Miller and Company Community Outreach
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The whole crew visited Pinz Bowling in Studio City for some fun before the fall deadlines!
TV/Film Producers and Distributors Rejoice!
Section 181 Gets an Extension
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Last week the dysfunctional political process resulted in a two year extension of the tax law that allows for immediate write-off of qualified United States productions. The rule is retroactive to productions commencing principal photography in 2015 and extends to those productions commencing principal photography in 2016. So, the legislation is retroactive for 350 days and prospective for 380 days. This is an improvement compared to the 2014 legislation, which was retroactive for about 355 days and expired in about ten days. So, having certainty about 2016 is a positive. General Rule: Section 181 allows for the 100% deduction of up to $15 million production costs for qualified US produced film/television content. The law is designed to encourage production and related jobs in the United States. Over the years, we’ve found there are a number of intricacies/traps that are important to consider: |
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Conclusion: Section 181 is a favorable tax opportunity for taxpayers in the film/television industry. Knowing that this has been extended through 2016 can help with future tax liability projections and so much more. Due to the complexity of the rules, we strongly recommend retention of knowledgeable tax advisors with experience in these matters. At Miller and Co. LLP, we have deep experience as accountants and business advisors for producers and distributors in the film, television and new media industry. For further information, contact our office at any time. |
David Free Presents to the LA County Bar Association
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Our Partner David Free recently participated in a panel discussion in front of the Los Angeles County Bar Association to discuss choice of business entity issues in entertainment. Along with Mr. Free were Tom Ara from Greenberg Traurig, LLP and Marco Cordova from Entertainment Partners
This panel addressed the process of selecting the appropriate form of entity for entertainment projects, including whether(and if) to set up an LLC or corporation for a project-specific single purpose vehicle (SPV); when and where to set up the SPV, considering state tax credit programs and foreign corporation rules; where, if, and how the SPV should fit into the larger corporate structure; setting up SPVs to become guild signatories for the organization/project; and implications for foreign co-productions and international exploitation, and relevant U.S. tax issues. |
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Some of David Free’s contributions to the panel consisted of:
The panel concluded with an open question and answer session with the audience. It was an overall success for all in attendance. The team at Miller and Co. LLP looks forward to the next opportunity to serve our clients and our community. |
For further information, contact our office at any time.
Posted by: Joe DeVitis, CPA 12-02-2015
GREAT NEWS FROM THE IRS!
| The IRS has just issued guidelines to expense individual capital asset purchases up to $2,500 each beginning in 2016. The De minimis Safe Harbor for small businesses (businesses that do not issue audited financial statements) that has been $500 per item/invoice has now increased to $2,500. So, those twoiPad Pros you were worried about capitalizing can now be an expense. But wait, there’s more! The IRS has stated in Notice 2015-82 that if you had treated capital assets in tax years since 2011 in this manner, they will not use it against you in a tax audit. Yes, that includes the 2015 tax year. The treatment for businesses which issue Applicable Financial Statements (AFS) continues to treat De minimis safe harbor as $5,000 per item or invoice. |
For further information, contact our office at any time.
Posted by: Joe DeVitis, CPA 11-25-2015
Homeboys 5K - Community Support
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At Miller and Company, we like to give back to the community. We had a perfect opportunity to do that and have fun at the same time. Thanks to Homeboy Industries, we enjoyed a day in the sun in Downtown Los Angeles. Everyone had a great time and we all finished as big winners. We're looking forward to our next outing.
