20 trends to watch in accounting

Iowa Society of CPAs... Advancing the professional success of our members

Originally published in Accounting Today for the Web CPA, these are the top 20 trends that accountants need to have on their radar screen. Watch for future articles in Iowa CPA as we track these

trends and how they are impacting public and private industry CPAs in Iowa.

LOOK, MA — NO WALLS!Who it matters to: Very small and start-up firms.The details: With the cloud enabling “virtual firms”, start-ups will find it

easier and cheaper than ever to get up and running. Small firms should find it easy to make the switch, with midsize and large firms finding it more challeng-ing due to significant legacy investments in leases and equipment.

THE IMPERIAL MPWho it matters to: Midsize and larger firms.The details: With the growing realization that firms must be tightly

integrated and focused on a small set of well-defined goals, firms are slowly giving their managing partners (MPs) more authority and power to move partners to act together for the good of the firm.

SPYING ON YOUR CLIENTSWho it matters to: Firms of all sizes.The details: One of the most important uses accounting firms are finding

in social media is in “social listening” — following your clients’ tweets, blogs and Facebook posts to learn about what they’re thinking and doing, and what your competition is doing.

THE OUTSOURCED CFOWho it matters to: Firms of all sizes interested in accounting work.The details: New tools, particularly of the cloud variety, are making

the idea of being the virtual back office or even CFO for a growing company quite attractive for firms looking to open the doors and expand their advisory service offerings.

OPPORTUNITY IN OBAMACAREWho it matters to: Anyone with a business client, but particularly those serving small businesses.The details: Your small-business clients will be looking for someone they trust to help them wade through the Affordable

Care Act — someone who is used to digesting and explaining complicated regulations and helping with compliance issues.

“Understanding how to engage our professionals with their careers in a meaningful way, and how to connect with clients that are in different places along the trend continuum, will be both a challenge and an

opportunity for all firms, large and small. The changes and advances in technology directly impact the pace of change in the profession. Iowa firms need to not just address, but to em-brace the changes and advances, so they can grow and thrive along with their clients.” – Susan Davis, assurance partner, McGladrey LLP

“As accounting professionals play an increasingly strategic role in the livelihood of individu-als and businesses, leveraging new technologies and embrac-ing change will help Iowa CPAs evolve and thrive in a con-nected world. While technology brings great opportunities, it also comes with risks and a need for more diligence to protect your clients’ private information.” — Don Seibel, CFO & treasurer, FBL Financial Group, Inc. & 2013-14 ISCPA president

October 2013

Newsletter from the Iowa Society of CPAs, your primary source for profession-related information

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2 | Iowa CPA | October 2013 www.iacpa.org

BEYOND EXPERTWho it matters to: Firms with differ-entiated practices or client groups.

The details: You need to be more than an expert — get in front of your clients and be a demonstrated “thought lead-er.” Show that your expertise extends well beyond “mere” tax and accounting rules into the future of whatever client areas you focus on.

SENDING SECURELYWho it matters to: All firms.The details: Communication

between colleagues and clients is often more compromised than many are aware. Keeping whatever is exchanged — text or email — secure has become a top priority and spurred the rise of tools to handle such security measures.

BEYOND BORDERSWho it matters to: Everyone, every-where.

The details: Even the smallest CPA firms can have clients with international ties. You can find pockets of international activity almost anywhere, and tap into wide-ranging expertise through networks of professional firms that span the globe.

THE COOPERATIVE INTERNSHIPWho it matters to: Growing small

firms in areas with lots of similar firms.The details: Internships are a great way to find and lock in talent early. They’re also complex to run and not all that cheap. Some small firms realized that there’s strength in numbers, and started banding together to offer group internships and broader opportunities than they could on their own.

TABLET MADNESSWho it matters to: All firms.The details: Tablets can be

used as a valuable presentation device, and run various aspects of firm and cli-ent business. And with mobile business applications being designed for this very platform, the tablet will likely have some staying power for use in the boardroom, or wherever work is being conducted.

