Ohio Department of Taxation Warns of Fraud Scheme
Mar 29, 2016
(Columbus, OH. / March 28, 2016) — The Ohio Department of Taxation (ODT)* today began alerting employers to the latest fraud scheme that is being reported nationwide. Over the past few weeks, payroll and human resources offices at various companies across the country, including some in Ohio, have received emails that appear to come from the CEO or other high ranking management official of the company. The emails seem to be a legitimate request for confidential payroll data. In fact, those emails are a phishing scheme by cyber criminals posing as company officers and fooling employees into providing detailed payroll and W-2 information that is then used to file fraudulent tax returns.
This scam has been worked on more than thirty companies resulting in the theft of W-2 tax information for thousands of current and former employees. The W-2 form contains an employee’s Social Security number, salary and other confidential data. This information enables thieves to create a realistic looking, but fraudulent tax return requesting a tax refund that is then filed with Ohio or other states, and the IRS.
Any Ohio company that has been the victim of or experienced this or any email phishing scheme should immediately contact ODT at 1-800-282-1780 so appropriate measures can be taken to protect against potential tax fraud and safeguard Ohio taxpayer dollars.
*http://www.prod.tax.ohio.gov/Portals/0/OhioTaxAlert/ArchivedAlerts/TaxFraudAlert.pdf
Categories: Other Resources
Tax Break Extender Package Approved By Congress
Mar 24, 2016
At the end of last year, Congress continued its tradition of passing an “extender package.” Typically, the year-end packages extend various tax benefits for one year only, but this most recent legislation — the Protecting Americans from Tax Hikes (PATH) Act of 2015 — extended many benefits for longer periods, and in some cases, permanently.
Individuals
Following are some of the more important provisions affecting individual taxpayers:
State and local sales taxes. The new law permanently extends the provision allowing taxpayers to take an itemized deduction for state and local sales taxes rather than state and local income taxes. This provision may be useful to individuals who live in states with no income tax or who have purchased an expensive item, such as a car.
American Opportunity Tax Credit. Also made permanent is the tax credit of up to $2,500 per year for the payment of qualified tuition and related expenses for the first four years of post-secondary education. The credit is subject to phaseout based on income level.
Higher education expense deduction. This provision allows eligible individuals to deduct up to $4,000 or $2,000 (depending on income) of qualified tuition and related expenses. Because the deduction is “above the line,” taxpayers do not need to itemize to take it. The deduction is extended for 2015 and 2016.
Nontaxable IRA charitable transfers. Under this provision, now permanent, individuals age 70½ or older may exclude from gross income up to $100,000 per year for direct transfers from their individual retirement accounts to qualifying charities. If all requirements are met, such contributions also count toward the taxpayer’s required minimum distributions.
Businesses
Among other changes, the PATH Act of 2015 provides more generous write-offs for qualifying fixed asset purchases:
Higher Section 179 limit. Effective for the 2015 tax year, the new law makes permanent the $500,000 limit on the cost of machinery, equipment, and other eligible property that businesses may expense each year. The election is subject to a dollar-for-dollar phaseout once the cost of expensing-eligible property exceeds $2,000,000.
“Bonus” first-year depreciation. Thanks to the new law, businesses will continue to have the option of deducting 50% of the cost of qualifying property (e.g., most machinery and equipment) in the year the property is placed in service. The 50% “bonus” depreciation percentage is available for 2015, 2016, and 2017. The percentage drops to 40% in 2018 and to 30% in 2019.
Categories: Other Resources
Is It Truly Lean Manufacturing?
Mar 24, 2016
I recently met with the CFO of a large manufacturing firm located in Northern Ohio which primarily produced automotive parts. This particular firm was part of a much larger organization with multiple plants across North America, as well as internationally. As we discussed the current state of the industry and his individual division, he mentioned a number of years earlier the entire company, including the international affiliates, went to lean manufacturing.
The primary goal of lean manufacturing is to use the least amount of resources necessary to make a given product and to maintain your inventory to avoid retaining large inventories. Providing customers with continuous, perfectly timed shipments without creating a stockpiling effect is also an element of lean manufacturing.
As we talked about how the operations were working, he mentioned one of the plants in his division recently failed to deliver and as a result, the assembly line was shut down for an extended period. He was concerned because the penalty rate for causing a shutdown of this operation was $15,000 a minute. Given the shut down for his plant was over an hour, this cost can add up quickly. At the time of our discussion, he had yet to receive the penalty charge from the customer and was hoping due to mitigating circumstances there would be no such penalty.
Such experience led to a conversation about how lean manufacturing was working in his operation. He acknowledged a number of plants had become very efficient, however behind the scenes, there was slippage occurring in each of the organizations.
He explained many manufacturing plants operating under extreme penalty provisions from their customers kept a small, off the books inventory, containing some of the most critical parts. There is no actual inventory kept in the plant, but instead in storage trailers on the grounds or at the customer’s location. The idea being if there is an absolute need due to a failure in the production process, the customer’s assembly line would not be shut down. Instead, the hidden inventory would be used to keep operations running. Based on his description, this concealed inventory never appeared on any of the lean analysis. In fact, it represented an off the books safety margin for emergencies.
