On Balance March | April by WICPA

March|April 2013 | Vol. 9 No. 2 A publication of the Wisconsin Institute of CPAs | www.wicpa.org

TAKING FLIGHT Katie Horan, CPA ascends in her career at Outagamie County Regional Airport

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March/April 2013 Vol. 9 No. 2

6 Features

Columns

6 Taking flight Katie Horan, CPA ascends in her career at Outagamie County Regional Airport. By Cynthia M. Hodnett 10 Consider checking the box to disregard foreign subsidiaries Analyzing a taxpayer’s foreign tax credit and foreign operations can provide significant tax advantages. By Robert J. Misey Jr., J.D., MBA, LL.M 13 Human capital management: A key driver for growth Learn the four steps to successfully manage your company’s talent. By the AICPA Communications Team 16 Finding hidden income and assets in family law cases A CPA can analyze an individual’s or business’s assets to search for hidden income. By Tracy L. Coenen, CPA, CFF

24 TAX IRS releases rules on capitalization of fixed assets Should you capitalize or expense costs? Learn what the IRS says and why. By Rick Stezenski, CPA and Larry Bovee, CPA 28 INDUSTRY Government contractors face an era of uncertainty Resources are available for contactors facing lower margins due to increased competition and burdensome regulations. By Stephanie J. Geurts, CPA, CITP 30 TECHNOLOGY QuickBooks can address advanced users’ common issues Use these advanced quick tips to perform your job tasks more efficiently. By Heather J. Richter

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On Balance

March|April 2013

{ Membership Matters | more involvement }

Belong to something MORE: INVOLVEMENT! By Barb Gamez, vice president of Membership and Marketing, WICPA 2008 Clarion Award Winner

2012-2013 WICPA OFFICERS/BOARD MEMBERS Chair Danica E. Olson, CPA, CGMA Chair-elect Robert A. Gruber, CPA Past-chair Nicholas S. Lascari, CPA, CEA Secretary-treasurer Todd J. Poppe, CPA Directors Thomas J. Alberte, CPA Greta C. Diercks, CPA Kelly K. Miller, CPA Joan M. Phillips, CPA Matthew I. Raunio, CPA Gregory L. Ryan, CPA Carver Smith III, CPA Martin D. Verhelst, CPA Steven R. Volz, CPA AICPA Council David O. Christianson, CPA Karla E. Blair, CPA President & CEO Dennis F. Tomorsky, CPA, J.D., CGMA Vice President of Communications Amy E. Gaeth Vice President of Membership & Marketing Barb Gamez Editor Cynthia M. Hodnett Copy Editor Joan Bahr Design & Layout Angela Wade Advertising Manager Ellen Engel Printing Marek Printing Join us online!

On Balance is published six times a year by the Wisconsin Institute of Certified Public Accountants (WICPA). Change of address should be sent to: Membership, 235 N. Executive Drive, Suite 200, Brookfield WI 53005; Phone: 262-785-0445 or 800-772-6939 (WI/MN); Fax: 262-785-0838; email: jessica@wicpa.org. Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2013 On Balance.

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Nearly every member I’ve talked to or surveyed said one of their primary reasons for joining the WICPA was to build their professional network. But how does someone go about “building their network?” Building something requires action or participation. In other words, you need to become involved. The WICPA offers you numerous ways to do that. Whether it’s attending an event or volunteering to be part of a group, you have more options for getting to know people and building your network because of your WICPA membership. Member Recognition Banquet & Annual Business Meeting: May 9 This event is sure to be one of the best membership experiences you’ll have all year! Join your fellow members to applaud the accomplishments of your peers who are: • Honored with a WICPA Excellence Award for their outstanding achievements. • Celebrated for 10, 25 and 40 years of membership. • Nominated to the WICPA Board of Directors. There is no cost for members to attend. But the best part is how much fun you’ll have celebrating and getting to know other CPAs. New CPA Welcome Dinner: June 6 Remember how proud you felt when you became a CPA? It’s a tremendous achievement, and it deserves to be celebrated.

The WICPA and the WICPA Educational Foundation are pleased to honor newly licensed CPAs, and we encourage you to join us in welcoming them to the profession. You’ll meet Wisconsin’s newest CPAs and tomorrow’s leaders in the profession. Many past honorees have become active in WICPA committees and the Board of Directors. It’s a great way to launch your CPA career and get involved. Volunteer to serve on a WICPA board, committee or task force Another way you’ll experience meaningful membership involvement is by serving on the WICPA Board of Directors, the Educational Foundation Board of Directors, one of seven committees or one of seven conference planning task forces. Not only will you be directly involved in shaping the WICPA’s governance and CPE, you’ll also strengthen valuable leadership skills. A number of committees also have opportunities to plan networking activities and special events. If you have yet to become involved with the WICPA in some way, you have yet to experience all that your membership has to offer. The next time you’re at a WICPA conference, look for a fellow member with a special ribbon on their name badge that says, “Ask me about my WICPA involvement!” They’d be happy to tell you how they started getting involved and how much they’ve benefitted from it.

Your membership to-do list this month:  Register to attend the Member Recognition Banquet & Annual Meeting: www.wicpa.org/banquet2013  Consider joining a WICPA board, committee or conference planning task force: www.wicpa.org/boards&committees  Check out all the new enhancements to the WICPA website: www.wicpa.org www.wicpa.org

{ Outlook | chair’s letter } “As I leave this position, I’m happy to say we continued to promote the efforts and programs of past chairs and have laid the foundation for future chairs to grow the organization.”

Saying farewell and thank you

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y term as your chair ends in May, and I can’t believe how fast the year went by! As I leave this position, I’m happy to say we continued to promote the efforts and programs of past chairs and laid the foundation for future chairs to grow the organization. Increasing membership continues to be a top priority of the WICPA. Currently, we have approximately 8,000 members. Plus, as our membership grows, so will our influence and voice in Wisconsin and Washington, D.C. Specific efforts from this past year included: • “Member Get a Member” campaign with the Young Professionals Committee leading the way with the recruitment of more than 50 percent of new members recruited during the campaign. • Staff visits to a variety of firms to share the benefits of WICPA membership, which led to increased attendance at seminars and conferences. • The New CPA Welcome Dinner occurred in June to introduce young professionals to the organization. • New membership categories were added to encourage high school educators and students to join. • WICPA members testified in October at a Wisconsin legislative committee hearing intended to identify opportunities for improvements to Wisconsin income tax policies and processes. • Three-hundred and fifty-nine of my fellow Wisconsin CPAs joined me in obtaining the CGMA designation. The future is set up for continued success, as all five CPAs retained their Wisconsin Assembly seats in the 2012 election. In addition, 12 CPAs were elected to the U.S. Congress. On Jan. 23, 30 CPAs from across the state gathered in Madison to meet with more than 40 legislators. While there aren’t any pending bills that affect the profession at this time, we must maintain a strong presence in Madison so our voices are heard on any future legislation that affect Wisconsin CPAs. If you were unable to join us this year, please consider joining