THE NEW FLAVORS OF M&AWho it matters to: Everyone — in

their own way.The details: There’s been an almost-uninterrupted bull run in accounting firm mergers and acquisitions (M&A) over the past 15 years. As the main driver of this boom — the ongoing retirement of the Baby Boom — picks up steam, look for the M&A markets to get even more fractured and more complicated.

THE NEW CAREER PATH(S)Who it matters to: Anyone

whose career isn’t over.The details: Time was, there were only one or two career paths — working for industry or for a public firm until you made partner. Staff, partners and even whole practice groups are now jump-ing from firm to firm, between public practice and industry, as they pursue whatever professional goal suits them.

CLOUD CLOSETSWho it matters to: All firms.The details: As firms look at the

challenges and costs of maintaining their own file storage, they are increasingly turning to the cloud not only to perma-nently house client information, but have redundant support of all of their pro-grams that they can access at any time.

RISE OF THE EMERITIWho it matters to: Midsize and larger firms.

The details: Smart firms will find transi-tional roles for many accountants who are coming to see retirement as optional — keeping them as mentors, business development experts or consultants within the firm, thus keeping their exper-tise on tap but clearing space for young up-and-comers.

YOU OWE YOUR CLIENTS A SUCCESSION PLAN

Who it matters to: Everyone, but par-ticularly smaller firms and sole practi-tioners, and extra small and solo firms with financial planning clients.The details: When it comes to succes-sion planning, accountants owe it to their clients as a kind of fiduciary duty — par-ticularly the CPA financial planner. If they have no clear plan for what will happen to their practice after they retire or die, they are seriously shirking their responsi-bilities to their clients.

THE AUTOMATED IRSWho it matters to: Anyone with tax clients.

The details: The IRS is automating more of its investigation and notice proce-dures. That means more notices and audits initiated and conducted by mail. The IRS likes this because it will bring in revenue more efficiently; you might like it because clients will need your help dealing with the flood of notices.

MANDATES ROLL DOWNHILLWho it matters to: Anyone the

government can identify.The details: Congress comes up with a

Issue No. 2013-10

Published eleven times per year by the Iowa Society of Certified Public Accountants (ISCPA). Send address changes, advertising inquiries and all correspondence to:

Iowa Society of CPAs950 Office Park Rd, Ste 300West Des Moines, IA 50265-2548 Email: iacpa@iacpa.orgWebsite: www.iacpa.orgor, contact the ISCPA office:515-223-8161/800-659-6375

Front page photo: Central Iowa fall foliagePhoto by: JIM HEEMSTRA

20 trends to watch in accountingContinued from page 1

Continued on page 3

www.iacpa.org Iowa CPA | October 2013 | 3

A message from your boardThe ISCPA Board of Directors met Sept. 20, 2013, at the ISCPA office in West Des Moines. The board:

• Approved minutes of the April 26, 2013, board and June 3, 2013, executive committee meetings.

• Approved memorial resolutions for Ronald M. Nims, Ross A. Smith, Da-vid C. Pingel and Dallas E. Voigts.

• Reviewed financial statements for the four months ended Aug. 31, 2013.

• Received a report from Tom Thomp-son, chair of the Iowa Accountancy Examining Board.

• Reviewed written reports submit-ted by committee chairs.

• Received an update on the 2013 Nominating Committee.

• Received a report from the Society’s investment manager, Miles Capital Holding, Inc.

• Received a report on the spring 2013 meeting of the AICPA Council from Steve Marlow.

• Approved advocacy areas and legis-lative retainer for the 2014 legisla-tive session.

• Received a staff stewardship report summarizing activities of the staff since the previous meeting.

• Approved renewal of officers and directors liability coverage for calen-dar year 2014.

• Reviewed completed Form 990 for the year ended April 30, 2013.

• Established May 9, 2014, as the date of the next annual meeting.

• Scheduled a meeting for Dec. 5, 2013.

law, but doesn’t want to create a whole new bureaucracy to enforce the provi-sions, so it drops them on, say, the IRS. They pass the paperwork on to those under their authority — and suddenly tax preparers are required to police clients.

