include the election to take an itemized deduction for state and local general sales taxes in lieu of the itemized deduction for state and local income taxes; the $250 above-the-line deduction for certain expenses of elementary and secondary school teachers; and the research credit.
After a one-year hiatus, the estate tax will be reinstated for 2011 and 2012, with a top rate of 35%. The exemption amount will be $5 million per individual in 2011 and will be indexed to inflation in following years. Estates of people who died in 2010 can choose to follow either 2010's or 2011's rules.
Omitted from the new law: Repeal of a controversial expansion of Form 1099 reporting requirements.
Also not included: Extension of the Build America Bonds program, which permits state and localities to issue federally-subsidized municipal bonds.

ALTERNATIVE MINIMUM TAX

This summary provides details regarding two key provisions in the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.” The provisions extend partial relief to individual taxpayers from the alternative minimum tax, or AMT. Earlier temporary measures to deal with the unintended creep of the AMT's reach expired at the end of 2009, meaning that more than 20 million additional taxpayers would have faced paying the tax on their 2010 returns without the new relief.

Brief overview of the AMT.

The AMT is a parallel tax system which does not permit several of the deductions permissible under the regular tax system, such as property tax. Taxpayers who may be subject to the AMT must calculate their tax liability under the regular federal tax system and under the AMT system taking into account certain “preferences” and “adjustments.” If their liability is found to be greater under the AMT system, that's what they owe the federal government. Originally enacted to make sure that wealthy Americans did not escape paying taxes, the AMT has started to apply to more middle-income taxpayers, due in part to the fact that the AMT parameters are not indexed for inflation.

In recent years, Congress has provided a measure of relief from the AMT by raising the AMT “exemption amounts”— allowances that reduce the amount of alternative minimum taxable income (AMTI), reducing or eliminating AMT liability. (However, these exemption amounts are phased out for taxpayers whose AMTI exceeds specified amounts.) For 2009, the AMT exemption amounts were $70,950 for married couples filing jointly and surviving spouses; $46,700 for single taxpayers; and $35,475 for married filing separately. However, for 2010, those amounts were scheduled to fall back to the amounts that applied in 2000: $45,000, $33,750, and $22,500, respectively. This would have brought millions of additional middle-income Americans under the AMT system, resulting in higher federal tax bills for many of them, along with higher compliance costs associated with filling out and filing the complicated AMT tax form.

New law provides two-year stopgap fix.

To prevent the unintended result of having millions of middle-income taxpayers fall prey to the AMT, Congress has once again relied on a temporary “patch” to the problem, this time a two-year extension of the 2009 exemption amounts, increased slightly. Under the new law, for tax years beginning in 2010, the AMT exemption amounts are increased to: (1) $72,450 in the case of married individuals filing a joint return and surviving spouses; (2) $47,450 in the case of unmarried individuals other than surviving spouses; and (3) $36,225 in the case of married individuals filing a separate return. For tax years beginning in 2011, the AMT exemption amounts are increased to: (1) $74,450 in the case of married individuals filing a joint return and surviving spouses; (2) $48,450 in the case of unmarried individuals other than surviving spouses; and (3) $37,225 in the case of married individuals filing a separate return.

Personal credits may be used to offset AMT through 2011.

Another provision in the new law provides AMT relief for taxpayers claiming personal tax credits. The tax liability limitation rules generally provide that certain nonrefundable personal credits (including the dependent care credit and the elderly and disabled credit) are allowed only to the extent that a taxpayer has regular income tax liability in excess of the tentative minimum tax, which has the effect of disallowing these credits against the AMT. Temporary provisions had been enacted which permitted these credits to offset the entire regular and AMT liability through the end of 2009. The new law extends this temporary provision to 2010 and 2011.

ESTATE TAX

The estates of wealthy individuals who died in 2010 didn't pay any federal estate tax, but that situation is about to change. Under the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,” the federal estate tax, which disappeared for 2010, springs back to life in 2011 and is imposed at the top rate of 35% of the estate's value after the first $5 million. Below is a brief overview of the new law.

Background

The modern estate tax dates back to 1916, when it was imposed at a rate of 10% on the portion of estates above $50,000. Over the following years, the rates and exemption amounts have varied, reaching a high of 77% from 1941 to 1976 with a $60,000 exemption amount.

In 2001, Congress passed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the first of the two large legislative packages that contain most of what are now commonly referred to as the “Bush tax cuts.“ EGTRRA gradually lowered the maximum estate tax rate and substantially raised the applicable exclusion amount over the years 2002 through 2009. The maximum tax rate fell from 60% under prior law in 2001 (a 55% marginal rate on taxable estate values over $3 million plus a 5% surtax from $10 million to $17 million) to 45% in 2007-2009. EGTRRA repealed the estate tax completely for decedents dying in 2010. That led to several well-publicized instances in which famous people died in 2010 leaving multibillion-dollar estates that will pass to their heirs without paying so much as a penny in federal estate tax. However, all of those provisions were scheduled to sunset on December 31, 2010, meaning that if Congress had not acted, starting January 1, 2011, the estate tax would have sprung back at a level that no one seemed to want. Where the exclusion was $3.5 million ($7 million for couples) in 2009 – a level at which it affected relatively few households – it would have been $1 million ($2 million for couples) in 2011 .The tax rate would also have risen, from a top rate of 45% in 2009, to a top rate of 55% in 2011.

New law

The new law brings back the estate tax, for 2011 and 2012 anyway. During 2011 and 2012, the top rate will be 35%. For 2011, the exemption amount will be $5 million per individual (indexed for inflation after 2011). At those levels, the vast majority of estates (all but an estimated 3,500 nationwide in 2011) will not be subject to any federal estate tax, and the tax will raise about $11.4 billion for the government. By way of comparison, the 55% tax with a $1 million exemption would have resulted in about 43,540 taxable estates in 2011, and raised about $34.4 billion. Tax historians would also note that except for the temporary repeal of the estate tax in 2010, the estate tax rate has not been less than 45% since 1931.

The new law also gives heirs of decedents dying in 2010 a choice of which estate-tax rules to apply – 2010's or 2011's. That's important because although there is no estate tax in 2010, some inherited assets are subject to higher capital gains tax under the 2010 rules, a situation that actually raises the tax burden for some heirs. Inherited assets under the 2010 rules have a tax basis equal to the price when they were purchased (referred to in tax parlance as “carryover basis”) rather than the price at death. That could lead to a significant tax burden for heirs who sell assets such as stocks that had been held for many years and have greatly appreciated in value. Under the 2011 rules, by contrast, heirs will be allowed to inherit assets with a “stepped-up basis.” While most heirs would choose the 2011 regime ($5 million exemption from both estate and generation-skipping tax and an unlimited step-up in the basis of assets to their current market value), the heirs of superrich decedents could find it more advantageous to elect the 2010 law (limited step-up in the basis of assets and no estate tax). If the executor makes the election to have the 2010 rules apply, the estate tax return's due date will not be earlier than the date that's nine months after the new law's enactment date.

For gifts made after December 31, 2010, the gift tax will be reunified with the estate tax. Under the new law, the estate and gift tax exemptions will be reunified starting in 2011, which means that the $5 million estate tax exemption will also be available for gifts. The law in effect prior to 2010 provided a $3.5 million lifetime exemption for estates, but only $1 million for gifts. The gift tax rate, starting in 2011, will be 35%. The exemption from the generation-skipping tax (GST) – the additional tax on gifts and bequests to grandchildren when their parents are still alive – will also rise to $5 million from the $1 million it would have been without the new law. The GST tax rate for transfers made in 2011 and 2012 will be 35%.

From a planning standpoint, a nice feature of the new law is that it makes it easier to transfer the $5 million exemption to a surviving spouse, so married couples can shield $10 million of their assets from taxes. In the language of tax professionals, the estate tax exemption will be “portable.”

INDIVIDUAL AND BUSINESS EXTENDERS

In addition to extending the Bush tax cuts, providing relief from the AMT, and cutting the payroll tax by two percentage points, the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” (Tax Relief Act) extends a host of other important tax breaks for businesses and individuals. This gives you an overview of these key tax breaks that were extended by the new law. Please call our office for details of how the new changes may affect you or your business.

Individual tax relief

The following tax breaks for individuals that expired at the end of 2009 have been retroactively reinstated by the Tax Relief Act and extended through 2011:

The election to take an itemized deduction for State and local general sales taxes instead of the itemized deduction permitted for State and local income taxes.
The above-the-line deduction for qualified higher education expenses.
The $250 above-the-line tax deduction for teachers and other school professionals for expenses paid or incurred for books, certain supplies, equipment, and supplementary materials used by the educator in the classroom.
The increased contribution limits and carryforward period for contributions of appreciated real property (including partial interests in real property) for conservation purposes.
The provision that permits tax-free distributions to charity from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer, per tax year. Individuals also will be allowed to make charitable transfers during January of 2011 and treat them as if made during 2010.
The look-thru rule for certain regulated investment company (RIC) stock in determining the gross estate of nonresidents.
The increase in the monthly exclusion for employer-provided transit and vanpool benefits to equal that of the exclusion for employer-provided parking benefits.

In addition, the new law extends for an additional year (i.e., through 2011) the rule allowing premiums for mortgage insurance to be deductible as qualified residence interest.

Business tax relief

On the business side, the following business tax breaks that expired at the end of 2009 have been retroactively reinstated and extended through 2011 by the Tax Relief Act:

The research and development credit.
15-year writeoffs for qualified leasehold improvements, and restaurant buildings (and certain improvements to such restaurant buildings).
7-year writeoffs for certain motorsports racetrack property.
The employer wage credit for activated military reservists.
The active financing exception from the Code's Subpart F rules for a controlled foreign corporation predominantly engaged in the conduct of a banking, financing, or similar business.
Look-through treatment of payments between related controlled foreign corporations.
The Indian employment credit.
The new markets tax credit.
Accelerated depreciation for business property on an Indian reservation.
The railroad track maintenance credit.
The special expensing rules for certain film and television productions.
The mine rescue team training credit.
The election to expense advanced mine safety equipment.
Expensing of environmental remediation costs.
The deduction allowable for domestic production activities in Puerto Rico.
The American Samoa economic development credit.
The rules exempting from gross basis tax and from withholding tax the interest-related dividends and short-term capital gain dividends received from a RIC by certain foreign persons (extended to apply to tax years of a RIC beginning before 2012).
The inclusion of a RIC within the definition of a “qualified investment entity” under the provisions of the Foreign Investment in Real Property Tax Act as codified in.Code Sec. 897 .
The enhanced deduction for contributions of food and book inventories, and computer equipment for educational purposes.
A liberal rule for S corporations making charitable donations.
The special rules for interest, rents, royalties and annuities received by a tax-exempt entity from a controlled entity.
Empowerment zone tax incentives.
Renewal community tax incentives.
Tax incentives for investments in the District of Columbia.
The work opportunity credit (extended for four months (through the end of 2011)).
Qualified zone academy bonds.

