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EVANSVILLE, INDIANA (September, 2012, Written by Max Roll, published in the Evansville Business Journal.

Soon after graduating cum laude with an accounting degree from the University of Southern Indiana in 1995, Matthew Folz landed a position with Harding, Shymanski & Co. as a staff accountant. Three years later, he was a licensed certified public accountant before a promotion to manager in 2001 and to vice president in 2007. 

Folz, a lifelong Evansville resident and Mater Dei High School alumnus, knew several people who had worked at Harding, Shymanski & Co. they had nothing but great things to say about the firm, so he decided to make his mark there. Being in a position of influence the past five years has been Folz’s key motivator to his success.

“It’s gratifying to be in a position where decisions I make influence the future, long-term success of both our clients’ business as well as our own business,” he said. “It also is great being in a position where I can hopefully help those that work around me become more successful in their career paths, seeing new members of our firm come on board, grow, learn and advance in their careers.”

A typical day for Folz, who runs the firm’s outsourcing department, involves juggling multiple projects related to all things accounting and business, serving not only the multitude of clients but the department of 20 people working under him. Every day brings a new challenge, he said, from full-service on-site accounting, payroll processing and compliance to employee benefits consulting.

“Matt is a dedicated team member of the firm and throughout his career has shown his ability to take on new responsibilities,” said Trudy Stock, president and CEO of Harding, Shymanski & Co. “I believe he is a great role model for aspiring accountants.”

Growing up in a family of six where everyone was expected to pull his weight, Folz became a hard worker at an early age.

Folz said he didn’t feel he had anything to prove as an up-and-comer in the accounting world, but his competitive nature played a factor in climbing the corporate ladder.

“I just wanted to work hard and learn from those ahead of me what it takes to be successful and then make my own way in my own style,” he said. “It’s important to observe those around you but to not try to copy one person’s path. I have taken individual traits from many leaders in front of me, both at work and personally, and tried to take that information and incorporate it into a way of life that works best for me and my family.”

Outside of work, Folz is the finance director of Mater Dei’s board of trustees, executive committee member of the Mater Dei Friends and Alumni Association, chairman of the Evansville Catholic High Schools Coordinating Council, finance committee member of Sisters of St. Benedict, past member of the Evansville Diocese Deposit and Loan Fund Committee, and past member and treasurer of the Evansville Parks Foundation.

Folz’s mother often teases him and his wife, Kristen, for wasting their time building a house, saying they’re never home to enjoy it. 

In some ways, Folz feels his mother has a point, but at this stage in the game, he knows his schedule is going to be hectic. Folz and his family try hard to set aside blocks of time dedicated to what he calls “intentional stay-at-home nights.” 

“Sometimes having the ability to say ‘no’ is very important,” he said. “I try not to overextend myself in any of these areas so that the things I do commit to doing, I do well versus overcommitting and then not delivering as I should.”

LOUISVILLE, KENTUCKY (August 21, 2011) – Harding, Shymanski & Company, P.S.C. has been honored with the 2012 Alfred P. Sloan Award for Business Excellence in Workplace Flexibility. Given by the Families and Work Institute and the Society for Human Resource Management, the Sloan Awards recognize employers that have distinguished themselves in Greater Louisville and across the country. Winners are identified through a rigorous selection process, which involves an evaluation of employers’ flexibility programs and practices, from telecommuting to job sharing to phased retirement programs, via a confidential employee survey.

LOUISVILLE, KENTUCKY – We are proud to have been recognized by Business First as one of the most Philanthropic Organizations in Louisville according to their 2012 Partners In Philanthropy publication. We congratulate all of the other companies listed as well as the organizations they support.

LOUISVILLE, KENTUCKY (August 3, 2011) – Harding, Shymanski & Company, P.S.C. has been honored with the 2011 Alfred P. Sloan Award for Business Excellence in Workplace Flexibility for its use of flexibility as an effective workplace strategy to increase business and employee success.

This prestigious award, part of the national When Work Works project, recognizes employers of all sizes and types in the greater Louisville area and across the country.