BRING YOUR OWN DEVICEWho it matters to: Primarily

growing or more mobile firms.The details: As firms grow and staff work more in the field, concern is growing over every device they work on that leaves the office. This has caused IT departments and directors some consternation, and they are increasingly considering policies and practices around controlling sensi-tive data.

OUTSIDE COLLABORATIONWho it matters to: All but the

paranoid.The details: Firms and individual ac-

countants are working together beyond sharing best practices and brainstorm-ing with professionals in other firms. They are setting up joint ventures, offer-ing services to one another and banding together in networks and leadership groups.

EYE ON AUDITORSWho it matters to: Auditors, naturally.

The details: Don’t worry, talk about man-datory auditor rotation is not going to happen in any serious way. What seems more likely is something less than rota-tion, but more than what we have now — mandatory tendering, for instance, or some sort of codification of some of the ideas proposed by opponents of rotation in those public meetings. And to go with it, tougher enforcement and inspections.

Access the full article here http://goo.gl/0YCk9w

Final repair/tangible property regulations finally issued The Internal Revenue Service has issued much-anticipated final regula-tions on the capitalization or deduc-tion of expenses incurred in acquiring, producing or improving tangible prop-erty. www.journalofaccountancy.com/News/20138725.htm

Nominate CPAs for 2014 Society AwardsShare your story of an outstanding CPA you know by nominating them for the Public Service or Outstanding CPA in Business and Industry Award. Nomina-tion forms available at: www.iacpa.org/Libraries/member_resources/Award_Nomination_Form.sflb.ashx

Nomination deadline: October 10, 2013.

Continued from page 2

4 | Iowa CPA | October 2013 www.iacpa.org

Classifieds

For ad rates and deadlines, visit: www.iacpa.org/ Resources/ClassifiedAds/ad_rates.aspx.

POSITIONS: TAX ACCOUNTANTS AND AUDITORS–Some peo-ple think accountants are dull. At TD&T Financial Group, work is anything but dull – it’s awesome! We’re looking for career-mind-ed individuals to bring their passion for accounting to the table. Competitive Wage. Great Benefits. Send resume to recruiting@tdtpc.com. See listing of open positions at www.tdtpc.com.

OPPORTUNITIES: Bohr, Dahm, Greif & Associates, P.C., a dy-namic local firm in Cedar Rapids, IA, is looking for an experi-enced Audit or Tax Manager with at least five years of public accounting experience and a CPA designation. A Senior As-sociate position is also available to a candidate with at least three years of public accounting experience who possesses or is working toward a CPA designation. Send resume and cover letter to wrobenalt@bdgcpas.com.

CAREER OPPORTUNITY-CORPORATE TAX MANAGER–Our client has an immediate need for a Corporate Tax Manager due to promotion. In this highly visible role, you will partner with the C level suite to plan and implement tax strategy as it relates to capital structure and tax savings opportuni-ties. Responsibilities include compliance for Federal, State, Local, International, Sales and Use, and Property Taxes. CPA required. For confidential inquiry and consideration, contact Miles Morrow, Iowa Career Connection: 515-282-5823 or morrow@iowacareerconnection.com. We are retained by our clients who pay all fees.

SENIOR ACCOUN-TANT–Roger Klos-terman & Co is hiring for a position as Senior Accoun-tant: CPA with a minimum of two years public accounting experience. Prepare individual, corporate and partnership tax returns. Instruct and train assistants on tax preparation. Assist clients with various accounting services. Strong verbal and written communica-tions. Independent, self-motivated and able to function as a member of a team. Critical thinking and strong analytical problem solving skills

and attention to detail. Opportunity for firm ownership in two-five years. Qualified candidates send resume to kklos@rk-cpa.com.

