OFF I C I AL PUBL I CAT I ON OF THE NEBRASKA SOC I ETY OF CPAs ISSUE 5, 2022 NEBRASKA SOCIETY ANNOUNCES NEW LEADERSHIP FOR 2022-2023 A CELEBRATION OF LEADERSHIP
BOARD OF DIRECTORS LORRAINE A. EGGER CHAIRMAN (402) 965-0328 CyncHealth La Vista KELLY J. MARTINSON CHAIRMAN-ELECT (402) 827-2054 Lutz Omaha JODI M. ECKHOUT SECRETARY (308) 995-6151 Woods & Durham Chartered Holdrege DAVID E. SWAN TREASURER (402) 420-7758 SP Group, PC Lincoln GRANT H. BUCKLEY DIRECTOR (402) 444-1872 Buckley & Sitzman, LLP Lincoln MEGAN C. HOLT DIRECTOR (402) 342-7600 Mutual of Omaha Insurance Co. Omaha BRIAN M. KLINTWORTH DIRECTOR (402) 423-4343 HBE LLP Lincoln SHARI A. MUNRO AICPA ELECTED REPRESENTATIVE (402) 963-4316 Frankel Zacharia, LLC Omaha ERICA R. PARKS IMMEDIATE PAST CHAIRMAN (402) 431-9805 FORVIS LLP Omaha DR. THOMAS J. PURCELL, III DIRECTOR (402) 280-2062 Creighton University Omaha LINDA M. SCHOLTING DIRECTOR (402) 826-6777 Doane University Crete JESSICA L. WATTS DIRECTOR (402) 216-6116 Rehmann Omaha DANA J. WEBER WEST NEBRASKA CHAPTER PRESIDENT (308) 635-3008 Dana J. Weber, CPA Scottsbluf JONI SUNDQUIST NESCPA PRESIDENT & EXECUTIVE DIRECTOR joni@nescpa.org KELLY EBERT VICE PRESIDENT kelly@nescpa.org MICHELLE LYONS STAFF ACCOUNTANT & OFFICE MANAGER michelle@nescpa.org LORI VODICKA MEMBERSHIP & CPE ASSISTANT lori@nescpa.org OFFICERS BOARD MEMBERS NESCPA STAFF IPE 1031 | 888.226.0400 | WWW.IPE1031.COM | INFO@IPE1031.COM EXPERTISE From a Respected Industry Leader THE PREMIER SPECIALIST FOR SECTION 1031 EXCHANGES SECTION 1031 EXCHANGE 3 nebraska society of cpas W W W . N E S C P A . O R G
26 14 C O N T E N T S 10 ©2022 Nebraska Society of Certified Public Accountants | The newsLINK Group, LLC. All rights reserved. The Nebraska CPA is published six times each year by The newsLINK Group, LLC for the Nebraska Society of Certified Public Accountants and is the official publication for this society. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Nebraska Society of Certified Public Accountants, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Nebraska CPA is a collective work and as such some articles are submitted by authors who are independent of the Nebraska Society of Certified Public Accountants. While the Nebraska CPA encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at: 855.747.4003. ISSUE 5, 2022 EDITORIAL: The Nebraska Society of CPAs seeks to reflect news and relevant information to Nebraska and other news and information of direct interest to members of the Nebraska Society of CPAs. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the Nebraska Society of CPAs. Articles may be reproduced with written permission only. ADVERTISEMENTS: The publication of advertisements does not necessarily represent endorsement of those products or services by the Nebraska Society of CPAs. The editor reserves the right to refuse any advertisement. SUBSCRIPTION: Subscription to the magazine, a bi-monthly publication, is included in membership fees to the Nebraska Society of CPAs. 6 PRESIDENT’S MESSAGE: A CELEBRATION OF LEADERSHIP BY JONI SUNDQUIST, NEBRASKA SOCIETY OF CPAs 10 STATE BOARD REPORT: BOARD ADOPTS NEW APS GUIDELINES BY DAN SWEETWOOD, NEBRASKA BOARD OF PUBLIC ACCOUNTANCY 12 2022 NESCPA COURSE CALENDAR 14 ACHIEVE SUPERHERO STATUS BEFORE TAX SEASON 16 COUNSELOR’S CORNER: YOUR BUSINESS NEEDS A SUCCESSION PLAN: START TODAY BY CLARK YOUNGMAN & NATE PATTERSON, KOLEY JESSEN 17 CLASSIFIED ADS 18 STATE TAX BRIEFING: THE MOST UNWANTED SURPRISE IN STATE TAXATION: NEXUS BY NICK NIEMANN & MATT OTTEMANN, McGRATH NORTH LAW FIRM 23 READY TO SELL: HOW ACCOUNTING PRACTICES ARE SOLD 26 OUTSTANDING CPA IN BUSINESS & INDUSTRY AWARD: DOUG EWALD 27 PUBLIC SERVICE AWARD: BOB BERGER 28 OUTSTANDING ACCOUNTING EDUCATOR AWARD: KAY MARESH 29 DISTINGUISHED SERVICE TO THE PROFESSION AWARD: LARRY KOPSA 30 WELCOME NEW SOCIETY MEMBERS! 31 IN MEMORIAM ON THE COVER: LORI EGGER TAKES THE REINS OF THE SOCIETY FROM ERICA PARKS AT THE NESCPA ANNUAL MEETING ON OCT. 27 AT THE EMBASSY SUITES IN LA VISTA. I S S U E 5 , 2 0 2 2
PRESIDENT’S MESSAGE BY JONI SUNDQUIST, NEBRASKA SOCIETY OF CPAs A CELEBRATION OF LEADERSHIP THE MEMBERSHIP OF THE NEBRASKA SOCIETY OF CPAs has selected an outstanding slate of CPAs to serve in leadership positions for the 2022-2023 fiscal year. New officers and board members were elected during the Society’s Annual Meeting and Society Board of Directors Meeting, held Oct. 27, 2022. The meetings were held in conjunction with the Fall Conference at the Embassy Suites Conference Center in La Vista. Since the Nebraska Society of CPAs began in 1928, member volunteers have generously contributed their time and talents to the Society and the profession. “Volunteering for the Nebraska Society of CPAs has strengthened my ties to the profession and given me the opportunity to inf luence the direction of the Society,” said Past Chairman and Nominating Committee Chairman Ryan Burger of Gabriel, Burger & Else, CPA, PC in Seward. “Every member should consider volunteering a portion of their time, skills, and energy to help advance the accounting profession—it’s a powerful way to make a difference and it’s extremely rewarding on a personal level as well,” he said. “Serving as your chairman this past year has been an honor,” stated Society Past Chairman Erica Parks of FORVIS LLP in Omaha. “I have made great connections with fellow CPAs through my service and, together, we’ve found ways to help move the Society and the profession forward. I encourage other members to get involved, too.” SOCIETY ANNOUNCES NEW LEADERSHIP FOR 2022-2023 I S S U E 5 , 2 0 2 2 6 nebraska cpas
