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Strategic
Issues...Online
For week ending March 16,
2007, Issue #299
Featured Articles:
1. Look
"Above the Line" for Tax
Savings
2. Focus
on Fraud: Fear Factor -
Risk of Detection
Dampens Employees'
Fervor for Fraud - Part
1
3. Compliance
Calendar
Happy St. Patrick's Day!
If you would like to
have further information
on any of these
articles, let us know.
We would appreciate receiving your comments and/or suggestions, anytime!
acarroll@pmcpa.com
We would appreciate receiving your comments and/or suggestions, anytime!
acarroll@pmcpa.com
1. Look "Above
the Line" for Tax
Savings
Pop quiz:
If you count by the line
on your federal income
tax return, you'll add
up a baker's dozen of
these items. The actual
total is even higher -
and each item can save
you money. What are
they?
Answer:
Called "above-the-line
deduction," these items
are adjustments you can
subtract from your total
income, whether you
itemize or not.
For 2006, some of these
deductions have
changed. Here's a
selected overview.
-Educator expenses.
Because of last-minute
legislation in 2006, you
won't see this deduction
on your tax form. But
if you're an eligible
teacher, you can reduce
your income by up to
$250 of unreimbursed
classroom expense.
Books, supplies, and
computer equipment you
purchase with your own
money are examples of
qualifying expenses.
-Tuition and fees
deduction. The
adjustment for tuition
or related expenses
you paid for yourself,
your spouse, or a
dependent is also
missing from your tax
form, but is
still available.
For 2006, the maximum
deduction is $4,000.
-Archer Medical Savings
Accounts (MSA). Though
MSA contributions made
by you or your employer
have been deductible in
the past, you'll find a
separate line for this
item on your 2006
return. The amount you
can claim is limited by
your income and a
percentage of your
health insurance plan's
annual deductible.
-Moving expenses. If
you moved in order to
start work in a new
location, this deduction
can benefit you. The
standard mileage rate
for moving increased to
18 cents for 2006.
Other changes include
increased income
phase-outs for the IRA
contribution deduction
and higher deduction
limits for health
savings accounts. We
can help you make the
most of these
adjustments. Please
give us a call.
2. Focus on
Fraud: Fear Factor -
Risk of Detection
Dampens Employees'
Fervor for Fraud - Part
1
Do your employees feel like they’re being watched? If they don’t they may be emboldened to steal. As most fraud investigators know, the fear of getting caught is one of the most powerful deterrents. In the same way that putting more police officers on the street tends to reduce crime, making your antifraud activities more visible can discourage fraudsters. Historically, businesses have relied on internal controls to defend against fraud. But as many companies have learned the hard way, employees bent on fraud can find their way around internal controls if the incentive outweighs the risk. Businesses must, therefore be sure their employees – including senior executives – see the risks of committing fraud as being greater than the rewards.
Perception of detection
There
are a number of ways to
increase the perception
of detection among
employees, but first is
education. An ongoing,
visible fraud education
program fosters the
belief that anyone who
commits fraud will be
caught, simply by
demonstrating that fraud
is always on the company
radar screen.
Fraud education should
begin with employee
orientation and continue
with ongoing employee
training programs.
Familiarize employees
with your company values
and expectations, and
train them to know what
constitutes fraud.
Educated employees
aren’t only more likely
to notice and report
fraud if they spot it,
but they’re also less
likely to be tempted to
perpetrate it.
Next Issue: Fear Factor – Risk of Detection Dampens Employees’ Fervor for Fraud – Part 2 - Setting up a confidential tip hotline
Next Issue: Fear Factor – Risk of Detection Dampens Employees’ Fervor for Fraud – Part 2 - Setting up a confidential tip hotline
3. Compliance Calendar
March 15
-Monthly
depositors must deposit
Social Security,
Medicare and withheld
income tax for February.
-Corporations must file
2006 calendar year
income tax returns on
Form 1120, U.S.
Corporation Income Tax
Return or Form 1120-A.
U.S. Corporation
Short-Form Income Tax
Return.
-S
corporations file 2006
calendar year income tax
returns on Form 1120-S,
U.S. Income Tax Return
for an S corp and
provide shareholders
with a copy of Schedule
K-1 (Form 1120-S),
Shareholder's Share of
Income, Credits,
Deductions, etc.
-Entities
must file Form 2553,
Election by a Small
Business Corporation, to
choose to be treated as
an S Corporation
beginning in calendar
year 2007.
Partnerships must
provide each partner
with a copy of Schedule
K-1 (Form 1065-B),
Partner's Share of
Income (Loss) From an
Electing Large
Partnership.
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