AUDIT PROFESSIONAL–For over 50 years, Denman & Compa-ny, LLP, Des Moines Metro Area’s 4th largest CPA firm, located in West Des Moines, has been serving the financial needs of the Midwest offering a full range of accounting, auditing, tax and consulting services. Due to continued growth, we are currently seeking an audit professional with three+ years audit experience in a public accounting environment. Position re-quires a Bachelor’s degree in Accounting or related field; CPA license and strong technical abilities, leadership and mentor-ing skills, and availability for limited travel. Denman & Com-pany, LLP is experiencing growth and offers opportunities for advancement. We offer a generous compensation package, including excellent benefits and incentive bonuses. Please submit your resume and salary requirements in confidence to Human Resources, Denman & Company LLP, 1601 22nd St, Suite 400 West Des Moines, IA 50266, email to hr@denman-cpa.com, or Fax: 515-225-0149.

TAX PREPARER/ACCOUNTANT–Western Iowa CPA firm has an opening for an accountant/CPA. Three+ years of tax experi-ence required. Responsibilities include preparing individual & business tax returns and client write-up. Potential partner-ship possibilities exist. Please e-mail or mail your resume & references to: susan@manningcpas.com, Heithoff, Hansen, Muhlbauer & Co, 305 Main Street, Manning, IA 51455.

IOWA PRACTICES FOR SALE: Manchester CPA Practice - gross $435K; Fayette County/Northeast IA CPA Tax Practice - gross $37K; Northwest IA CPA Practice - gross $170K; Fair-field CPA Practice - gross $655K; NE Iowa (Near Waterloo/Ce-dar Rapids) Tax & Acctng - gross $240K; Muscatine County EA Tax & Acctng Practice - gross $157K. Also, view listing details and register for free email updates at www.AccountingPractic-eSales.com. Thinking of Selling Your Practice? Accounting Practice Sales is the leading marketer of accounting and tax practices in North America. We have a large pool of buyers, both individuals and firms, looking for practices to purchase. We also have the experience needed to help you find the right fit for your firm, negotiate the best price and terms and get the deal done. To find out more about our risk-free and confiden-tial services, call Trent Holmes at 1-800-397-0249 or email trent@accountingpracticesales.com.

Like us on Facebook and let us know why you belong to ISCPA. www.facebook.com/IowaCPAs.

www.iacpa.org Iowa CPA | October 2013 | 5

ClassifiedsOctober

7 Expanding the CPA Role: How to Boost Your Influence in Your Organization (eri) West Des Moines8 QuickBooks 2013 for CPAs: Focus On Intermediate/Advanced Features (qbc) West Des Moines9 Excel 2013 Budgeting, Projections, and Cash Flow Forecasting (ecf) West Des Moines

10 Financial Reporting: Turn Information Into Action! (fr-ic) Coralville10 High-Tech Communication: Master the New Technologies that are Changing the Way We

Communicate (comm)West Des Moines

11 Fraud Alert! Prevention and Follow-up (fa-ic) Coralville15 Current Economic Issues and Their Impact on the Financial Professional (ceicfo) West Des Moines16 Cost Allocation in Nonprofits (camn-ic) Coralville16 From Hiring To Firing and Everything In Between: Legal, Tax, and Health Care Issues (htof-sf) Sioux Falls, SD16 Advanced Tax Strategies for LLCs and Partnerships (dtt) West Des Moines17 Determining How Much Money You Need To Retire, and Tax Ideas, and Money

Management in Retirement (drmm-cr)Cedar Rapids

17 Detecting Misstatements -Risk Assessment (demi-ic) Coralville17 Should Client Expenditures Be Capitalized or Expensed? A Guide to the New IRS

Regulations (cpe4-sc)S. Sioux City

17 New Medicine: Key Issues CPAs Need to Know About the Patient Protection Affordable Care Act (nme4-sc)

S. Sioux City

17 Tax Strategies for Businesses (chtx) West Des Moines18 The Best Income Tax, Estate Tax, and Financial Planning Ideas of 2013 (iefp-cr) Cedar Rapids21 Update for Accountants and Auditors (auaa-sc) S. Sioux City21 Guide to Compilation, Review and the Cash and Tax Basis of Accounting (Latest Edition)

(cro-wlo)Waterloo

21 Advanced Selected Issues For Trusts, Estates, and Their Beneficiaries (iteb) West Des Moines22 Ethics Update for CPAs (eubi-ic) Coralville22 AICPA’s Financial Reporting Framework For Small to Medium-Sized Entities: What You

