Applicants will:

• Have a passion for public accounting
• Be focused on advancement to partner and a firm to call home for their career
• Possess a high degree of technical competence and a strong sense of confidence in one’s own abilities
• Be eager to put in the hours it takes to achieve rapid professional growth
• View constructive criticism as an opportunity for improvement
• Recognize the opportunity to be part of the growth and transition of a firm moving to the next level
• Keep the “big picture” view in mind at all times

About LMGW

LMGW is a full service tax and accounting firm located in Saratoga, California. Our firm possesses a broad range of clients from individual tax work and small businesses to CEOs of public companies, high net worth individuals and businesses with over 1,000 employees. With a staff of 18, LMGW is a small firm focused on personal and professional growth and as a result LMGW has been ranked as one of the Best Accounting Firms to Work for by Accounting Today for the last four years in a row. Several of our partners have been in public accounting for over 30 years and provide the guidance and mentoring the firm needs while in transition to the next generation of leaders looking to grow the business. We want you to be part of that transition team!

Requirements:

• CPA License
• Undergraduate degree in Accounting or equivalent, Masters in Taxation is a plus
• 2-5 years experience in a public accounting firm
• A proven track record of hard work and success – whether in work, school, sports, or other activities
• We are not looking for applicants from Industry/Private for this position

Please e-mail resume and cover letter to resumes@lmgw.com or submit directly at our website

Applicants will:

• Have a passion for public accounting
• Ultimately be focused on advancement to partner
• Possess a strong sense of confidence in one’s own abilities and a drive to learn
• Be eager to put in the hours it takes to achieve rapid professional growth
• Understand it takes hard work and discipline to succeed, and look forward to proving oneself
• View constructive criticism as an opportunity for improvement
• Recognize the opportunity to be part of the growth and transition of a firm moving to the next level
• Keep the “big picture” view in mind at all times

About LMGW

LMGW is a full service tax and accounting firm located in Saratoga, California. Our firm possesses a broad range of clients from individual tax work and small businesses to CEOs of public companies, high net worth individuals and businesses with over 1,000 employees. With a staff of 18, LMGW is a small firm focused on personal and professional growth and as a result LMGW has been ranked as one of the Best Accounting Firms to Work for by Accounting Today for the last four years in a row. Several of our partners have been in public accounting for over 30 years and provide the guidance and mentoring the firm needs while in transition to the next generation of leaders looking to grow the business. We want you to be part of that transition team!

Requirements:

• Passed the CPA Exam or have scheduled tests – Applicants are expected to pass the Exam within one year at LMGW
• Undergraduate degree in Accounting or equivalent
• A proven track record of success – whether in work, school, sports, or other activities
• No experience in public accounting necessary – We are willing to train for this position provided you are willing to learn

Please e-mail resume and cover letter to resumes@lmgw.com or submit directly at our website

Income apportionment determines the ratio of income that is subject to tax in a particular state. There are several different methods used to determine state apportionment and acceptable methods for determining apportionment vary by the applicable state law. The acceptable methods have changed numerous times over the past couple of years in California due to a law change beginning with the 2011 tax year, the recent court decision in the Gillette Case and the passage of Proposition 39 in November 2012.  Click here for a reference chart showing the different apportionment formulas referred to in this article.

Prior to 2011, companies were required by California to determine their taxable income using a four-factor apportionment. Four factor apportionment takes into consideration the proportion of payroll, property and sales that can be sourced to California. Sales are then double-weighted, representing the fourth factor, and a percentage is calculated. This percentage is then applied to total taxable income to determine state taxable income.

Beginning in tax year 2011 and continuing for tax year 2012, most multi-state business were permitted to elect to calculate their California apportionment using a single sales factor or the four-factor apportionment. The single sales factor method calculated a percentage based on California sales over total sales. This percentage was then applied to total taxable income to determine state taxable income. This provided businesses a benefit of selecting the most favorable method. The apportionment election is made on an original, timely filed return and is irrevocable. Therefore, a corporation can calculate taxable income using both apportionment factors and elect to use the method that is most favorable. Although the election is irrevocable once made for a particular tax year, it is an annual election so a different method could be used each year.