Workplace flexibility—such as flextime, part-time work and compressed work weeks—has been demonstrated to help businesses remain competitive while also benefiting employees as well. The Sloan Awards are unique for their rigorous, two-step selection process, which involves an evaluation of employers’ flexibility programs and practices, and a confidential employee survey. All applicants are measured against national norms from FWI’s National Study of Employers. As a recipient of the 2011 Sloan Award, Harding, Shymanski & Company, P.S.C. ranks in the top 20% of employers nationally in terms of its programs, policies and culture for creating an effective and flexible workplace. In addition, what makes this honor so special is that their employees have corroborated this, affirming that it is indeed an effective and flexible workplace. Harding, Shymanski & Company, P.S.C. will be recognized as a 2011 Sloan Award recipient at an upcoming event hosted by Greater Louisville Inc.-The Metro Chamber of Commerce.

When Work Works is a national project to educate the business community on the value of workplace flexibility by sharing research and promising practices, and conducting the annual Sloan Awards. It is an ongoing initiative of Families and Work Institute first funded by the Alfred P. Sloan Foundation. In 2011, the Society for Human Resource Management and FWI formed a ground-breaking, multi-year partnership to grow When Work Works and help businesses become more successful by transforming the way they view and adopt effective and flexible workplaces. 

LOUISVILLE, KENTUCKY – The Work/Life Alliance commended Harding, Shymanski & Company, P.S.C. for its excellent employer-friendly practices. The designation was recognized in the October 29 issue of Business First. 

Formerly called the Business/Family Partnership, the Alliance honors organizations in the Greater Louisville region that strive to help employees maintain a work/life balance. The new Work/Life Alliance Awards feature an easier application process, increased recognition for award recipients and culminates with a recognition luncheon. 

Helping balance work and life responsibilities for employees continues to be a significant challenge confronting employers. In our current economy, work/life benefits are now facing budget constraints and competing organization priorities. However, by offering work/life benefits, organizations can significantly increase employee morale and commitment, advance performance, improve the organization’s reputation, reduce turnover and help recruit quality employees.

LOUISVILLE, KENTUCKY (April 12, 2011) – Harding, Shymanski & Company, P.S.C. has been named to the High Impact Portfolio as one of the top fast-growth companies headquartered in the Metro Louisville Region.  The High Impact Program, a public/ private partnership between Louisville Metro Government and Greater Louisville Inc.’s (GLI) ENTERPRISECORP, introduced the newest companies selected to the High Impact Portfolio during ENTERPRISECORP’s Signature Event today.

“Fast-growth companies are critical to the continued economic success of our region,” said Bobby Ferreri, Executive Director of ENTERPRISECORP. “The High Impact Portfolio honors those businesses poised to lead our community in job growth over the coming years, and it was exciting to see the variety in this year’s companies.”

Collectively, High Impact Portfolio companies represent $2.3 billion in annual revenues; have a 36 percent average growth rate; have created nearly 3,000 new jobs in our region; and have invested $438 million over the last four years. 

 “We are honored to be recognized as a member of the High Impact Portfolio and are proud to be included in this group of Louisville based companies. We enjoy the opportunity to work with businesses to allow them to reach their potential,” said Trudy Stock, President and CEO. 

About the High Impact Program

The High Impact program strives to nurture the prosperity of Greater Louisville’s growth businesses. The High Impact Program is a public/ private partnership, funded by Louisville Metro Government and administered by GLI’s ENTERPRISECORP, that identifies and serves fast-growth companies, companies with the potential for fast growth, and those companies that enable growth in others. The program focuses on companies of these types headquartered in Louisville that have a disproportionately higher impact on the metro area economy. For more information on the High Impact Program, visit www.HighImpactLouisville.com.

On December 17, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (H.R. 4853) after passage by the Senate on December 15 and the House on December 16.

The new law extends, renews or enhances a large number of individual and business tax incentives. 

INDIVIDUAL PROVISIONS

Individual tax rates.  

Reduced individual tax rates put in place in 2001 were scheduled to expire after 2010. The new law extends the reduced rates for two years. The current rate brackets (10, 15, 25, 28, 33 and 35 percent) remain unchanged for 2011 and 2012. The new law also extends full repeal of the itemized deduction limitation and full repeal of the personal exemption phase-out, both scheduled to expire after 2010, for two years.   

The extension of the reduced individual tax rates is significant. If the old rates had returned, the top two rates would have jumped from 33 and 35 percent to 36 and 39.6 percent, respectively. The current 10 percent rate would have disappeared. Additionally, marriage penalty relief in the form of an expanded 15 percent rate bracket would also have expired. 

AMT relief.