“Nothing gets done by one person alone,” Burger agreed. “We couldn’t do what we do without the continued commitment and active participation of our members.” “Fortunately, we have an outstanding group of highly experienced leaders who will continue to guide and move our Society in a positive direction this coming year,” added Parks. “Congratulations to our newly elected officers and board members for the coming year.” CHAIRMAN: Lorraine A. Egger, CyncHealth, La Vista CHAIRMAN-ELECT: Kelly J. Martinson, Lutz, Omaha SECRETARY: Jodi M. Eckhout, Woods & Durham Chartered, Holdrege TREASURER: David E. Swan, SP Group, PC, Lincoln DIRECTOR: Grant H. Buckley, Buckley & Sitzman LLP, Lincoln DIRECTOR: Brian M. Klintworth, HBE LLP, Lincoln CHAIRMAN Lorraine A. “Lori” Egger of Gretna joined CyncHealth in La Vista in 2019 as the chief administrative officer and became the chief financial officer (CFO) in 2020. In 2021, she added CFO of CyncHealth Iowa to her role. Prior to that, she was a tax managing director for KPMG LLP in Omaha, belonged to KPMG’s National Development and Exempt Organizations (DEO) Group, and created KPMG’s Midwest DEO practice. A graduate of the University of Nebraska-Lincoln, Egger has more than 25 years of public accounting and tax experience, specializing in tax consulting and compliance for tax-exempt organizations. She is a frequent speaker on exempt organization tax matters at industry forums and conferences. A Society member since 2001, Egger has served on the Society Board of Directors since 2019 and currently serves on the Society’s Women in Accounting Committee and the Not-For-Profit Committee, where she led the latter as vice chairman and chairman for five years. She previously served on the Society Board from 2008-2011 and on the Foundation of the Nebraska Society of CPAs Board of Trustees from 2013-2019. Egger is the mother of three children: Emma, Gavin, and Ava. CHAIRMAN-ELECT Kelly J. Martinson of Bennington is a tax shareholder at Lutz in Omaha, with more than 27 years of experience in taxation. She began her public accounting career with Sweet & Associates in 1995. A member of the Nebraska Society of CPAs since 1996, she served on the Society Board from 2016-2020 and as secretary from 2018-2020. She currently serves on the Society’s Women in Accounting Committee. Martinson received a Bachelor of Science in accounting, with highest distinction, from Dana College in Blair. She is an AICPA member and a past president of the Omaha Chapter of the Accounting & Financial Women’s Alliance (AFWA). She is also treasurer of the Pension Council of the Midlands and a member of the American Society of Pension Professionals and Actuaries. Martinson is active in the LPGAAmateur Golf Association and is a past president of the Omaha chapter. In addition, she has served in various leadership roles in the Lutheran Church of the Master, including past service on the Foundation of the Master Board of Directors. SECRETARY Jodi M. Eckhout of Miller is a CPA atWoods &Durham inHoldrege and will be entering the Shareholder in Training program in January 2023. A native of Lewiston, Eckhout earned a Bachelor of Science in accounting fromNebraskaWesleyanUniversity, graduating with distinction, and aMaster of Accounting from Montana State University in Bozeman, MT. She started her accounting career with Galusha, Higgins & Galusha, PC, and continued working for Wipf li LLP after the firms merged, spending more than seven years working in Helena, MT. In 2015, she returned to Nebraska, where she worked for McDermott & Miller, PC, and KSO CPAs & Advisors in Kearney, before beginning her career with Woods &DurhamChartered. AtWoods &Durham, she works in small business and individual taxation with a specialty in agricultural businesses. Eckhout graduated from the AICPALeadership Academy in October 2020, served as treasurer for the Helena (MT.) Area Habitat of Humanity for six years, and served on the Kearney Area Children’s Museum Board and Finance Committee from 2016 to 2019. Currently, she is president of the Council of CatholicWomen at St. John Capistran in Amherst and co-chairman of the Amherst PTO. Eckhout has been a member of the Nebraska Society for seven years and has served on the Taxation Committee for five years, presently as committee vice chairman. She and her husband Evan have a daughter, Ember, and two sons, Barrett and Lane. 7 nebraska society of cpas W W W . N E S C P A . O R G
Joni Sundquist is president and executive director of the Nebraska Society of CPAs. You may contact her at (402) 476-8482 or joni@nescpa.org. TREASURER David E. “Dave” Swan of Lincoln is a founder of SP Group, PC. He has extensive experience with corporate, partnership, and individual taxation and overall wealth planning. Swan grew up in Grant before attending the University of Nebraska-Lincoln, where he was a member of both Farmhouse Fraternity and the Innocents Society. He graduated with a Bachelor of Business Administration in accounting from UNL in 1994. Swan joined Grant Thornton LLP in 1993, working there for six and a half years before starting SP Group, PC in Lincoln. A member of the Nebraska Society since 1997, Swan has served on the Society Board as treasurer since 2018 and on the Society’s Taxation Committee from 2000-2019. He is married to Tracey and hopes to be a role model for his two daughters, Kate and Lauren. He still loves to play “old man” basketball. DIRECTOR Grant H. Buckley is a partner and fourth-generation accounting professional with Buckley & Sitzman LLP in Lincoln. He joined the firm in 2013 after spending three years with Deloitte & Touche LLP. Buckley graduated with highest distinction from the University of Nebraska-Lincoln, earning a Bachelor of Science in Business Administration degree in accounting, with minors in finance and sociology. He also received a Master of Professional Accountancy, with highest distinction, from UNL. Buckley has been a member of the Nebraska Society of CPAs for nine years and is also a member of the AICPA and the Association of Certified Fraud Examiners. He is a board member and treasurer for the Community Action Partnership of Lancaster and Saunders Counties and also has served on the University of Nebraska-Lincoln School of Accountancy Junior Advisory Board. His wife, Kelsey, is a dentist and together they share two daughters, Libby and Claire. Outside the office, Buckley enjoys golf and traveling. DIRECTOR Brian M. Klintworth is a partner at HBE LLP in Lincoln. He graduated with highest distinction from the University of Nebraska-Lincoln with a Bachelor of Business Administration in accounting and finance. In 2015, he joined HBE as a tax intern and shortly after began his full-time career as an accountant. He has been instrumental in growing the firm’s tax preparation and consulting services. While at HBE, Klintworth earned a Master of Taxation in 2019 from the University of Denver, Sturm College