| Dean Dorton Ford

March 1, 2010

It Pays to Build Green

Filed under: Construction — Tags: accounting, Accounting Firm, Assurance services, CPA, DDF, DDF Technology, Dean Dorton Ford, Kentucky accounting firm, KY accounting, Lexington CPA, Louisville CPA — ddf @ 11:08 am

The Emergency Economic Stabilization Act of 2008 (HR-1424), signed on October 3, 2008, extended the benefits of the Energy Policy Act of 2005 through December 31, 2013. This Act creates multiple incentives for construction projects to include environmentally friendly components. What does that mean to you as a contractor? It means there may be financial benefits for using environmentally friendly components in construction design plans and perhaps more importantly, you may actually have time to market these concepts to potential clients.

The Energy Policy Act of 2005 created a tax deduction of up to $1.80 per square foot (of entire building) available to owners or tenants of new or existing commercial buildings that are constructed or modified to save at least 50% of the heating, cooling, ventilation, water heating, and interior lighting energy cost of a building that meets ASHRAE Standard 09.1-2001. In the case of government owned buildings, designers are also eligible for this deduction.

A partial deduction of $.60 per square foot is available if improvements are made to any one of three building systems that reduce total heating, cooling, ventilation, water heating and interior lighting energy by a specified percent – the building envelope (10%), lighting (20%), or heating and cooling system (20%).

The tax deductions discussed above are for the benefit of the party paying for the construction. The deduction can be taken in the year the property is placed in service. To qualify for the deduction the building or system must be tested and inspected to confirm compliance with the energy cost savings goal according to guidance issued by the IRS in consultation with the Department of Energy.

Construction contractors should take the time to familiarize themselves with the commercial building tax deductions discussed above. Dean Dorton Ford, PSC has thirty years experience helping clients understand the various tax laws impacting their industry. Our construction team devotes significant time to researching and applying the tax laws for contractors and related services. We would be happy to assess the benefits that this deduction may provide you and your customers.

For more information please contact,
Justin Hubbard
jhubbard@ddfky.com
859.425.7604

Hubbard Justin

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February 15, 2010

Energy Efficient Tax Incentives

Filed under: Real Estate — Tags: accounting, Accounting Firm, CPA, DDF, DDF Technology, Dean Dorton Ford, Kentucky accounting firm, KY accounting, Lexington CPA, Louisville CPA — ddf @ 10:29 am

The Energy Policy Act of 2005 is starting to draw more attention due to the extension of certain tax incentives through the year 2013. For commercial buildings, The Energy Policy Act of 2005 allows for an immediate tax deduction of up to $1.80 per square foot for energy-efficient features of the building’s construction or retrofit under IRC §179D. Commercial buildings also include multi-family residential buildings with more than three stories. For instances where a non-taxpaying entity, such as the government or a municipality owns the building, The Energy Policy Act of 2005 allows for the primary designer, typically the architects and engineers, to claim the deductions. If the market downturn is a factor in current year profitability, this may still be beneficial due to the ability for certain small businesses to carry back net operating losses up to five years, thus, creating immediate cash benefits.

To claim a tax deduction under The Energy Policy Act of 2005, there are three different areas that qualify for a tax deduction of up to $.60 per square foot for each area. These areas include interior lighting systems, HVAC, and the building envelope. The building envelope is defined as the perimeter of the building including the roof, walls, windows, doors and floor/foundation. The deductions apply to buildings or systems placed in service or remodeled during calendar years 2006-2013. To qualify for those deductions, a project – whether an entire building or one of the three subsystems – must cut energy use compared to the limits specified in ASHRAE 90.1-2001.�
Of the three areas available for these tax incentives, the one that is drawing the most attention is interior lighting systems. With substantial improvements in recent lighting product efficiency, most products currently available meet the requirements of The Energy Policy Act of 2005. The incentive for lighting systems can also be taken advantage of without energy modeling, which is required by the two other areas. Owners of commercial buildings have the opportunity to take advantage of the combination of savings from the energy efficient lighting and the savings from the tax incentives available. To demonstrate the economic benefit of a commercial building that qualifies for the maximum deduction for lighting systems, a 100,000 square foot building will generate an immediate federal tax deduction of $60,000 and in most states an additional $60,000 state deduction.