In addition, the new law extends for an additional year (i.e., through 2011) the temporary exclusion of 100% of gain on the sale of certain small business stock.

Energy provisions

The following energy provisions were extended by the Act (through 2011):

The credit for manufacturers of energy-efficient new homes.
Incentives for biodiesel and renewable diesel.
The credit for refined coal facilities.
Excise tax credits and outlay payments for alternative fuel and alternative fuel mixtures.
The special rule to implement FERCs and State electric restructuring policy.
Suspension of the limitation on percentage depletion for oil and gas from marginal wells.
Grants for specified energy property in lieu of tax credits.
Provisions related to alcohol used as fuel.
The energy efficient appliance credit.
The credit for energy-efficient improvements to existing homes.
The 30% investment tax credit for alternative vehicle refueling property.

Disaster relief provisions

The following disaster relief provisions are extended through 2011:

New York Liberty Zone tax-exempt bond financing.
Increased rehabilitation credit for structures in the Gulf Opportunity Zone.
Low-income housing credit rules for buildings in Gulf Opportunity Zones.
Tax-exempt bond financing for the Gulf Opportunity Zones.
Bonus depreciation deduction applicable to specified Gulf Opportunity Zone extension property.

EXTENSION OF BUSH TAX CUTS

The heart of the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” is a two-year extension of the Bush tax cuts. But what, exactly, are the Bush tax cuts? Here's a primer:

Bush tax-cut legislation

The Bush tax cuts refer primarily to tax changes in two major pieces of legislation back in 2001 and 2003: the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA).

The 2001 legislation (EGTRRA) was a 10-year $1.35 billion tax cut package that was the largest tax cut since 1981. Key elements of EGTRRA included:

A lowering of individual income tax rates from 15%, 28%, 31%, 36%, and 39.6% to 10%, 15%, 25%, 28%, 33%, and 35%.
A doubling of the child tax credit from $500 to $1,000.
A gradual reduction in estate taxes, culminating in a one-year repeal in 2010 (but reinstatement in 2011).

But the crucial element of the 2001 tax cuts, at least for current purposes, is that they were temporary, set to expire at the end of 2010 unless Congress acted to extend them.

The 2003 legislation (JGTRRA) accelerated certain tax changes passed in EGTRRA, but the centerpiece of the law was a cut in the top capital gains rate from 20% to 15% and a cut in the top individual rate on dividends from 35% to 15%. Under the 2003 legislation, the capital gains and dividends cuts were set to expire after 2008, but they were later extended for two additional years (until 2010).

So when people talk about the “Bush tax cuts,” they are referring, for the most part, to the provisions in the 2001 and 2003 Acts that lowered individual income tax rates and cut the top rates on capital gains and dividends.

New law extends lower rates for all taxpayers for two years

Over the past several years, a lot of political energy has been expended on the issue of whether the favorable individual income tax rates, which were set to expire at the end of 2010, should be extended for everyone, or for everyone except the “rich.”

The new law settles the issue by extending the lower rates for all taxpayers. Under the new law, the rates that have been in effect in recent years—10%, 15%, 25%, 28%, 33%, and 35%—will remain in place. However, the extension is only for two years—through 2012.

New law extends lower capital gains rates for two years

Capital gains, generally speaking, refers to the profits realized on sales of non-inventory assets. For individuals, capital gains are generally taxed at a preferential rate in comparison to ordinary income.

The amount of tax depends on both the investor's tax bracket and how long the investment was held before being sold. Short-term capital gains on investments held for a year or less are taxed at the investor's ordinary income tax rate. Long-term capital gains, which apply to assets held for more than one year, are taxed at a lower rate than short-term gains.

Since 2008, the tax rate on long-term capital gains has been 0% for individuals in the 10% and 15% income tax brackets, and 15% for everyone else. However, those rates were scheduled to expire at the end of 2010, as explained above, with the result that in 2011 the long-term capital gains tax rate would have risen to 20% (10% for taxpayers in the 15% tax bracket) if Congress had not acted.

The new legislation forestalls these increases by extending the 0% and 15% long-term capital gains tax rates for two years (through 2012).

New law extends lower rates for qualified dividends for two years

Since 2003, “qualified dividends” have been taxed at the same low tax rates that apply to long-term capital gains. For dividend income falling in the higher tax brackets, the rate is 15%. In the first two brackets (where ordinary income is taxed at 10% and 15% rates), the dividend rate is 0%.

To count as “qualified,” dividend-paying common stocks must be held for at least 61 continuous days before the ex-dividend date—the last purchase day for collecting the dividend. For preferred stock, the required holding period is 91 days before the ex-dividend date.

The low rates for qualified dividends, like the other Bush tax cuts, were scheduled to expire at the end of 2010. If Congress had not acted, beginning in 2011 taxes on dividends would have returned to the rates that were in effect before 2001, and all dividend income received in 2011 would have been taxed as ordinary income. Since the top income tax rate was scheduled to return to 39.6%, individuals could have paid as much as a 39.6% tax on dividends.

The new legislation prevents that from happening by continuing the tax regime in effect for qualified dividends (i.e., treatment as long-term capital gains, subject to a 0% tax rate for individuals in the 10% and 15% tax brackets and a 15% tax rate for other taxpayers) for two years—through 2012.

EXPENSING AND ADDITIONAL FIRST-YEAR DEPRECIATION

The recently enacted 2010 Tax Relief Act includes a wide-ranging assortment of tax changes affecting both individuals and business. On the business side, two of the most significant changes provide incentives for businesses to invest in machinery and equipment by allowing for faster cost recovery of business property. Here are the details.

Expansion and extension of additional first-year depreciation.Businesses are allowed to deduct the cost of capital expenditures over time according to depreciation schedules. In previous legislation, Congress allowed businesses to more rapidly deduct capital expenditures of most new tangible personal property, and certain other new property, placed in service in 2008, 2009, or 2010 (2011 for certain property), by permitting the first-year write-off of 50% of the cost. The new law extends and temporarily increases this additional first-year depreciation provision for investment in new business equipment. For investments placed in service after September 8, 2010 and through December 31, 2011 (through December 31, 2012 for certain longer-lived and transportation property), the new law provides for 100% additional first-year depreciation. In other words, the entire cost of qualifying property placed in service during that time frame can be written off, without limit. Note that even though the legislation did not take shape in Congress until mid-December of 2010, the effective date of this provision was made retroactive, to include qualifying property placed in service after September 8, 2010.

Fifty percent additional first-year depreciation will apply again in 2012.

The Act extends through 2012 the election to accelerate the AMT credit instead of claiming additional first-year depreciation.

The new law leaves in place the existing rules as to what kinds of property qualify for additional first-year depreciation. Generally, the property must be (1) depreciable property with a recovery period of 20 years or less; (2) water utility property; (3) computer software; or (4) qualified leasehold improvements. Also the original use of the property must commence with the taxpayer – used machinery doesn't qualify.

Enhanced small business expensing (Section 179 expensing).Generally, the cost of property placed in service in a trade or business can't be deducted in the year it's placed in service if the property will be useful beyond the year. Instead, the cost is “capitalized” and depreciation deductions are allowed for most property (other than land), but are spread out over a period of years. However, to help small businesses quickly recover the cost of capital outlays for qualifying personal property, small business taxpayers can elect to write off these expenditures in the year of acquisition instead of recovering the costs over time through depreciation. The expense election is made available, on a tax year by tax year basis, under Section 179 of the Internal Revenue Code, and is often referred to as the “Section 179 election” or the “Code Section 179 election.” The new law makes three important changes to the Code Section 179 expense election.

First, the new law provides that for tax years beginning in 2012, a small business taxpayer will be allowed to write off up to $125,000 (indexed for inflation) of capital expenditures subject to a phaseout (i.e., gradual reduction) once capital expenditures exceed $500,000 (indexed for inflation). The new maximum expensing amount and phaseout level for tax years beginning in 2012 is actually lower than the levels in effect for tax years beginning in 2010 or 2011 (maximum expensing amount of $500,000, and a phaseout level of $2,000,000). For tax years beginning after 2012, the maximum expensing amount will drop to $25,000 and the phaseout level will drop to $200,000.

Second, the rule which treats off-the-shelf computer software as qualifying property is extended through 2012.

Finally, the new law extends, through 2012, the provision permitting a taxpayer to amend or irrevocably revoke a Code Sec. 179 expense election for a tax year without IRS's consent.

PAYROLL TAX CUT

The biggest new tax break for individuals in the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” is the one-year payroll tax reduction. Under this new provision, which is intended to supplement income and boost economic growth, the payroll tax—which funds Social Security—will be cut by two percentage points during 2011. Here are the details:

The Social Security payroll tax on individual wages will be lowered to 4.2% in 2011, from the usual 6.2% rate. For an individual with wages of $60,000, that amounts to a $1,200 savings for individuals with an income of $60,000. If the individual gets paid twice a month, it will mean an extra $50 in his or her paycheck starting in January.
Self-employed workers will also get the tax break. Their self-employment taxes will be cut from 12.4% to 10.4%.
There is no phaseout (i.e., gradual reduction) of the payroll tax reduction for higher income workers. It goes to everyone who works, regardless of income. However, since Social Security taxes apply only to the first $106,800 in earnings in 2011, the benefit for high earners tops out at $2,136.
The payroll tax reduction in effect replaces the $400-per-worker tax break included in the 2009 stimulus bill. That break, called the Making Work Pay tax credit, provided a tax credit of 6.2% on the first $6,450 of a worker's wages but was phased out for workers making more than $75,000 ($150,000 for couples). The Making Work Pay credit, which was billed as a way to stimulate the stalled economy, is widely thought to have had little if any success in that regard, in part because of the small amounts involved—$400 for individuals, $800 for couples. The new law's payroll tax reduction, by contrast, provides a potentially much bigger tax break for taxpayers (up to $2,136 for individuals, $4,272 for couples). In addition, the benefits of the payroll tax reduction are distributed far differently than they were under the Making Work Pay credit, which was aimed primarily at low and moderate-income workers. For example, an individual making $100,000 in 2011 will be able to keep an extra $2,000 under the payroll tax reduction, but under the Making Work Pay credit (which was phased out for earnings over $75,000), the individual's tax break would have been zero.
The employer's share of Social Security tax is not affected; it stays at 6.2%. Thus, the cost of hiring new workers isn't directly affected by the payroll tax reduction.
The tax break only applies for one year, 2011—for now anyway. There will almost certainly be efforts to extend it beyond 2011, and I will keep you apprised of any developments in that regard.
The payroll tax reduction will cost the government an estimated $120 billion.
The payroll tax reduction will not affect the worker's future Social Security benefit, because benefits are based on lifetime earnings, not the amount of tax paid by the worker into the Social Security system.