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us next year! If you haven’t logged on to www.wicpa.org, take a minute to do so. The website has been redesigned to be a useful resource for you. There you will find streamlined navigation, video testimonials and highlights of upcoming events, short tutorials on how to make the most of member tools like the online CPE Tracker and the Find a CPA directory. We’ve accomplished so much this past year, but there’s still more work to do. I ask for your continued efforts to help promote the CPA profession and the WICPA. One way to do so is by attending the Member Recognition Banquet & Annual Business Meeting on May 9. This event will recognize the accomplishments of your peers and the profession, and elect incoming WICPA board members. Once again, it was a pleasure serving as your chair, and thanks for helping to make my year a success. Danica E. Olson, CPA, CGMA is the accounting manager for the Milwaukee Bucks, Inc. Contact her at 414-227-0575 or dolson@bucks.com.

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On Balance March|April 2013

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{ Spotlight | letter from the editor } “We’ll continue to update the site’s content, and provide ways for you to join and engage with the information and peers you need to boost your career.”

WICPA.org has a new look and renewed focus

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pring signals a time of growth and change. Therefore, now is a perfect time for WICPA to transform its website into a comprehensive professional resource for members like you. The enhanced website is the result of a yearlong process to align the website with the organization’s goal to provide better service to you. During that time, an advisory group of members and staff reorganized the website’s content and tested its new features. The result of their hard work is an improved website that includes the following invaluable new content and features: New videos : Testimonials featuring WICPA President & CEO Dennis Tomorsky, CPA, J.D., CGMA, WICPA Chair Danica E. Olson, CPA, CGMA, conference and seminar speakers and vendors. New layout features: • Navigation and banner links: The navigation, which includes four headings on the homepage, allows you to access content relevant to you. • Quick links: Quick links are located at the top of each webpage, so you can bookmark and access your favorites from anywhere on the site. • Rotator ads with 1-2-3 buttons: Get quick details about upcoming events at the touch of a button. • Gadgets: Use gadgets to customize your member page by selecting preselected RSS feeds to websites including jsonline.com. You can also use gadgets to add homepages, including My CPE Tracker and My Membership. • Instructional videos: Learn how to perform tasks on the website.

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• On Balance: Access the digital, password-protected version of the bimonthly member magazine. Don’t worry, you will still receive a printed copy of the magazine. • Twitter feed on homepage: Interact with your peers through Twitter. We are confident you’ll enjoy the enhanced website. So browse the website, access its invaluable resources, and connect with others. What’s next? We’ll continue to update the site’s content, and provide ways for you to join and engage with the information and peers you need to boost your career. As we continue to expand the website, we want to know about your user experience. Email your comments or questions to membership@wicpa.org. Speaking of changes, this issue of On Balance includes an article about Katie Horan, CPA, former controller for Outagamie County who is now administration and finance manager at the Outagamie County Regional Airport. This issue also provides updates about Wisconsin public policy and government contracting. Cynthia M. Hodnett is editor of On Balance magazine. Contact her at 262-785-0445 ext. 3004 or cynthia@wicpa.org.

Photography by John Nienhuis

On Balance

March|April 2013

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TAKING FLIGHT

Katie Horan, CPA ascends in her career at Outagamie County Regional Airport By Cynthia M. Hodnett Change is in the air at the Outagamie County Regional Airport (ATW), and its administration and finance manager, Katie Horan, CPA is right in the thick of things. When airport officials recently proposed changes including repairing several aircraft runways and leasing land to the Fox Valley Technical College (FVTC) to build a new public safety training facility, they tapped into Horan’s accounting expertise to manage its costs. “We have a strong collaborative team that’s free-flowing with ideas, and Katie’s personality and ability to think outside the box is a great fit to our team.” said airport director, Martin Lenss. “As new ideas surface or old business models need change, Katie is instrumental in assisting our organization work through the business plan, identify key synergies and mitigate potential risks.”

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Preparing for takeoff

Horan’s interest in making the numbers work goes back to her childhood. “I had a cousin who was a CPA, and I always looked up to him,” she said. “As I grew up and interned at my cousin’s accounting firm, I saw that he was so respected and trusted by people he worked for. I knew what he did was important. I always knew I wanted to be like him.” Horan graduated with a bachelor of arts degree in accounting from the former Rosary College in River Forest, Ill. She earned her CPA license in 2002. Her accounting career includes positions at the former F.E.R.S, in Chicago, (which merged into McGladrey & Pullen), and the former Clifton Gunderson LLP (now CliftonLarsonAllen LLP) in Racine. “In public accounting, I specialized in government,” she said. “I also had the opportunity to work with several manufacturers, so I gained experience in both government and business. The diverse experience that public accounting gave me has enhanced my skills and broadened my knowledge base. I feel this gives me the edge in working at the airport, which although is a government entity, operates as a business.” In 2011, she was hired as Outagamie County controller, which also included working at the

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airport one day a week. Her duties also included assisting with the annual audit and preparing the Comprehensive Annual Financial Report, a set of government financial statements comprising the financial report of the county, which complies with the accounting requirements promulgated by the Governmental Accounting Standards Board. Horan was hired in her current position in December 2012. Her duties include financial analysis, assisting the airport with the applications mandated by the Federal Aviation Administration, handling lease negotiations with the airport’s various tenants, and preparing budget and financial statements. “Now, the trend in governments is finding ways to cut costs by becoming more lean and efficient,” she said. “We’re always trying to look at processes, make them more efficient, and create more areas where people can perform tasks in more productive ways to better serve our customers. In addition, many airports are now focusing on generating new sources of nonaeronautical revenue. “In the current economic state, the industry is seeing fewer enplanements, which leads to lower utilization of airport services, including rental cars, food and concessions,” Horan said. “It’s essential for airports to find other sources of revenue so that

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they’re not relying solely on airline tenants. “ATW owns the airfield’s Fixed Based Operator, which serves the general aviation sector,” she said. “The revenue from fueling is a large source of income for the airport. The new partnership with FVTC is another example of finding other revenue sources. The parcel of land owned by the airport was a $5,000 per year agricultural lease. This will bring in approximately $150,000 of nonaeronautical revenue.”

