U P D A T E Margaret McDeed, Editor Summer Issue 2015

In This Issue

Current Proposed Tax Reform pg. 2

Consumer Spending of Tax Refunds pg. 2

Be A Good Boss pg. 3

How Washington Spends Your Taxes pg. 3

Personal Safety Tips pg. 4

Congratulations & Summer Fun pg. 5

Closing Entries pg. 6

Certified Public Accountants

611 S. Magnolia Ave. Tampa, FL 33606 813.251.2411

www.dwightdarby.com

John Brannan Managing Partner

Brad Tushaus Senior Partner

Kathy Tushaus Audit Partner

Dawn Lopez Audit Partner

Wayne Bond Senior Member

Practice Areas: Tax planning and preparation Business acquisitions and sales Record and Bookkeeping Preparation of financial statements - Audits, Reviews, & Compilations

Buy - lease decisions Property and equipment purchases Valuation of businesses Financial management advice Pension and profit-sharing plans and much more…

Generally, the IRS has up to three years after the tax filing deadline to initiate an audit so keep your tax returns and supporting documents at least that long. If you have a complicated return, are self-employed or have income from a variety of sources or a complex tax situation you’ll want to maintain your paperwork and returns for at least six years.

Keep copies of your W-2s, 1099s and other income documents; canceled checks and receipts for charitable donations, receipts for deductions and credits, including health savings accounts and 529 withdrawals.

Maintain paperwork supporting the fact that you had minimum essential health insurance coverage or qualified for an exemption.

Other documents to keep longer than the three/six year guideline are:

Form 8606 – reporting non-deductible contributions to traditional IRAs. You can then prove that you have already paid tax on this money when you withdraw it.

Keep records of purchase dates and price of stocks and municipal funds.

If you inherit stocks or funds, keep records of the value of these items on the day the original owner died to help calculate your basis when you sell them. Your tax basis is the fair market value on the date of death (which will reduce your gain upon sale).

Maintain records of reinvested dividends. This is added to your basis of the original stock and you won’t be taxed on them upon sale.

Keep records of home improvements as long as you own your house. To ex-clude any gain over $250,000 if single or $500,000 if married filing joint you must have lived in the home at least 2 of the 5 years prior to the date of the sale.

For a complete list of items to maintain in support of your personal tax return and/or your business tax return please visit our website at: www.dwightdarby.com and click on News & Info tab and download our Record Retentions Schedule.

As always, please do not hesitate to call us if you have any questions.

Dwight Darby & Company is a full service accounting firm equipped to handle your needs.

How Long Should You Keep Your Tax Return Supporting Documents?

Dawn Lopez

Summer 2015, Page 2

President Obama made a host of tax reform proposals in his fiscal year 2016 budget. The President proposed increasing the top long-term capital gains and qualified dividends tax rate from 20 percent to 24.2 percent for tax years beginning after December 31, 2015. The President called for tripling the maximum child and dependent care credit for families with children under age five and proposed a new "second earner" tax credit of up to $500 for qualified couples where both spouses work.

In Congress, Republicans and Democrats debated different approaches to tax reform. The House approved its fiscal year 2016 budget framework on March 25. The Senate followed on March 27. The House budget calls for elimination of the alternative minimum tax, along with reduced individual and corporate taxes. The Senate budget includes language enhancing Code Sec. 179 small business expensing, eliminating the federal estate tax, expanding education tax incentives, and calling for a reduction in the corporate tax rate. The House and Senate now need to reconcile their budget resolutions, which they are expected to do. Democrats generally echoed the President’s proposals to enhance tax incentives for lower and middle income taxpayers.

In February, the House approved legislation to

expand the Code Sec. 529 college savings plans. The bill would allow the purchase of a computer to be considered a qualified expense, remove distribution aggregation requirements and allow a student who receives a refund of any 529 qualified expenses to redeposit those funds without penalty. The House also passed the America’s Small Business Tax Relief Act of 2015 (HR 636). The bill provides for a $500,000 dollar limit and a $2 million investment limit for Code Sec. 179 expensing, adjusted for inflation after 2015.

The Senate Finance Committee announced the creation of working groups to develop tax reform proposals. The groups are expected to make their reports in May. The leaders of the Senate Finance Committee and the House Ways and Means Committee have indicated they are holding regular discussions about tax reform.

Current Proposed Tax Reform & LegislationCurrent Proposed Tax Reform & Legislation Thomas Ladd

Consumer Spending of Tax Refunds – A Matter of Perspective

A new study of consumer spending of tax refunds found a correlation between how the refunds are perceived and whether taxpayers opt to spend the money right away or save it for later.