EXTENSION OF EXPANDED CHILD TAX CREDIT

This summary provides details regarding provisions in the recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,” which make several important changes to the child tax credit, which is an up-to-$1,000 credit (i.e., dollar-for-dollar reduction in tax) for each qualifying child under the age of 17 that taxpayers with incomes below certain levels can take against their federal tax liability.

$1,000 maximum child tax credit is extended for two years.

Under pre-Act law the maximum amount of the credit per child was $1,000 through 2010, but was scheduled to drop to $500 after 2010. The Act extends the $1,000 child tax credit through 2012.

Phaseout amounts are left unchanged.

The aggregate amount of child credits that may be claimed is phased out (i.e., gradually reduced) for individuals with income over certain threshold amounts. Specifically, the otherwise allowable aggregate child tax credit amount is reduced by $50 for each $1,000 (or fraction thereof) of modified adjusted gross income over $75,000 for single individuals or heads of households, $110,000 for married individuals filing joint returns, and $55,000 for married individuals filing separate returns. The new law leaves these phaseout levels in place.

Allowance of the credit against the alternative minimum tax (AMT) is extended for two years.

The credit is allowable against the regular tax and, under pre-Act law, it was also allowable against the AMT, although this provision was scheduled to expire after 2010. The Act provides a two-year extension (through 2012) of the allowance of the child tax credit against the AMT.

Expanded rules for the additional child tax credit are extended for two years.

To the extent the child tax credit exceeds the taxpayer's tax liability, the taxpayer is eligible for a refundable credit (the additional child tax credit) equal to 15 percent of earned income in excess of a threshold dollar amount (the “earned income” formula). For 2009 and 2010, the threshold was set at $3,000, but under pre-Act law the ability to determine the refundable child credit based on earned income in excess of the threshold dollar amount was set to expire after 2010. The new law extends the earned income formula for determining the refundable child credit for two years (through 2012), with the earned income threshold of $3,000.

Treatment of refundable portion of child tax credit not as income is extended for two years.

The new law extends for two years (through 2012) the rule that the refundable portion of the child tax credit does not constitute income and will not be treated as resources for purposes of determining eligibility or the amount or nature of benefits or assistance under any federal program or any state or local program financed with federal funds.

EXTENSION OF THE AMERICAN OPPORTUNITY CREDIT

The recently enacted “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” includes a two-year extension of the American Opportunity tax credit for college costs. Added to the tax code in 2009 as a temporary replacement of the previous Hope tax credit, the American Opportunity credit both increased the tax relief available for students from middle-income families and extended relief for the first time to students from lower-income families.

Now that the American Opportunity credit has been extended for two years, it might be a good time to review the tax benefits available under that credit, with an eye to how it compares with the Hope credit, which would have been in effect over the next two years had the American Opportunity credit not been extended.

Families with a family member in college can benefit from a tax credit for tuition and fees. From a taxpayer's point of view, a credit is almost always preferable to a deduction, because a credit reduces taxes owed, while a deduction only reduces taxable income. The maximum amount of the American Opportunity credit is $2,500 (up from a maximum of $1,800 under the Hope credit). The credit is 100% of the first $2,000 of qualifying expenses and 25% of the next $2,000. The maximum credit of $2,500 is reached when a student has qualifying expenses of $4,000 or more.
While the Hope credit was only available for the first two years of undergraduate education, the American Opportunity credit is available for up to four years.
Under the Hope credit, qualifying expenses included just tuition and fees required for the student's enrollment. Textbooks were excluded, despite their escalating cost. The American Opportunity credit expands the list of qualifying expenses to include textbooks.
The Hope credit was nonrefundable. It could reduce your regular tax bill to zero but could not result in a refund. This meant that if a family didn't owe any tax it couldn't benefit from the credit, prompting critics to argue that the credit was unavailable to the families who needed it most. The American Opportunity credit addresses this criticism by providing that 40% of the credit is refundable. This means that someone who would qualify for the maximum credit of $2,500, but has no tax liability to offset that credit, would qualify for a refund of $1,000 (40% of $2,500).
The Hope credit wasn't available to someone with more than moderate income. Under the credit's “phaseout” provision, taxpayers with adjusted gross income (AGI) over $50,000 (for 2009) saw their credits reduced, and the credit was completely eliminated for AGIs over $60,000 (twice those amounts for joint filers). Taxpayers with somewhat higher incomes can qualify for the American Opportunity credit, as the phaseout of the credit begins at AGI in excess of $80,000 ($160,000 for joint filers).

December 18, 2010

Congress Passes Tax Relief Act of 2010

On December 6th, President Obama and GOP leaders agreed to the framework of the Tax Relief, Unemployment Insurance Reauthorization and Jobs Creation Act of 2010 (Tax Relief Act of 2010) to extend Bush-era tax cuts which were originally due to expire on December 31, 2010. In an expected move on the evening of December 16th, the U.S. House of Representatives voted in favor of the bill after the Senate gave its approval earlier in the week. The bill will now be sent to the President to be signed into law.

As you may already be aware, the 2010 Tax Relief Act would extend individual and capital gains/dividend tax cuts for all taxpayers for an additional two years. The bill also provides for:

One-year payroll tax cut
100% bonus depreciation through 2011 and 50% bonus depreciations for 2012
Extenders tax relief
AMT "patch"
Top federal estate tax rate of 35% with a $5 million exclusion

For a full analysis of this bill, click here to view a recent article from the Journal of Accountancy. If you have any questions about the Tax Relief Act of 2010 or would like to discuss how it impacts your personal situation, please do not hesitate to contact the tax professionals at Watkins Uiberall at 901.761.2720.

November 19, 2010

Health Reform Timeline 2010-2020

The following timeline provides an overview of the significant changes that will be taking place over the next decade due to the healthcare reform legislation.

November 18, 2010

MEDICAL ECONOMICS: Last 60 Days of 2010

Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, recently authored an article in the November issue of the Memphis Medical News. Read the full article.

November 12, 2010

Bill Appling Elected to Lifeblood’s Board of Directors

Memphis, TN—Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, was recently elected to serve on the Board of Directors for Lifeblood, a not-for-profit volunteer blood center located in Memphis. Appling’s term was effective October 28, 2010, during Lifeblood’s October 2010 Board meeting.

“I look forward to serving on the Board of an organization that is so critical to the health of our local community,” said Appling. “I am also committed to helping enhance the awareness of Lifeblood to increase its donations, and ultimately, eliminate the dependence on other communities.”

Appling joined Watkins Uiberall Healthcare Consulting Group in 2008. In his role as President, he is responsible for managing, facilitating and coordinating all physician and hospital organization consulting engagements. Appling works closely with members of Watkins Uiberall’s healthcare consulting team to solve key management and organizational issues for clients so they may achieve increased operational efficiencies.

Beyond his involvement with Lifeblood, Appling is an active member of numerous other community and professional organizations, some of which include the National Medical Group Management Association, MidSouth Medical Group Management Association, American College of Medical Group Practice Executives, Medical Group Management Association/University Advisory Committee and the March of Dimes. He currently resides in Memphis.

Lifeblood is the Memphis region’s only not-for-profit volunteer blood center, dedicated to meeting the needs of patients, healthcare facilities, medical professionals and the community at large by building exceptional relationships between volunteer donors and Lifeblood’s caring employees. Every year Lifeblood supplies more than 100,000 units of blood and blood products for local patient transfusion. For more information, visit www.lifeblood.org.

November 12, 2010

Information about a Health Care Tax Credit Available to Tax-exempt Organizations

As part of the Affordable Care Act that was enacted this March, some small tax-exempt organizations are eligible to receive tax credits for providing health insurance coverage to their employees. As your trusted advisor, Watkins Uiberall, PLLC has provided the following information to help you determine if you are eligible and, if so, the appropriate steps to take to claim your credit.

Who:

Eligible small employers, including tax-exempt organizations, which make non-elective contributions toward their employees’ health insurance premiums under an arrangement that meets certain requirements.
Generally eligible:
- Fewer than 25 full-time equivalent employees (FTEs)
- Paying wages averaging less than $50,000 per employee per year
- Pays at least 50% of health insurance costs for employees

What:

The maximum credit is 25% of premiums paid by eligible employers that are tax-exempt organizations. In 2014, the maximum credit increases to 35%.

When:

For taxable years beginning after December 31, 2009

How:

Credit % multiplied by qualifying health care premiums paid = initial amount of credit
Credit reductions for FTEs or excess wages (see formulas above)
Subtract reductions from initial credit amount = total tax credit

Determining FTEs and Average Annual Wages:

FTEs: Total hours on which the employer pays wages during the year (not more than 2,080 per employee) divided by 2,080. (Round down to the next lowest whole number.) Seasonal workers are disregarded in determining FTEs. Also, salaried employees are treated as 1 FTE, regardless of actual hours worked.

Average Annual Wages: Total wages paid by employer divided by the number of FTEs for the year (Round down to the nearest $1,000). For this purpose, wages mean wages as defined for FICA purposes (without regard to the wage base limitation).

Additional Information:

The employer must pay at least 50% of the premium cost for each employee enrolled in coverage offered to employees by the employer. The requirement that the employer pay at least 50% of the premium for an employee applies to the premium for single (employee-only) coverage for the employee. Therefore, if the employee is receiving coverage that is more expensive than single coverage (such as family or self-plus-one coverage), the employer satisfies the 50% requirement with respect to the employee if the employer pays an amount of the premium for such coverage that is no less than 50% of the premium for single coverage for that employee (even if it is less than 50% of the premium for the coverage the employee is actually receiving).
Starting in 2014, businesses with more than 50 employees will be required to either offer healthcare coverage or pay a penalty of $750 per year per full-time worker. The coverage must meet minimum benefits.
Phase-out of credit: If the number of FTEs exceeds 10 or average annual wages exceed $25,000, the percent of premiums paid used to determine the credit is reduced.
Tax-exempt organization credit cannot exceed the total amount of income and Medicare tax the employer is required to withhold from employees’ wages for the year and the employer share of Medicare tax on employees’ wages.
For a tax-exempt employer, the credit is a refundable credit, so even if the employer has no taxable income, the employer may receive a refund (so long as it does not exceed the income tax withholding and Medicare tax liability).