Need to Know Right Now (frsme-ic)Coralville

22 Social Security, Medicare, and Prescription Drug Retirement Benefits: What Every Baby Boomer Needs to Know Now (ssrb)

West Des Moines

23 Accounting and Auditing Current Developments (aacd-ic) Coralville24 Form 1041 Made Easy (1041) West Des Moines24 Technology Trends in the Future and Professional Issues Update (piu-se) Iowa City28 Practical Accounting and Auditing Issues Facing Nonprofit Entities (aanfp-cr) Cedar Rapids28 Internal Controls (That Work) for Small Business (icsb-sc) S. Sioux City28 2013 Real World Ethics Update (rweu-sc) S. Sioux City28 Should Client Expenditures Be Capitalized or Expensed? A Guide to the New IRS Regula-

tions (cpe4-dm)West Des Moines

28 New Medicine: Key Issues CPAs Need to Know About the Patient Protection Affordable Care Act (nme4-dm)

West Des Moines

29 Building Your Moral Capacity (Ethics) (bymc-frf) Fairfield29 2013 Compilation and Review Update: Here Comes A Lot of Change: AGAIN! (cruc-sc) S. Sioux City29 Best Practices for Audits in Compliance with Government Auditing Standards and OMB

Circular A-133 (awac)West Des Moines

29 Surgent McCoy’s Multistate Tax Update (mstu) West Des Moines30 Building Your Moral Capacity (Ethics) (bymc-bet) Bettendorf

CPE Calendar

6 | Iowa CPA | October 2013 www.iacpa.org

30 Building Your Moral Capacity (Ethics) (bymc-dq) Dubuque30 Partnerships and LLCs Update (Classroom Webcast) (plu-mol) Moline30 Partnerships and LLCs Update (Classroom Webcast) (plu-wlo) Waterloo30 Practical Accounting and Auditing Issues Facing Nonprofit Entities (aanfp-dm) West Des Moines30 Partnerships and LLCs Update (Classroom Webcast) (plu-dm) West Des Moines31 Building Your Moral Capacity (Ethics) (bymc-mc) Mason City31 Building Your Moral Capacity (Ethics) (bymc-wlo) Waterloo31 HSAs, HRAs, and FSAs After the Patient Protection and Affordable Care Act (hsa) West Des Moines31 Professional Issues Update (piu-ne) Waterloo

CPE Calendar (continued)

Exempt Organizations ConferenceISCPA’s annual conference for those working in or with nonprofit organiza-tions is Nov. 8, 2013, at the Sheraton West Des Moines. Topics include:

• Executive compensation.• Tax update.• Social media.• Employment law/employer issues.• Accounting & auditing update.• Healthcare.

Go to www.iacpa.org for details.

Ethics seminars approved for Iowa insurance CEBuilding Your Moral CapacityOct. 29 – FairfieldOct. 30 – Bettendorf, DubuqueOct. 31 – Waterloo, Mason CityDec. 4 – Des Moines

2014 Multistate CPE & Ski ConferenceThe 2014 Multistate CPE & Ski Confer-ence is supported by K2 Enterprises and 19 state CPA Societies. It is Jan. 13-15, 2014, at Beaver Run Resort & Conference Center in Breckenridge, Colorado. The conference features six 4-hour sessions on a variety of CPE topics. For more information on the conference, contact K2 Enterprises at 1-888-542-9390.

ACPEN monthly webcast (classroom or individual)Partnerships and LLCs Update, Oct. 30, 2013Classroom locations: Des Moines, Moline, Waterloo

Staff Training: Semi-SeniorNov. 13-15, 2013ISCPA Training Center, West Des Moines

Upcoming tax updatesNov. 4 Individual Income Tax Workshop (West Des Moines)Nov. 5 Corporate/Business Income Tax Workshop (West Des Moines)Nov. 11 Tax Advisors Update (Iowa City)Nov. 12 Tax Advisors Update (West Des Moines)Nov. 18-19 2-Day Federal Tax Update: Individual, Business, & Corporate (Cedar Rapids)Nov. 25 Tax Advisors Update (Sioux City)Nov. 26 Tax Advisors Update (Storm Lake)

