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Volume XXV No. 1 Spring 2019Blackburn, Childers & Steagall, PLC Quarterly NewsletterCHANGES FOR RENTAL INCOMEBY TRAVIS MCMURRAYWhen the Tax Cuts and Jobs Act (TCJA) was passed overthe addition of this provision, he denied any correlation.a year ago, we felt certain that the intent of the law wasSeveral months later, the IRS issued proposed regulationsthat rental activities would qualify for the deduction. Thisconcerning the new pass-through deduction and chosebelief was based on one of the two potential limitationsto use a very narrow view of the definition of a qualifiedfor the deduction if a taxpayer’s income exceeded a certaintrade or business. This narrow view seemed to jeopardizethreshold. One of the potential limitations is based solely onthe inclusion of rental property in qualifying for the newthe wages paid by the qualified trade or business. However,deduction. After receiving many comments on the proposedthere was a late addition of a second potential limitationregulations, the IRS did choose to specifically address thiswhich included the unadjusted basis of the propertymatter in the final regulations that were issued in January ofowned by the qualified trade or business. It seemed thatthis year. So what’s the big issue with rental property? Thethis addition was added specifically for rental property.issue is this: is the rental property merely an investment or isSome referred to this provision as the “Corker Provision.”it an actual trade or business?continued on page 7While Senator Corker’s vote for the TCJA changed afterHISTORIC SALES TAX RULING FOR ONLINE RETAILERSBY SHEILA EMORYThe US Supreme Court ruled that a business DOES NOTneed a physical presence in a state for that state to imposeand collect sales tax.In a reversal of the 1992 case, Quill Corp. v. North Dakota,the Supreme Court decided that obligations for sales tax canbe imposed on sellers with no physical presence in that state.This landmark case has been in the news over the last severalmonths, South Dakota v. Wayfair, Inc.Sellers with an economic presence in a state will be required tocollect and remit sales tax. The term “economic presence” isdefined differently by each state, but generally means sales ornumber of transactions past a certain amount in a year.Online retailers need to examine their sales data and ensurethey are collecting and remitting sales tax for each state theyhave an economic presence. If you need assistance with filingsales tax in other states or determining whether or not you havean economic presence in a particular state, please contact us.

NEW EMPLOYER CREDIT AVAILABLEPERSONAL FINANCIAL SPRING CLEANINGBY TOMMY GREERI believe the notion of spring cleaning should apply toour personal finances too. Why? Reviewing our accountsand keeping our important records organized lets us knoweverything is working together. What are some personalfinancial “spring cleaning” tasks to consider doing?As part of the Tax Cuts and Jobs Act, The Employer Creditunder the Family and Medical Leave Act of 1993, regardlessfor Paid Family and Medical Leave (FMLA) went into effectof whether they otherwise apply. Although the written policySeptember 25, 2018. The credit is applicable to wages paidis required to be in place before the qualifying employee goesin tax years beginning after December 31, 2017 and beforeon FMLA, the employer is allowed a transition period for theJanuary 1, 2020.first taxable year beginning after December 31, 2017.years, though there are exceptions. Keep tax returns andTo be eligible for this credit, employers must meet theseFor example, the employer’s taxable year ends December 31,supporting documents for at least four years or indefinitely ifrequirements:2018. An employee took unpaid FMLA beginning June 1,they related to cost basis information you might need later. Written policy in place before qualifying employee goesHow long should you keep financial records? A rule of thumbis to keep financial account statements for at least sevenREVIEW ITKeep records pertaining to your home, other real estate, orLike our houses, it’s easy let the months and years go byother investments for as long as you own the asset plus sevenwithout “dusting off” things that are out of sight. Review youryears. You can generally discard credit card statements, paidinvestments, insurance policies, bank accounts, and debts toutility bills, and receipts after one month. (Just keep receiptsmake sure they’re still meeting your needs. Maybe it’s time toto items that have a warranty and receipts that you mighttake a fresh look at your portfolio, retirement contributionneed during tax time.)or withdrawal amounts, or insurance coverage. Or perhapsthere are opportunities to consolidate brokerage accounts,retirement accounts, or bank accounts for simplification.BY GINA LEMONSon FMLA Allow at least two weeks of paid leave to full-timeemployees