If you have any questions or would like to discuss these tax credits in more detail, please do not hesitate to contact the tax professionals at Watkins Uiberall at 901.761.2720.

November 11, 2010

Watkins Uiberall Releases Results of Its 2010 Medical Office Personnel Salary & Benefits Survey

Memphis, TN—Watkins Uiberall, PLLC and its affiliate, Watkins Uiberall Healthcare Consulting Group, LLC, recently released the results of the 2010 Medical Office Personnel Salary & Benefits Survey.

Conducted each year, the Medical Office Personnel Salary & Benefits Survey is regarded by many practitioners as the source for benchmarking information for Mid-South physician practices. The survey is designed to help practice leaders make strategic decisions related to operations, benefits, compensation and more. This year’s survey was sponsored by BancorpSouth, the Mid-South Medical Group Management Association (MS-MGMA) and The Memphis Medical Society.

“We appreciate all the physicians and practice administrators who took time out of their busy schedules to participate in this year’s survey,” says J. William “Bill” Appling, President of Watkins Uiberall Healthcare Consulting Group. “Each practice’s participation truly makes a difference in the quality of the results, and we rely on their support for the continuing success of our survey. We are also grateful to our survey partners, who play an integral role in generating awareness of our survey throughout the local healthcare community.”

To present the survey results in a manner that can be easily interpreted and utilized, Watkins Uiberall has published a results booklet, which includes a description of the survey respondents; a summary of data for medical practices, including salary ranges, medians and averages for various positions; and graphical representation of the reported data. The dominant profile among the 2010 survey respondents includes specialty practices with 2-5 physicians and 21-40 total staff.

To download the complete results from the 2010 Medical Office Personnel Salary & Benefits Survey, visit http://www.wucpas.com/docs/survey-results/WU_Healthcare_Survey_Results_2010.pdf. To be included on the distribution list for the 2011 survey, please send your request to Mary Ann Lucas at mlucas@wucpas.com.

October 28, 2010

IRS Releases 2011 COLA Limits

The IRS has just released cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011. We have posted these new limits on the Resources section of our website. For questions, please contact Scott Fletcher, President of Plan Administration & Consulting, LLC at 901.261.6400 or sfletcher@wucpas.com.

October 27, 2010

Watkins Uiberall, PLLC to Participate in Memphis Chamber of Commerce’s Small Business Council Breakfast

Memphis, TN—The Memphis Chamber of Commerce is hosting its Small Business Council Breakfast on the morning of Tuesday, November 2, 2010. The event will include guest speakers Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, and Jason Whaley, CPA, Member at Watkins Uiberall, PLLC, Certified Public Accountants.

The topic of the breakfast seminar is Healthcare Reform 101: How the historic bill impacts the healthcare industry, your business and your wallet. The Chamber is hosting the event from 7:30 to 9:30 a.m. at Holiday Inn Memphis East, located at 5795 Poplar Avenue in Memphis. The cost to attend the seminar is $25 for Chamber members and $35 for prospective members. For more information or to register, please contact the Ericka Milford at Memphis Chamber of Commerce at 901.543.3518 or emilford@memphischamber.com.

“Since the healthcare reform bill was signed into law in March of this year, there has been a lot of uncertainty and confusion among both individuals and businesses,” stated Appling. “Our goal through this seminar is to provide an overview of the legislation in a manner that can be easily interpreted and give people a better understanding of how the bill is going to affect them personally, professionally and financially.”

In addition to Appling and Whaley, also presenting will be Calvin Anderson, Vice President of Federal & State Relations at BlueCross BlueShield.

Whaley has been with Watkins Uiberall since 2002 and joined the member group in 2009. In his role, he provides comprehensive tax preparation, planning and consulting services to the firm’s clients. Whaley works with a variety of clients including corporations, S corporations, partnerships, estates, trusts and individuals.

September 30, 2010

Information about the New Small Business Jobs Act

The recently enacted 2010 Small Business Jobs Act includes a wide-ranging assortment of tax breaks and incentives for small business, paid for with various revenue raisers. As your trusted business advisors, Watkins Uiberall, PLLC is pleased to provide the following overview of the tax changes in the new law.

Tax Breaks and Incentives

Enhanced small business expensing (Section 179 expensing).

To help small businesses quickly recover the cost of certain capital expenses, small business taxpayers can elect to write off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Under pre-2010 Small Business Jobs Act law, taxpayers could expense up to $250,000 of qualifying property - generally, machinery, equipment and certain software - placed in service in tax years beginning in 2010. This annual expensing limit was reduced (but not below zero) by the amount by which the cost of qualifying property placed in service in tax years beginning in 2010 exceeded $800,000 (the investment ceiling). Under the new law, for tax years beginning in 2010 and 2011, the $250,000 limit is increased to $500,000 and the investment ceiling to $2,000,000.

The new law also makes certain real property eligible for expensing. For property placed in service in any tax year beginning in 2010 or 2011, the property expensed can include up to $250,000 of qualified real property (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property).

100% exclusion of gain from the sale of small business stock for qualifying stock acquired after date of enactment and before Jan. 1, 2011.

Before the 2009 Recovery Act, individuals could exclude 50% of their gain on the sale of qualified small business stock (QSBS) held for at least five years (60% for certain empowerment zone businesses). To qualify, QSBS must meet a number of conditions (e.g., it must be stock of a corporation that has gross assets that don't exceed $50 million, and the corporation must meet active business requirements). Under the 2009 Recovery Act, the percentage exclusion for gain on QSBS sold by an individual was increased to 75% for stock acquired after Feb. 17, 2009 and before Jan. 1, 2011. Under the new law, the amount of the exclusion is temporarily increased yet again, to 100% of the gain from the sale of qualifying small business stock that is acquired in 2010 after date of enactment and held for more than five years. In addition, the new law eliminates the alternative minimum tax (AMT) preference item attributable to that sale.

General business credits of eligible small businesses for 2010 allowed to be carried back five years.

Generally, a business's unused general business credits can be carried back to offset taxes paid in the previous year, and the remaining amount can be carried forward for 20 years to offset future tax liabilities. Under the new law, for the first tax year of the taxpayer beginning in 2010, eligible small businesses can carry back unused general business credits for five years. Eligible small businesses consist of sole proprietorships, partnerships and non-publicly traded corporations with $50 million or less in average annual gross receipts for the prior three years.

General business credits of eligible small businesses in 2010 aren't subject to AMT.

Under the AMT, taxpayers can generally only claim allowable general business credits against their regular tax liability, and only to the extent that their regular tax liability exceeds their AMT liability. A few credits, such as the credit for small business employee health insurance expenses, can be used to offset AMT liability. The new law allows eligible small businesses, as defined above, to use all types of general business credits to offset their AMT in tax years beginning in 2010.

S corporation holding period.

Generally, a C corporation converting to an S corporation must hold onto any appreciated assets for 10 years following its conversion or face a business-level tax imposed on the built-in gain at the highest corporate rate of 35%. This holding period is reduced where the 7th tax year in the holding period preceded the tax year beginning in 2009 or 2010. The 2010 Small Business Jobs Act temporarily shortens the holding period of assets subject to the built-in gains tax to 5 years if the 5th tax year in the holding period precedes the tax year beginning in 2011.

Extension of 50% bonus first-year depreciation.

Businesses are allowed to deduct the cost of capital expenditures over time according to depreciation schedules. In previous legislation, Congress allowed businesses to more rapidly deduct capital expenditures of most new tangible personal property, and certain other new property, placed in service in 2008 or 2009 (2010 for certain property), by permitting a first-year write-off of 50% of the cost. The new law extends the first-year 50% write-off to apply to qualifying property placed in service in 2010 (2011 for certain property).

Special rule for long-term contract accounting.

The new law provides that in determining the percentage of completion under the percentage of completion method of accounting, bonus depreciation is not taken into account as a cost. This prevents the bonus depreciation from having the effect of accelerating income.

Enhanced deduction for start-up expenditures.

The new law allows taxpayers to deduct up to $10,000 in trade or business start-up expenditures for 2010. The amount that a business can deduct is reduced by the amount by which startup expenditures exceed $60,000. Previously, the limit of these deductions was $5,000, subject to a $50,000 phase-out threshold.

Limitation on penalty for failure to disclose certain reportable transactions (including listed transactions) on a return.

The new law limits the penalty to 75% of the decrease in tax resulting from the transaction. The minimum penalties are $10,000 for corporations and $5,000 for individuals (for failure to report a listed transaction, the maximum penalties are $200,000 and $100,000, respectively). These changes are retroactively effective to penalties assessed after Dec. 31, 2006.

Deductibility of health insurance for the purpose of calculating self-employment tax.

The new law allows business owners to deduct the cost of health insurance incurred in 2010 for themselves and their family members in calculating their 2010 self-employment tax.

Cell phones removed from listed property category.

This means that cell phones can be deducted or depreciated like other business property, without onerous recordkeeping requirements.

Offsets (Revenue Raisers)

Information reporting required for rental property expense payments.

For payments made after Dec. 31, 2010, the new law requires persons receiving rental income from real property to file information returns with IRS and service providers reporting payments of $600 or more during the tax year for rental property expenses. Exceptions are provided for individuals renting their principal residences on a temporary basis (including active members of the military), taxpayers whose rental income doesn't exceed an IRS-determined minimal amount, and those for whom the reporting requirement would create a hardship (under IRS regs).

Increased information return penalties (effective for information returns required to be filed after Dec. 31, 2010).

Application of continuous levy to tax liabilities of certain federal contractors.

For levies issued after date of enactment, the new law allows IRS to issue levies before a collection due process (CDP) hearing on Federal tax liabilities of Federal contractors (taxpayers would have an opportunity for a CDP hearing within a reasonable time after a levy is issued).

Allow participants in governmental 457 plans to treat elective deferrals as Roth contributions.

For tax years beginning after Dec. 31, 2010, the new law will allow retirement savings plans sponsored by state and local governments (governmental 457(b) plans) to include designated Roth accounts. Contributions to Roth accounts are made on an after-tax basis, but distributions of both principal and earnings are generally tax-free.

Allow rollovers from elective deferral plans to designated Roth accounts.

The new law allows 401(k), 403(b), and governmental 457(b) plans to permit participants to roll their pre-tax account balances into a designated Roth account. The amount of the rollover will be includible in taxable income except to the extent it is the return of after-tax contributions. If the rollover is made in 2010, the participant can elect to pay the tax in 2011 and 2012. Plans will be able to allow these rollovers immediately as of date of enactment.

Crude tall oil (a waste by-product of the paper manufacturing process) is excluded from eligibility for the cellulosic biofuel producer credit.