of Law. Since 2021, he has taught income tax as an adjunct instructor at Concordia University Nebraska in Seward. In the community, Klintworth is a mentor and presenter at Academy Sessions for TeamMatesMentoring. Amember of the Nebraska Society of CPAs for five years, he serves as chairman of the Society’s CPECommittee and as a member of the Accounting Careers Committee, LincolnMAP Roundtable, and Taxation Committee. Klintworth graduated from the AICPA Leadership Academy in 2019 and played an active role in the Nebraska Leadership Seminar in Omaha from 2015-2020. A complete list of the members of the Nebraska Society of CPAs Board of Directors is found on page 3. THANK YOU! We also extend our sincere gratitude to Ryan L. Burger of Gabriel, Burger & Else, CPA, PC in Seward, Neal D. Lyons of UNICO Group Inc. in Lincoln, and Patrick A. “Pat” Meyer of HBE LLP in Lincoln, whose terms on the Society Board of Directors have come to an end. Burger is a past Society chairman and has served on the Nebraska Society Board of Directors for five years. Lyons has been the Society’s secretary for the past year and has served on the Society Board for three years. Meyer is a past chairman of the Society and a past AICPA Elected Council Representative; he has served on the Society Board for seven years. All of these individuals will continue their volunteer service on the Foundation of the Nebraska Society of CPAs Board of Trustees. Without a doubt, leadership and involvement are the greatest contributions you can make to your Society and your profession. Thank you to each and every one of these individuals for their ongoing commitment to the Society and the CPA profession. I S S U E 5 , 2 0 2 2 8 nebraska cpas
• Business succession and exit planning • Partnership taxation structuring and compliance • Tax credit, tax incentives, and alternative financing • Tax-free and tax-deferred acquisitions, mergers, and reorganizations • Tax-deferred Section 1031 exchanges • Wealth transfer planning, including trust and estate taxation • Nonprofit formation and tax-exempt qualification and compliance • Audit response and representation before the IRS, state, and local taxing authorities LET OUR EXPERIENCE WORK FOR YOU 1700 Farnam Street, Suite 1500 Omaha, NE 68102 www.bairdholm.com NESCPA - Half Page Ad.indd 1 10/26/21 4:33 PM 9 nebraska society of cpas W W W . N E S C P A . O R G
S TAT E B O A R D R E P O R T BOARD ADOPTS NEW APS GUIDELINES BY DAN SWEETWOOD, NEBRASKA BOARD OF PUBLIC ACCOUNTANCY THE NEBRASKA BOARD OF PUBLIC ACCOUNTANCY AT ITS Sept. 9, 2022, meeting adopted new guidelines regarding how CPA f irms can associate with non-CPA f irms known as an “Alternative Practice Structure” (APS). The new guidelines precipitated after State Board staff determined several CPAs and small/sole proprietor CPA firms were associating with non-CPA firms in various ways. This included the offering of professional services under the banner of the non-CPA firm, which could lead toconfusionas towho is providing the services andharmthe public. The staff’s goals in issuing the new guidelines are: 1) to ensure the CPA and firm remained properly licensed and in compliance with State Board regulations, and 2) to ensure clarity in any type of advertising and/or on websites that CPA professional services are offered through the CPA firm and not via the non-CPA firm. Based on continued requests for this type of APS arrangement by CPAs and CPA firms, the matter was initially reviewed by the State Board’s Licensing Committee to determine if these arrangements were proper and to formalize them as State Board guidance, if necessary. After several suggested revisions to the APS Guidance draft, the final version was adopted to assist CPAs, CPA firms, and non-CPA firms while associating with each other in the offering of professional services. Please find below the adopted APS Guidelines. NEBRASKA BOARD OF PUBLIC ACCOUNTANCY Alternative Practice Structure Guidelines Summary Per the following guidelines, it is permissible for individual CPAs and CPA firms to associate with non-CPA firms that provide accounting, insurance, wealth management, and other services. As referenced within the AICPA Code of Professional Conduct, this type of practice is known as an Alternative Practice Structure (APS) as it is not the traditional structure of a sole CPA firm. Nebraska Rules of Professional Conduct under NAC Title 288, Chapter 5.003 requires a CPA to offer CPA services only through a licensed CPA firm. The State Board thus provides the below guidelines for those seeking to provide services under an APS. An individual CPA cannot hold out, offer, or provide CPA professional services within a non-CPA firm as this would be in violation of NAC Title 288, Chapter 5.003. It could also confuse the public on how professional CPA services are being offered. It is the policy of the State Board to interpret its regulations whenever possible not to impact small business or impair the ability to provide accounting services to the citizens of Nebraska. It is the goal of the State Board that this guidance will assist those CPAs with the intent to work within and/or provide professional services while associating and/or working within a non-CPA firm. Relevant Regulations Ch. 3.001.20 “Practice of public accountancy” shall mean the performance or offering to perform by a person holding himself out to the public as a permit holder, for a client or potential client, of one or more kinds of services involving: • 001.20A the use of accounting or auditing skills, including the issuance of reports on financial statements which state or imply any level of assurance as to the reliability of any financial statements associated with such assurances; • 001.20B management, advisory, financial, or consulting services, or the preparation of tax returns or the furnishing of advice on tax matters. Ch. 5.007.03 Form of Practice and Name. A licensee may practice public accountancy, whether as an owner or employee, only in the form of a proprietorship, a partnership, a professional corporation, a limited liability company, or any other permissible form of practice… I S S U E 5 , 2 0 2 2 10 nebraska cpas
