The CPA Desk

A Thought Leader Production by PKFTexas

Gearing Up For The ACA’s Information Reporting Requirements

Starting in 2016, applicable large employers (ALEs) under the Affordable Care Act (ACA) will have to file Forms 1094-C and 1095-C to provide information to the IRS and plan participants regarding their health care benefits for the previous year. Both the forms and their instructions are now available for ALEs to study and begin preparations for required filings. In addition, organizations that expect to file Forms 1094 and 1095 electronically can peruse two final IRS publications setting out specifications for using the new ACA Information Returns system.

Keep in mind that ALEs are employers with 50 or more full-time employees or the equivalent. And even ALEs exempt from the ACA’s shared-responsibility (or “play or pay”) provision for 2015 (that is, ALEs with 50 to 99 full-timers or the equivalent who meet certain eligibility requirements) are still subject to the information reporting requirements in relation to their 2015 health care benefits.

If your company is considered an ALE, please contact us for assistance in navigating the ACA’s complex requirements for avoiding penalties and properly reporting benefits. If you’re not an ALE, we can still help you understand how the ACA affects your small business and determine whether you qualify for a tax credit for providing coverage.

Don Looper, “Profit and Peril” Contributor Talks Mergers & Acquisitions

Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Don Looper, Attorney with Looper Goodwine P.C., and contributor to the “Profit and Peril” report. Welcome to the Playbook, Don.

Don: Thank you very much.

Russ: You bet. So, you’re contribution to the report is titled, “Foreign Transactions Require an Investment of Professional and Emotional Capital.” That emotional capital part, that’s pretty interesting. Tell us about that.

Don: My practice is an M&A practice. We represent clients acquiring companies, and when US companies go overseas, one of the biggest mistakes they make is to believe they can plop down the price, get the company, and it succeed. Lawyers very seldom understand that they need to invest themselves professionally into the local environment, the community, the employees, and the success of that acquisition depends upon how successful the legal team is in helping the company get to know the environment, the surroundings, and the people; the vendors, to make the acquisition successful.

Russ: Sounds like the legal team might spend weeks, maybe months, there?

Don: On a good acquisition, you would spend many weeks there, yeah. And it may be over nine months, but they would spend quite a bit of time there.

Russ: Really interesting. Thank you for sharing that with us.

Don: You’re welcome.

Russ: For other international topics visit This has been another Thought Leader Production brought to you by PKF Texas Entrepreneur’s Playbook.

Upcoming October Events in Houston

Our friends and clients look to us, as accountants and business advisors, to formulate ideas and facilitate solutions for your business. With this in mind, we are supporting several upcoming events we think may be of interest to you.  

  • Greater Houston Partnership – State of Energy
  • Turnaround Management Association
  • Houston Technology Center
  • Greater Houston Women’s Chamber of Commerce
  • Houston Business Journal
  • District Export Council
  • Texas A&M University – Aggie 100
  • University of Houston – Cougar 100

If you have questions about any event details or registration information, the organization-specific contacts are below. We hope to see you at any or all of these events!
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Selling Rather Than Trading in Business Vehicles Can Save Tax

Although a vehicle’s value typically drops fairly rapidly, the tax rules limit the amount of annual depreciation that can be claimed on most cars and light trucks. Thus, when it’s time to replace a vehicle used in business, it’s not unusual for its tax basis to be higher than its value.

If you trade a vehicle in on a new one, the undepreciated basis of the old vehicle simply tacks onto the basis of the new one (even though this extra basis generally doesn’t generate any additional current depreciation because of the annual depreciation limits). However, if you sell the old vehicle rather than trading it in, any excess of basis over the vehicle’s value can be claimed as a deductible loss to the extent of your business use of the vehicle.

For example, if you sell a vehicle with an adjusted basis of $20,000 for $12,000, you’ll get an immediate write-off of $8,000 ($20,000 – $12,000). If you trade in the vehicle rather than selling it, the $20,000 adjusted basis is added to the new vehicle’s depreciable basis and, thanks to the annual depreciation limits, it may be years before any tax deductions are realized.