Making a smooth landing

Horan, a WICPA member since 2006, also promotes financial literacy, including the American Institute of CPAs’ Feed the Pig campaign. Some of Horan’s colleagues say her easygoing demeanor gives her a professional edge. “A lot of people think of a typical accountant as an introverted, quiet, shy-type personality, but Katie breaks the mold on that,” said Jacob C. Lenell, CPA and partner at CliftonLarsonAllen in Milwaukee. The two met in 2006 when Lenell was a manager at the firm’s Milwaukee office and Horan worked in its Racine office, then known as Clifton Gunderson LLP. Both of them worked with governments and nonprofits, and

with several audit clients. “I have seen where this can really be an advantage for Katie and helps her set herself apart,” Lenell said. “For example, in a networking environment, Katie will be among the first to introduce herself to others. While many typically find this environment intimidating, she uses the opportunity to find common ground, build relationships, and find ways to be a resource to these people.” Horan advises other CPAs to find new ways to add value to their careers and employers. “Don’t just perform your tasks because that is the way you’ve always performed it,” she said. “Go the extra mile, think outside of the box, and challenge yourself. Take on new projects and sell yourself, your skills and your company. Above all else, have fun doing it.”

Cynthia M. Hodnett is editor of On Balance magazine. Contact her at 262-785-0445 ext. 3004 or cynthia@wicpa.org.

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On Balance

March|April 2013

Consider checking the box to

disregard

foreign

subsidiaries By Robert J. Misey Jr., J.D., MBA, LL.M

uring the first few months of each year, taxpayers deluge the IRS with Forms 8832 to â&#x20AC;&#x153;check-the-boxâ&#x20AC;? to disregard foreign subsidiaries. Due to the increase of the tax rate on dividends from 15 to 20 percent, tax professionals should consider checking the box more now than they ever have before. Many tax professionals did not realize that the 15 percent capital gains rate on qualified dividends extended beyond domestic dividends to dividends received from foreign subsidiaries. These dividends were received from foreign subsidiaries that were incorporated in a country with which the United States had entered a tax treaty. Because of the Dec. 31, 2012, expiration of the 15 percent rate, many tax professionals advised their clients to take a distribution of the maximum amount of earnings and profits (E&P) from a foreign subsidiary by the end of 2012.

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Because of compromise in the American Taxpayer Relief Act of 2012, the tax rate on dividends received from foreign subsidiaries beginning Jan. 1, 2013 increases from 15 percent. Consequently, tax planners should consider several check-the-box strategies. From a U.S. tax perspective, there are several reasons why a closely held business should check the box to disregard its foreign subsidiary: • Lowering the effective rate of tax via foreign tax credits. • Receiving a “last chance” dividend that is taxed at the 15 percent tax rate and avoiding the new 3.8 percent Medicare Tax. • Locking in a capital gain taxed at 15 percent. All these check-the-box strategies involve the owner filing a Form 8832 by 75 days after the desired effective date. All foreign subsidiaries except per se corporations, which are primarily public companies in various foreign countries, are eligible entities.

Lowering the effective rate of tax By owning a foreign subsidiary through a flow through entity in the United States (an LLC or an S corporation), a U.S. owner could defer taxation of the foreign subsidiary’s earnings until repatriated as a dividend. Although the U.S. owner could not receive a foreign tax credit for foreign corporate taxes paid by the foreign subsidiary, the U.S. owner could defer the income from U.S. taxation and ultimately incur U.S. tax at the favorable rate of 15 percent. It may no longer be worthwhile for a U.S. owner to incur double taxation — once at the foreign corporate rate and once at the new U.S. individual rate for qualified dividends of 20 percent, plus the 3.8 percent Medicare Tax. Instead, the U.S. owner should consider checking-the-box for the foreign subsidiary to disregard it. In effect, for U.S. tax

take a foreign tax credit to reduce the effective tax rate.

Example 1: U.S. individual’s LLC wholly owns ForCo, which pays Country F corporate tax at a 30 percent rate. By checking-the-box, U.S. individual will have to report all of ForCo’s income, but will now have paid foreign income taxes that are creditable in the United States against the U.S. tax on ForCo’s income.

Receiving a “last chance” dividend If the U.S. flow through entity is an S corporation, checking the box offers the opportunity to take a “last chance” dividend taxed at the 15 percent rate. Because checking-the-box results in a deemed liquidation of the foreign subsidiary, the U.S. international tax rules treat the E&P of the foreign subsidiary as a deemed dividend on the effective date of the liquidation. With a checking-thebox effective date of Dec. 31, 2012, which the U.S. owner must file by March 16, 2013, that deemed dividend should be treated as a qualified dividend and taxed in 2012 at the favorable 15 percent rate.

Example 2: U.S. individual owns USACo (an S corporation), which owns ForCo, a wholly owned subsidiary incorporated in a foreign country with which the U.S. has entered a tax treaty. Pursuant to a check-the-box election, effective Dec. 31, 2012, ForCo distributes all of its assets, which have a fair market value of $7 million, to USACo as part of a complete liquidation. On the date of the liquidation, ForCo had $3 million of earnings and profits. U.S. individual will pay U.S. tax at a 15 percent rate for $450,000. However, if the effective date of the check-the-box liquidation is during 2013, U.S. individual will pay tax on the $3 million dividend at the higher U.S. rate of 20 percent, plus the 3.8 percent Medicare Tax.

purposes, the foreign subsidiary is now a foreign branch and

Locking in capital gains

the U.S. owner is treated as paying the foreign income taxes

If the U.S. flow through entity is an LLC, which is treated

and, assuming there is enough foreign source income, may

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as a partnership for U.S. tax purposes, checking-the-box for

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March|April 2013

the foreign subsidiary could also result in capital gains taxed

have gain of $2 million ($7 million less $5 million) and pay

at the preferential 15 percent rate. Unlike a liquidation into

tax at 15 percent on the gain for $300,000.

an S corporation, a liquidation into an LLC would be treated

However, if the effective date of the check-the-box

as gain to the extent that the fair market value of assets

liquidation is during 2013, U.S. individual will pay tax at

received exceeds the LLC’s basis in the foreign subsidiary.

the increased capital gains rate of 20 percent.

