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The Daily

NEWS HIGHLIGHTS FOR MONDAY - 2.8.16

By:
Maya Lindsay
Published Date:
Feb 8, 2016

NYSSCPA Members in the News


Tom Walpole (Rochester)

Tax basics

WROC Rochester First

CPA Tom Walpole discussed the basics of taxes and why we pay them Monday on News 8 at Sunrise. Walpole said taxes are a special kind of fee or charge the government requires people to pay in order live and work in their state and country.  Sales tax for example are a percentage of the total price when you buy things like mobile phones, sneakers or a new toy.  New York's sales tax rate is currently 4 percent.  Depending upon the local municipality, the total tax rate can be as high as 8.875 percent. Walpole said people also pay taxes to the state and federal government on the money they earn from their jobs.  Companies also pay taxes on profits they make.  In addition, those who own property like buildings and homes pay property taxes.  If you inherit money or win the lottery you will also pay a tax on that sum.


Other Accounting and Finance News


Property-tax cap is the wrong tool for NYC’s homeowners

Crain’s New York Business

When my husband and I decided to start a family a few years ago, we house-hunted for months in the district I represent until we found our current home. It was perfect—a Tudor, with all the amenities a new mom could ask for. Except for the property-tax bills, which left me scratching my head. Now I am the Finance Committee chair of the City Council, and property taxes still do not make sense to me. In addition, I have heard from many struggling homeowners across the city that they need help staying in their homes. So I can understand why a proposal to cap annual property-tax increases at 2% seems like a simple way to solve their problem. A cap, however, would do more harm than good. Yes, it would lower tax bills, but for whom? A 2% cap would provide the typical Queens homeowner with about $150 in savings on next year’s property tax.


China’s Forex Reserves Plunge to More-Than-Three-Year Low

Wall Street Journal

China’s foreign-exchange reserves fell to the lowest level in more than three years in January, raising questions about how long Beijing can keep burning through the rainy-day funds to defend the yuan without triggering a huge flight of capital. The People’s Bank of China said Sunday that the world’s largest stockpile of foreign currency plunged by $99.5 billion last month, to $3.23 trillion. The drop follows a record $107.9 billion plunge in December and continues a decline that picked up speed in August, as China’s exchange-rate policies started to appear to be in flux. In mid-August, the central bank unexpectedly devalued the yuan, saying it wanted to bring its value more in line with market forces. But the action backfired, as investors sold the currency in panic fashion, forcing the Chinese central bank to dig into the reserves to stabilize it.


U.S. Adds 151,000 Jobs in January, Including 5,800 in Accounting

Accounting Today

The unemployment rate dipped one-tenth of a percentage point to 4.9 percent as employers added 151,000 jobs in January, to the U.S. Bureau of Labor Statistics reported Friday, including 5,800 jobs in accounting and bookkeeping services. “Overall the unemployment rate has fallen to less than 5 percent and for accountants in the skilled accountant labor market, it's much lower than that,” said Kim Gottschalk, senior regional vice president for the staffing company Accounting Principals. “For the skilled accountant workforce, those people can find jobs immediately if they're looking, or they can switch jobs for a bump in salary right now. Wages are very strong in accounting and finance. People are taking multiple offers and they are getting significant bumps up in pay in many cases. This is for both the temporary labor market, which continues to be very strong, and the direct hire force.


Internal Auditors Straying into Risky New Areas

Accounting Today

Internal auditors are increasingly finding themselves tasked with new responsibilities that carry some degree of risk, according to a new report. The report, from the Institute of Internal Auditors Audit Executive Center raises serious questions about how practitioners are coping with these new demands. The IIA surveyed  chief audit executives and identified several areas where practitioners should branch out—cybersecurity, data usage and analysis step—even if it means they have to step outside their comfort zone. The report encourages internal auditors to also develop so-called “soft skills,” such as active listening, effective communications and diplomacy. “Each year the North American Pulse of Internal Audit provides insightful data about our profession from the CAE perspective and outlines the challenges and opportunities the data reveal,” said IIA president and CEO Richard F. Chambers in a statement.


Good News for 529 Plans May Lead to Lower Fees

Forbes

The Protecting Americans from Tax Hikes (PATH) Act provided an important update to 529 plans, retroactive to the beginning of 2015. However, since Congress didn’t get around to passing the legislation until the mid-December, 529 plan administrators were left in a bind to adjust their software to issue correct 1099-Qs that reflect the new rules. Fortunately for 529 plan administrators, the IRS has promised not to impose penalties for earnings computations that do not reflect the new law. Prior to the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001, the earnings portion of 529 withdrawals, even when used to pay for college, was taxable income to the beneficiary. Because of this, all 529 savings accounts in one state with the same account owner and beneficiary had to be aggregated for the purposes of calculating of earnings reported on Form 1099-Q when withdrawals were made.