In order to qualify for these deductions for commercial buildings a certification must be obtained by an engineer or contractor that is properly licensed as a professional engineer or contractor in the jurisdiction in which the building is located. Dean Dorton Ford has the resources available to provide you with this certification and walk you through the cost/benefit analysis of taking advantage of these tax incentives.�
Along with these incentives, an additional tax incentive that is set to expire at the end of the year allows for eligible contractors that construct new energy-efficient homes to claim a $2,000 tax credit for each home that they sell. In order to qualify for the $2,000 tax credit for newly constructed energy-efficient homes, contractors must meet certain requirements that will classify these homes as energy-efficient. The homes must be constructed to consume 50% less energy for heating and cooling than that of a comparable home. In addition the building envelope must be constructed to consume 10% less energy for heating and cooling than a comparable home. There is also a reduced credit of $1,000 available for homes that meet certain lower requirements. These credits are calculated per qualifying home, which can add up to a large tax benefit for a contractor that builds multiple energy-efficient homes.

For further details on the commercial energy tax deductions under The Energy Policy Act of 2005 or the $2,000 tax credit for newly constructed energy-efficient homes, please contact Paula Hanson (phanson@ddfky.com) or Brandi Marcum (bmarcum@ddfky.com) at 859-255-2341.

John Calabrese �
jcalabrese@ddfky.com

Calabrese John

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January 29, 2010

Recovery Through Buying American

Filed under: Uncategorized — ddf @ 12:17 pm

On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (the Recovery Act) into law. This act provided for a $787 billion economic stimulus package, of which, $135 billion is designated for construction, repair and maintenance of federal buildings, public transportation infrastructure and other public works. Section 1605 of the Recovery Act, titled “Use of American Iron, Steel, and Manufactured Goods” contains requirements that any project receiving stimulus funds for “the construction, alteration, maintenance, or repair of public buildings or public works” utilize “iron, steel, and manufactured goods…. produced in the United States.” This “Buy American” requirement has become a focal point within the construction industry, as contractors seek to maximize opportunities provided by the Recovery Act.

The Recovery Act does contain some exceptions to the requirements of section 1605. The “Buy American” requirements may be waived if it can be determined that buying American materials “would be inconsistent with the public interest.” An exception would also be granted if the availability of materials produced in the United States were insufficient. A third exception is if the use of American made components would increase the costs of the overall project by more than 25%.

The implementation of Section 1605 of the Recovery Act has generated some controversy within the construction industry as experts try to dissect various terms within the Act’ wording. The Recovery Act does not provide clear guidance for what constitutes a “maintenance” project. Previous public building projects have focused on terms such as “construction” and “repair”, but not “maintenance”. Industry experts have also speculated about the absence of a clear definition for the terms “public building” and “public works.” The phrase “produced in the United States” is also open to debate as the Recovery Act has not adopted definitions as historically presented within subpart 25.2 of the Federal Acquisition Regulation, which has governed previous public construction projects.

The provisions of Section 1605 of the American Recovery and Reinvestment Act of 2009 are facts of life now. These provisions will impact every step of the construction process. The controversy and uncertainty surrounding the implementation of the requirements within Section 1605 will continue to be a focus of attention until further clarification is provided.

Many businesses working on construction projects receiving stimulus funding will fall under the “Buy American” requirements of Section 1605. Dean Dorton Ford, PSC has over thirty years of experience in helping clients navigate through new legislation impacting their businesses. Our construction team devotes significant time to researching changes within the construction industry and seeking new opportunities to better serve our clients. We would be happy to offer your business our expertise.

If you have any questions please contact Justin Hubbard at jhubbard@ddfky.com

Hubbard Justin

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January 6, 2010

Meaningful Use Defined

Filed under: Technology, consulting, healthcare — Tags: accounting, Accounting Firm, DDF Technology, Dean Dorton Ford, Kentucky accounting firm, KY accounting, Lexington CPA, Louisville CPA, medicare, Technology — ddf @ 5:13 pm

As promised, the Centers for Medicare & Medicaid Services (CMS) delivered their proposed rule defining meaningful use of certified electronic health record (EHR) technology. As provisioned in the American Recovery and Reinvestment Act of 2009 (Recovery Act) incentive payments will be available to eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) who can demonstrate meaningful use of EHR technology.