The new law limits eligibility for the tax credit to fuels that are not highly corrosive (i.e., with an acid number of 25 or less), effective for fuels sold or used after Dec. 31, 2009.

Nonqualified annuity contracts.

The new law permits holders of nonqualified annuities (annuity contracts held outside of a qualified retirement plan or IRA) to elect to receive part of the contract in the form of a stream of annuity payments, leaving the remainder of the contract to accumulate income on a tax-deferred basis.

Guarantee fees.

Amounts received directly or indirectly for guarantees of indebtedness of a U.S. payor issued after date of enactment are sourced, like interest, in the U.S. As a result, amounts paid by U.S. taxpayers to foreign persons will generally be subject to U.S. withholding tax.

Please keep in mind that we have described only the highlights of the most important changes in the new law. If you would like more details about any aspect of the new legislation, please do not hesitate to contact the tax professionals at Watkins Uiberall.

September 20, 2010

Daniel Moore, Audit Manager, to Facilitate “Understanding Nonprofit Accounting” Workshop

Daniel Moore, CPA, Audit Manager, will be facilitating this workshop and answering your questions about nonprofit accounting. We encourage you to participate in this workshop, as well as other workshops presented by the Alliance for Nonprofit Excellence, as they provide valuable information and best practices to guide you in effectively managing your organization.

Understanding Nonprofit Accounting

Understanding the unique nature of nonprofit accounting is an important skill for any nonprofit manager. This workshop will cover the accounting standards that pertain specifically to nonprofits such as depreciation, accounting for contributions and promises to give, functional allocation of expenses, agency transactions, net asset classification and financial reporting requirements. It will provide a comprehensive introduction to the unique accounting requirements for nonprofit organizations.

Location: Alliance Office, 5100 Poplar Ave., Suite 502, Memphis
Date & Time: September 23, 2010; 8:30 a.m. to 12:00 p.m.
Core Area: Finance
Certificate Program: May be applied toward Certificate in Finance
Training level: Basic and Intermediate
Participants: Chief Financial Officers, Executive Directors, Board Members and other nonprofit financial staff
Objective: Participants will learn to ensure that financial data and economic transactions are properly managed with a sound accounting system.
Cost: $55 PNE/$60 members/$110 non-members

For more information, go to www.npexcellence.org or call 901.684.6605.

September 9, 2010

Ben Watkins Appointed to National Executive Board of Directors for University of Memphis Alumni Association

Memphis, TN—Ben Watkins, CPA, CMPA, Member of Watkins Uiberall, PLLC Certified Public Accountants, was recently appointed to serve on the National Executive Board of Directors for the University of Memphis Alumni Association. Watkins will serve on the Board beginning with the 2011-2012 term and through June 30, 2013.

“I am excited about my term on the Board of Directors and look forward to helping enhance the services and benefits offered by the Alumni Association,” said Watkins. “I always jump at the chance to give back to the university that helped establish the foundation for my knowledge and skills in accounting, as well as so many others at Watkins Uiberall.”

Watkins joined Watkins Uiberall in 1988. As the member-in-charge of the firm’s Healthcare Group and Plan Administration and Consulting (PAC), he oversees all of Watkins Uiberall’s healthcare and pension-related engagements. Watkins concentrates his practice on healthcare assurance and accounting services, and he works with both for-profit and not-for-profit organizations.

Watkins, a graduate of the University of Memphis (previously Memphis State University) in 1978, is still heavily involved with the university and its alumni association. Beyond his new appointment to the National Executive Board of Directors, he recently completed his term on the Board of Directors for the Fogelman College of Business & Economics (FCBE). In addition, in 2009 Watkins received the Outstanding Alumnus Award from the FCBE Alumni Chapter. His other memberships include the American Institute of Certified Public Accountants (AICPA), Tennessee Society of CPAs (TSCPA), BKR International Healthcare Consulting Committee, Healthcare Financial Management Association (HFMA), Mid-South Medical Group Management Association (MS-MGMA), Comprehensive Medical Practice Analysis, Tennessee Association of the Homes and Services for the Aging (TNAHSA), Tennessee Hospital Association (THA) and Affiliated Healthcare Advisors (AHA). Watkins currently resides in Germantown, Tennessee.

Watkins Uiberall has been providing reputable accounting and business consulting services in the Mid-South since 1971. As one of the largest locally-owned certified public accounting firms in Memphis, the firm employs over 60 individuals including 9 partners and 40 professionals. Through its affiliated companies, Plan Administration Consulting, LLC and Watkins Uiberall Healthcare Consulting Group, LLC, the firm goes beyond the traditional services of tax accounting and auditing by offering clients extended services such as retirement plan administration and healthcare-focused business advisory and consulting services. For more information on the firm, please visit www.wucpas.com.

September 3, 2010

Highlights of GuideStar’s Survey on the Effect of the Economy on the Nonprofit Sector

You are likely already aware of how the current economic recession has impacted your nonprofit organization, but how has it affected the industry as a whole? To help nonprofits like yours gain a better understanding of the state of the industry, GuideStar recently conducted a survey of public charity and private foundation employees from institutions across the U.S. Below we have provided more information about the survey and have highlighted some of the key results.

The Effect of the Economy on the Nonprofit Sector

GuideStar collected more than 7,000 responses for its survey, including 6,434 from public charities and 580 from private foundations. While California was the most represented state, with 12% of all responses, all other states, including Tennessee, were also represented. Here are a few other key stats from the survey results:

40% of respondents reported total contributions to their organizations decreased between January 1, 2010, and May 31, 2010.
Even though organizations experienced a decrease in contributions overall, 63% of respondents said demand for their services increased during the same time period.
Despite the decrease in contributions, 41% of respondents reported their 2010 budgets have increased, compared to 2009.

Those are just some of the results from GuideStar's June 2010 survey. For all the stats and analysis, download a free copy of the results.

If you have any questions or concerns, please contact Daniel Moore, CPA at 901.761.2720 or dmoore@wucpas.com.

August 11, 2010

Watkins Uiberall 2010-2011 WebTaxGuide

Watkins Uiberall is pleased to provide our clients and friends access to the 2010-2011 WebTaxGuide. Included in this guide are insightful tax planning tips and strategies to help improve your overall tax situation. You'll find information on a variety of areas, including:

Tax Planning Basics
Investing
Real Estate
Business & Executive Compensation
Family & Education
Charitable Giving
Retirement
Estate Planning

To view the 2010-2011 WebTaxGuide, visit http://webtaxguide.net/WatkinsUiberall/.

August 9, 2010

MEDICAL ECONOMICS: Managed Care Contracting - Helpful Hints

Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, recently authored an article in the August issue of the Memphis Medical News. Read the full article.

June 30, 2010

MEDICAL ECONOMICS: The Rise of Medical Practice Embezzlement

In the June 2010 issue of the Memphis Medical News, Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, authored an article regarding an increase in medical practice embezzlement in recent years. Read the full article.

June 7, 2010

A Conversation on Leadership with General Colin Powell

Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, recently authored an article entitled "A Conversation on Leadership with General Colin Powell". The article was published in the Summer 2010 issue of Medical Society Quarterly. Read the full article.

June 2, 2010

Daniel Moore to Facilitate Best Practices in Internal Controls Workshop

Memphis, TN—Daniel Moore, CPA, Audit Manager at the local CPA firm of Watkins Uiberall, PLLC, will be facilitating a workshop entitled Best Practices in Internal Controls for the Alliance of Nonprofit Excellence (“the Alliance”) on June 3, 2010.

“I enjoyed the opportunity to facilitate this workshop for the Alliance last year and I look forward to doing it again this year,” says Moore. “Even though internal controls may not be glaring risks or opportunities for nonprofit organizations, they are an integral component to ensuring optimal performance within these types of entities. It’s exciting to get to share my knowledge to help area organizations learn best practices which will greatly benefit their organizations.”

Best Practices in Internal Controls takes place on June 3rd from 8:30 a.m. to 12:00 p.m. at the Alliance office at 5100 Poplar Avenue in Memphis. The workshop teaches participants how to develop the most useful internal controls for: protecting resources against fraud; ensuring accuracy in accounting and operating data; complying with organization policies; and evaluating organizational performance. The workshop is offered through the Alliance’s 501(c)ollege. The 501(c)ollege provides over 60 workshops in seven core areas of management, as well as four certificate programs. For more information, visit http://www.npexcellence.org or call 901.684.6605.

Moore leads Watkins Uiberall’s nonprofit services division, possessing expertise in the unique accounting needs of nonprofit clients. He specializes in nonprofit audits, tax compliance and A-133 (single audit) compliance engagements, with an emphasis on social service organizations and churches. Moore also manages the firm’s annual Nonprofit Industry Survey. As part of his commitment to providing the highest quality service to the firm’s clients, he attends the annual Nonprofit Industry Conference in Washington, DC sponsored by the American Institute of Certified Public Accountants (AICPA), as well as other continuing education courses affecting nonprofits. Moore is a member of the Tennessee Society of Certified Public Accountants (TSCPA) and the AICPA.

May 22, 2010

Spring 2010 Doctor Perspectives Newsletter

Watkins Uiberall Healthcare Consulting Group, LLC has released its Spring 2010 issue of the Doctor Perspectives Newsletter. In this issue you will find:

Boosting Your Practice's Professional "Staff" to Outsmart Recession
Avoid Repayment in 1st 2 Medicare Appeal Levels (Even for RAC)
The Patient Protection Act Includes Many Tax Provisions
"Noncontributory" Doesn't Contribute Much
Increase in OSHA Inspections
Hotel Room Magnet
Try, Try Again: Successful Medical Documentation
PPACA Strikes 1st at In-Office Imaging & DHS
Codes Previously Known as Consults
It Pays to Appeal, or Foiling Payers' Denial Ploy

To view the complete newsletter, click here.

May 17, 2010

MEDICAL ECONOMICS: The Integration of Physicians and Hospitals

Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, recently authored an article entitled "MEDICAL ECONOMICS: The Integration of Physicians and Hospitals". The article was published in the May issue of Memphis Medical News. Read the full article.

April 28, 2010

Information about the Small Business Healthcare Tax Credit

In the past few days, you may have noticed a postcard in the mail from the IRS regarding a healthcare tax credit available for small businesses. This credit, which is part of the recently enacted Patient Protection and Affordable Care Act, is intended to encourage small businesses and tax-exempt organizations to begin offering health insurance coverage to employees or maintain coverage if they already do so. As your trusted advisor, we have provided highlights of this tax credit, including eligibility requirements, below.