Once again, by checking-the-box with an effective date of

Although a relatively short form to complete, the impact

Dec. 31, 2012, which must be filed by March 16, 2013, this

of filing a Form 8832 to check-the-box is large. Tax

gain would be taxed at the preferential 15 percent rate for

professionals should double, triple and even quadruple

capital gains.

check their work. With proper analysis of a taxpayer’s

which owns ForCo, a wholly owned subsidiary incorporated in a foreign country. Pursuant to a check-the-box election effective Dec. 31, 2012, ForCo distributes all of its assets, which have a fair market value of $7 million, to USACo as part of a complete liquidation. Assuming that USACo’s basis in ForCo’s shares was $5 million, U.S. individual will

foreign tax credit and foreign operations, the tax planner may provide some significant tax advantages by analyzing the propriety of a check-the-box election. Robert J. Misey Jr., J.D., MBA, LL.M is chair of the International Department at Reinhart Boerner Van Deuren s.c. in Milwaukee. He was previously a trial attorney with the Internal Revenue Service Chief Counsel (International) in Washington, D.C. Contact him at 414-298-8135 or rmisey@reinhartlaw.com.

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Example 3: U.S. individual owns USACo (an LLC),

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Human capital management: A key driver for growth By the AICPA Communications Team Intensifying competition, continuing marketplace volatility and widespread globalization have done more than redefine the strategies, rules and measures of sustainable success for organizations today. They have also fueled the emergence of a critical driver of growth that until now has been too often overlooked — human capital management. Employee skills, experience, development and job satisfaction can mean the difference between success and failure. Acknowledging this, the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) commissioned the Economist Intelligence Unit to perform a global survey, “Talent Pipeline Draining Growth: Connecting Human Capital to the Growth Agenda.” The survey of more than 300 CEOs, CFOs and

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human resource directors from a wide range of organization sizes and industry sectors was performed in July 2012. Its purpose is to understand talent management’s importance in business strategy and determine whether organizations have the resources in place to manage talent effectively.

Senior executives focus on performance targets, strategy leadership Among the survey’s eye-opening findings is the damage inadequate human capital management is having on the bottom line. Forty-three percent of senior executives surveyed attribute their organization’s failure to hit key financial targets to ineffectively harnessing and managing their employees’ skills and experience. In addition, 40 percent believe that mismanaging talent has reduced their ability to innovate and 39

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percent believe it is a barrier to achieving forecasted growth. Such measurable shortfalls take a tremendous toll on organizations, especially at a time when optimum performance, progress and competitive standing are needed most. “Ideas are the currency of the knowledge economy, so human capital must be managed as rigorously as financial capital,” said Arleen Thomas, CPA, CGMA, senior vice president for management accounting at the AICPA. “It is clear from our research that many companies are falling short of their potential because they lack thorough, relevant information about their people to support effective strategy, hiring and training decisions,” Thomas said. “Chartered global management accountants can bridge this gap, combining broad perspective and analytical rigor to ensure the right focus and metrics that align talent management with business strategy.” As the value of a successful talent management strategy begins to take greater hold among business leaders, there is less clarity on who holds responsibility for measuring the effectiveness of a firm’s talent management strategy. Eighty-three

the best talent to slip away,” said Charles Tilley, FCMA, CGMA and CEO of CIMA. “It is vital that organizations embed a robust human capital strategy within the wider business plan and develop appropriate metrics and KPIs that are subject to the same level of scrutiny as financial data.”

Four steps lead the way to successful talent management To help senior executives reap the full benefits of an effective human capital management strategy, and overcome any roadblocks that may arise, the AICPA and CIMA identified in their survey report the following four steps business leaders can take, which can be supported with guidance from CGMAs, to reconnect talent management with growth and progress:

Step 1: Create human capital metrics and KPIs that are core features of the organization’s overall business strategy, and ensure that they also help implement the business strategy.

Step 2: Make certain that human capital information is credible and accurate, and made relevant and actionable so it can support business decisions.

Step 3: Establish clear guidelines that not only

Instead, 65 percent of CEOs responded that the CFO

explain responsibility, accountability and ownership of human capital management but also bring heightened visibility and credibility to the function.

and finance team should be responsible for measuring

Step 4: Ensure that your organizational structure

percent of human resource directors believe it is their responsibility; however, CEOs and CFOs disagree.

the overall cost and value of recruiting, retaining and developing talent in their organizations. “There is a worrying boardroom divide that

fosters close partnerships between executive and operational levels, especially collaboration between finance and human resources.

threatens to destabilize sustainable growth by allowing

Visit www.cgma.org/Resources/Reports/Pages/talent-pipeline-draining-growth.aspx to learn more about the “Talent Pipeline Draining Growth: Connecting Human Capital to the Growth Agenda” survey.

On Balance

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{ In Touch | president & CEO’s message } “The WICPA remains strongly committed to representing your interests in public policy matters and encourages your contributions to WICPA CPAC/LIF to help us maintain the positive visibility CPAs have in the legislative process.”

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WICPA advocacy: Reducing your costs, risks and burdens Most Wisconsin CPAs are unaware of how WICPA advocacy has saved them time, money and convenience. Our advocacy has defeated several proposals to impose sales taxes on accounting services, which would be costly, inconvenient and burdensome on those seeking to establish or expand business and employment in Wisconsin. Such a tax would also encourage businesses near Wisconsin’s borders to hire professionals outside the state in order to avoid sales tax on services. Our advocacy also resulted in a CPA exemption to the practice of law definition adopted by the Wisconsin Supreme Court in 2010. Without this exemption, the new rule would have prohibited CPAs from providing the tax and other business consulting services they have provided for more than a century. Other legislative proposals we defeated would have required CPAs to comply with duplicative and burdensome requirements regarding tax return preparer registration and privacy. Again, our advocacy exempted CPAs from these requirements. WICPA members’ testimonies at six hearings around the state were critical in defeating the proposed expansion of joint and several liability in 2009. This avoided the increased professional liability insurance premiums and risk for Wisconsin CPAs that would have resulted from expanding joint and several liability. We also played a crucial role in conforming Wisconsin law to federal law with respect to IRA and 401(k) contribution deduction limits in 2010. Without this law change, these retirement

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plan contribution limits would have reverted to 2005 levels. More recently, WICPA members testified in support of a constitutional amendment introduced by WICPA member Rep. Dale P. Kooyenga, CPA (R-Brookfield) to require application of Generally Accepted Accounting Principles in preparing the state budget. Other WICPA efforts to improve public policy included WICPA members Michael E. Friedman, CPA, J.D., Henry A. Jasper, CPA, MST, and Richard J. Kollauf, J.D., CPA. All three testified before a Wisconsin legislative steering committee in 2012 to explain opportunities for improving Wisconsin taxation policy and processes. Our members have provided positive visibility for the Institute and the CPA profession on Advocacy Day in 2009, 2011, and 2013 meeting with many Wisconsin legislators to share CPAs’ positions on public policy matters. The WICPA remains strongly committed to representing your interests in public policy matters and encourages your contributions to WICPA CPAC/LIF to help us maintain the positive visibility CPAs have in the legislative process. Visit http://tinyurl.com/aqwbpob to contribute.

