Open enrollment for health insurance coverage through the Marketplace begins October 1, 2013.  Due to this substantial change, a new Fair Labor Standards Act is now in place that requires employers to provide a notice to employees of their coverage options available through the Marketplace.  This week, the Department of Labor issued Technical Release 2013-02 to provide guidance on the applicability, form, timing, content, and delivery of these notices.   

Employers must provide a notice of coverage options to each  current employee before October 1, 2013, regardless of plan enrollment status (if applicable) or of part-time or full-time status. 
Employers are also required to provide the notice to each new employee at the time of hiring beginning October 1, 2013.  The notice must be provided "in writing in a manner calculated to be understood by the average employee", and it may be provided by first-class mail.  For employers who offer a health plan to some or all employees, this Model Notice serves as an excellent starting point, while employers who do not offer a health plan will want to start with this Model Notice instead. 

If you have any questions or concerns, please call one of our offices and ask to speak to one of our accountants. 

Karl A. Lehman earns Exclusive Personal Financial Specialist Credential
Designation certifies advanced education, training and experience in financial planning.

Hanover, PA – Karl A Lehman, a CPA, managing partner of Rager, Lehman & Houck, P.C. (RLH) in Hanover, PA, Westminster, MD and Frederick, MD has been awarded the Personal Financial Specialist (PFSSM) credential by the American Institute of Certified Public Accountants, joining an elite group of professionals who have demonstrated advanced knowledge of tax, estate, retirement, investment and insurance planning.

The PFS credential, established in 1987 by the AICPA, is awarded only to CPAs with extensive training and experience in financial planning. To earn the credential, CPAs must have at least 80 hours of personal financial planning education and 3,000 hours of planning experience within the previous five year period. They also must pass a comprehensive exam covering nine topic areas and be a member in good standing with the AICPA, binding them to the AICPA Code of Professional Conduct. 

“Given their formal education and technical training in the areas of accountancy and taxation, CPAs are the most qualified, knowledgeable and objective financial planning professionals,” said Jeannette Koger, the AICPA’s director of specialized communities. “Supplementing this background with the PFS credential demonstrates a CPA’s commitment to providing the highest level of expert financial planning services. For clients, that translates to financial planning that is CPA strong -- comprehensive financial strategies that put their needs and interests first.”

Currently, more than 5,000 CPAs hold the PFS credential nationwide and many regularly appear on lists of top financial planners. In addition to meeting rigorous requirements to join this elite group, Lehman must meet recertification requirements every three years to maintain the credential.

“I am pleased to have been recognized by the AICPA with this credential and will work to continue to provide meaningful comprehensive planning services to our clients.” said Lehman.

Lehman is president and managing principal of RLH and has 39 years of experience in planning for businesses, individuals, not-for profit entities, estates and trusts  in taxation, entity selection, succession and exit planning, mergers and acquisitions, business planning and projections, technology, retirement funding, education funding, investment analysis, and business profitability improvement strategies.

Carli D. Lehr Awarded Estate Planning Designation
Carli D. Lehr, CPA, CVA, a Tax and Consulting Supervisor at Rager, Lehman & Houck, P.C. (RLH) in Hanover, has recently earned the professional designation of Certified Specialist in Estate Planning™ (CSEP).  This designation was awarded by The National Institute for Excellence in Professional Education, LLC, in conjunction with various state societies of CPAs and Surgent McCoy CPE, LLC.  

To earn this designation, Lehr was required to complete a curriculum of eight courses, meeting core and elective obligations ranging from basic ideas to advanced concepts.  At the completion of each course, each candidate must earn a passing grade on a rigorous timed exam.  Designation candidates are also required to meet prerequisites of education and experience and to meet high ethical standards.  Lehr will also be required to meet ongoing standards of continuing education to retain this designation in good standing.

A 2005 graduate of Juniata College, magna cum laude, with a Bachelor’s of Science degree in Accounting, Lehr began work with RLH the same year.  Since then, she has accumulated eight years of experience in the areas of estate and trust, business, individual, and not-for-profit taxation, business valuation, and management advisory services.  In 2007, Lehr was awarded the designation of Certified Public Accountant by the Pennsylvania State Board of Accountancy and in 2010, she was awarded the designation of Certified Valuation Analyst by the National Association of Certified Valuators and Analysts.

The program is designed not only to promote professional competence in estate planning and trust taxation, but also to provide the public with a high standard by which estate-planning professionals may be judged.  Those who have successfully earned the Certified Specialist in Estate Planning™ (CSEP) designation have achieved this goal through completion of an intensive series of integrated courses in this subject area, and thus have earned the practical knowledge necessary to provide the best possible service to the general public.

Do you know where your money is? If some of it is offshore, you might have tax reporting responsibilities – and those responsibilities generally go further than checking the familiar box on the Schedule B you submit with your federal income tax return. Here are two:

1. FBAR. Foreign bank account reporting has been required since 1970, so you may be familiar with “Form TD F 90-22.1,” commonly known as “FBAR.” Unless you qualify for an exception, that’s the form you fill out when you control assets in a foreign financial account and the total value of your account exceeds $10,000 at any time during the calendar year.
   
   The FBAR is an annual information form, filed separately from your federal income tax return. You may need to file it even if you receive no taxable income from your foreign account.
   
   The due date for the FBAR differs from Form 1040 as well. Your 2012 FBAR must be received by the Treasury Department no later than June 30, 2013. No extension is available. “Received by” means you’ll need to mail the FBAR before June 30. Since that’s a Sunday, your return must reach its destination by Friday, June 28.
   