For more ideas on how to maximize your vehicle-related deductions, contact us.

The Birkman & Acceptance

Byron: Hi, my name is Byron Hebert and this is another Tool Time Update brought to you by your friends at PKF Texas and The Entrepreneur’s Playbook. We’ve been talking about Birkman and how we use it in the workplace for hiring, conflict resolution, coaching, things like that; it’s a very powerful tool, it’s a good tool for you to use to understand the communication styles and to keep people productive in our organization. We talked about esteem last time, this time we’re going to talk about acceptance. Acceptance is how we relate to each other in a group setting; in other words, whether we want to be accepted by a group, whether we like working in a group environment or whether we’d rather work alone.

A lot of times you’ll find someone with a very high acceptance, being the kind of person that can go to a party and meet a lot of people, mingle very easily. Someone with a low acceptance may not – that might be more of a task for them to go and mingle at a party and meet new people. But you will find sometimes again that someone’s usual style, which is the way we see them, your reputation if you will, may be that they’re very good at that; they go out and they meet people very easily. But if they have a low need that means that after a few of those they want to go home and be with just their family or friends or just a few people.

And so acceptance is how we relate to each other in a group setting and how we like to work in a group setting or not. And so very good to find that out about yourself and about your coworkers, who’s the best person to send to networking events, things like that; who may not be so comfortable with that sort of thing. And if we’re forcing them into that and forcing them to their stress behavior because we’re asking them to do something they’re not comfortable with that could be detrimental to their career and to their work environment. So again, my name is Byron Hebert, this had been another Tool Time Update brought to you by your friends at PKF Texas and The Entrepreneur’s Playbook.

Why You Should Contribute More To Your 401(k) in 2015

Contributing to a traditional employer-sponsored defined contribution plan, such as a 401(k), 403(b) or 457 plan, offers many benefits:

  • Contributions are pretax, reducing your modified adjusted gross income (MAGI), which can also help you reduce or avoid exposure to the 3.8% net investment income tax.
  • Plan assets can grow tax-deferred — meaning you pay no income tax until you take distributions.
  • Your employer may match some or all of your contributions pretax.

For 2015, you can contribute up to $18,000. If your current contribution rate will leave you short of the limit, consider increasing your contribution rate through the end of the year. Because of tax-deferred compounding, boosting contributions sooner rather than later can have a significant impact on the size of your nest egg at retirement.

If you’ll be age 50 or older by December 31, you can also make “catch-up” contributions (up to $6,000 for 2015). So if you didn’t contribute much when you were younger, this may allow you to partially make up for lost time. Even if you did make significant contributions before age 50, catch-up contributions can still be beneficial, allowing you to further leverage the power of tax-deferred compounding.

Have questions about how much to contribute? Contact us. We’d be pleased to discuss the tax and retirement-saving considerations with you.

Perspectives from the Honorable Astrid Marklund: Sweden


Russ: This is PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Astrid Marklund, Houston’s Honorary Consul General of Sweden who is taking part in Coffee with the Consuls this coming Wednesday September 23rd at the Greater Houston Partnership. Welcome to the Playbook Astrid.

Astrid: Thank you Russ, thank you for having me.

Russ: You bet, absolutely. So tell us – give us an overview for the relationship – business relationship between Sweden and the United States.

Astrid: Sweden has a great relationship with the United States and business wise this has been going on for a long time, even from the beginning of the 1900s. It started with a large number of Swedish people emigrating from Sweden to the United States and since then we have exported many of the Swedish inventions to the United States. Currently we’re working on biochemistry, life science, shipping; we have a collaboration with the medical center here in Houston and we also have a Swedish astronaut here at NASA.

Russ: Oh wow, and what’s his or her name?

Astrid: Her name is Jessica Mayor.

Russ: Okay. And has she been up yet?

Astrid: She is in training for the space station.

