Inside DMLO

New legislation signed into law last month as part of a spending bill repeals the nonprofit parking tax, simplifies the private foundation excise tax on investment income, and provides special treatment for disaster relief donations to public charities.

Read the full article here* and please reach out to us with any questions.

*The Act referred to in the article was merged into H.R. 1865, Further Consolidated Appropriations Act, 2020.

You’ve spent hours dreaming, researching and planning, and you are finally ready to move forward with your Kentucky startup business venture. It can be a little overwhelming if you are starting from the ground up. Here are some tips to help you build on a solid foundation.

► Form your team of advisors. This is a very important step. You will avoid numerous pitfalls if you form connections with a reputable business attorney, a trusted CPA, a savvy banker, and a proactive insurance agent right from the start. These professionals will help you navigate safely through the many challenges that face a new business. Ask owners of established businesses, or perhaps retired business owners, to serve as your mentors, and listen to their advice.

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The federal government spending package titled the Further Consolidated Appropriations Act 2020 does more than just fund the government. It extends certain income tax provisions that had already expired or that were due to expire at the end of 2019. The agreement on the spending package also includes the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

Let’s look at some of the highlights.

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Two important tax bills – the Taxpayer Certainty and Disaster Relief Act of 2019 and the Setting Every Community Up for Retirement Enhancement Act of 2019 (the SECURE Act ) – are attached to a year-end appropriations bill making its way through Congress. It is likely to be on the President’s desk by the end of this week. Both bills create significant current and long-term tax planning opportunities.

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The clock is ticking on an important benefit available through the federal Qualified Opportunity Fund (QOF) and Kentucky Opportunity Zone investment programs. Investing in a QOF before December 31, 2019 will allow you to take advantage of a 15% permanently excluded taxable gain if you hold the investment through December 31, 2026.

Generally, a capital gain realized can be reinvested (within 180 days) in a QOF which uses the capital to invest in economically depressed areas. The Tax Cuts and Jobs Act created a federal provision to encourage investment in these areas throughout the United States. There are over 140 designated zones located in Kentucky. Individuals, C corporations, S corporations, partnerships, trusts, estates, regulated investment companies and real estate investment trusts are eligible to participate in Qualified Opportunity Fund investments.

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The FASB issued two Accounting Standards Updates (ASUs) earlier this month that finalize various effective date delays for standards on leases, current expected credit losses (CECL), hedging, and long-duration insurance contracts:

• ASU 2019-09, Financial Services—Insurance (Topic 944): Effective Date,
• ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates.

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College accounting students: we’d like to invite you to join us for our 2020 Accounting Leadership Engagement and Development program (L.E.A.D.). Learn about #CPALife, our firm, how to have an awesome interview, and the skills you need to be recognized as a leader.

Join us for a social event on Wednesday afternoon, followed by a full program on Thursday. Jeans are perfectly appropriate – we wear them daily.

Check out photos from a prior year and read what participants had to say about the program.

Applications are due March 31st – apply by completing this form.

With immense sadness, we share the news that founding partner John Livesay has passed from this life, at the age of 80, on September 9, 2019. Leaving a successful career at a national firm, Mr. Livesay, along with Joel Deming, Bill Malone, and Armand Ostroff, formed Deming Malone Livesay & Ostroff in 1975, a local, independent ‘Louisville original’ firm that would do business differently, and have a significant impact on our community in the process. The firm grew to one of the largest accounting firms in the Louisville area, and continues the legacy instilled by John and the other DMLO founders of giving back, celebrating its anniversary each year with a DMLO Day of Service.

A graduate of Lexington’s Lafayette High School and the University of Kentucky, John was a highly regarded CPA in Louisville. He was a member of Sigma Chi Fraternity, a UK fellow and he enjoyed Wildcat Sports. He loved golf, gin rummy, gambling on sports, casinos, and horseracing (finished in top 20 of a National Handicapping Contest). John also participated in the Louisville Jaycees and was a member of the Presbyterian Church. He was a member of Big Spring Country Club for over 50 years and lately enjoyed Jack’s Lounge.

John was born February 28, 1939 in Danville, Virginia to the late Carrie Lee Powell Livesay and C. S. Livesay, Jr. He was the beloved husband to Jeannie, his wife of 56 years; they have two children and five grandchildren.

Chris Ward, President of DMLO CPAs, commented “John was a wonderful man and we will forever be grateful to him for taking a risk and starting our great firm with Joel, Bill and Armand back in 1975. Our hearts go out to Jeannie and the entire Livesay family.”

Bill Malone, founding partner, said “John was a great accountant and an even greater friend. He was passionate about serving his clients. His unselfish attitude toward our firm had much to do with our growth and success.”

To celebrate his life, all are invited to drop by Big Spring Country Club on Saturday, September 14 from 4-6 P.M. and lift a glass to John. In lieu of flowers, the family requests that contributions in John’s memory be made to Heuser Hearing & Language Academy, 111 E. Kentucky Street, 40203.

The Governor has signed House Bill 354, effective immediately, which includes relief on sales tax regulations for Kentucky nonprofits. 