On December 30, 2009, CMS released their 556 page proposed rule on the requirements for the EHR incentive program (RIN 0938-AP78 and CMS-0033-P). The major component of this rule is the definition of meaningful use. CMS is proposing a multiple stage rollout for meaningful use. Stage 1 is the focus of the current proposed rule. Stage 1 criteria will be in effect for reporting year 2011. CMS anticipates that Stage 2 will be implemented for reporting year 2013, and Stage 3 will be implemented for reporting year 2015.

The proposed Stage 1 criteria for meaningful use focus on electronically capturing health information in a coded format, using that information to track key clinical conditions, communicating that information for care coordination purposes, and initiating the reporting of clinical quality measures and public health information. The proposed criteria for meaningful use are based on a series of specific objectives, each of which is tied to a proposed measure that all EPs and hospitals must meet in order to demonstrate that they are meaningful users of certified EHR technology.

For Stage 1, CMS proposes 25 objectives for EPs and 23 objectives for eligible hospitals that must be met to be deemed a meaningful EHR user. For a detailed listing of the EPs and hospital criteria, please visit our website: www.ddfky.com/HITECH-Act.html.

In a separate but related proposed rule, the Office of the National Coordinator for Healthcare Information Technology (ONC) released the proposed set of standards, implementation specifications, and certification criteria for EHRs. Preliminary review of this proposed rule indicates that the standards are primarily based on existing standards and technology. The intent is to make the goals more achievable in the desired timeframe. Subsequent rules are expected to follow, with greater detail and steps toward better interoperability.

Both of these proposed rules will have a 60-day comment period. The respective agencies will review all comments and make final changes as quickly as possible. I encourage all interested parties to review the rules and share your comments and concerns with the respective government agency.

Jason D. Miller

Director of Technology Consulting

jmiller@ddfky.com

Miller Jason

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December 31, 2009

Many US Tax Implications for Non-US Participants in the US Equine industry

Filed under: Equine — Tags: accounting, Accounting Firm, CPA, DDF, Dean Dorton Ford, Equine, equine sales, Keeneland, Kentucky accounting firm, KY accounting, Lexington CPA, Louisville CPA, non US equine sales, Sales proceeds, tax — ddf @ 12:17 pm

The world is becoming a smaller place for those participating in the equine industry. We see many of our US-based clients either expanding operations abroad or our non-US based clients bringing horses into the US for the first time.

There are many US tax implications for non-US participants in the US equine industry, which may be confusing. I’ve attempted to summarize some of the most frequent issues that we see in our practice below. If our equine team can assist with any of these matters, please let us know!

Do you conduct your equine activity as a hobby, or as a business with expectation of profit? This is an issue for US participants in the equine industry as well. If you conduct your equine activity as a hobby, you will not be able to deduct some or all of the expenses associated with that activity against the income from that activity. There is the potential that you would owe federal tax on your gross US income from the activity. If conducted properly as a business, racing or breeding activities (among others) would qualify (i.e., there are not activities that the US considers inherently hobbies).
If you have US income from your equine activity, you should file a return generally within 20 months of your year-end or face tax on your gross (vs. net) income. This is a significant generalization, but the message is a valid generalization. If you have gross income from the US, you should consider filing timely in the US.
If your only involvement in the US equine industry is via an independent agent who doesn’t regularly conclude contracts on your behalf (including racing agreements) and if you are a resident of a country that has a regular (e.g., OECD) treaty with the US, you may be able to claim a treaty exemption based on your having no “permanent establishment” in the US.
Horses owned by a foreign company (vs. an individual or partnership) will be subject to rules that may impute a dividend on leaving the US.
Income from horses may be eligible for federal treaty exemptions, but they will always be subject to state and local taxes – so planning in this regard is necessary.
Federal withholding (at 30%) can be minimized or eliminated depending on you current situation.
State sales and use taxes can be imposed on the sale or use of a horse – every US state has different exceptions for the sale and use of horses in their state.
Horses owned directly by a non-US individual or indirectly by US corporation owned directly by a non-US individual (vs. by a foreign corporation) can result in US estate tax if the owner dies while the horse is in the US.