APS Guidelines A CPA providing tax services may register as another type of agent with the IRS, such as an enrolled agent, paid tax preparer, etc. to be able to provide tax services within the APS/non-CPA firm. In this case, the CPA cannot hold out, offer, or provide CPA professional services within the APS/ non-CPA firm, but can sign the tax returns as their designated agent with the IRS (EA, paid tax preparer). ACPA licensed as a sole proprietor or as a licensed CPA firm may hold out, offer, and provide professional services within an APS (a non-CPA firm) with the following guidance: • Any engagement letters provided to clients should clarify the professional CPA services are being provided by the CPA under their sole proprietorship or CPA firm. • Within any advertising, including website design by the non-CPA firm, it must be clear the CPA provides professional CPAserviceswithin their sole proprietorship or CPA firm. • CPAs can use the non-CPA firm’s letterhead, business cards, etc., however would need to state somewhere that professional CPA services are being provided through the sole proprietorship or CPA firm. As one example, this could be through a disclaimer or asterisk under the CPA’s name. CPAs working within an APS may sign off on experience hours earned by the staff they supervise. Per PAA 1-136.02(1) (a) and (b), the necessary experience requirement for initial licensure will depend on who employs the CPA supervisor and staff member. • If the licensed sole proprietorship or CPA firm employs both, the experience requirement will be at least 4,000 hours earned in at least 2 years. • I f the APS (non-CPA f i rm) employs both, the experience requirement will be at least 6,000 hours in at least 3 years. • If the staff member is employed by the APS (non-CPA firm), the CPA supervisor must also be employed by the APS to be able to sign off on the experience hours earned. The Nebraska Board of Public Accountancy administers public accountancy law in Nebraska. Dan Sweetwood is executive director of the Nebraska Board of Public Accountancy. You may contact him at (402) 471-3595 or dan.sweetwood@nebraska.gov. You may also contact State Board Administrator Kristen VanWinkle at kristen.vanwinkle@nebraska.gov or State Board BusinessManagerHeatherMyersatheather.myers@nebraska.gov. HBE LLP is pleased to announce that for the eighth consecutive year, they have been named to the Accounting MOVE Project’s 2022 Best Firms for Equity Leadership and 2022 Best Firms for Women. With women leading 42% of the firm, HBE is one of the 15 firms awarded with these honors nationwide. The MOVE methodology investigates the factors proven to be essential for career success: Money, Opportunity, Vital supports, and Entrepreneurship. HBE emphasizes employment programs proven to retain midcareer women, including phased return to work for new parents, remote-work opportunities, worklife supports for the busy season, and coaching to help managers lead teams based on productivity, not face time. “We are committed to fostering an environment where all of our associates, regardless of gender, age, race, or other diversity, are able to thrive within the profession,” stated Scott Becker, Managing Partner of HBE. “Through our core values centered on integrity, respect, and teamwork, we will continue to support and advance flexible leadership pathways built upon unique contributions and talents.” www. hbecpa.com 11 nebraska society of cpas W W W . N E S C P A . O R G
12/112/2 TX 2022-2023 Two-Day Federal Tax Update - Individuals & Businesses The Tax U, The Garvs LLC Embassy Suites, La Vista 16 12/7 IT Excel Tips, Tricks & Techniques for Accountants K2 Enterprises Live Webcast 8 12/7 TX Getting Ready for Busy Season: Key Changes Every Tax Practitioner Should Know Surgent, Co-sponsored with Iowa Society of CPAs Live Webcast 4 12/8 IT Artificial Intelligence for Accounting & Finance Professionals K2 Enterprises Live Webcast 4 12/8 IT Emerging Technologies, Including Blockchain & Cryptocurrencies K2 Enterprises Live Webcast 4 12/9 IT Excel Charting & Visualizations K2 Enterprises Live Webcast 4 12/9 IT Introduction to Excel Macros K2 Enterprises Live Webcast 4 12/12 TX Preparing Individual Tax Returns for New Staff Surgent, Co-sponsored with Iowa Society of CPAs Live Webcast 8 12/1212/15 MA AHI Staff Training - Level 5 - Advanced Management & Leadership Essentials AHI Associates Live Webcast 16 2022 NESCPA COURSE CALENDAR DATE TYPE EVENT TITLE VENDOR LOCATION CPE HOURS 11/1411/17 MA AHI Staff Training - Level 4 - Management & Leadership Essentials AHI Associates Live Webcast 24 11/15 MA High-Risk Clients & How to Get Rid of Them AMBA, with Wilson Elser Law Firm & Berkley Select Live Webcast 1 11/16 TX Reviewing S Corporation Tax Returns: What Are You Missing AICPA Live Webcast 4 11/16 TX Reviewing Partnership Tax Returns: What Are You Missing? AICPA Live Webcast 4 11/17 TX This Year's Best Income Tax, Estate Tax & Financial-Planning Ideas Surgent Live Webcast 8 11/17 TX Critical Issues Involving Taxation of Construction Contractors Surgent Live Webcast 4 11/17 AA Contract Accounting & Lease Accounting & Their Impact on Contractors AICPA Live Webcast 2 11/18 TX Estate & Life Planning Issues for the Middle-Income Client Surgent Live Webcast 8 11/21 AA Non-GAAP Financial Statement Options: Cash, Modified Cash & Tax Basis Surgent Live Webcast 4 11/21 TX Mastering Basis Issues for S Corporations, Partnerships & LLCs Surgent Live Webcast 4 11/28 IT Advanced Excel K2 Enterprises Live Webcast 8 11/29 IT Excel Best Practices K2 Enterprises Live Webcast 8 11/29 AA Construction Contractors: Non-Revenue & Non-Lease Accounting Considerations AICPA Live Webcast 4 11/29 AA Construction Contractors: Auditing Considerations AICPA Live Webcast 4 11/30 IT Excel PivotTables for Accountants K2 Enterprises Live Webcast 8 NOVEMBER DECEMBER I S S U E 5 , 2 0 2 2 12 nebraska cpas