House Bill 354 exempts organizations from collecting sales tax on most of the sales of admissions to events and activities sponsored by nonprofits, and sales at fundraising events. 

What does this mean for you?

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The IRS will begin processing tax returns on Monday, January 28, 2019, and has confirmed that 2018 tax refunds will be issued to taxpayers as scheduled.
 
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” stated IRS Commissioner Chuck Rettig. He said employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years.

The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be released in the coming days.
 
The IRS will begin accepting and processing individual tax returns once the filing season begins. The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.

We look forward to hearing from you soon! 

The Internal Revenue Service recently issued interim guidance regarding the treatment of qualified transportation fringe benefit expenses paid or incurred after Dec. 31, 2017. The new rules assist taxpayers in determining the amount of parking expenses that are no longer tax deductible. They also help tax-exempt organizations determine how these nondeductible parking expenses create or increase unrelated business taxable income (UBTI).

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We have an immediate opportunity in our growing tax practice for a CPA with 3-5 years of recent public accounting experience.

Our tax team provides comprehensive tax services and specialized expertise to businesses, individuals, trusts, estates, non-profit and governmental entities and associations. Services include compliance (preparation), planning and consulting, and various outsourcing projects. We serve clients in all fields, with particular emphasis in manufacturing, distribution, construction, healthcare, exempt organizations and private equity firms.

This position requires a CPA license and a minimum of three (3) years of  public accounting experience with a tax emphasis.

We offer a full benefits and competitive compensation package, along with an award-winning workplace, a recently-renovated office in a convenient Hurstbourne location, and a family-oriented culture. You will not only have the opportunity to make a difference here, but will have fun doing it! 

Apply online here or mail to:

DMLO CPAS
Attn: Personnel
9300 Shelbyville Road, Suite 1100
Louisville, KY 40222

Congratulations to these professionals whose contributions to the firm have resulted in a promotion:

Supervisor to Manager: Renee Gehring, Peggy Athanasakes, Keith Von Handorf

Senior Accountant to Supervisor: Charlene Chessler, Melissa Bragg, Amelia Higdon

Staff Accountant to Senior Accountant: Megan Weaver, Krissy Moore, Nate Littles, Scott Gagel

We are proud to have you on our team!

Significant changes were made to Kentucky sales tax laws effective July 1, which impact many local, independent businesses from gyms to nonprofits. The Louisville Independent Business Alliance (LIBA) is hosting a seminar for local business owners to learn more about the new laws on Thursday, October 4^th from 9:00am-10:00am at The Foundation for a Healthy Kentucky, 1640 Lyndon Farm Court, Suite 100.

At this seminar, accountants from DMLO CPAs will provide a practical understanding of who is impacted by the new Kentucky law, how to apply and file online for those who have not had to previously, where to get answers to very specific circumstances and what to do if you are not yet in compliance.

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I was recently invited to speak about our decision to partner with Canopy in pursuit of Making Kentucky First in Good Business. In explaining why it is such a natural fit, I highlight three of the top reasons I chose and continue to choose DMLO:

If our culture and values align with what is important to you, connect with me to learn more about how you might join us in using business as a force for good.

Wondering how you are going to figure out where you fit best, when CPA firms often seem to be more similar than different at first glance? Look closer, and you will find we each have a distinct ‘personality’ and culture, and it can have a big impact on your satisfaction and success if you end up in a firm that doesn’t ‘get’ you.

We embrace specific values that you won’t find to be as highly prioritized at other firms in our area. If words like choice, fun, flexibility, meaningful work, buy local, social impact, using business as a force for good, and more than the numbers resonate with you, keep reading. And don’t just take our word for it. Learn about the independent recognition we repeatedly receive for our workplace culture and philanthropic work.

We’re unique in important ways, and if that piques your interest, stay tuned as we update this Top 10 series:

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Kentucky House Bill 487 includes provisions related to expanded sales tax regulations. The bill, effective July 1, 2018, impacts many nonprofit organizations. This infographic addresses some of the questions we are hearing most frequently about what is taxable and what is not. You may also find helpful information here.

Changes in annual not-for-profit financial statements prescribed in Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities (ASU 2016-14) will affect substantially all NFPs. They are designed to provide more relevant information about an organization’s resources, and the changes in those resources, to donors, grantors, creditors, and other financial statement users. We will be happy to review the changes in more detail with you, but below is a brief overview.

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Kentucky House Bill 487 includes provisions related to expanded sales tax regulations.  This bill does apply to nonprofit organizations and is effective July 1, 2018. 

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#CPALife can be highly rewarding but also present its share of challenging moments. Sometimes it’s the little things that make a difference in your day. In our industry, that often involves food or refreshments! In addition to the treats delivered to our office during busy season from vendors, clients and friends of the firm, and the healthy snacks provided by our Health & Wellness Committee, we have a wonderful administrative staff who go the extra mile to bring in ice cream for Float Fridays, keep the popcorn machine poppin’ on Wednesday afternoons, stock the break room with free soft drinks, coffee and iced tea, celebrate birthdays each month with cake, and coordinate meals on Saturdays during tax season.

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