Dennis F. Tomorsky, CPA, J.D., CGMA is president & CEO of the Wisconsin Institute of CPAs. Contact him at 262-785-0445 ext. 3014 or dennis@wicpa.org.

Finding H ASSETS in

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IDDEN INCOME and FAMILY LAW CASES By Tracy L. Coenen, CPA, CFF Divorce and child support cases often are highlighted by disputes over money. One party may be accused of artificially depressing earnings, hiding assets or manipulating the finances to lower the financial obligation to another party. Understanding the complete picture of the finances is necessary before a fair settlement can be reached. Chicago divorce attorney Jeffrey Knipmeyer, partner at Nottage & Ward, cautions that spouses of individuals hiding income and assets rarely have the financial sophistication to recognize that manipulation is occurring. He adds that during the marriage, they typically have been hands-off, and their only knowledge of the finances depends on what the spouse has communicated. Self-employed individuals, people working for family members and employees of closely held businesses have ample opportunity to manipulate the numbers. Sometimes a spouse stops taking a paycheck to make it appear that no earnings are available for support. A cash intensive business may have a sudden unexplained drop in revenue, which might suggest that cash receipts are going unreported. Financial analysis by a qualified expert can level the playing field when such issues are present.

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Financial documents needed A CPA can analyze the finances of an individual or business to search for hidden income and assets. Knipmeyer emphasizes the importance of retaining and working with a CPA early in the divorce process. By getting an early start on understanding the partiesâ&#x20AC;&#x2122; assets and income, a CPA can assist the attorney in requesting documentation that will lead to the discovery of hidden money. Knipmeyer notes thereâ&#x20AC;&#x2122;s little that can be hidden if the attorney hires the right experts. For example, an analysis of tax returns and financial statements from year to year will often provide clues about the money and allow a tracing of assets. Consider seeking third party records, rather than relying on spouse-created documentation such as check registers and financial statements. Third party records such as bank statements, credit card statements and brokerage account statements are generally reliable and not subject to manipulation.

Income and expense analysis Financial documents can show income or spending patterns that contrast with whatâ&#x20AC;&#x2122;s reported by the other side. Bank statements may show a higher level of revenue than reported on tax returns or to the court. An analysis of bank deposits should

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be done, segregating transfers between accounts or other nonrevenue sources of funds, such as draws from a line of credit. Business owners who intentionally underreport revenue on tax returns often still report all business expenses. An analysis of the expenses as a percent of revenue can quickly reveal such a problem. Look closely at the items that typically fluctuate with revenue. If cost of goods sold, payroll, or supplies suddenly increase as a percentage of sales, this may indicate unreported revenue. On a personal level, a lifestyle analysis may indicate an undisclosed source of income. The party may claim his salary was reduced or eliminated, but spending patterns evidenced by bank or credit card statements may show expenditures at or above historical levels. This could indicate a previously unknown source of funds. A sophisticated person hiding income may not use known bank accounts or credit cards to conduct financial business. He may be clever enough to take steps to conceal sources of income and spending habits. Many times, however, the individual is unaware that such documents can be examined and used to refute his income claims.

Hidden assets In some cases, assets such as real estate, vehicles, jewelry, bank accounts and brokerage accounts are hidden to prevent the other party from obtaining his rightful share of the assets. Tax returns, financial statements, bank and brokerage records, and credit card documentation can be used to help find such assets. Tax returns will list interest and dividend income, assisting in identifying bank and brokerage

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accounts. Real estate taxes and mortgage interest paid may point to real estate owned. Expenditures from bank accounts and credit cards may show transactions related to real estate purchases, vehicle purchases or expenses or other assets acquired. Frequent trips to the same location may indicate real estate or business interests there. It may take some creativity, but a critical analysis of expenditures can provide important clues to concealed assets. Knipmeyer stresses the importance of retaining CPAs who can explain the fruits of their labor once hidden assets are found. He said, “There is nothing worse than hiring a top-notch expert who is unable to effectively describe her conclusions to a judge or jury.” In a divorce, the client has one chance to get the best result. Knipmeyer emphasizes, “The court can only divide the property it is aware of and grant support based on income proven at the time of trial.” In order to for the client to receive what she is rightly entitled to, Knipmeyer cautions that, “Not every divorce attorney or CPA has the sophistication and experience to handle hidden asset cases — choose wisely and choose early.” Tracy Coenen, CPA, CFF is the owner of Sequence Inc. Forensic Accounting in Milwaukee and Chicago. Contact her at tracy@sequenceinc.com or 414–727–2361.

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make an immediate impact. Make an immediate, positive impact on your career when you visit Madison and participate in Wisconsin School of Business Executive Education courses. Youâ&#x20AC;&#x2122;ll learn valuable skills, connect with faculty and real-world business leaders, and quickly add value to your organization. Take a three-day course or earn a professional development certificate in key business areas including: Business Analysis Project Management Advanced Management and Leadership Take the first step toward lifelong learning today at exed.wisc/guide.

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kudos Anthony J. Balistreri, CPA has been named partner at Kiesling Associates LLP in Madison. James A. Holmes, CPA, managing partner at Vrakas/Blum, S.C., in Brookfield, has been elected treasurer of the North America board of directors of CPA Associates International, Inc. Anthony J. Balistreri, CPA

Justin K. Huebner, CPA, CITP has been named partner at Kiesling Associates LLP in Madison. Terry Jannsen, CPA, CFP, president of Jannsen + Company in Pewaukee, has won the inaugural Challenger Award at the first Global National Conference, according to Oconomowoc Focus. Jannsen was recognized for demonstrating excellence in challenging conventional wisdom to attract new clients and extend the boundaries of the financial services profession.

Justin K. Huebner, CPA, CITP

Rep. Chris Kapenga, CPA, (R-Delafield) has been selected to serve as cochair of the Wisconsin State Assembly Constitution and Ethics Committee. Jill A. Kimmerly, CPA was promoted to senior accountant at Wegner CPAs in Baraboo, according to Wisconsin Dells Events. Clifford J. Konkol, CPA has been hired as vice president of finance at Accelerated Genetics in Baraboo, according to the Wisconsin State Farmer. Rep. Dale P. Kooyenga, CPA (R- Brookfield) has been selected to serve on the Wisconsin State Assembly Joint Finance Committee.