Russ: Really cool, that’s great. Okay, so you already brought up Houston, so it seems to me like most of the people that we have at Coffee with the Consul Generals from all these countries have really taken a deeper interest in Houston over the past year, mostly because of energy. And I know Sweden is very serious about sustainable energy, but is there still a business relationship with our oil and gas companies?

Astrid: Yes there are. There are many industries that are – we don’t have any oil, but on the other hand we have support industry that we are trying to export to the United States and to the energy industry. For example, we have drilling industry from the mining – with our experience from the mining industry which also can be applied here to the oil exploration. In the fracking industry we have found that our two big trucking companies – Volvo Trucks and Skornia Trucks – they have established offices in San Antonio to take advantage of the fracking industry.

Russ: Interesting, very interesting too. Okay, so comparing the countries, Sweden in my opinion is very unique and very cool, population is right under 10 million, is that right?

Astrid: That’s correct.

Russ: Most of the people live in major cities too as well.

Astrid: Yes, the larger population is in the 3 largest cities in Stockholm, Gothenburg and Malmo; but on the other hand, even if it’s not that populated in the rest of the country the innovation atmosphere in high in the more remote areas.

Russ: Okay, wow, that’s interesting. So I also can’t help but always think about countries up north and man, it’s way up there. So you go through some of those summers where it’s daylight most of the time and some winters where it’s dark most of the time.

Astrid: That’s correct.

Russ: Now you’ve been away for a while, you haven’t lived there full time for a few years?

Astrid: I haven’t lived there for a few years, but on the other hand I have a summer home in the northern part of Sweden and so I experience this every summer.

Russ: Okay, do you find it fun and exciting or does it kind of throw your sleep out of whack?

Astrid: In the summertime it throws the sleep out of whack in a good way. In the summertime you don’t need as much sleep, but on the other hand around Christmas time and the wintertime up there you only have more or less like 4 hours of daylight every day.

Russ: That’s amazing, that’s amazing. All right, so I introduced you as the Honorary Consul General, which means that, you know, you’re doing this in an honorary way because you also have employment somewhere else; tell us about yourself.

Astrid: My other job is to be a CFO for a small chemical company.

Russ: Here in Houston?

Astrid: It’s based in Houston, yes. And we do the catalyst – or activate catalysts for the refineries.

Russ: Okay, okay, real interesting. And how long have you – I mean have you been been sort of a financial person through education and most of your business career?

Astrid: Yes, that’s actually my education.

Russ: Okay, interesting. And how long have you been the Consul General – the Honorary Consul General now?

Astrid: This is – I’m on my third year now.

Russ: Okay, real interesting. Sweden, we always think of Sweden as being really kind of interesting in these difficult times that we live in because they’re kind of neutral in the world and never pick sides essentially. Did I say that – is that the accurate description?

Astrid: Politically that’s probably the accurate description, however Sweden is a very U.S. friendly state.

Russ: Okay, okay, real cool. Well I’m looking forward to Coffee with the Consuls next Wednesday, September 23rd and I thank you so much for spending some time with us.

Astrid: Thank you very much, thank you for coming.

Russ: You bet, thank you Astrid. And that wraps up my discussion with Astrid Marklund, Houston’s Honorary Consul General of Sweden. And that wraps up the PKF Texas Entrepreneur’s Playbook for this week. Tune in next week for another edition.

How To Determine If You Need To Worry About Estate Taxes

Here’s a simplified way to project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death.

Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. Those assets qualify for the marital deduction and avoid potential estate tax exposure until the surviving spouse dies. The net number represents your taxable estate.

You can transfer up to your available exemption amount at death free of federal estate taxes. So if your taxable estate is equal to or less than the estate tax exemption (for 2015, $5.43 million) reduced by any gift tax exemption you used during your life, no federal estate tax will be due when you die. But if your taxable estate exceeds this amount, it will be subject to estate tax. Many states, however, now impose estate tax at a lower threshold than the federal government does, so you’ll also need to consider the rules in your state.

If you’re not sure whether you’re at risk for the estate tax or if you’d like to learn about gift and estate planning strategies to reduce your potential liability, please contact us.