About the Credit
Generally speaking, the Small Business Healthcare Tax Credit applies to small businesses and tax-exempt organizations which pay at least half the cost of insurance coverage for individual employees. The credit is effective immediately and may be claimed on employers’ 2010 tax returns. The maximum credit for businesses is 35% of premiums paid in 2010 and 25% of premiums paid by tax-exempt organizations. Beginning in 2014, the rates increase to 50% for businesses and 35% for tax-exempt employers.

Who’s Eligible?
The IRS has clearly defined the eligibility rules for the tax credit. If you can answer “yes” to each of the three questions posed below, there is a good chance you may qualify. Please note that both taxable (for profit) and tax-exempt organizations are eligible for the credit.

1. Do you pay at least 50% of the cost of healthcare coverage for your employees?
2. Do you employ less than 25 full-time equivalent (FTE) workers or fewer than 50 part-time workers?
3. Do you pay average annual wages below $50,000?

For more information, or to find out if you qualify for this tax credit, please visit the IRS’ website at http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6. As always, please do not hesitate to contact us if you have any questions or concerns.

April 12, 2010

MEDICAL ECONOMICS: Strategic Planning: An Overview

Bill Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, recently authored an article entitled "MEDICAL ECONOMICS: Strategic Planning: An Overview". The article was published in the April issue of Memphis Medical News. Read the full article.

March 12, 2010

Memphis Medical Society Talks with Bill Appling about ACMPE Board Position

Victor Carrozza of the Memphis Medical Society recently sat down with Bill Appling, President of Watkins Uiberall Healthcare Consulting, LLC, to discuss his Board position with the ACMPE. Download the complete interview from the Spring 2010 issue of the The Memphis Medical Society Quarterly.

November 11, 2009

Watkins Uiberall 2009-2010 WebTaxGuide

Watkins Uiberall is pleased to provide our clients and friends access to the 2009-2010 WebTaxGuide. Included in this guide are insightful tax planning tips and strategies to help improve your overall tax situation. You'll find information on a variety of areas, including:

Tax Planning Basics
Investing
Real Estate
Business & Executive Compensation
Family & Education
Charitable Giving
Retirement
Estate Planning

To view the 2009-2010 WebTaxGuide, visit http://webtaxguide.net/WatkinsUiberall/ or click the button above.

September 29, 2009

Ben Watkins Receives Outstanding Alumnus Award from the University of Memphis Fogelman College of Business and Economics Alumni Chapter

Memphis, TN—Ben Watkins, CPA, CMPA, Member of Watkins Uiberall, PLLC Certified Public Accountants, was recently announced as the 2009 recipient of the Outstanding Alumnus Award by the University of Memphis Fogelman College of Business and Economics (FCBE) Alumni Chapter.

Watkins, a 1978 graduate of the FCBE, was chosen for the award in recognition of his contributions to the college and the local community. In particular, he is heavily involved in fundraising for the college, including selling tables to various luncheons and events and setting up teams for the FCBE Alumni Chapter’s golf tournament. In addition, Watkins serves on the University of Memphis School of Accountancy Advisory Board for Director Dr. Carolyn Callahan. The Outstanding Alumnus Award is the highest honor the FCBE and Alumni Chapter bestows on its alumni. Watkins will officially be presented the award at the Alumni Day awards luncheon, held on October 28, 2009 at the Holiday Inn, University of Memphis.

“I am very proud of this award, and I greatly appreciate the Fogelman College of Business and the Alumni Chapter for their recognition of my service,” said Watkins. “The FCBE has not only been instrumental in my professional development and success, but Watkins Uiberall has also benefitted from the extraordinary talent produced by the college over the years. As a result, I feel it is my duty to give something back whenever and however possible.”

Watkins joined Watkins Uiberall in 1988. As the member-in-charge of the firm’s Healthcare Group and Plan Administration and Consulting (PAC), he oversees all of Watkins Uiberall’s healthcare and pension-related engagements. Watkins concentrates his practice on healthcare assurance and accounting services, and he works with both for-profit and not-for-profit organizations.

Beyond his involvement with the FCBE Alumni Chapter, Watkins is a member of numerous professional organizations, including the American Institute of Certified Public Accountants (AICPA), Tennessee Society of CPAs (TSCPA), BKR International Healthcare Consulting Committee, Healthcare Financial Management Association (HFMA), Mid-South Medical Group Management Association (MS-MGMA), Comprehensive Medical Practice Analysis, Tennessee Association of the Homes and Services for the Aging (TNAHSA), Tennessee Hospital Association (THA) and Affiliated Healthcare Advisors (AHA). Watkins currently resides in Germantown, Tennessee.

Watkins Uiberall has been providing reputable accounting and business consulting services in the Mid-South since 1971. As one of the largest locally-owned certified public accounting firms in Memphis, the firm employs over 60 individuals, including 9 partners and 40 professionals. Through its affiliated companies, Plan Administration Consulting, LLC and Watkins Uiberall Healthcare Consulting Group, LLC, the firm goes beyond the traditional services of tax accounting and auditing by offering clients extended services such as retirement plan administration and healthcare-focused business advisory and consulting services. For more information on the firm, please visit www.wucpas.com.

September 11, 2009

Watkins Uiberall, PLLC Releases Results of Its 2009 Nonprofit Survey

Memphis, TN—The local certified public accounting firm of Watkins Uiberall, PLLC recently released the results of its third annual Nonprofit Survey.

Conducted each spring, the Watkins Uiberall Nonprofit Survey provides Mid-South tax-exempt organizations the opportunity to benchmark against their peers and review valuable industry and local statistics. The survey is designed to help organization leaders make strategic decisions relating to operations, salary and personnel, fundraising, governance and more.

“We would like to thank all of this year’s survey respondents for their participation,” says Daniel Moore, CPA, Audit Manager and leader of Watkins Uiberall’s nonprofit services division. “We are also grateful for the tremendous support we’ve received from the local nonprofit community, which has been imperative to the success of our survey over the past three years.”

To present the survey results in a manner that can be easily interpreted and utilized, Watkins Uiberall provided in the results book a description of the survey respondents, as well as summaries and graphical representation of the reported data. The 2009 survey respondents represented a diverse group of organizations, most commonly consisting of education/training organizations, arts/culture organizations and human services/social welfare organizations. The dominant profile of respondents also comprises organizations in the $1 – $4.9 million annual revenue range and with fewer than 10 full-time employees.

A new feature of the 2009 Nonprofit Survey was Watkins Uiberall’s partnership with GuideStar®, a nonprofit organization based in Williamsburg, Virginia which provides information on more than 1.7 million IRS-recognized nonprofit organizations nationwide. Specifically, the 2009 survey results include excerpts of comparative salary data courtesy of GuideStar’s 2008 National Nonprofit Compensation Report. For more information on GuideStar, visit www.guidestar.org.

“We were thrilled to have the opportunity to team up with GuideStar, which is a highly respected organization throughout the nonprofit community,” continued Moore. “The data provided to us by GuideStar allows us to add even more value to the recipients of the survey results by comparing annual salaries in the Memphis MSA to national averages.”

To view the complete results from the 2009 Nonprofit Survey, please visit http://www.wucpas.com/docs/survey-results/WU_NFP_Survey_Results_LR.PDF. In addition, to receive a copy of the survey results book, email your contact information (including address, telephone number and email address) to Daniel Moore at dmoore@wucpas.com.

Watkins Uiberall has been providing reputable accounting and business consulting services in the Mid-South since 1971. As one of the largest locally-owned certified public accounting firms in Memphis, the firm employs over 60 individuals, including 9 partners and 40 professionals. Through its affiliated companies, Plan Administration Consulting, LLC and Watkins Uiberall Healthcare Consulting Group, LLC, the firm goes beyond the traditional services of tax accounting and auditing by offering clients extended services such as retirement plan administration and healthcare-focused business advisory and consulting services. For more information on the firm, please visit www.wucpas.com.

September 3, 2009

Watkins Uiberall, PLLC to Facilitate Understanding Nonprofit Accounting Workshop

Memphis, TN—Daniel Moore, CPA, Audit Manager of the certified public accounting firm of Watkins Uiberall, PLLC, will be facilitating a workshop entitled Understanding Nonprofit Accounting for the Alliance of Nonprofit Excellence (“the Alliance”) on September 24, 2009.

“Considering the unique nature of accounting in today’s nonprofit organizations, this workshop should be extremely valuable to those in attendance,” says Moore. “I am excited for this opportunity, and I am confident participants will walk away with skills and tools they can apply to their organizations’ accounting systems right away.”

Understanding Nonprofit Accounting takes place on Thursday, September 24th from 8:30 a.m. to 12:00 p.m. at the Alliance office: 5100 Poplar Ave, Suite 502 in Memphis. The workshop teaches participants about the major components of a nonprofit accounting system, functional allocation of expenses, booking promises to give, capitalizing and depreciating assets, and generating financial statements and reports. Participants will also receive a comprehensive introduction to building all of the critical systems and practices in the annual accounting cycle. The workshop is offered through the Alliance’s 501(c)ollege. The 501(c)ollege provides over 60 workshops in seven core areas of management, as well as four certificate programs. For more information, visit http://www.npexcellence.org or contact April DeBerry at 901.684.6605 Ext. 21.

Moore leads Watkins Uiberall’s nonprofit services division, possessing expertise in the unique accounting needs of nonprofit clients. He specializes in nonprofit audits, tax compliance and A-133 (single audit) compliance engagements, with an emphasis on social service organizations and churches. Moore also manages the firm’s annual Nonprofit Industry Survey. As part of his commitment to providing the highest quality service to the firm’s clients, he attends the annual Nonprofit Industry Conference in Washington, DC, sponsored by the American Institute of Certified Public Accountants (AICPA), as well as other continuing education courses affecting nonprofits. Moore was recently quoted in an August 2008 article by The Memphis Business Journal discussing new IRS filing and auditing requirements for nonprofits. He is a member of the Tennessee Society of Certified Public Accountants (TSCPA) and the AICPA.

Watkins Uiberall has been providing reputable accounting and business consulting services in the Mid-South since 1971. As one of the largest locally-owned certified public accounting firms in Memphis, the firm employs over 60 individuals, including 9 partners and 40 professionals. Through its affiliated companies, Plan Administration Consulting, LLC and Watkins Uiberall Healthcare Consulting Group, LLC, the firm goes beyond the traditional services of tax accounting and auditing by offering clients extended services such as retirement plan administration and healthcare-focused business advisory and consulting services. For more information on the firm, please visit www.wucpas.com.

August 27, 2009

J. William "Bill" Appling Nominated to American College of Medical Practice Executives

Memphis, TN—J. William “Bill” Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC, was recently nominated to and will serve on the American College of Medical Practice Executives (ACMPE). Appling will begin serving his three year term in October 2009.