Allow a prorated amount of paid leave for part-timeemployees Paid leave must be at least 50% of the wages normally paidrequirements on December 1, 2018, and chooses to make thepolicy effective retroactive to January 1, 2018. The employerpays the employee for two weeks of unpaid leave taken inJune. Assuming all requirements are met, the employer mayclaim the credit on the 2018 tax return.The credit begins at 12.5% and cannot be more than 25% ofpaid FMLA for each qualifying employee while on FMLA forto that employeeLEAVE IT CLEAN2018. The employer adopts a written policy that satisfies allMake sure beneficiaries are listed correctly on insurance The employee’s compensation must be 72,000 or lesspolicies and financial accounts, especially if there has beenThe written policy must provide certain protection applicableup to 12 weeks per taxable year. The employer must reducethe deduction amount for Salaries and Wage Expense by theCredit reports are also good to review periodically fora significant life change recently. Organize estate planningamount of the credit.errors. AnnualCreditReport.com is the only official site todocuments and make sure the appropriate people knowrequest your credit reports. Federal law allows you to requestwhere they are located. Also make a list of assets, liabilitiesNEW BCS EMPLOYEESone copy from each of the three credit reporting agencies(including bills), and financial accounts (including online(Equifax, Experian, and TransUnion) once every 12 months.login info) for reference by your power of attorney, estateEven one negative item not belonging to you can lower yourrepresentative, or family members.credit score.Keeping these records current and easy to find will not only beFILE IT AWAYa tremendous help to you but also to your loved ones. EstateIt happens easily. A couple of harmless pieces of paper morphplanning documents and vital records may be kept in a safetyinto a mountainous pile. Sort through account statements,deposit box, but a fireproof and waterproof filing cabinetpaid bills, and receipts. Shred them or file them away. Aor safe at home might be more convenient. Whichever youhome filing system should be simple to use and the bestchoose, make sure your family or trusted representative knowthese days is digital by scanning items. Online accounthow to get into it.access and e-statements are an easy way to streamline yourrecordkeeping and to reduce paper clutter also. Either way,categorize documents into folders in a way that you and yourfamily can work with.Remember organization is a top tool for efficiency andsuccess! A little bit of “cleaning” now can help us to havepeace of mind for the summer and beyond.JESSICA BRUNERJessica is a CPA inthe Johnson CityTaxDepartment.She is an ETSU gradwith nearly 10 yearsof experience.SARAH HOEYSarah is the new Admin Assistant in ourGreeneville office.She plans to graduate from ETSU inMay.NEW INTERNSThomas DeHartCaleb EasterlingAlex DoyleJessica WoodbyAbbi PolandBrandon PierceJordan EvansDanielle PriceCody MudrackNEW BCS WEALTH EMPLOYEESCAROLYN KERRCarolyn Kerr is thenewest Admin Assistant at BCS Wealth.She has over 30 yearsof experience in administration.SCOTT HOILMANScott joined BCSWealth as an InsuranceConsultant.He is a graduateof ETSU where heplayed baseball.JEFF BURGESSJeff is a new financialadvisor with BCSWealth. He has over20 years of experience as a financialadvisor.

IN THE LAST 25 YEARS.Things have changed in the last 25 years. In themid-90s, we had phone numbers memorized andrented movies at Blockbuster. There were 1.5billion less people. The word “selfie” didn’t exist.World War I veterans and widows of Civil Warsoldiers were still alive. Pluto was still a planet.Things have changed a little for the BCS partners, too. When the first issue of the ClientTellcame out, Tommy Greer had just joined BCSas a partner. Tommy and Jim Wilson had amarketing meeting and decided to produce anewsletter. Andy Hatfield was watching PeytonManning play from the student section. ChadKisner was attending Milligan and working as abank teller. Kevin Peters was a student at ETSUtaking introductory accounting classes and learning new four letter words GASB, FASB, FIFO,LIFO and COGS. Kenny Benson was at ETSUdreaming about public accounting. ChuckHuffman was a partner at Hoover Harrison. JeffBlackburn was transitioning from a generalistto full-time tax partner, while Karen McMurraytransitioned to a full-time audit partner. MelissaSteagall-Jones was happy to be doing accountingwork instead of entering everyone’s timesheets.Mike Eddy was establishing his own firm withhis dad. Travis McMurray was in college andworking as a bookkeeper at BCS. Wade Farmerworked as a bookkeeper at a fastener shop whileobtaining his Masters. Charles Steagall was ourChief of Maintenance, but some things neverchange.Thanks for reading the ClientTell for the last 25years, and we are looking forward to the next 25!