Leigh McKee
lmckee@ddfky.com

McKee Leigh

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December 17, 2009

Windows 7

Filed under: Technology, consulting — Tags: accounting, Accounting Firm, CPA, DDF Technology, Dean Dorton Ford, KY accounting, Lexington CPA, Louisville CPA, Technology, Windows 7 — ddf @ 1:14 pm

The Microsoft Windows Vista operating system was viewed by many IT decision makers as a training hassle, slow performing, unreliable, and an unneeded cost for businesses and consumers. Many companies made the business decision not to upgrade PCs from Windows XP to Windows Vista, and large corporations flexed their purchasing power to force major PC manufacturers and Microsoft to continue offering Windows XP for business PCs. Although this is true, home users were forced to use Windows Vista if they bought a new PC during the last 3 years. While Microsoft would argue that the Vista operating system was a success, they have put a lot of research and effort into ensuring businesses and consumers alike that it is worth it to upgrade to Windows 7. Microsoft touts the new operating system as being very stable, fast, user friendly, and generally a must have for all businesses and consumers.

It has now been a little over a month of sales for the new Microsoft Windows 7 operating system, and the holiday purchasing season is upon us. Windows 7 commercials are playing quite frequently on primetime (and not-so-primetime) TV, and is no coincidence that Microsoft released Windows 7 near the end of the year. The company hopes holiday shopping and excess IT department budget spending at the end of the year will deliver strong sales of the new operating system. Early sales figures suggest this is the case, and most of the technical reviews say it is a much better operating system than Windows Vista.

To better serve our clients, a limited number of employees at DDF volunteered to upgrade their work PCs to Windows 7. After a month or so of everyday use, we all agree it is much better than Windows Vista and serves as a good replacement for Windows XP. The PCs seem to boot quicker, the graphics and end user experience are great, and many of the annoying features of Vista are turned off. That being said, there are a few considerations that must be made prior to moving to Windows 7.

Make sure all your critical business applications run on Windows 7. Some software companies have not performed full testing of their applications on the new operating system. Make sure you test your printers as well. Old printers may not work with the new system.
Make sure you purchase the correct version of Windows 7. Businesses should purchase Windows 7 Professional or Ultimate.
Make sure you understand the upgrade process from Windows XP or Vista to Windows 7. Windows XP users cannot perform an in place upgrade and the included migration tool may not work as well as desired. Windows Vista users must make sure they purchase the correct Windows 7 upgrade.
If you are upgrading an existing PC, make sure the hardware is new enough to give you a positive experience. Older PCs may technically meet the minimum requirements of Windows 7, but the system may run slow.
Make sure you backup all your data before performing an upgrade of your existing PC to Windows 7.

Dean Dorton Ford’s Technology Consulting Group provides end to end IT services for all sizes of business. We can help your company with desktop and network support, remote access, strategic IT consulting, software project management, and IT audit services. If you would like more information about Windows 7 or have any technology questions, please contact Chris Jones at 859-425-7685 or cjones@ddftech.com.

Jones Chris

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December 9, 2009

The “Meaningful Use Guarantee”

Filed under: Technology, healthcare — Tags: accounting, CPA, DDF, DDF Technology, Dean Dorton Ford, healthcare, Kentucky accounting firm, KY accounting, Lexington CPA, Louisville CPA, medicaid, medicare, Recovery Act, software, Technology — ddf @ 3:09 pm

On February 17, 2009, President Obama signed The American Recovery and Reinvestment Act of 2009 (the Recovery Act). A major component of the Recovery Act is its emphasis on improving health information technology (also known as HIT).

To accomplish the improvement in HIT, the Recovery Act includes payment incentives for qualifying professionals. Physicians and hospitals that are considered early adaptors of electronic health records (EHR) can receive a significant amount of money from Medicare or Medicaid. However, there are many stipulations and criteria for receiving these incentives.