Evan Y. Lin, J.D., CPA

Bonnie S. Lilley, CPA has been hired as senior manager of the accounting department at Komisar Brady & Co., LLP in Milwaukee. Evan Y. Lin, J.D., CPA, a shareholder with Stellpflug Law, S.C. in DePere, has been named to the 2012 Wisconsin Super Lawyers Wisconsin Rising Stars list as one of the top up-and-coming attorneys in estate planning and probate. Jay M. McMahon, CPA has been hired as an audit manager at Kerber, Rose & Associates in Shawano.

Glenn F. Miller, CPA

Glenn F. Miller, CPA has been named managing partner at Wegner CPAs in Madison.

Odd & Ends Wisconsin named among worst states for business Forbes’ latest rankings of The Best States for Business listed Wisconsin No. 42 in the nation, decreasing from No. 40 in 2011 (http://tinyurl.com/btajq4q). The state had negative 0.3 percent job growth and ranked 43rd in growth prospects in 2012, according to Forbes. Criteria used for the ranking were business costs, labor supply, regulatory environment, economic climate, growth prospects and quality of life. Conversely, Utah, Virginia, North Dakota and North Carolina were cited among the best states for business

Chortek & Gottschalk named fastest-growing firm Chortek & Gottschalk, LLP, a CPA and business advisory firm in Waukesha, has been named to INSIDE Public Accounting’s list of Fastest Growing Firms for 2012. Chortek & Gottschalk was listed as an All-Star Firm within the Great Lakes region, ranking fourth in growth percentage. It also ranked fourth in the nation on Public Accounting’s ranking for top merger and acquisition (M&A) firms and third in the nation for percentage of fees associated with our technology service offerings.

memorials

JAMES W. BRUSSELL, CPA

JAMES M. JACQUART, CPA

(1930–2012)

(1954–2012)

James W. Brussell, CPA died Dec. 4, 2012, according to the Portage Daily Register. He was 82. Brussell served in the U.S. Army from 1949–1952. He later attended Eastern Illinois State College before transferring to the University of Denver where he earned an accounting degree. He later earned his certified public accounting license in 1962. His accounting career included a position as managing partner at Miller, Brussell, Ebben & Glaske LLC in Portage. He retired in 1990. The Fraser, Colo., resident joined the WICPA in 1963.

James M. Jacquart, CPA died Nov. 21, 2012, according to Wisconsin State Journal. He was 58. Jacquart earned an associate degree from the University of Wisconsin–Sheboygan in 1974. In 1976, he earned an accounting degree from UW–Milwaukee. He earned his certified public accountant license later that year. He had been an accountant for Windsor Homes and was as a CPA for Jacobson Brothers Meats and Deli. The Madison resident joined the WICPA in 1982.

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You deserve a

Silver Lining.

When something bad happens, it may not be a disaster. But whatever it is, you always deserve fast and fair service from your insurance company. West Bend provides a Silver Lining, no matter what the claim may be. If your beloved pet is injured in an accident, having coverage for veterinarian expenses is important. So that’s just what we offer with our Home and Highway® policy. And you’ll find a Silver Lining in many other ways, like coverage for just about everything you own; a 5% cash back award if you don’t have a claim; and one policy, one premium, and one deductible. You even get a special discount just for being a member of the WICPA. Some things can never be replaced. But if something bad does happen, West Bend makes sure our customers experience the Silver Lining. Because the worst brings out our best.® To find out more, contact Professional Insurance Programs at (414) 277-0154 or pip@execpc.com.

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Expertise. Insight. Clarity.

At Keebler & Associates, We are nationally recognized tax professionals in family wealth transfer/estate planning and retirement distribution planning. We provide tax and estate planning for high net worth individuals and families, and educate financial, tax and estate professionals on cutting-edge tax strategies.

We bring expertise and years of experience in the following: • Family wealth transfer planning • Retirement distribution and retirement planning • Estate tax planning and administration • Charitable gift issues • IRS private letter ruling representation • Roth IRA conversions

• Net unrealized appreciation strategies • One stock portfolio issues • Quantitative analysis of tax and retirement planning options • Creating educational materials for CPE providers • Tax seminars • Ponzi scheme tax representation

Stephen J. Bigge, CPA, CSEP

Peter J. Melcher, MBA, JD, LLM

Most of our clients are referred to us by their primary CPA or lawyer and we seriously respect those referrals. We strive to work collaboratively with other advisors keeping the client’s best interest in the forefront. Robert S. Keebler, CPA, MST, AEP

Michelle L. Ward, JD, LLM

420 S. Washington Street | Green Bay, WI 54301

Call Bob Keebler at 920-593-1700 | www.keeblerandassociates.com 22

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March|April 2013

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The new and improved www.WICPA.org You’ve got to see it to believe it! Your best online resource for the CPA profession in Wisconsin just got better! Here’s how: •

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On Balance

March|April 2013

{ Tax | fixed assets }

IRS releases rules on capitalization of fixed assets By Rick Stezenski, CPA and Larry Bovee, CPA

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A number of major battles in the capitalization versus expense war between taxpayers and the Internal Revenue Service (IRS) have occurred over the past six years. These battles were largely in the courts until 2008. In March of 2008, taxpayers won a victory when the Department of the Treasury issued new proposed regulations that relaxed the rules relating to repairs. Prior to onset of the new proposed regulations, taxpayers needed to capitalize certain costs or rely on a number of court

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Units of property/ restorations The rules in the new regulations for determining the proper unit of property for the most part are the same as the proposed regulations. One significant change, however, is that the regulations now apply the tests to determine if property has been improved to both the structural components of a building and building systems (for example, a roof).

The regulations definING building systems include: • Heating, ventilation and air conditioning (HVAC) systems. • Plumbing systems. • Electrical systems. • Escalators. • Elevators. • Fire-protection and alarm systems. • Security systems. • Gas distribution systems.

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Once the proper unit of property is identified, taxpayers must evaluate whether a restoration or betterment has occurred. The new rules for determining whether an amount is paid to restore a unit of property, and therefore would result in capitalization of costs, are the same as the proposed regulations with a few notable exceptions. Examples of costs that may be deductible are work done on roof and parking lot membranes and light remodels of buildings. Examples of costs that may not be deductible are substantial remodels of buildings, the replacement of a roof including the joists and infrastructure, and replacement of a parking lot including a re-grading of the underlying surface.

{ Tax | fixed assets }

cases. Now, the taxpayer could expense these costs as repair and maintenance expenses. Many taxpayers were excited with this victory and filed requests to change their accounting methods that would allow them to maximize these relaxed rules. The IRS later waged a new battle, and this time, it was the victor. On Dec. 23, 2011, the department issued temporary regulations that replace the proposed regulations issued in 2008. The new temporary regulations don’t remove all of the benefits provided in the proposed regulations. However, the regulations do make it difficult for taxpayers to treat some costs as being eligible for expensing. The following paragraphs outline several significant changes from the proposed regulations to the new temporary regulations as they currently read.