“It is an honor to be part of an organization that provides such great support and benefit to the medical community,” said Appling. “I am committed to help carry out the mission of the ACMPE and will use this opportunity to grow on both a personal and professional level.”

Appling joined Watkins Uiberall Healthcare Consulting Group in 2008. In his role as president, he is responsible for managing, facilitating and coordinating all physician and hospital organization consulting engagements. Beyond his work with the ACMPE, Appling is a member of the National Medical Group Management Association, MidSouth Medical Group Management Association and Medical Group Management Association/University Advisory Committee.

Established in 1956 as an affiliate of the Medical Group Management Association (MGMA), the ACMPE is the national board and the standard-setting and certification body of the MGMA. The goal of the ACMPE is to promote the professional growth of leaders in healthcare practices. Through its Body of Knowledge for Medical Practice Management, the ACMPE provides a central framework for MGMA resources.

The MGMA serves 22,500 members who lead and manage more than 13,700 organizations, in which almost 275,000 physicians practice. Its diverse membership comprises administrators, CEOs, physicians in management, board members, office managers and various other management professionals. Other affiliated organizations of the MGMA include the MGMA Center for Research, the research and development companion to the MGMA, and MGMA Services, Inc., a for-profit subsidiary which furthers the provision of high quality medical management services.

Watkins Uiberall Healthcare Consulting Group, LLC specializes in assisting physician practices, hospitals and various healthcare organizations with the evaluation, development and monitoring of systems and processes which are essential for sustaining growth and profitability in today’s highly regulated and complex healthcare environment. Watkins Uiberall Healthcare Consulting Group is a part of the Watkins Uiberall Family of Companies including Watkins Uiberall, PLLC Certified Public Accountants, and Plan Administration & Consulting LLC, a third-party plan administration firm. For more information, please visit www.wucpas.com.

July 7, 2009

William H. “Bill” Watkins, Jr. Honored by the University of Memphis

Memphis, TN—William H. “Bill” Watkins Jr., Founding Member of Watkins Uiberall, PLLC Certified Public Accountants, has recently been recognized by the University of Memphis when a classroom was named in his honor in the Fogelman College of Business and Economics.

“Naming a room in our Fogelman College, where accountancy students learn their profession, is a fitting tribute to Bill Watkins,” said Dr. Shirley Raines, president of the University of Memphis. “Because of his commitment to the future of accountancy education and education in general, it is very appropriate that a classroom in the business building bear his name.”

The classroom named for Watkins is a 144-seat auditorium where many business students are taught accounting principals. The naming ceremony capped an evening of awards and recognition of new members of Beta Alpha Psi, a professional society for accounting students. Taking part in the recognition of Watkins were Dr. Shirley Raines, president of the University of Memphis, and Dr. Charles Manning, chancellor of the Tennessee Board of Regents (TBR), which governs the University of Memphis and 45 other public higher education institutions in Tennessee.

Watkins earned his Bachelor of Business Administration degree in accounting from the University of Memphis in 1967. In the four decades since his graduation, Watkins has led a successful career in the field of accountancy. He began his career in public accounting with a large local firm, served as controller for the sixth largest industrial security firm in the U.S., and was divisional controller for a subsidiary of a security firm. Watkins returned to public accounting in 1971, founding the firm of Watkins and Watkins, which is now Watkins Uiberall, PLLC.

Throughout his career, Watkins has been an active contributor to his profession, community organizations, the Fogelman College and the University of Memphis. Watkins is a member of the American Society of Certified Public Accountants (AICPA) and the Tennessee Society of CPAs (TSCPA). He has served as a member of the Tennessee Board of Regents (TBR) and its Audit Committee. Watkins also serves on the University of Memphis’ voluntary advisory body, the Board of Visitors, and has been president of the National Alumni Association, of which he is a lifetime member.

June 29, 2009

Randy Gammill Named Vice President of Mississippi Society of CPAs Northeast Chapter

Tupelo, MS—The local CPA firm of Watkins Uiberall, PLLC is pleased to announce that Randy Gammill, CPA, audit manager, was recently appointed Vice President of the Northeast Chapter of the Mississippi Society of Certified Public Accountants (MSCPA). He transitions to the role of Vice President after serving for one year as Secretary/Treasurer.

“I am proud and honored to serve as Vice President for the Northeast Chapter of the MSCPA,” says Gammill. “As Vice President, I look forward to working with members and fellow officers to implement initiatives which promote education and growth within the local CPA community.”

Gammill joined Watkins Uiberall in 1998. In his role as audit manager, his primary responsibilities include the management of audit engagements and supervision of audit staff members. Gammill specializes in services for healthcare, HUD and nonprofit organizations. He played a primary role in the opening of the firm’s Tupelo location and runs the office’s day-to-day operations.

Gammill is a graduate of Mississippi State University where he earned his Bachelor of Professional Accountancy degree. He is a licensed Certified Public Accountant in the states of Tennessee and Mississippi. In addition to his service in the MSCPA, Gammill is a member of the American Society of Certified Public Accountants (AICPA) as well as the Tennessee Society of Certified Public Accountants (TSCPA).

The MSCPA was organized in 1927 by a group of fifteen accountants who recognized the importance of uniting local professionals in the accounting industry with a focus on legislation, education and ethics. Today, the society serves over 2,600 Certified Public Accountants within seven localized chapters throughout the state of Mississippi.

May 27, 2009

William H. "Trey" Watkins Elected to Board of Directors for University of Memphis Fogelman College of Business and Economics Alumni Chapter

Memphis, TN—William H. “Trey” Watkins, Member of Watkins Uiberall, PLLC Certified Public Accountants, has recently been elected to the Board of Directors for the University of Memphis Fogelman College of Business and Economics Alumni Chapter.

“This opportunity to serve the University of Memphis and the Fogelman College of Business and Economics means a great deal to me,” says Watkins. “As a graduate of the University of Memphis, the Alumni Chapter has been a great resource to me in my professional career. I look forward to sharing my time and dedication as a member of the Board.”

The mission of the Alumni Chapter is to strengthen the relationship between alumni and their alma mater in order to effectively support Fogelman College of Business and Economics and the University of Memphis through service, contributions and active volunteerism. The Board of Directors of the Alumni Chapter also serves as an advisory committee to the Dean of the College and is responsible for the facilitation of various events which support alumni and give them opportunities for networking within the community.

As a Member with a concentration in auditing at Watkins Uiberall, Watkins provides comprehensive audit preparation, compliance and consulting services. He is actively involved in the administration of the firm’s audit department, serving as a mentor and leader to the department’s staff and ensuring deadlines are met and quality deliverables are produced. Watkins is a Certified Public Accountant (Tennessee) and is an active member of the Tennessee Society of Certified Public Accountants (TSCPA) and the American Institute of Certified Public Accountants (AICPA). He is a graduate of the University of Memphis, obtaining a Bachelor’s degree in Business Administration in 1996.

May 15, 2009

Watkins Uiberall, PLLC to Facilitate Best Practices in Internal Controls Workshop

Memphis, TN—The certified public accounting firm of Watkins Uiberall, PLLC will be facilitating a workshop entitled Best Practices in Internal Controls for the Alliance of Nonprofit Excellence (“the Alliance”) on June 23, 2009.

“I am honored to facilitate this very important workshop for the Alliance,” says Daniel Moore, CPA, Audit Manager at Watkins Uiberall. “Internal controls are an integral component to ensuring optimal performance within a nonprofit entity, and it is a pleasure to have this opportunity to help area organizations learn best practices which will greatly benefit their organizations.”

Best Practices in Internal Controls takes place on June 23rd from 8:30 a.m. – 12:00 p.m. at the Alliance office at 5100 Poplar Ave in Memphis. The workshop teaches participants how to develop the most useful internal controls for: protecting resources against fraud; ensuring accuracy in accounting and operating data; complying with organization policies; and evaluating organizational performance. The workshop is offered through the Alliance’s 501(c)ollege. The 501(c)ollege provides over 60 workshops in seven core areas of management, as well as four certificate programs. For more information, visit http://www.npexcellence.org.

Moore leads Watkins Uiberall’s nonprofit services division, possessing expertise in the unique accounting needs of nonprofit clients. He specializes in nonprofit audits, tax compliance and A-133 (single audit) compliance engagements, with an emphasis on social service organizations and churches. Moore also manages the firm’s annual Nonprofit Industry Survey. As part of his commitment to providing the highest quality service to the firm’s clients, he attends the annual Nonprofit Industry Conference in Washington, DC sponsored by the American Institute of Certified Public Accountants (AICPA), as well as other continuing education courses affecting nonprofits. He was recently quoted in an August 2008 article by The Memphis Business Journal discussing new IRS filing and auditing requirements for nonprofits. Moore is a member of the Tennessee Society of Certified Public Accountants (TSCPA) and the AICPA.

May 1, 2009

Keeping Your 401(k) Plan in Motion: Planning for retirement remains critical

The recent economic downturn is taking its toll. Case in point: Some employees are having second thoughts about the viability of their 401(k) plans. According to a recent report by an independent consulting firm, 4% of plan participants stopped making 401(k) contributions at the end of last year. Also, the percentage of 401(k) savings traded jumped to 5.3% in 2008 from 3.5% in 2007.

Nevertheless, despite the understandable concerns of employees in this uncertain economy, the fundamental principle behind 401(k) plans remains sound. Over time, this type of plan can provide a solid base for retirement savings.

Basic premise: In the typical 401(k) plan setup, an employer allows participating employees to defer part of their salary to their accounts on a pretax basis. Each employee determines the amount that he or she chooses to contribute each year, within certain inflation-adjusted limits. The maximum dollar amount allowed for 2009 is $16,500. Then the funds are invested on behalf of the employees according to their investment choices.

Although the employer is not legally required to provide additional funds, it may choose to do so in a matching plan. For instance, an employer may match contributions up to a stated percentage of deferral. With this add-on, employees are often able to set aside a sizeable amount for retirement. Of course, there are no guarantees as to investment earnings, but the contributions may accumulate on a tax-deferred basis over a lengthy period of time.

Furthermore, “catch-up contributions” are permitted for employees who are 50 years of age or older. For example, in 2009 you can add another $5,500 to the pot if you qualify. The total dollar limit for 50-or-older participants is $22,000.

Note that a 401(k) plan must benefit employees in general. It may be disqualified if highly compensated employees contribute a disproportionately higher amount than lower-paid employees. Withdrawals from the plan can be made when an employee separates from service after age 55 or due to death or disability. Otherwise, withdrawals before age 59½ are generally subject to a 10% tax penalty plus regular income tax.