Being eligible for the incentives is not going to be as easy as just installing an EHR product. One of the major stipulations in the Recovery Act is the demonstration of “meaningful use” by the EHR product. The problem facing providers is that “meaningful use” was not defined in the Recovery Act. CMS does not expect to release the criteria for “meaningful use” until the end of 2009. There is also expected to be a period of time for discussion and refinement. I do not anticipate a final definition until sometime late in the first quarter of 2010.

So what is the issue? Healthcare providers are reluctant to make any major decisions on EHR solutions until “meaningful use” is fully defined. On the surface, that would seem like a logical process. However, the incentives become available in 2011 and it is anticipated that you will need some amount of historical information (3 to 6 months at a minimum) in your EHR to be able to demonstrate “meaningful use.” Again, so what is the issue? An average EHR solution implementation, for a five physician practice will require a minimum of ninety to one hundred twenty days to be up and running. That is only considering the EHR functions. If the practice management (billing, scheduling, etc.) modules are also needed, that will likely double the time required. Larger practices and hospitals are looking at much longer implementations to account for increased complexities and size. Another item to consider is the probable increase in demand of EHR products which will only lengthen the implementation time lines.

To help alleviate the concerns of potential customers, the larger EHR solution providers have started offering a “Meaningful Use Guarantee.” The goal is provide potential customers with some comfort that they can go ahead and make decisions even though we do not know what the criteria will be. The software companies know that we cannot all wait until the first or second quarter of 2010 to make the decision and expect to be ready in time for 2011.

Providers should be cautious as to how the “Meaningful Use Guarantee” is worded. I believe it will be very difficult for a software company to guarantee that a healthcare provider will receive the incentives. There are too many factors within your organization that they cannot control, nor do you want them to. The kind of guarantee that you should be looking for is one that states that the solution provider will guarantee that their software will be adapted to meet any certification criteria by a set time. I believe that any of the established and large EHR solution providers should be able to react quickly enough to any “meaningful use” criteria. The ability to accomplish this will primarily be determined by their size and resources.

I believe that there are many safe bets out there that allow you to begin evaluating and working toward selecting an EHR vendor. Just be sure they are established, motivated, and have the resources to react quickly enough.

A final thought of caution. These incentives are there and motivating healthcare professionals to engage in technology improvement. I do believe this is ultimately a good direction for the profession. However, please be cautious as you work through determining the right solution for your organization. Technology itself is NOT the whole answer. A software solution is only as good as the process and ability of those people using it. Be sure you do not rush your EHR implementation for the sake of receiving the incentive. A bad implementation could ultimately cost you and your organization more than these incentives provide.

If you would like assistance on your EHR project, please contact Dean Dorton Ford. Our team of Technology, Healthcare Compliance, and Performance Improvement consultants are uniquely qualified to help your organization work through the evaluation and transition process.

For more information, contact Jason Miller.

Jason D. Miller
Director, Technology Consulting
Dean Dorton Ford
(859) 425-7626
jmiller@ddftech.com

Miller Jason

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December 3, 2009

The equine industry is an international one. Many participants in the US equine industry come from outside of the US.

Filed under: Equine — Tags: accounting, Accounting Firm, business, CPA, DDF, Dean Dorton Ford, Equine, Equine sales proceeds, tax — ddf @ 12:48 pm

There are many US tax implications for non-US participants in the US equine industry. I’ve summarized some of the most frequent issues that arise for non-US persons below. Please let us know if we can help you plan for and comply with US tax laws as they relate to your

Do you conduct your equine activity as a hobby, or as a business with expectation of profit? This is an issue for US participants in the equine industry as well. If you conduct your equine activity as a hobby, you will not be able to deduct some or all of the expenses associated with that activity against the income from that activity. There is the potential that you would owe federal tax on your gross US income from the activity.
If you have US income from your equine activity, you should file a return generally within 20 months of your year-end or face tax on your gross (vs. net) income.. This is a significant generalization, but the message is a valid generalization. If you have gross income from the US, you should consider filing timely in the US.
If your only involvement in the US equine industry is via an independent agent who doesn’t regularly conclude contracts on your behalf (including racing agreements) and if you are a resident of a country that has a regular (e.g., OECD) treaty with the US, you may be able to claim a treaty exemption based on your having no “permanent establishment” in the US.
Horses owned by a foreign company, vs. an individual will be subject to rules that may impute a dividend on leaving the US.
Income from horses may be eligible for federal tax exempions, but they will always be subject to state and local taxes – so planning in this regard is necessary.
Federal withholding (at 30%) can be minimized or eliminated depending on you current situation.
Horses owned by a non-US individual or a non-US corporation can result in US estate tax if the owner dies while the horse is in the US.