12/12 AA Nonprofit Accounting & Financial Reporting Paul Koehler Hillcrest Country Club, Lincoln 8 12/13 AA Governmental Accounting & Auditing Update Paul Koehler Hillcrest Country Club, Lincoln 8 12/13 TX Tax Forms Boot Camp: LLCs, Partnerships & S Corporations Surgent, Co-sponsored with Iowa Society of CPAs Live Webcast 8 12/13 AA You Have a SOC 1® Report - Now What? AICPA Live Webcast 4 12/14 TX General Sales Tax & Nebraska Incentive Program Nebraska Department of Revenue Mahoney State Park, Ashland 4 12/14 ET Doing the Right Thing - Continuing to Refresh Your Ethical Foundation Bryan Slone Mahoney State Park, Ashland 4 12/14 MA Working Remotely: Best Practices, Challenges & Opportunities Surgent Live Webcast 2 12/14 MA Work-Life Balance: Maximizing Productivity & Understanding Related Tax Issues Surgent Live Webcast 2 12/14 TX Federal Tax Update Surgent Live Webcast 4 12/15 TX The Complete Guide to Payroll Taxes & 1099 Issues Surgent Live Webcast 8 12/16 TX Four Tiers of Loss Limitations: A Guide to the Rules for PassThrough Entities Surgent Live Webcast 4 12/16 MA Deal Makers & Deal Breakers! Potential Pitfalls in CPA Firm M&A and Partner Talent Acquisition AMBA, with Wilson Elser Law Firm & Berkley Select Live Webcast 1 12/19 IT 2022's Biggest Security & Privacy Concerns K2 Enterprises Live Webcast 4 12/19 IT An Accountant's Guide to Blockchain & Cryptocurrency K2 Enterprises Live Webcast 4 12/19 TX 2022 Federal Tax Update for Businesses & Individuals Van Der Aa Tax Ed LLC Quarry Oaks, Ashland 8 12/19 AA Preparation, Compilation & Review Engagements: Update & Review AICPA Live Webcast 4 12/19 AA Financial Reporting Implications of the COVID-19 Pandemic Surgent Live Webcast 4 12/19 TX Social Security & Medicare: Maximizing Retirement Benefits AICPA Live Webcast 4 12/19 TX Employer's Handbook: Health Care, Retirement & Fringe Benefit Tax Issues Surgent Live Webcast 4 12/20 IT Data Analytics for Accountants & Auditors K2 Enterprises Live Webcast 4 12/20 ET Ethics & Technology K2 Enterprises Live Webcast 4 12/20 TX 2022 Federal Tax Update for Businesses & Individuals Van Der Aa Tax Ed LLC Ramada Midtown Conf. Ctr., Grand Island 8 12/20 AA Annual FASB Update & Review Surgent Live Webcast 4 12/20 ET Ethics & Professional Conduct: Updates & Practical Applications AICPA Live Webcast 4 12/20 TX Securing a Comfortable Retirement Surgent Live Webcast 4 12/20 TX S Corporation, Partnership & LLC Tax Update Surgent Live Webcast 4 12/21 TX Reviewing Individual Tax Returns: What Are You Missing? AICPA Live Webcast 4 12/21 TX IRS Tax Examinations & Hot Issues Surgent Live Webcast 4 12/21 AA Current Issues in Accounting & Auditing: An Annual Update Surgent Live Webcast 4 12/21 AA Fraud Basics: Protecting the Company Till Surgent Live Webcast 4 DECEMBER 13 nebraska society of cpas W W W . N E S C P A . O R G
YOU’VE HEARD THE PHRASE, “NOT ALL HEROESWEARCAPES.” Well, the NEST 529 College Savings Plan team thinks it’s true, especially when it comes to helping people set their loved ones up for the future while receiving a nice tax deduction. Contributions made in 2022 by NEST 529 account owners are eligible for a Nebraska state income tax deduction up to $10,000 ($5,000 if married filing separately).1 That means they have more money to celebrate—or save for—their loved one’s future. Here are three great reasons to remind your clients to contribute to their NEST 529 account before December 31, 2022: 1) Rising Cost of College The price of higher education looks much different than it did 20 years ago. Tuition and fees, amere fraction of an individual’s total college bill, continue to increase. Scholarships and grants may help cover items like textbooks, but many do not cover living expenses. ACHIEVE SUPERHERO STATUS BEFORE TAX SEASON The College Board is a national not-for-profit dedicated to helping future students prepare to attend college. Its annual report, “Trends in Higher Education Series: Trends in College Pricing and Student Aid 20212,” states the average published tuition and fees for fulltime undergraduate students were: Public two-year college: $3,800 Public four-year in-state college: $10,740 Public four-year out-of-state college: $27,560 Combine the sticker price of tuition and fees with room and board, books, supplies, transportation, and other student expenses, and the costs climb further. Public two-year college: $18,830 Public four-year in-state college: $27,330 Public four-year out-of-state college: $44,150 While postsecondary school is expensive, studies show the more education an individual receives, the more opportunities A MESSAGE FROM THE NEBRASKA STATE TREASURER I S S U E 5 , 2 0 2 2 14 nebraska cpas
and earning potential they will have down the road. That’s why investing in a 529 account now can pay big dividends later. 2) Triple Tax Benefits There are ways to increase the tax benefits during tax season. We are referring to the three big T’s: tax deduction, tax-deferred growth, and tax-free withdrawals. It’s important to remind your clients of the following tax benefits they receive from their NEST 529 account. Account owners are eligible to receive a Nebraska state income tax deduction of up to $10,000 ($5,000 if married, filing separately) for contributions made to their own NEST 529 accounts.1 Contributions made beyond the $10,000 mark cannot be carried over to a future year. The current bear market may make clients hesitant to increase their contributions, but explaining the benefits of tax-deferred growth may convince them to do so. NEST 529 contributions are made with after-tax dollars and any earnings grow federally tax deferred. This means clients can use any investment growth for college expenses, and they don’t have to pay federal or state income taxes on any gains/earnings while in the account. When the time comes to use the funds for school, clients can access those carefully saved dollars tax-free for qualified college expenses.3 Funds cover a wide range of college expenses including tuition, fees, room and board (if enrolled at least half-time), books, supplies, equipment, a computer or printer, computer software or internet access, any special-needs services for specialneeds students, apprenticeship program expenses, and qualified education loan payments. 