Dispositions The new temporary regulations have expanded the definition of a disposition to include retirements of structural components of buildings. Under the new disposition rules, each structural component of a building is the asset for disposition purposes. Therefore, when a component of a building is removed, the adjusted basis of the component must be recovered. For example, if a taxpayer replaces a window in its building, the taxpayer must calculate the amount of adjusted basis related to the original window remaining and claim a loss on disposal of that window. On its surface this seems like a pro-taxpayer rule; however, there are two issues with this rule. First, it forces taxpayers to go back and calculate the amount of the original basis they will allocate to the window component of a building they may have purchased a number of years ago. Second, unless a taxpayer makes a special election known as “a general asset account election,” all amounts for replacement property must be capitalized.

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â&#x20AC;&#x153;

T he new temporary regulations donâ&#x20AC;&#x2122;t remove all of the benefit s provided in t he proposed regulations. However, t he regulat ions do make it difficult for taxpayers to treat some cos t s as being eligible for expensing.

â&#x20AC;&#x153;

De minimis Also new in the regulations is a limit on how much a business can deduct under its capitalization policy. Most companies currently have a policy for book and tax to expense asset purchases under a certain dollar threshold (for example $1,000). Under the new IRS rules, companies are generally limited in any given year to deducting the greater of .1 percent of gross receipts or 2 percent of book depreciation. The Treasury is taking comments on these limits, and they could change significantly.

Summary In summary, the new rules present issues and opportunities around fixed assets and will apply to all businesses. Initially, the temporary regulations were to be effective Jan. 1, 2012. However, before Thanksgiving

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2012, the IRS issued a notice deferring the effective date of these regulations to Jan. 1, 2014. There has been speculation that the IRS may also modify some of the rules by taking some of the advice the tax practitioner community has supplied related to the regulations. Although the effective date has been deferred and certain aspects may change, the rules are here to stay. Taxpayers should become familiar with the new rules and understand how they will affect their tax filings.

Rick Stezenski, CPA is a federal tax services partner at Grant Thornton LLP in Appleton. Contact him at 920-968-6722 or rick.stezenski@us.gt.com. Larry Bovee, CPA is a tax director at Grant Thornton LLP in Appleton. Contact him at 920-968-6750 or larry.bovee@us.gt.com.

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WICPA’s On Balance magazine is Digital! On Balance is now online! Access your No. 1 publication for Wisconsin CPA news any time or place. View the current issue and browse the archives at www.wicpa.org/OnBalance.

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COMING IN APRIL

Reading Makes ¢ents

Read-A-Thon Help Wisconsin kids become money smart! Visit the local elementary school of your son, daughter, niece, nephew or neighbor during April, and read to students about the basics of money. Select a book from a recommended reading list or choose your own book with a money-related theme. Borrow a book from your

local library, or purchase a book and leave it with the teacher. WICPA members will receive handouts to bring to class, including information for parents, a piggy bank for students and financial literacy curriculum for teachers. For more information, visit www.wicpa.org/Reading.

In conjunction with Financial Literacy Month,

To pledge your participation,

Money Smart Week and Teach Children to Save Day,

email Mary Murray at

the WICPA will host its fifth Read-A-Thon in April.

www.wicpa.org

mary@wicpa.org.

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March|April 2013

{ Industry | government contracting }

GOVERNMENT

CONTRACTORS FACE AN ERA OF UNCERTAINTY

By Stephanie J. Geurts, CPA, CITP

he U.S. government is the largest contractor in America. It is the single largest consumer of goods and services with estimated spending at $350 billion each year. However, what does the future look like for government contractors in a market where the customerâ&#x20AC;&#x2122;s current financial position and spending policies arenâ&#x20AC;&#x2122;t sustainable? In recent years, several efforts have been made to improve the economy and create jobs, including the American Recovery and Reinvestment Act of

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2009 (ARRA), the Housing and Economic Recovery Act of 2008 (HERA) and the Emergency Economic Stabilization Act of 2008 (EESA). The ARRA provided $787 billion in tax cuts, benefits and funding for government contracts, grants and loans with the hope of creating new jobs and investing in long-term growth while increasing accountability in government spending. The HERA was intended to provide housing reform and established the Federal Housing Finance Agency. It also created the popular First Time Homebuyer Credit,

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{ Industry | government contracting }

“ Federal contracts are subject to the FEDERAL

ACQUISITION REGULATION (FAR), which is a set of standards for policies, procedures, accounting systems, internal controls and fraud prevention.

”

which allowed a tax credit of 10 percent of the purchase price of a new home up to $7,500 for qualified taxpayers.

the largest federal contracting agencies. The new budget

The EESA’s goal was to provide economic stability by giving the federal government authority to purchase and insure troubled assets. The controversial bill was commonly referred to as a “Wall Street bailout.” The EESA created the Troubled Asset Relief Program (TARP) with a $700 billion spending authority that was reduced later by the Dodd-Frank Wall Street Reform and Consumer Protection Act. In 2011, the Department of the Treasury reported a $1.3 trillion budget deficit. (This is a cash-based deficit that does not include expenses incurred but not paid.) The Treasury also reported $2.7 trillion in assets compared to $17.5 trillion in liabilities. The majority of debt ($10 trillion) is in the form of publicly held securities. One of the key performance measures the federal government uses is the debt-to-gross domestic product ratio, which takes the U.S. national debt as a percentage

the next 10 years, beginning with a $5 billion reduction in

of the value of goods and services produced in the country. The continuous rise in this ratio indicates the current and projected budgets are not sustainable. Enter the Budget Control Act of 2011 (BCA), which aims to reduce the deficit by $1.5 trillion (2012–2021) and improve the short-term and long-term fiscal imbalance by curtailing discretionary spending. However, the debt-toGDP ratio likely will increase over the next 75 years, even with the BCA. The 2013 President’s Budget includes measures for reductions in discretionary spending, consolidation and elimination of programs, and among other changes a new

Contractors in this market should also understand and

defense strategy. The Department of Defense is one of

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includes proposals of $487 billion in spending cuts over 2013. In addition to uncertain market conditions, contractors also need to concern themselves with audit scrutiny and increased regulations. The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) and the Defense Contract Audit Agency (DCAA) have increased monitoring of several areas, including executive compensation, related party transactions and the business systems used by contractors. Federal contracts are subject to the Federal Acquisition Regulation (FAR), which is a set of standards for policies, procedures, accounting systems, internal controls and fraud prevention. In addition to the FAR, many agencies have their own set of requirements such as the DFARS for the Department of Defense and VAAR for the Department of Veterans Affairs. have the resources to enforce various fraud regulations such as the False Claims Act and the Fraud Enforcement and Recovery Act. Many projects are subject to additional reporting requirements such as usage of Recovery Act money at the FederalReporting.gov website or the Federal Funding Accountability and Transparency Act (FFATA) that tracks government spending at

http://usaspending.gov/.