The study, from researchers at Georgetown University’s McDonough School of Business and the Georgetown Institute for Consumer Research, found that how consumers view their tax refund – either as an unexpected “bonus” or money the government owes them – influences their spending habits.

For example, 53% of consumers who think of their refund as unexpected money plan to make some sort of purchase with their refund money. In contrast, only 39% of consumers who view their tax refund as money they are owed plan to make purchases with their refund.

The study also found that early filers expect larger refunds than those who file closer to Tax Day, and they plan to spend a greater proportion of their refund. Those who filed earlier are more likely to spend the refund they are getting on purchases, as opposed to saving or investing it.

When asked about the proportion of their refund that they will allocate toward saving, paying down debt, buying something needed, buying a treat, investing, and contributing to charity, consumers plan to allocate about a third to saving, using a third to pay down debt, and the remainder on something they need, buying a treat, investing, or other.

Dave Bove

Summer 2015, Page 3

BE A GOOD BOSS BE A GOOD BOSS BE A GOOD BOSS Being a good boss, whether you are the top dog or a manager, is vital to your success as well as the employee. Certain comments that you make to your employees can show if you are a good boss or a bad one. Which are you?

Do you think or actually say, "This place will fall apart without me"? Good bosses create a team atmosphere including accountability instead of micro-managing. Thinking that you are so important that the

department or company will fail without you is actually a sign of poor management skills.

How often have you said, "This is the way we have always done it"? I know I have. When we say this, we are passing the difficult decisions onto the previous management because we do not want to upset people. Good bosses explain decisions, educate and communicate openly. Employees who see their boss taking responsibility will also take responsibility for their actions.

Do you make comments that play on others emotions, such as, "You need to think about where your priorities lie"? Good bosses will assist with making decisions and offer advice instead of degrading the

employee and having him or her make a poor decision when they obviously need guidance.

Another emotional comment is, "You're lucky you have a job". This is a sign of an ineffective manager trying to show authority negatively. This comment will not make an employee work harder. Instead, it shows that the boss doesn't know how to coach and motivate his or her people. Good bosses inspire employees to be great.

As a boss, your comments are as important as your actions. Lead by example and don't just talk the talk. Although money can be a great motivator, you need to encourage creativity and provide employees with emotions associated with accomplishment and purpose. Think about what you are about to say before you say it, especially when times are tough or a situation is causing you to be upset. With better communication, your employees will improve their work habits, self-esteem and create a better work environment. This in turn, will increase you and your company’s overall success.

Dave Bove

Ever wonder as you pay the amount you owe in federal income taxes how your money is being spent by the federal government?

The National Priorities Project did the math for you based on the actual federal spending in 2013.

Broadly speaking, for every dollar you pay in federal income taxes, about a quarter goes to military spending at 27% and spending on federal health programs is 22.7%. The latter covers everything from Medicare and Medicaid to the Children’s Health Insurance Program.

The next biggest percentage of your income taxes, 13.8%, goes to paying interest on U.S. debt.

After that, 9.8% is used to support unemployment and jobs-related programs, such as career training

and temporary assistance for needy families.

Veterans’ benefits get about 5.1% of your federal income taxes, as do food and agriculture programs.

Running the government, including overhead costs and spending on various agencies and offices, such as the FBI and immigration services, comes in at 4.5%.

About 4% goes to housing programs, such as community development block grants, while 2% is spent on education, including everything from Head Start programs to Pell Grants.

Less than 2% is spent on each of the following: science, international affairs, transportation, and energy.

Kathy Tushaus

How Washington Spends Your Taxes

Summer 2015, Page 4

Modern technology provides us with many wonderful, useful tools. Unfortunately, thieves can and will use these tools against us if we are not careful. Listed below are some suggestions to keep everyone a little safer.

1. LONG-TERM PARKING Some people left their car in an airport long-term parking garage while away, and a thief broke into the car.

Using the information on the car's registration in the glove compartment, the thief drove the car to the owner’s home and robbed it. So, if you are going to leave your car in long-term parking, you should NOT leave the registration/insurance cards or your remote garage door opener in it.

2. GPS Someone had their car broken into while they were at a football game. Their car was parked in a lot specially

allotted to football fans. Things stolen from the car included a garage door remote control, some money and a GPS which had been prominently mounted on the dashboard. When the victims got home, they found that their house had been ransacked and just about everything worth anything had been stolen. The thieves had used the GPS to guide them to the house. They then used the garage remote control to open the garage door and gain entry to the house. The thieves knew the owners were at the football game, they knew what time the game was scheduled to finish and so they knew how much time they had to clean out the house. It would appear that they had brought a truck to empty the house of its contents. Something to consider if you have a GPS - don't put your home address in it. Put a nearby address (like a store or gas station) so you can still find your way home if you need to, but no one else would know where you live if your GPS were stolen.