In the last few years, several new features have enhanced the use of 401(k) plans. Here are a few key examples:

An employer may institute an automatic enrollment program to ensure that the company meets certain participation requirements under the law.
Solo 401(k) plans for small businesses have multiplied as administrative costs have been reduced.
Safe harbor plans have been designed to reduce the strict compliance burdens facing employers. These plans allow you to bypass complex testing procedures and permit highly compensated employees to maximize their contributions.
A Roth IRA feature can be added to an existing plan, enabling 401(k) plan participants to receive qualified distributions free of any income tax. This new feature first became available in 2006.

Reminder: There are no guarantees about investment earnings within a 401(k) plan. But reliance on sound financial concepts may put you in position to meet your retirement goals.

April 1, 2009

Overview of the new 2008 Pension Law: Key provisions affecting retirement plans

The Worker, Retiree, and Employer Recovery Act of 2008 was passed by Congress late last year. It was promptly signed into law on December 23, 2008.

This new federal legislation includes several important changes affecting qualified retirement plans and IRAs, and clarifies provisions in the Pension Protection Act of 2006 (PPA). The following is a brief summary of several key provisions in the new pension law.

Required minimum distributions: As a general rule, you must begin taking a required minimum distribution (RMD) from your qualified retirement plans, including 401(k) plans and traditional IRAs, by April 1 of the year after the year in which you turn age 70½. If you do not take the RMD, you are liable for a penalty tax equal to 50% of the required amount.

The amount of the RMD is based on your life expectancy and, significantly, the value of your accounts on the last day of the previous year (e.g., December 31, 2007, for 2008 distributions). In light of the recent stock market volatility, the new law suspends the RMD rule, but only for the 2009 tax year. Despite public calls for retroactive tax relief, there is no such waiver for the 2008 tax year. Note that the rule for RMDs will be reinstated for the 2010 tax year.

Nonspouse rollovers: Prior to the PPA, only a surviving spouse was able to roll over proceeds tax-free from a qualified plan to a traditional IRA. A nonspouse beneficiary—such as a child or grandchild—could not use this technique. But the PPA permitted tax-free rollovers for plan distributions after 2006 as long as they were made directly from one trustee to another.

It was not clear at the outset if the administrators of qualified plans were required to provide this option to nonspouse beneficiaries. Under the new law, the option is mandatory, effective for distributions after 2009.

Single-employer plans: The PPA set transitional funding requirements for pension plans, but some employers may have difficulty meeting the targets under current economic conditions. For instance, the target percentage for 2009 is 94%. The PPA requires employers who do not meet these targets to subsequently provide 100% funding. Under the new law, this rule is relaxed so that the employer can limit subsequent funding to the target percentage.

Multi-employer plans: The new law also liberalizes several special PPA funding rules for multi-employer plans in “endangered” or “critical” status. For example, effective for plan years beginning after September 30, 2008, and before October 1, 2009, the current funding status of multi-employer plans may be frozen, based on the prior year’s status.

Also, the rehabilitation period is extended from 10 years to 13 years for plans in endangered or critical status in 2008 or 2009 (from 15 years to 18 years for plans in “seriously endangered” condition).

Finally, the new pension law contains a slew of technical corrections to the PPA. Consult with your professional tax advisers for its application to your company retirement plans and your personal situation.

March 1, 2009

Should You Convert to a Roth IRA Now? Weigh the benefit against future tax break

There’s a big tax break looming next year if you want to convert a traditional IRA into a Roth IRA. But you might not want to wait that long.

Basic rules: As with a traditional IRA, you may contribute up to $5,000 to a Roth IRA (less any traditional IRA contributions) for 2008. An extra $1,000 “catch-up contribution” is allowed if you are 50 years of age or older. There is no current income tax on any earnings within the Roth IRA. The deadline for 2008 contributions is your tax return due date (i.e., April 15, 2009).

However, you cannot take advantage of a Roth IRA if your modified adjusted gross income (AGI) exceeds a certain level. For instance, the phaseout for the 2008 tax year occurs between $159,000 and $169,000 of modified AGI for joint filers, and $101,000 and $116,000 for single filers.

Significantly, qualified distributions from Roth IRAs are exempt from income tax. A qualified distribution is a distribution from a Roth IRA in existence at least five years made

after age 59½,
upon death or disability, or
to pay for first-time homebuyer expenses (up to a lifetime limit of $10,000).

If distributions do not meet these requirements, the funds are treated as being withdrawn as follows: contributions first, any amount converted from a traditional IRA second and earnings third. Withdrawals made before age 59½ may also be subject to a 10% penalty.

Fortunately, you can choose to convert a traditional IRA to a Roth IRA to secure future tax-free distributions. Of course, you must pay the resulting tax on the conversion. This option is only available to individuals who have an AGI of $100,000 or less.

Key tax break: Beginning in 2010, the $100,000 AGI cap for Roth IRA conversions is removed. Furthermore, for conversions taking place in 2010, you may elect to spread the resulting tax liability ratably over the following two years.

So why would you accelerate a conversion? If you believe your IRA assets are currently valued on the low side, you might opt for a conversion if you are below the $100,000 AGI level for 2009. This reduces your tax liability on the conversion. Similarly, if you converted within the past year and the value of the assets has declined since then, you can elect to “undo” the conversion. Otherwise, you will have paid tax on the conversion when the assets were at a higher value.

The decision to convert to a Roth IRA—and when—is complex. Obtain professional assistance for your situation.

February 24, 2009

J. William “Bill” Appling Named Revenue Chair of the March of Dimes March for Babies

Memphis, TN—J. William “Bill” Appling, President of Watkins Uiberall Healthcare Consulting Group, LLC has recently been named Revenue Chair for the March of Dimes March for Babies.

“Throughout my career as a healthcare consultant and involvement in pediatrics, I have personally witnessed the urgent need in the Memphis area for prenatal and infant care,” stated Appling. “I am honored to serve as Revenue Chair for the March for Babies and look forward to working with the March of Dimes on this important initiative that touches the lives of so many in our community.”

As Revenue Chair, Appling is responsible for managing and coordinating all fundraising activities. He and a team of committee members will generate funds by soliciting corporate and individual donations and team registrations.

“Our goal is to raise a total of $600,000 for the March for Babies with an average of $150.00 per each individual in the walk,” stated Appling. Businesses and individuals can register to walk or make donations at www.marchforbabies.org or by calling 901.385.8580.”

The March of Dimes March for Babies is an annual walking fundraiser supporting programs that help mothers give birth to healthy, full-term babies. March for Babies is close to the hearts of many in this area as Memphis has been identified as having the highest infant mortality rate in the nation. Since 1970, March for Babies has raised $1.8 billion for 900 local communities throughout the country.

In Memphis, the 2009 March for Babies will take place on April 25th, 2009 at Shelby Farms Park. The March of Dimes is the leading nonprofit organization for pregnancy and baby health. With chapters nationwide and its premier event, March for Babies, the March of Dimes works to improve the health of babies by preventing birth defects, premature birth and infant mortality.

February 1, 2009

IRS Boosts Retirement Plan Limits for 2009: Higher figures reflect higher inflation rate

The IRS recently issued its annual cost-of-living adjustments for certain retirement plan thresholds. Due to low inflation rates during the middle of this decade, the increases have been relatively modest or nonexistent the last few years. However, the new indexed figures for 2009 reflect a few significant jumps as inflation crept higher last year.

Below is a summary of the key retirement plan limits for the past two years.

Note: The dollar limit for catch-up contributions to a SIMPLE (Savings Investment Match Plan for Employees) plan remains unchanged at $2,500. We will feature contribution limits for traditional and Roth IRAs in an upcoming issue.

	Limit for 2008	Limit for 2009
Maximum annual dollar benefit for a defined benefit plan	$185,000	$195,000
Maximum dollar limit on additions to a defined contribution plan	$46,000	$49,000
Maximum amount of compensation taken into account for qualified retirement plans	$230,000	$245,000
Dollar limit for definition of “key employee” in top-heavy retirement plan	$150,000	$160,000
Dollar limit for definition of “highly compensated employee” in qualified plan	$105,000	$110,000
Dollar limit for elective deferrals to a 401(k) plan	$15,500	$16,500
Dollar limit for contributions to a SIMPLE plan	$10,500	$11,500
Dollar limit for elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations	$15,500	$16,500
Dollar limit for catch-up contributions to a SIMPLE plan	$2,500	$2,500
Dollar limit for catch-up contributions to a 401(k), 403(b), 457 or SEP (Simplified Employee Pension) plan	$5,000	$5,500

January 19, 2009

Bill Appling Selected to Participate in a Grant Awarded to the Healthy Memphis Common Table

Bill Appling of Watkins Uiberall Healthcare Consulting Group has been selected to participate in a grant awarded to the Healthy Memphis Common Table.

This $600,000 grant is to be used as a pilot in "Aligning Forces for Quality: The Regional Market Project." The purpose of this is to build and align local forces that support and drive quality improvement for outpatient chronic care. In this project, the focus will be on consumer engagement, provider quality improvement, and performance measurement and reporting.

This is one of the few grants this year that has been awarded by the Robert Wood Johnson Foundation. The Foundation selection is for previous and ongoing support for quality improvement through local, market-based strategies.

December 8, 2008

Watkins Uiberall, PLLC Announces New Members

Memphis, TN—The local certified public accounting and financial advisory firm of Watkins Uiberall, PLLC is pleased to announce William H. “Trey” Watkins and Jason D. Whaley have been promoted to Member effective January 1, 2009.

“Trey and Jason have shown tremendous leadership ability and commitment to client service during their careers at Watkins Uiberall. Both are very deserving of the promotion to Member and I am confident they will excel in their new roles” says Jeff Thomason, Chief Manager of Watkins Uiberall.

Watkins joined Watkins Uiberall, PLLC in 1996. As Member of the firm, he will be integrally involved in the supervision and management of the firm’s audit department, lead key client audit engagements and contribute to the firm’s strategic planning activities. Watkins specializes in providing clients of various industries with audit preparation, compliance and consulting services. He maintains memberships in the American Institute of Certified Public Accountants (AICPA) and the Tennessee Society of CPAs (TSCPA). Watkins is a graduate of the University of Memphis.

Whaley joined Watkins Uiberall, PLLC in 2002. In his role as Member, Whaley will maintain active involvement within the firm’s tax department, lead key client engagements and increase his participation in the firm’s recruiting and training initiatives. He has expertise in providing comprehensive tax services such as tax preparation, planning and consulting to a variety of clients including corporations, S corporations, partnerships, estates, trusts and individuals. Whaley is a member of the American Institute of Certified Public Accountants (AICPA), Tennessee Society of CPAs (TSCPA) and the Estate Planning Council of Memphis. He is a graduate of the University of Mississippi.