In July 2012 the California Court of Appeal handed down a decision in the Gillette Case. The Gillette Case arose because The Gillette Company argued that since California was a part of the Multi-state Tax Compact (MTC), California was obligated to offer a choice between three-factor and four-factor apportionment. The MTC is a cooperative effort among state governments to ease the tax burden of multi-state enterprises and the states that are a part of it are assumed to offer three-factor apportionment. Three-factor apportionment differs from four-factor because sales are only weighted once. In response to the suit, California moved to remove itself from the MTC. The court originally sided with Gillette but has since indicated that it will revisit this case. The implications of the uncertainty surrounding the Gillette case are that if the ruling is upheld, many corporations may be permitted to amend prior returns electing to use the three-factor method. Multi-state taxpayers may file a protective claim in order to retroactively elect to utilize the apportionment method contained in the MTC. The Franchise Tax Board has released instructions on how to properly file a protective claim and any corporation that thinks that they may benefit from three-factor apportionment for tax years still open for amendment under statute should consider doing this until further guidance on the issue is decided. As it stands currently, taxpayers have the option of using four-factor or single sales factor apportionment for the 2012 tax year.

Yet more changes were put into place for tax year 2013 when Proposition 39 was passed in November 2012 by the California electorate. Prop 39 mandates that all businesses use single sales factor apportionment and changes certain definitions when it comes to defining how sales are sourced from California. This mandatory change of method will cause higher taxes for business with little California property or payroll but high California sales and lower taxes for those corporations with large payroll and property but low sales. The law will likely result in higher taxes for out-of-state corporations conducting business in California, which was the intent of the law.

This issue will have relevance to a corporation that has a significant business presence in another state — an office, property, employees or sales to customers. It may be necessary and beneficial for a corporation to track where its resources are allocated so it can be in compliance and assure that it is not paying unnecessary taxes to California. Please contact LMGW should you have any questions about navigating state apportionment issues or other state tax issues.

• The David Andrew “Pooh” Maddan Foundation
• Students Rising Above
• Wildlife Center of Silicon Valley
• Earth Island Institute-Save Japan Dolphins
• Saint Francis High School Alumni Class Endowed Scholarship Program
• Second Harvest Food Bank
• St. Jude Children’s Research Hospital
• Humane Society Silicon Valley
• American Red Cross – Hurricane Sandy Relief

If you are not familiar with any of the organizations listed feel free to ask us about them. Several members of the LMGW team are personally involved with the charities and would be happy to tell you about them!

A second option is for taxpayers to treat an IRA distribution received in December 2012 as a qualified charitable distribution as long as the taxpayer transfers the money to an eligible charity by January 31, 2013. This gives taxpayers a way to retroactively reduce their 2012 taxable income.

Remember, charitable IRA transfers are not included in taxable income. Additionally, a qualified charitable IRA transfer is beneficial because the charitable deduction is directly offset “above-the-line” against the IRA withdrawal. Without the charitable transfer the IRA distribution will increase your AGI, which impacts numerous other tax calculations and deduction phaseouts including how much of your Social Security is taxable, allowable deductions for charitable and medical expenses, as well as a myriad of tax credits. You must act quickly to take advantage of either, or both, of the provisions discussed above as transfers must be made by January 31, 2013 in order to qualify.

Peer Review Report – 2012

Blank Organizer

Individual Tax Provisions:

• Retains the 2012 tax rates for taxpayers earning less than $450,000 for joint filers and surviving spouses, $425,000 for head of household filers, $400,000 for single filers and $225,000 for married filing separate filers. Tax rates for these individuals were set to increase prior to the passing of the 2012 Taxpayer Relief Act.
• Increases the top tax rate to 39.6% for individuals exceeding the thresholds mentioned above.
• Increases the long-term capital gain and dividend tax rates to 20% for taxpayers with incomes exceeding the thresholds above (so a 23.8% rate applies in 2013 to higher income individuals, counting the 3.8% Medicare Contribution Tax from the Health Care Act).
• Provides permanent AMT relief by increasing the exemption amounts to $50,600 for single filers, $78,750 for joint filers and $39,375 for married persons filing separately, to be indexed for inflation after 2012.
• Reinstates the personal exemption phase-out for taxpayers earning more than $300,000 for joint filers and surviving spouses, $275,000 for head of household filers, $250,000 for single filers and $150,000 for married filing separate filers.
• Reinstates itemized deduction limitations, called the “Pease Limitation” for higher income taxpayers. The limitation applies to taxpayers with income of more than $300,000 for joint filers and surviving spouses, $275,000 for head of household filers, $250,000 for single filers and $150,000 for married filing separate filers. Taxpayers subject to the limitation will have their total itemized deductions reduced by 3% of the amount by which their AGI exceeds the threshold amount. However, the reduction cannot exceed 80% of the amount of otherwise allowable itemized deductions.
• Certain personal nonrefundable credits can offset regular tax as well as AMT. Previously, certain credits could only reduce regular tax. This new law is retroactive to tax years beginning after 2011 and is permanent.
• Extends a number of individual deductions and credits, including a five-year extension of the American Opportunity Tax Credit.

Estate Tax Provisions:

• A permanent $5 million exemption for individuals dying and gifts made after 2012. The exemption will be adjusted for inflation
• A top estate, gift, and generation-skipping transfer tax rate of 40% (up from 35%).
• Extends portability of the Deceased Spousal Unused Exclusion Amount (DSUEA), effective for individuals dying and gifts made after 2012. The DSUEA allows some or all of the basic exclusion amount not used by a deceased spouse’s estate to be transferred to the surviving spouse, who can use this amount, in addition to his or her own basic exclusion, for lifetime gifts or transfers at death.

Business Tax Provisions:

• Increased Section 179 expensing limitations to $500,000, applied retroactively to 2012. Under prior law the Section 179 expense limit was $139,000 for 2012 and $25,000 for 2013. A Section 179 expense phase-out begins when total assets placed in service during the year exceed $2,000,000.
• Extends 50% bonus depreciation to qualified property placed in service before January 1, 2014 (January 1, 2015 for certain longer lived property and transportation equipment).
• Extension of higher first year depreciation caps for autos and trucks placed in service by December 31, 2013.
• Retroactive extension of 15-year straight line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. The 15 year recover period applies to eligible assets placed in service between January 1, 2012 and December 31, 2013.
• Extension of the Work Opportunity Tax Credit to eligible veterans and non-veterans employed before January 1, 2014.
• The Act extends (and in some cases modifies) many other tax breaks, including the research credit, new markets tax credit, enhanced charitable deduction for contributions of food inventory under IRC Sec. 174(e), basis adjustment to stock of S corporations making charitable contributions of property under IRC Sec. 1367(a) and reduction from 10 to five years in the S corporation built-in gains tax recognition period under IRC Sec. 1374(d)(7).

The judging took place on Thursday, December 13, 2012 and the winner was announced at our annual Hot Cocoa and Secret Gift Exchange. To view all the contestants’ photos click here.

Happy holidays from all of us at LMGW!

The IRS and state taxing authorities can assess penalties for failure to file these forms. Additionally, they may disallow these deductions if you do not file.

You are not required to file Form 1099 for 2012 if the person or business to whom you paid is a corporation, unless the payments are made to an attorney or to a medical or health service provider registered as a corporation.

If you would like LMGW to prepare the required forms for you, please fill out the LMGW 1099 request form and return it by sending an email with the request form attached to 1099@lmgw.com. You can also fax or mail back the request form to the fax number and address listed below.

Please download and use Form W-9 from our website to request the required information from your vendors, if needed.

The deadline for filing is January 31, 2013. In order for LMGW to guarantee your forms are timely filed, we ask that we receive all necessary information no later than January 18^th, 2013.

Please call Collin at 408-252-1800 ex. 232 or email 1099@LMGW.com if you have any questions.