Please Contact Chris Humphrey if you have any questions chumphrey@ddfky.com

Humphrey Chris

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November 19, 2009

End of Year Accounting

Filed under: consulting — Tags: accounting, Accounting Firm, CPA, DDF, Dean Dorton Ford, Kentucky accounting firm, KY accounting, Lexington CPA, Louisville CPA — ddf @ 11:42 am

The end of the year is fast approaching with a chill in the air. The holiday season will be upon us before we know. We all like to avoid last minute shopping and promise ourselves that next year we will start earlier with our shopping list.

You can also avoid the year end rush and deadlines with you business by using a Year-end Checklist. We hope the Year-end Checklist below will help. Additional checklists can be found in QuickBooks and other accounting software.

Review all employee information to include current address, social security number, gross wages and fringe benefits. This makes year end payroll reporting for forms W-2, W-3, 940 and 941 go smoother.
Review Accounts Payable and verify all vendor invoices are posted for the current year.
Review Accounts Receivables and verify all clients have been billed up through year end. Examine old receivables and consider any write offs as bad debt.
Review payments to vendors for 1099 requirements to include rent, royalties, non-employee compensation over $600.00, and medical and health care payments. Verify current address, social security number or federal I D number.
Reconcile all bank accounts to include checking, investments, credit card, and loan statements.
Take physical inventory of any stock.
Review all expense accounts to verify all fixed assets have been recorded. Adjust for any fixed assets that have been sold or replaced.
Back up all data and print preliminary year end reports to include Balance Sheet and Profit Loss Statement.
Meet with your accountant to review year end reports for year end tax planning and future business planning.

Donna Olliges

dolliges@ddfky.com

Olliges Donna

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November 12, 2009

Web Filtering Options

Filed under: Technology — Tags: CPA, DDF, DDF Technology, facebook, myspace, social media, spyware, Technology, viruses — ddf @ 1:26 pm

For most businesses, internet access is critical to the continued success of the company. It allows remote offices to connect to the main location, employees to research business issues, products to be purchased or sold, bills to be paid online, etc. At the same time, internet access can be one the biggest risks for a company. Social media sites like Facebook and MySpace, can lead to lost productivity and management frustration. Computer viruses and spyware on websites can damage pcs and lead to increased IT expenses and employee downtime. Also, human resource issues related to employees visiting questionable sites can consume management’s time.

There are a number of solutions to help a business win back lost productivity and protect their IT environment. The best solutions provide flexibility to meet a business’s changing needs at a price the business can afford. Two popular web filtering methods are installing a hardware appliance on location and outsourcing to a 3rd party (aka: Software as a service, Saas, Cloud computing).

Both web filtering options reduce the risk of spyware and viruses being installed on work pcs. They also allow management to block categories of websites such as social media (Facebook, MySpace), gambling, and pornography, while allowing web users to view other categories such as news and banking related sites. Both methods provide reports that can be used to help determine if an employee is abusing his/her internet privileges. Lastly, both options can be implemented quickly to protect your business.

The onsite appliance generally works better for growing organizations with one office or multiple large remote locations. The upfront cost is higher than the outsourced option, but the flexibility of the device allows for a more customized web filtering solution. The outsourced model can be very cost effective for even the smallest of companies. It is also a better solution if employees need web filtering protection while working away from the office. Companies with multiple sites and traveling users often benefit from a mixture of the onsite device and the outsourced solution. Regardless of the business environment, these two options are great tools to help protect your business from spyware, viruses, and to minimize lost productivity.

The DDF Technology group provides end-to-end IT network and desktop management, software consulting services, and technology project management. If you would like to sign up for a free web filtering trial or learn more about any of our services, please contact Chris Jones at 859-425-7685 or info@ddftech.com. We look forward to solving your business’s technology problems.

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