3) Holiday Gifting When discussing the upcoming tax season with clients, encourage them to talk with family and friends about contributing to a loved one’s NEST 529 account. The NEST GiftED process takes the guesswork out of the process, and they will put their loved one on track for success. That’s far more meaningful than yet another toy or set of holiday pajamas. Keep inmind, account owners qualify for the tax deduction. For a third party to qualify for the tax deduction, they would need to be an account owner. As we quickly approach year-end 2022, take time to strengthen your client relationships. It doesn’t take much effort to reassure them about the many benef its of investing in a NEST 529 account—and it could provide up to $10,000 in tax deductions. By helping them become heroes to their friends and family, you can achieve superhero status yourself. Want to learn more? Contact the NEST Direct Plan at (888) 993-3746 to set up a presentation for your office and find more details at NEST529.com. An investor should consider the investment objectives, risks, and charges and expenses associated with municipal fund securities before investing. This and other important information are contained in the fund prospectuses and the NESTDirect College Savings Plan ProgramDisclosure Statement (issuer’s official statement), which can be obtained at NEST529.com and should be read carefully before investing. You can lose money by investing in an Investment Option. Each of the Investment Options involves investment risks, which are described in the Program Disclosure Statement. An investor should consider, before investing, whether the investor’s or beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s 529 plan. Investors should consult their tax advisor, attorney, and/or other advisor regarding their specific legal, investment, or tax situation. NOT FDIC INSURED* | NO BANK GUARANTEE | MAY LOSE VALUE (*Except the Bank Savings Static Investment Option Underlying Investment) 1 Account owners may deduct for Nebraska income tax purposes contributions they make to their own account (and any other accounts they own in the Nebraska Educational Savings Plan Trust) up to an overall maximum of $10,000 ($5,000 if married, filing separately). Contributions in excess of $10,000 cannot be carried over to a future year. For a minor-owned or UGMA/ UTMA 529 account, the minor is considered the account owner for Nebraska state income tax deduction purposes. The minor must file a Nebraska tax return for the year their contributions are made to be eligible for a tax deduction for their own contributions. In the case of a UGMA/UTMA 529 account, contributions by the parent/guardian listed as the Custodian on the UGMA/ UTMA Plan account are also eligible for a Nebraska state tax deduction. 2 Trends in College Pricing. https://research.collegeboard.org/media/pdf/ trends-college-pricing-student-aid-2021.pdf 3 Withdrawals used to pay for qualified higher education expenses are free from federal and Nebraska state income tax. Qualified higher education expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance; certain room and board expenses incurred by students who are enrolled at least half-time; the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution; certain expenses for special needs services needed by a special needs beneficiary; apprenticeship program expenses; and payment of principal or interest on any qualified education loan of the Beneficiary or a sibling of the Beneficiary (up to an aggregate lifetime limit of $10,000 per individual). However, earnings onall other types ofwithdrawals are generally subject to federal and Nebraska state income taxes, and an additional 10% federal tax. Nebraska law does not treat the following Federal Qualified Higher Education Expenses as Nebraska Qualified Expenses: K–12 Tuition Expenses. If a withdrawal is made for such purposes, although it is a Federal Qualified Withdrawal, it will be treated as a Nebraska Non-Qualified Withdrawal and may result in the recapture of a previously claimed Nebraska state income tax deduction, and the earnings portion will be subject to Nebraska state income tax. Please consult your tax professional about your particular situation. 15 nebraska society of cpas W W W . N E S C P A . O R G
C O U N S E L O R ’ S C O R N E R YOUR BUSINESS NEEDS A SUCCESSION PLAN START TODAY! BY CLARK YOUNGMAN & NATE PATTERSON, KOLEY JESSEN SMALL BUSINESSES ARE THE LIFEBLOOD OF THE AMERICAN economy. The U.S. Small Business Administration estimates that small to medium-sized businesses account for nearly 43.5% of the total GDP of the United States and create about two-thirds of new jobs each year. Small businesses drive American innovation and creativity. These organizations and their owners provide vital services and products not only to individuals but also to other businesses, keeping the U.S. economy functioning and viable. As has become apparent from the COVID-19 pandemic, disruptions to small businesses can have devastating impacts on local communities and the economy as a whole. With the Baby Boomer generation owning approximately 40% of small businesses and nearly 10,000 Baby Boomers retiring every day, one of the major concerns over the next 10 years is what will happen to these organizations when their owners exit. According to a national survey conducted by Business Enterprise Institute Inc., nearly 75% of small businesses will go through an ownership transition in the next 10 years, yet only 20% of organizations have a written succession and exit plan for their owners. Despite this fact, 100% of business owners will eventually exit their businesses, whether planned or otherwise. Succession planning should be an integral part of every small business in order to reduce the risk of failure or major disruption that may result from the transition. As professional advisors, we can guide business owners through the process to help ensure a successful transition. What Is Business Succession Planning? Business succession planning is the comprehensive and holistic approach to designing a successful exit strategy for one or more owners that provides the highest possible value for their business and, optimally, will allow the owner and the business to function well following the transition. When a business succession plan is properly designed and implemented, not only will the owner have the financial resources necessary to live out the next chapter of his/ her life as desired, but the business also will continue providing stability to employees, the community, and other stakeholders after the owner’s exit. Successful business succession plans require an understanding of the owner’s personal and financial objectives, as well as a team of experienced advisers to design and implement the succession plan, along with a written and comprehensive roadmap of the owner’s exit path. As with most client engagements, the first step in designing a business succession plan is understanding the owner’s personal and financial objectives. When would the owner like to exit? To whom do they envision passing the business: a key employee, a child, a third party? Has the owner thought about what his/her post-exit life will look like and what financial resources that will require? If the owner exited tomorrow, would the current business value and cashf low support his/her post-exit life? I S S U E 5 , 2 0 2 2 16 nebraska cpas