CPE news you can useUpgrade your efficiency Register today for the Nov. 20, 2013, Windows 8 and Microsoft Office Work-shop: Work from Anywhere, Anytime, on Any Device. This hands-on session is offered by Microsoft and K2 Enter-prises. Two class times are available and seating is very limited.

www.iacpa.org Iowa CPA | October 2013 | 7

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CPE Calendar (continued)

2013 liaison meeting with Iowa Department of RevenueBy Stephanie Mendenhall, Taxation Committee

On Aug. 6, 2013, members of the Taxation Committee (Committee) met with representatives of the

Iowa Department of Revenue (IDR). IDR representatives reviewed activities and changes at the IDR since the last meet-ing and addressed questions prepared by the Committee.

IDR updateCourtney Kay-Decker, IDR director, opened the program stating that “fun and exciting” things are happening with-in the IDR. Goals to improve customer service, provide accurate and clear information to taxpayers, and modern-ization of tax information delivery and services are being achieved. Moderniza-tion of the e-file system has allowed the development of a new fraud detection engine which assists with detecting compliance issues up front rather than through the audit process.

Discussion topicsJim McNulty, IDR program manager, Policy & Communications Division, pro-vided an update of individual taxpayers’ returns and stated that the number one issue is the Iowa Capital Gains Deduc-tion. For 2013, the IDR will be providing a worksheet as part of the return to determine eligibility for the Iowa Capital Gains Deduction.

Practitioners have noted that an under-payment penalty has been assessed in situations where taxpayers file IA 1040 with filing status married filing sepa-rately, and a refund is due on the tax return, but when calculated separately one of the taxpayers has a liability. The IDR stated that each spouse is viewed as if they filed separately and a penalty may be assessed if one spouse has an underpayment of tax.

The IDR received legislative authority to review the tax appeals process. Victoria Daniels, IDR administrator, Policy and Communications Division, indicated that the IDR works on protests in the order that they are received. Some protests simply take longer due to the complexity of the issues involved.

Sales and use taxConsumer use tax is the highest area of non-compliance. The IDR has developed an online form for consumers to utilize when submitting use tax. Consumers do not need a permit to pay this tax.

Many taxpayers are still unaware of the services in Iowa that are taxable. The IDR has a program to crosscheck Schedule C against sales tax permits. An IDR sales/use tax audit will typically go back ten years to collect the tax. Currently, there is a voluntary disclosure program in place to assist taxpayers wanting to come into compliance with sales and use tax that is owed.

Legislative issues The IDR will continue to be involved and encourage the Legislature to adopt tax law changes earlier in the session. In the area of property tax reform, the IDR is responsible for administering the commercial credits to the counties and determining the backfill amounts. They are also charged with the calculation and administration of the Taxpayers Trust Fund Credit. The IDR’s 2013 leg-islative summaries are online at www.iowa.gov/tax/taxlaw/13legsum.html.

Read full article: www.iacpa.org/Libraries/publications/2013_IDR_Meeting.sflb.ashx.

October is ISCPA membership renewal month

This month, you will receive a request to renew your member-ship with the Iowa Society of

CPAs. Membership in your Society is crucial to our ability to serve you — and all CPAs across the state — with the programs and services you need to keep you at the top of your profes-sion.

Watch for your dues statement com-ing this month. Renew your mem-bership and belong to an alliance of people dedicated to integrity and professional excellence that you won’t find anywhere else.

8 | Iowa CPA | October 2013 www.iacpa.org

Silver Lining.®You deserve a

When something happens to your home, car, or business, it may not be a disaster.

Fortunately, West Bend provides a Silver Lining, no matter what the claim may be. When Brian’s video camera was stolen, replacing it in time to record his daughter’s first steps was important. So that’s just what we did.

With West Bend’s Home and Highway,® you’ll find a Silver Lining with features that include coverage for just about everything you own and a 5% cash back award if you don’t have a claim. You even get a special discount just for being a member of the Iowa Society of CPAs.