Stephanie J. Geurts, CPA, CITP is accounting director at Suttner Accounting, Inc. in Oshkosh. Contact her at 920-233-4260 or sjg@suttnercpa.com.

On Balance

March|April 2013

{ Technology | QuickBooks }

QuickBooks can address advanced users’ common issues By Heather J. Richter

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March|April 2013

Are you a QuickBooks user who considers yourself advanced? Even if you’re an advanced user, there are QuickBooks features that can help make your job more efficient or less painful. A tool that was introduced by QuickBooks a few years ago, found within the Accountant’s edition of the QuickBooks software, is known as the Client Data Review. This tool reviews different areas in the company file (account balances, review list changes, accounts receivable, accounts payable, sales tax, inventory, payroll, bank reconciliations and miscellaneous) and determines if there are transactions/items that need additional cleanup or fixes. Within each area, there are further cleanup tasks that allow you to ensure the data related to that area is entered appropriately.

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{ Technology | QuickBooks }

“The CLIENT Data REVIEW TOOL allows for fixes that are more efficient. However, some of the QUICK FIXES can also be made manually within ANY VERSION of QuickBooks.” The following are different areas of the Client Data Review tool and the tasks included in each area: Account balances

Accounts payable

The cleanup tasks included in this section are: 1) Troubleshoot prior account balances. 2) Reclassify transactions. 3) Open working trial balance.

The accounts payable area allows for: 1) Fixing unapplied vendor payments and credits. 2) Evaluating and correcting 1099 account mapping. 3) Reviewing unpaid bills report.

Review list changes

Sales tax

This area allows you to review any list within QuickBooks and review any additions, deletions, merges or changes to the list(s). The tasks included are: 1) Chart of accounts. 2) Items. 3) Fixed asset items. 4) Payroll items. 5) Review item setup. 6) Customers. 7) Vendors. 8) Other names. Changes can’t be undone. However, this provides a listing of all the changes in one area.

The sales tax cleanup task includes options to: 1) Fix incorrectly recorded sales tax. 2) Adjust sales tax payable. 3) Manage sales tax. 4) Pay sales tax. 5) Sales tax preferences.

Accounts receivable

Payroll

Within the accounts receivable cleanup task, the options include: 1) Fix unapplied customer payments and credits. 2) Clear up undeposited funds account. 3) Review accounts receivable aging summary report. 4) Write off invoices.

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Inventory Within the inventory area, options include: 1) Review inventory setup. 2) Compare balance sheet and inventory valuation. 3) Troubleshoot inventory. 4) Adjust inventory quantity/value on hand.

Payroll includes the tasks of: 1) Find incorrectly paid payroll liabilities. 2) Review payroll liabilities. 3) Review employee default settings. This area is most useful if you are utilizing a QuickBooks Payroll solution.

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March|April 2013

Inventory

This area allows for the user to: 1) Reconcile accounts. 2) Locate discrepancies in bank reconciliation. 3) Review missing checks. This is not only for bank accounts; the reconciliation feature can be used for any balance sheet account the company finds useful in reconciling on a regular basis.

8) Review Inventory Setup (Lists, Item List). 9) Compare Balance Sheet Inventory and Inventory Valuation (a. Bring up current balance sheet; b. Reports, inventory, inventory valuation summary/ detail; c. Compare). 10) Adjust Inventory Quantity/Value on Hand (Vendors, Inventory Activities, Adjust Quantity/ Value On Hand).

Miscellaneous Cleanup tasks within this section include: 1) Set closing date and password. 2) Review QuickBooks preferences. 3) Condense data from previous periods. As mentioned initially, the Client Data Review tool is available within the Accountant’s version of the QuickBooks software. Some of the tasks/reports previously listed are in any version of the software, including the following:

AR 1) Review AR Aging Summary Report (“Reports, Customers & Receivables, AR Aging Summary”).

AP 2) Evaluate and correct 1099 settings (Edit, Preferences, Tax: 1099, Company Preferences). 3) Review unpaid bills report (Reports, Vendors & Payables, Unpaid Bills Detail).

Sales tax 4) Adjust Sales Tax Payable (Vendors, Sales Tax, Adjust Sales Tax Due). 5) Manage Sales Tax (Vendors, Sales Tax, Manage Sales Tax). 6) Pay Sales Tax (Vendors, Sales Tax, Pay Sales Tax). 7) Sales Tax Preferences (Edit, Preferences, Sales Tax, Company Preferences).

Payroll 11) Review Payroll Liabilities (Employees, Payroll Taxes and Liabilities, Pay Scheduled Liabilities). 12) Review Employee Default Settings (Edit, Preferences, Payroll & Employees, Employee Defaults).

Bank reconciliation 13) Reconcile Accounts (Banking, Reconcile). 14) Locate Discrepancies in Bank Reconciliation (Reports, Banking, Reconciliation Discrepancy). 15) Review Missing Checks (Reports, Banking, Missing Checks).

Miscellaneous 16) Set Closing Date & Password (Edit, Preferences, Accounting, Company Preferences, Set Date/ Password). 17) Review QuickBooks Preferences (Edit, Preferences). 18) Condense Data from Previous Periods (File, Utilities, Condense Data). The Client Data Review tool allows for fixes that are more efficient. However, some of the quick fixes can also be made manually within any version of QuickBooks. The Client Data Review tool is very powerful and can be quite useful. However, a word of caution: It shouldn’t be considered a full audit of your QuickBooks file. The areas mentioned previously are areas that QuickBooks users have found to be the most critical in order to have accurate data.

Heather J. Richter is a supervisor at Wegner CPAs in Madison. Contact her 608-442-1970 or heather.richter@wegnercpas.com.

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{ Technology | QuickBooks }

Bank reconciliation

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INVESTMENT ADVISORS

SAVE THE DATE For Our Seminar

Wednesday, June 19, 2013 Co-sponsored by Spectrum Investment Advisors and The Wisconsin Institute of CPAs. (More Information to Follow From the WICPA)

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800-242-4735

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The Magazine for Wisconsin CPAs A publication of the

Wisconsin Institute of Certified Public Accountants 235 N. Executive Drive Suite 200 Brookfield, WI 53005 www.wicpa.org