Miller and Company Day at the Races
Friday, October 23, 2015
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| To celebrate the end of busy season, the crew at Miller and Company went to Santa Anita Park to watch and wager on the ponies. We had lots of fun and everyone ended up a winner (according to them). Thanks for a great day at the races! | |
2015 Cost of Living Adjustments Increase Benefits and Contributions
By Michael Poladian on November 5, 2014
Last week the IRS released the new contribution limits for IRA, 401(k), SEP, SIMLE IRA, 403(b), 457(b) and defined benefit plans. Cost of Living adjustments are made annually to employee benefit contribution limits. The contribution limits are summarized in the chart below:
| 2015 | 2014 | 2013 | |
| IRAs | |||
| IRA Contribution Limit | $5,500 | $5,500 | $5,500 |
| IRA Catch-Up Contributions | 1,000 | 1,000 | 1,000 |
| IRA AGI Deduction Phase-out Starting at | |||
| Joint Return | 98,000 | 96,000 | 95,000 |
| Single or Head of Household | 61,000 | 60,000 | 59,000 |
| SEP | |||
| SEP Minimum Compensation | 600 | 550 | 550 |
| SEP Maximum Contribution | 53,000 | 52,000 | 51,000 |
| SEP Maximum Compensation | 265,000 | 260,000 | 255,000 |
| SIMPLE Plans | |||
| SIMPLE Maximum Contributions | 12,500 | 12,000 | 12,000 |
| Catch-up Contributions | 3,000 | 2,500 | 2,500 |
| 401(k), 403(b), Profit-Sharing Plans, etc. | |||
| Annual Compensation Limit | 265,000 | 260,000 | 255,000 |
| 401(k) and 403(b) Elective Deferrals | 18,000 | 17,500 | 17,500 |
| Catch-Up Contributions | 6,000 | 5,500 | 5,500 |
| Annual Contributions to Defined Contribution Plans | 53,000 | 52,000 | 51,000 |
| ESOP Maximum Balance for 5-Year Payout | 1,070,000 | 1,050,000 | 1,035,000 |
| Amount Over Minimum Balance for Lengthening of 5-Year ESOP Payout Period | 210,000 | 210,000 | 205,000 |
| Other | |||
| Highly Compensated Employee (HCE) | 120,000 | 115,000 | 115,000 |
| Annual Benefits from Defined Benefit Plans | 210,000 | 210,000 | 205,000 |
| Top Heavy Key Employee – Officer Test | 170,000 | 170,000 | 165,000 |
| 457 Elective Deferrals | 18,000 | 17,500 | 17,500 |
| Control Employee (board member or officer) | 105,000 | 105,000 | 100,000 |
| Control Employee (compensation-based) | 215,000 | 210,000 | 205,000 |
| Social Security Taxable Wage Base | 118,500 | 117,000 | 113,700 |
California Sales Tax Savings for Manufacturers, R&D, and Contractors
By Andy Free and David Free on August 20, 2014
California wants to encourage manufacturing and R&D. Therefore they passed Regulation 1525.4 where you can save over 4% of California sales tax when purchasing qualified equipment. And the better news: It is not mired in bureaucratic nonsense and is easily accessible without high-priced professionals. Here is a general overview:
The two key criteria to qualify for the tax reduction are:
- Be engaged in certain types of business, also known as a “qualified person”
- Purchase “qualified property”
A “qualified person” is a generally a business engaged in manufacturing or R&D.
Effective July 1, 2014 a qualified person can save over 4% on qualified purchases. “Qualified property” is generally tangible personal property used in manufacturing, processing, refining, fabricating, recycling process or R&D. This also includes property used to maintain, repair or test, and property to store materials before or during the manufacturing process. Equipment leases can also qualify.
Construction costs qualify for purchases when performing a construction contract where the improved real property is used for a qualified activity (i.e. manufacturing, processing, fabricating, R&D, etc.).
To receive the reduction, the purchaser provides the seller with a one page form before the seller charges/ bills the purchaser, or prior to delivery of the property. Best practice is to provide the form when placing the order.
The forms for equipment purchases and construction contracts can be found by clicking the links below. The forms can be completed in a few minutes.
Equipment purchases: http://www.boe.ca.gov/pdf/boe230m.pdf
Construction contracts: http://www.boe.ca.gov/pdf/boe230mc.pdf
For more detailed information please visit the California State official website: http://www.boe.ca.gov/sutax/manufacturing_exemptions.htm#Overview
Receiving the sales tax exemption is easy to access and understand. However, please contact us if you need any assistance.
About the authors:
David and Andy Free are a father and son team with the CPA firm, Miller and Co. LLP. They can be reached at 818-449-7920 or via email: afree@millcocpa.com or dfree@millcocpa.com.
Miller and Co. LLP is a Los Angeles based CPA firm in its seventh decade of providing accounting and consulting services to mid-sized businesses and their owners.
Website: https://millcocpa.com/