3. CELL PHONES A lady’s handbag, which contained her cell phone, credit card, wallet, etc., was stolen. Twenty minutes later

when she called her husband from a pay phone telling him what had happened, he says, "I received your text asking about our pin number and I replied a little while ago." When they rushed down to the bank, the bank staff told them all the money had been withdrawn. The thief had used the stolen cell phone to text "hubby" in the contact list and get hold of the pin number. Within 20 minutes he had withdrawn all the money from their bank account.

Lessons learned:

a. Do not disclose the relationship between you and the people in your contact list. Avoid using names like Home, Honey, Hubby, Sweetheart, Dad, Mom.

b. If you do, and very importantly, when sensitive info is being asked for through texts, CONFIRM by calling back.

c. Also, when you're being texted by friends or family to meet them somewhere, if suspicious, be sure to call back to confirm that the message came from them. If you don't reach them, be very careful about going places to meet "family and friends" who text you.

4. PURSE IN THE GROCERY CART SCAM

A lady went grocery shopping at a local mall and left her purse sitting in the children's seat of the cart while she reached something off a shelf. Her wallet was stolen, and she reported it to the store personnel. After returning home, she received a phone call from the Mall Security to say that they had her wallet and that although there was no money in it, it did still hold her personal papers. She immediately went to pick up her wallet, only to be told by Mall Security that they had not called her. By the time she returned home again, her house had been broken into and burglarized. The thieves knew that by calling and claiming to be Mall Security, they could lure her out of her house long enough for them to burglarize it.

The moral of these stories: Be diligent and pay attention at all times!

PPERSONALERSONAL SSAFETYAFETY TTIPSIPS Susan Ghaly

Summer 2015 Page 5

Pam Mattox Summertime Fun!

The start of summer is just around the corner. And with summer, come some great holidays for us to celebrate with our family and friends.

Memorial Day will be celebrated Monday, May 25th this year. On this day, honor the individuals who have died while serving in our United States armed forces.

Independence Day, will follow on July 4th, marking the adoption of the Declaration of Independence.

So get together, with friends and family and celebrate these great holidays. Get outside and fire up the grill and try the marinade recipe below on your favorite meat.

¾ cup soy sauce ¼ cup Worcestershire sauce 2 tablespoons dry mustard 2 ½ teaspoons salt 1 tablespoon black pepper ½ cup wine vinegar ½ teaspoons parsley ⅓ cup lemon juice 2 cloves crushed garlic 1 ½ cups oil Combine all ingredients. Place meat and marinade together in a sealed container or plastic bag and marinate overnight. The meat will be ready to cook on your grill the next day. Enjoy !

The partners and staff of Dwight Darby & Company would like to congratulate Christina Winters for receiving her CPA designation for the State of Florida. Christina accomplished this while juggling her career and family. As a matter of fact, she received the great news of having become a CPA at the same time she found out she is expecting her 4th child! Lots to celebrate and we are proud of her accomplishments.

CONGRATULATIONS!!!

Dwight Darby & Company 611 S. Magnolia Ave. Tampa, FL 33606-2744

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electronic format, please send an email to cpa@dwightdarby.com with the words “mailing list” in the subject line. Please also let us know if

you are a business, individual, or both.

Closing Entries

This newsletter is published for our clients and other interested persons. Since this information may be of a technical nature, no final decision should be made without first consulting our office.

ANNIVERSARIES

The following Dwight Darby & Company employment anniversaries will be occurring this summer:

Wayne Bond – 48 years in May

Brad Tushaus – 39 years in June

John Brannan – 36 years in August

Dawn Lopez – 22 years in August

Susan Ghaly – 11 years in August

Christina Winters – 9 years in August

Tara Nichols – 3 years in August

**IMPORTANT UPDATE **

Our article from the spring newsletter titled “Penalty Alert for Employer Reimbursing Employee Health Coverage” has an important update. On February 18, 2015, the IRS issued Notice 2015-17. This notice provides transition relief for small employers from the excise tax under Internal Revenue Code Section 4980D (4980D) for 2014 and up to July 1, 2015. Also, until further guidance is issued, and in any event through the end of 2015, the excise tax under 4980D will not be assessed for S corporations that fail to satisfy the market reforms by a 2-percent shareholder-employee healthcare arrangement.