To find out more, visit thesilverlining.com.

All legal same-sex marriages recognized for federal tax purposes

On Aug. 29, 2013, the U.S. Depart-ment of the Treasury and the Internal Revenue Service ruled

that same-sex couples, legally mar-ried in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

“From past experience, preparing returns for married same-sex couples

required twice the amount of time to file compared to a couple whose marital status was recognized for federal tax purposes. This new ruling will save legally married same-sex couples time and money when filing tax returns for 2013,” said Kurt Konek, Taxation Com-mittee chair.

Visit www.treasury.gov/press-center/press-releases/Pages/jl2153.aspx for full release, Q&A, information on how to file a claim for refund and future guidance.

IRS practitioner liaison meeting 2013By Bert Blank, Taxation Committee

The Internal Revenue Service (IRS) held its annual liaison meeting in West Des Moines, May 21, 2013.

Members of the ISCPA Taxation Com-mittee attended the meeting on behalf of the Society. The meeting included presenters from various departments of the IRS, as well as a representative from the Iowa Department of Revenue (IDR). Up-to-date information on current developments affecting tax practitio-ners was presented.

New Medicare Taxes for Workers and InvestorsRoger McEowen, a professor at Iowa State University, and Joe Kristan, a CPA from Roth & Company in Des Moines, touched on new Medicare taxes being

imposed Jan. 1, 2013, under a provi-sion of The American Taxpayer Relief Act of 2012. Ironically, the word “relief” in that new law’s name should have probably been replaced with the words “additional taxes” to make clear the law imposes additional taxes on taxpayers—no relief is provided at all—at least not in the case with Medicare taxes.

There are two main parts to the new Medicare taxes. The first part imposes additional taxes on employees and the self-employed so that both end up paying a Medicare tax rate on earnings equal to 3.8%, and the second part imposes a completely new tax of 3.8% on certain types of passive investment income, now referred to as “net invest-ment income.”

A New Home Office Deduction OptionAlso effective Jan. 1, 2013, is a new simplified home office deduction option for taxpayers. This topic was covered by

Kristy Maitre, senior stakeholder liaison from the IRS. To qualify for the simpli-fied deduction, taxpayers primarily need to meet the original qualification tests of exclusive and regular business use currently in place. IRS Revenue Proce-dure 2013-13 provides more details.

A taxpayer must choose to use the optional home office method on a timely filed original return. However, the taxpayer can always change back to the original home office method in any sub-sequent years, and this is not consid-ered a change in accounting method.

The annual IRS Liaison meeting pro-vides tax professionals with valuable in-formation with regard to current issues affecting both tax professionals and their clients. The ISCPA Taxation Com-mittee is committed to continuing to report the topics and issues discussed at this important annual meeting.

Read the full article: www.iacpa.org/Libraries/publications/2013_IRS_Liaison_Meeting.sflb.ashx.

www.iacpa.org Iowa CPA | October 2013 | 9

New MembersAndrew BaileyLuther College

DecorahDenise A. Bone

Mehar Associates PLCHiawatha

Chelsea L. BowdenMcGladrey LLPCedar RapidsKyle R. Day

Lane & Waterman LLPDavenport

Herbert W. FickelTrinity Logistics

CorporationDavenport

Adam M. KunkelRock River Family Office

LLCDavenport

Karie A. MeisgeierDes Moines University

Des MoinesBen Murray

CarteGraph Systems IncDubuque

Amanda S. SpencerErpelding Voigt & Co LLP

HumboldtHeidi H. ToaleArnolds Park

Exam-Qualified Affiliates:Brandi K. Augustine

Brooks Lodden PCWest Des MoinesGina M. Goering

Roth & Company PCDes Moines

Lori K. GreenFirst Cooperative

AssociationCherokee

Nicole HeplerMcGladrey LLP

OmahaKristin L. Rasmussen

Musser Accounting Firm PCWindsor Heights

Student AffiliatesBriar Cliff University

Dominic R. WetzbargerMount Mercy University

Zachary M. BlairDonald R. BradyLyndsey Moes

Greg A. OlbeksonUniversity of Iowa

Jiayu QianUniversity of Northern Iowa

Brad Kamrath

Bradley D. Smerage, Hamilton Juffer & Associates LLP, Des

Moines, has been promoted to partner.