The CFO spoke about how many of the operations have become very lean in relationship to manufacturing labor costs. In fact, some of the plants were running with exceptional efficiencies as a result of lean initiatives. It has also helped reduce crew sizes and still maintain production. However, the slippages have occurred in that some of the production support or perhaps production indirect labor was being recorded as an administrative charge. In doing so, the particular labor involved was not being considered with regard to the lean analysis being done on the overall labor. In effect what was happening is the crew was being supported and maintained by an indirect or support of direct labor positions, but the accounting department recorded such indirect support position as an administrative cost. Therefore, it was ignored as part of the overall efficiencies.
This manufacturing CFO was totally supportive of the lean manufacturing initiative and believed it did bring improved efficiencies to the operations. However, perhaps the true gains were somewhat less than reported gains if all of the slippages had been accounted for completely. The results may be quite different and may even result in a different conclusion.
Categories: Cost Accounting
Tax Break Extender Package Approved By Congress
Mar 24, 2016
At the end of last year, Congress continued its tradition of passing an “extender package.” Typically, the year-end packages extend various tax benefits for one year only, but this most recent legislation — the Protecting Americans from Tax Hikes (PATH) Act of 2015 — extended many benefits for longer periods, and in some cases, permanently.
Individuals
Following are some of the more important provisions affecting individual taxpayers:
State and local sales taxes. The new law permanently extends the provision allowing taxpayers to take an itemized deduction for state and local sales taxes rather than state and local income taxes. This provision may be useful to individuals who live in states with no income tax or who have purchased an expensive item, such as a car.
American Opportunity Tax Credit. Also made permanent is the tax credit of up to $2,500 per year for the payment of qualified tuition and related expenses for the first four years of post-secondary education. The credit is subject to phaseout based on income level.
Higher education expense deduction. This provision allows eligible individuals to deduct up to $4,000 or $2,000 (depending on income) of qualified tuition and related expenses. Because the deduction is “above the line,” taxpayers do not need to itemize to take it. The deduction is extended for 2015 and 2016.
Nontaxable IRA charitable transfers. Under this provision, now permanent, individuals age 70½ or older may exclude from gross income up to $100,000 per year for direct transfers from their individual retirement accounts to qualifying charities. If all requirements are met, such contributions also count toward the taxpayer’s required minimum distributions.
Businesses
Among other changes, the PATH Act of 2015 provides more generous write-offs for qualifying fixed asset purchases:
Higher Section 179 limit. Effective for the 2015 tax year, the new law makes permanent the $500,000 limit on the cost of machinery, equipment, and other eligible property that businesses may expense each year. The election is subject to a dollar-for-dollar phaseout once the cost of expensing-eligible property exceeds $2,000,000.
“Bonus” first-year depreciation. Thanks to the new law, businesses will continue to have the option of deducting 50% of the cost of qualifying property (e.g., most machinery and equipment) in the year the property is placed in service. The 50% “bonus” depreciation percentage is available for 2015, 2016, and 2017. The percentage drops to 40% in 2018 and to 30% in 2019.
Categories: Other Resources
Must Have Apps for this Farming Season
Mar 22, 2016
Technology has grown by leaps and bounds within the last several years. It is important, no matter what your profession, to make use of improved technology to better your business. Smart phone applications can be extremely beneficial for agricultural-based careers such as farming. Since farmers are constantly on the move during their busy seasons of planting and harvesting, smart phone apps provide mobility and allow farmers to remain up-to-date on items that may influence their crops.Here are just a few apps which may be of interest to agribusiness .
AgWeb – This free app is run by the Farm Journal and helps Farmers stay up-to-date on a variety of items such as market quotes, weather patterns, and recent agricultural articles. Users also have the option to listen to several top industry radio shows including AgriTalk.
FarmLogs – Another free app available for apple and android devices which allows users to maintain various logs from events which occur in the field, task lists, rainfall tracking, to managing inventory. Multiple users can log information, allowing everyone to see updates in real-time.
TractorHouse – This free app is similar to Autotrader for farm equipment. Farmers can sell farm equipment, parts, and equipment attachments. Some nice features are the ability to narrow a search by location and adding items to your “watchlist” for easy maneuvering.
Weed ID – There are several free apps for weed identification including those powered by BASF, Monsanto, or the University of Missouri. No matter which one you choose, these are excellent apps to aide in the quick identification of weeds and how to best treat an infected field.
CheckIt – This app allows farmers to narrow down what deficiencies are apparent in a given crop and provides recommendations for improvement. One great feature to this app is its ability to function without a strong tower signal. Hence, farmers will never be “stuck in the mud” with this app not working.
Do you use any of these applications? Are there others you believe to be extremely beneficial?
By: Ellie Herr, Staff Accountant
Categories: Agribusiness