Denise Patrick Talks Cost Analysis Associated With International Business


Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Denise Patrick, managing director of Energy Markets Access and lead researcher of the Profit and Peril Report. Welcome to the Playbook, Denise.

Denise: Hey Russ, how are you?

Russ: I’m doing great. Great to have you here.

Denise: Great, I’m excited.

Russ: Well, lead researcher, tell us how this evolved.

Denise: Well, it’s very interesting. We had conducted Energy Markets Access about two years ago, a research report for INSTOK, which is a Norwegian oil and gas company. And in that, we interviewed all the Norwegian companies that had come to the US and what happened. And then when PKF got involved, and we also got involved with the other sponsors, we really wanted to see if there were any differences across countries or culturally. So this time, the report is comprised of hundreds of hours of interviews with mid-market sized companies in oil and gas: half companies from the US that are internationalizing out, and half companies—foreign companies that are internationalizing in. And they’re all across the value chain in oil and gas. So, we interviewed them just to hear what their experience is like; what the story is, because we all go through this, and I was interested in knowing if there were differences and how business owners approached markets and that type of thing. And what was interesting is, there is no difference from where you come from. The difference is that all of us have to remember that no matter where we’re going, it’s different than where we came from. So, (

Russ: That was unanimous. Even if it seems very similar, you know, like Europeans coming to America or etcetera, we do know it’s going to be different but I think it’s human nature that we underestimate the actual differences. So, check your assumptions, because the way that capital flows through the market, the way the money flows through, the way a market works, is very different every country you go to.

Russ: And very important.

Denise: And very important because, obviously, the name, Profit and Peril: there’s definitely risk involved when you internationalize or you go somewhere, but the point of doing it is to make money. So, when you’re looking at a market, you have to look at things, because we make assumptions. For example: in oil and gas, we’re the only nation that owns its own— personally owns their own land rights. So, wherever else you’re working, you’re working against competitors who’ve been selling to their home national oil company that whole time, and the value propositions are different. So, here we have a cost analysis associated with everything—everyone does; I mean, when you’re transacting, it’s capitalism. We’re all functioning in a capitalistic market here, all over the world. But here, we want to know the cost analysis, we want to know the benefits, but we’re always just automatically thinking about how it’s going to work out moneywise.

But in other countries, where the government is funding a lot of the oil and gas, there are additional objectives that Americans might not be aware of. For example: in Norway, everyone knows this about Norway, their national objective, and they really invest a lot in this, is technology and innovation. So, if you’re creating a value proposition to sell in the North Sea, you want to start with those benefits first and then the money; as opposed to, how does this work for you moneywise? Which is how, America, we want to know that first, and if that’s going to work, then we also want to know about the benefits. It’s just a different way of telling your story, I think.

Russ: I really appreciate you sharing that with us.

Denise: Thanks, it was fun.

Russ: You bet, you bet. For other International topics visit This has been another Thought Leader production, brought to you by PKF Texas Entrepreneur’s Playbook.

Get Involved! Rotary Lombardi Award December 9, 2015

As a member of the Rotary Lombardi Award Executive Committee  (Del Walker) and Rotary Lombardi Award Young Professionals Board (Jen Lemanski) and with September being Childhood Cancer Awareness Month, we thought this was the perfect time to bring you up to speed on PKF Texas’ involvement and give you some insight into this great event.

We would both say that our love for college football is what first got us involved in this great event. However, it is what we are able to do for some great Houston charities that has kept us involved (Del’s third season and Jen’s second). The video below pretty much lays it out why we are “all in” on our involvement.

This is why “I am Lombardi”…

Last year’s event raised over $180,000 for the three charities. This year’s charities include Texas Children’s Hospital Cancer & Hematology Center and MD Anderson Cancer Center Children’s Cancer Hospital. The 2015 event looks to be another winning combination of celebrating college football and supporting two of Houston’s finest charities.

If you would like more information on how to get involved in this year’s event, please visit  Mark your calendars for December 9, 2015, this year’s event will be held at Revention Music Center in downtown Houston.