Betsy J. Bane-Ocak, Kiesling Associates LLP, West Des Moines,

has been promoted to accountant II.David A. Vaudt, GASB chair, has

been named to Accounting Today’s “Top 100 Most Influential People in

Accounting” for 2013.

Members in the News

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Get your 2013-14 tax tune-up!

When it comes to tax laws and legislation, you live in a world of keeping up with recent changes, predicting what could come next and delivering trusted expertise to your clients. Register to attend the ISCPA’s 2-Day

Federal Tax Update for the Year 2013-2014: Individual, Business and Corporate in Cedar Rapids, Nov. 18-19, 2013, and have your tax questions answered (before tax season) by national experts Vern Hoven and Ron Roberson, as they provide you with the practical, real-world solutions you need for successful financial planning and client-centered tax practices.

Conference highlights• Implementing Obamacare: what is the least an employer must pay? • Understanding the 3.8% Medicare tax on investment income. • Figuring out S corporation reasonable compensation. • Calculating the new §179 and bonus depreciation deductions. • Evaluating the new law changes to ordinary and capital gains tax rates.

Network and give backJoin your peers Monday, Nov. 18, from 4-6 p.m. for complimentary appetizers and conversation. Remember to bring your suit/professional clothing donations for the LEAP Task Force’s “Attire to Inspire” professional clothing drive. Donations will go to The Daisy Rack in Cedar Rapids. Proceeds of clothing sales support the Young Parents Network.

“Great course year after year - it’s already on my to-do list for next year.”

“Still the best tax update class offered!”

“Love the interaction between these two, and especially like how Vern focuses on the theoretical and Ron focuses on practical application.”

10 | Iowa CPA | October 2013 www.iacpa.org

1-800-397-0249The Holmes Group

www.AccountingPracticeSales.comtrent@accountingpracticesales.com

We are different because we can produce the best results for YOU. Give us a call today so that we can start working to remove your selling headache and to obtain the goal you desire.

Presorted StandardU.S. Postage

PAIDDes Moines, IowaPermit No. 3433

IAEB announces move to Des Moines

The Iowa Accountancy Examining Board (IAEB) has announced they are relocating their office from

Ankeny to downtown Des Moines. The move takes effect Oct. 11, 2013, and will result in new phone and fax num-bers.

IAEB’s new office will be in East Grand Office Park, located in the East Village of Downtown Des Moines. Their current office in Ankeny will remain open until Oct. 10, 2013. The office will be closed Oct. 11 due to the relocation.

200 E. Grand Suite 350Des Moines, IA 50309

Toni Bright, executive officer515-725-9025

Dana Wilkerson, administrative assistant515-725-9022

Fax 515-725-9032

Office hours:Monday - Friday 8:00 a.m. - 4:30 p.m.

IAEB new location & contact information

Succession planning #5Bill Reeb, CPA, continues his discus-sion on succession planning. So far, you have determined how to pay your part-ner for his/her value in the firm, pinned down a mandatory sale of ownership date (MSO) so that you can phase partners out of their leadership roles at predesigned times, outlined how to manage transition, and discussed how to find replacements for the retiring se-nior partners. Now it’s time to talk about some do’s and don’ts as they relate to “soon-to-be-selling” and “post-sale-of-ownership” partners, some of whom will likely want to continue to work for the firm. [Go to Iowa CPA archive for #1 (Jan.), #2 (March), #3 (May), #4 (July/Aug.).]

Read Reeb’s Commentary: www.iacpa.org/Libraries/publications/pp1308_1.sflb.ashx.

ISCPA Annual Meeting – May 9, 2014, The Meadows Events & Conference Center, Altoona

Iowa CPA Golf Classic – June 10, 2014, Copper Creek Golf Club, Pleasant Hill. Open to all ISCPA members.

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