These are all important questions in determining which advisers to involve and what exit path will be appropriate. Designing and implementing a successful business succession plan requires assembling a team of advisors with diverse skills from different professional backgrounds. Generally, this team of advisors includes a CPA, business/estate planning attorney, financial adviser, and other advisers as necessary. It is necessary to work closely with the advisory team to determine the initial finances of the business and whether there will be a deficiency in the owner’s personal finances. The advisory teamwill use a multidisciplinary approach to design the tax, business, and personal financial structures for a successful exit. The Final Piece of the Puzzle Depending on the owner’s objectives and the extent of the financial deficiency, the advisory teamwill need to identify the available exit paths for the owner, whichmay involve passing the business to a key employee or one or more children, or preparing the business for a third-party buyer. Successful succession plans are developed using a comprehensive roadmap that clearly identifies the exit path taken, the steps necessary to prepare the owner and business for the owner’s exit, and the parties or advisors responsible for each step along the way. In addition to implementing the proper exit path, the succession planwill also involve ensuring the owner’s estate planning objectives are met and business continuity planning is put in place. This will ensure the succession plan can adapt to unexpected circumstances such as the owner’s death or incapacity. Once the written succession plan is in place, it is important to routinelymonitor the progress and Classified Ads Nebraska Practices for Sale: Gross Shown • Lincoln, NE CPA $500K • Columbus, NE CPA $525K • Central Nebraska Tax and Accounting $1.05M New listings coming soon! For more information, call (800) 397-0249 or visit www.APS.net. THINKING OF SELLING? Accounting Practice Sales is the leading marketer of accounting and tax practices in North America. To learn more about our risk-free & confidential services, call Trent Holmes at (800) 397-0249 or email trent@apsholmesgroup.com. success of the implemented succession plan through measurable goals and markers, detailed on the plan roadmap. Over thenext 10years, understanding thebusiness successionplanning process and how to work with fellow advisors to meet business and owner objectives will be evermore important. The implementation of succession plans for most businesses can take upwards of five years to come to full fruition. In many cases, starting a succession plan at the 11th hour makes it extremely unlikely that the owner’s personal objective and objectives for the businesswill be achieved. Be proactive with your clients to ensure proper succession planning strategies are put into place now. It could mean the difference between success and failure as your clients begin to exit their businesses and may have lasting effects on business stakeholders and local communities throughout the country. Clark Youngman and Nate Patterson are attorneys at Koley Jessen, focusing their practices on estate planning and administration, business succession planning, and tax. Youngman and Patterson counsel business owners, families, and individuals, providing a range of services from preparation of basic estate plan documents to the development and implementation of sophisticated wealth transfer techniques and business succession strategies to achieve the client’s personal, financial, and business-based objectives. For more information, contact them at clark.youngman@koleyjessen.com and nathan.patterson@koleyjessen.com. Omaha CPA rm is looking for a CPA or accountant with 1-7 years of experience with a small or medium-sized CPA rm who will be trained to competently provide accounting, bookkeeping, consulting, payroll, and tax services to our clients. Communication skills and strong computer skills are necessary. Buy-in or purchase options are available in the future. In addition, an association with another rm is desired. Please contact Tony Buda at (402) 330-9927 or tony@tbudapc.omhcoxmail.com. TONY D. BUDA, P.C. CERTIFIED PUBLIC ACCOUNTANT 17 nebraska society of cpas W W W . N E S C P A . O R G
SURPRISESMAY BE GREAT FOR A BIRTHDAY, BUT RARELY ARE they great in business. One significant, unwanted surprise when it comes to state taxation concerns the concept of nexus. Having nexus in a state—unexpectedly—often leads to costly results. In this article, we review the concept of nexus, how it can be avoided (or obtained), and actions you can take if your company or client is faced with unexpected nexus in a state. What Is Nexus? Under the U.S. Constitution, a state cannot impose tax on a taxpayer without some connection between the taxpayer and the state. In brief, nexus is a sufficient connection between a state and a taxpayer that allows the state to impose its taxing jurisdiction on that taxpayer. In other words, if a taxpayer has nexus in a state, that state can require the taxpayer to collect tax and pay tax. The nexus connection is typically established in one of two ways: physical presence or economic presence. Physical presence means a taxpayer has some physical connection in the state. For businesses, this canmean the business has property in the state (including storing tangible personal property), a location in the state, or employees in the state. Economic presence means a taxpayer makes sales into a state or conducts other business or economic activity in that state. For many years, the concept of nexus by economic presence alone was permitted for state income tax but not sales tax. That was overturned in the recent U.S. Supreme Court case South Dakota v. Wayfair Inc. Now, a state can require the payment of income tax, and the collection of sales tax, from companies that only have an economic presence in that state. Therefore, businesses should be careful about when they have a new office, new employee, or new marketing S TAT E TA X B R I E F I N G BY NICK NIEMANN & MATT OTTEMANN, McGRATH NORTH LAW FIRM THE MOST UNWANTED SURPRISE IN STATE TAXATION: NEXUS I S S U E 5 , 2 0 2 2 18 nebraska cpas