   You can also file electronically.
2. Form 8938. The requirement to file “Form 8938 – Statement of Specified Foreign Financial Assets” began in 2011. Whether you have to complete Form 8938 depends on your federal income tax filing status, and if you’re living in the U.S. or abroad.
   
   For example, say you’re married filing a joint return, and live in the U.S. You may be required to file Form 8938 if the total value of your reportable foreign assets is more than $100,000 on December 31, or more than $150,000 at any time during the year.
   
   Reportable foreign assets include accounts at foreign banks and financial institutions, as well as certain stocks, bonds, and foreign investments. When determining if you meet the threshold for filing, consider the entire value of accounts you own jointly with someone other than your spouse, as well as assets owned by your dependent children.
   
   File Form 8938 with your federal income tax return. Depending on the amount and type of your foreign accounts and other assets, you might need to file both the FBAR and Form 8938.
   
   Please call if you need details or assistance with your filing responsibilities and options.

Tax rules are daunting at the best of times – and they’re more so at the worst of times, such as during a divorce, when you may feel too stressed to face decisions involving your taxes. Yet the choices you make will affect your future, both financially and personally. Here’s where to start.

~Filing status. For tax purposes, the timing of your divorce matters. The date of your final decree determines your filing status, which in turn has an impact on what you’ll owe.

Will your divorce be final by the last day of your tax year (generally December 31)? If so, you’ll file your income tax return as single or head of household. You can also use one of those filing statuses if you were legally separated according to the laws of your state by the end of your tax year.

If your divorce is closed after the end of your tax year, you’re considered married for that year. In that case, you’ll choose between married filing jointly and married filing separately. Head of household status may be available in certain situations.

Tip: Remember to adjust the income tax withholding statements you have on file with your employer.

~Exemptions. When you prepare your federal income tax return for 2013, you can deduct $3,900 for each qualified child or relative that you claim. In addition, you get the benefit of other credits and deductions related to your dependent, such as the child tax credit.

The general rule: You’re the custodial parent if you’re the one your child lives with for the majority of the year. You can release your claim to the exemption by filing a form with your return. The release will also allow your former spouse to claim the child tax credit.

Tip: Consider adjusted gross income and your exposure to the alternative minimum tax when discussing who will get dependency exemptions.

~Asset transfers. In general, ex-spouses can make a tax-free transfer of assets within a year of the divorce. “Tax-free” means the initial transfer is considered a gift, so you’ll want to make sure you’re fully informed about the basis of assets you receive. Why? Because you get the same basis and holding period your ex-spouse had before the transfer. That will be important when you sell the assets later.

Another caveat: Some types of property, such as retirement plans, have extra rules to be aware of. For example, to remain tax-free, a transfer from your traditional IRA to your spouse must be mentioned in your divorce decree, and should take place post-divorce, via a direct transfer to the new account.

Splitting assets in your 401(k) or other qualified retirement plan requires a “qualified domestic relations order,” a document you must get from the court.

These are just a few of the taxing aspects of divorce. Contact us for planning and advice specific to your situation.

Are you looking for a way to help your child with buying a home? Some strategies you might consider include lending your child money, gifting under the annual gift tax exclusion, pledging securities, and equity sharing.

Assuming you have enough liquid assets, you can effectively act as the mortgage lender to your child by lending money to pay for the house.

Another option is to give the child money for a down payment on a house. Making a gift to your child for the down payment is an ideal situation for parents who are primarily concerned with decreasing the size of their estate and the taxes on it after their death. Current tax law lets individuals make annual gifts of up to $14,000 per person. If both parents join in the gift, they can give the child $28,000 without any gift tax liability.

With some planning, even larger gifts can be made. For instance, if the child is married, his or her spouse is also eligible to receive gifts. Collectively, a married couple could receive $56,000 in gift-tax-free cash for a home purchase. If the gift is spread over a new year, it can be increased to double the amount, giving the child and his or her spouse $112,000 toward the cost of the home.

Another possibility is pledging securities to secure a child’s home loan at a financial institution. By pledging securities instead of selling them, the parents can be saved from a potentially taxable event.

Finally, another alternative is equity sharing where the ownership of the home is shared. Typically, the parent makes the down payment, and the child pays the mortgage payment, utilities, taxes, and other ongoing expenses. The home is jointly owned, and the family can agree on a split of any appreciation in value if the home is later sold.

For details on these and other options available to parents who want to help their child buy a home, give us a call.

The "Taxpayer Relief Act" signed on January 2, 2013, permanently sets the estate and gift tax exemption at $5,000,000 and the top tax rate at 40%. The exemption amount is adjusted annually for inflation, which puts the 2012 exemption at $5,120,000 and the 2013 exemption at $5,250,000. The annual gift tax exclusion for 2013 is set at $14,000 per recipient.

Now that the rules have been made "permanent," take the time to review your estate plan to make sure it still accomplishes your wishes.

With the higher exemption amount, fewer estates will be subject to tax, and perhaps yours falls short of the tax threshold. But regardless of the size of one's estate, everyone needs the following basic documents - updated for the current rules and your particular circumstances:

• A will that specifies who is to inherit your assets and who is to be the guardian of any minor children you have.
  
• A power of attorney naming someone to handle your financial affairs if you become disabled or seriously ill.
  
• A health care directive (living will) stating your wishes should you become terminally ill or permanently unconscious.
  
• A financial inventory listing such things as bank accounts, income sources, insurance policies, and other assets.
  

Your estate plan review should include checking your exposure to state inheritance taxes and an update, if needed, to beneficiary designations on such things as IRAs and insurance policies.

For help in getting your estate plan in order, please contact us and your attorney.