campaign that brings the business into a new state, as this may create tax liability for the business in that state. Do Businesses Always Try to Avoid Nexus? Given that nexus typically entails payment or collection of tax in a state, most businesses try to avoid nexus in additional states. However, in certain circumstances, nexus in another state may be helpful. For example, to apportion income for Nebraska income tax purposes, a corporation must have nexus in at least one other state (meaning that another state can impose income tax on the corporation). A corporation may reduce its tax bill by organizing its affairs in order to have nexus in one other state, so they can apportion some or all of their income away from Nebraska. When Can Nexus Be Created Inadvertently? In our practice, we’ve seen a number of times where a business unexpectedly obtained nexus in a state. These arose in the following situations: Remote Employee. As noted above, having an employee in a state generally creates nexus for a business. As employees work from home or remotely, and move to different locations, it can be easy for a company not to realize that its employee who moved to California created nexus in California for that company. Unexpected Sales. Most states have set a minimum threshold of activity in the state before a business is required to collect sales tax in that state. However, this is generally measured on an annual basis. An unexpected amount of sales in a state can therefore trigger nexus in that state under an economic presence theory. Travel Into a State for a Conference. Some states have taken the position that travel into their state for business purposes, including for a conference, creates nexus in that state. Property Storage. Many businesses hire other companies to help manage and store their inventory. Sometimes those businesses do not even knowwhere their inventory is stored.Many states have taken the position that any inventory storage in their state creates nexus—even when the company itself did not direct the inventory into the state. Does Public Law 86-272 Provide Protection? Public Law 86-272 is a federal law enacted to restrict a state’s ability to impose income tax on businesses engaged in interstate commerce. In short, the law protects an out-of-state business from having to pay a state’s income tax if that business’ only activity in the state is the solicitation of orders for tangible personal property, when the orders are approved and shipped from outside the state. The law lists a number of actions undertaken by businesses that will not, by statute, create taxable nexus. However, the law will not protect a business that takes an action which is not specifically listed in the statute itself. In practice, this lawwas enacted in 1959 and has not been updated. Accordingly, it does not ref lect the way most businesses currently BUILD YOUR CAREER HERE. We’re Hiring. Come see what all the noise is about. In a collaborative atmosphere of expertise and knowledge sharing With a team of professionals who value innovation, intelligence and integrity Support in finding your right work/life balance fzacpa.com 402.496.9100 19 nebraska society of cpas W W W . N E S C P A . O R G
operate. We have found that most businesses undertake some action that falls outside of Public Law 86-272’s protection and therefore cannot rely on it. For example, California recently issued guidance which states that “regularly providing post-sale assistance to California customers via either electronic chat or email” constitutes an activity that exceeds the protection of Public Law 86-272. A business that undertakes this activity would thus not qualify for Public Law 86-272 protection, at least according to the state of California. When Does Nexus Come Up? We most often see nexus issues arise in two ways. First, a company receives correspondence from a state that tries to initiate a nexus audit or asserts tax is due without an audit. Because the statute of limitations does not start in most states until a tax return is filed, we’ve seen states go back a number of years in these letters and assert significant amounts of tax owed. Second, buyers of a business often review potential state tax obligations when they purchase that business, as part of their due diligence. Many buyers will require businesses go back and pay state income taxes that may be due from past transactions, so they would not have to worry about past liabilities. We work closely with CPAs in both these situations to help evaluate potential tax liabilities and advise clients on the best ways to handle nexus issues. Nick Niemann and Matt Ottemann are partners with McGrath North Law Firm. As state and local tax and incentives attorneys, they collaborate with CPAs to help clients and companies evaluate, defend, and resolve tax matters and obtain various business expansion incentives See their websites at www.NebraskaStateTax.com and www.NebraskaIncentives.com for more information. For a copy of their full publication, The Anatomy of Resolving State Tax Matters, or their Nebraska Business Expansion Decision Guide, please visit their websites or contact Niemann or Ottemann at (402) 341-3070 or at nniemann@mcgrathnorth.com or mottemann@mcgrathnorth.com. Our experienced estate planning pros are here to help you and your clients navigate the legal ins and outs of wealth transfer taxes. Wills,Trusts and Estates endacotttimmer.com 402-817-1000 Your wealth transfer tax professionals. I S S U E 5 , 2 0 2 2 20 nebraska cpas
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