Along with extending these rate cuts, the new law targets relief to taxpayers facing the alternative minimum tax (AMT). Because the AMT is not indexed for inflation, and for other reasons, the tax steadily encroaches on middle income taxpayers. The new law stops this encroachment by giving individuals higher exemption amounts and providing other targeted relief. The reach of the AMT often surprises individuals. While the provisions in the new law are helpful, it is also important to plan strategically for the AMT. Unlike the income tax rates, the higher AMT exemption had already expired at the end of 2009 before the new law stepped in to save it. Its two-year extension, therefore, expires earlier, at the end of 2011.   

Payroll tax cut.

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $106,800 (in 2010 and 2011), while self-employed individuals pay 12.4 percent. Effective for calendar year 2011, the new law reduces the employee-share from 6.2 percent to 4.2 percent up to the taxable maximum. The employer-share remains unchanged. Self-employed individuals will pay 10.4 percent on self-employment income up to the taxable maximum. The reduction has no effect on an individual’s future Social Security benefits. 

Let’s look at an example.

Tyler, who is single, earns $106,800 (the maximum taxable wage). For 2011, the new law reduces Tyler’s share of Social Security taxes on his earnings to 4.2 percent. Tyler will see $2,136 in savings for 2011. 

The payroll tax cut replaces the Making Work Pay credit, which temporarily reduced income tax withholding in 2009 and 2010. The Making Work Pay credit phased-out for higher-income individuals. The payroll tax cut is across-the-board (up to the taxable maximum of $106,800).

Shortly after the new law was passed, the IRS instructed employers to start reducing the amount of Social Security tax withheld as soon as possible in 2011 but no later than January 31, 2011. For any Social Security tax over-withheld in January, employers should make an offsetting adjustment in an individual’s pay no later than March 31, 2011. 

The payroll tax cut opens up some tax planning opportunities for individuals. The savings could be contributed to an IRA or another retirement savings vehicle, thereby compounding available tax benefits. The savings also could be used to help fund a Coverdell education savings account. Please contact our office for details. 

Capital gains/ dividends.  

In 2003, Congress set new maximum tax rates for qualified capital gains and dividends but, like the individual rate cuts, these taxpayer-friendly rates were temporary. For 2010, the maximum tax rate is 15 percent (zero percent for individuals in the 10 and 15 percent tax brackets). The new law extends these rates for two years, through December 31, 2012. In a related development, the new law extends the temporary 100 percent exclusion of gain on certain small business stock.

Child tax credit.  

Many individuals enjoy the benefit of the $1,000 per child tax credit. Without the new law, the child tax credit would have dropped to $500 for 2011. The new law extends the $1,000 credit and keeps the refundability threshold at $3,000 for 2011 and 2012. In related developments, the new law also extends some enhancements to the earned income tax credit and the adoption credit for two years. 

Estate tax.  

Under the new law, the federal estate tax will again apply to the estates of decedents dying after December 31, 2009 and before January 1, 2013. The new law sets a maximum estate tax rate of 35 percent with a $5 million exclusion ($10 million for married couples). Additionally, executors of estates of individuals who died in 2010 can elect out of the estate tax (and apply modified carryover basis rules) or can elect to have the estate tax apply. This election, and many of the other estate tax provisions in the new law, is very technical. Besides the estate tax, there are provisions in the new law extending and modifying the federal gift tax and the federal generation skipping transfer (GST) tax. Please contact our office so we can discuss how these changes will affect your estate planning. 

Education.   

A variety of tax incentives are available to help save for and finance education costs. Like so many incentives, they are temporary. The new law extends some of the most popular education tax incentives. They include:

• American Opportunity Tax Credit
• Higher education tuition deduction
• Student loan interest deduction
• Exclusion for employer-provided educational assistance
• Enhancements to Coverdell education savings accounts
• Special rules for certain scholarships

The education incentives in the Tax Code are among the most complex. Often, taxpayers will mistakenly believe they cannot claim more than one or they may inadvertently claim ones they should not. Our office can help you sort through the complexity of the federal education tax incentives. 

Energy. 

Individuals who made some energy-efficient improvements in 2009 or 2010 may have benefitted from a special tax break. This tax incentive rewarded individuals who installed energy-efficient windows, doors, furnaces, and other items in their homes. The credit, while very valuable, was also very complex. The new law extends the credit but also adds to the complexity by reinstating rules for the credit in place before 2009. The complexity is certain to confuse taxpayers. Please contact our office if you are planning to install new windows, doors, heating or cooling systems, or other energy-efficient items so you do not miss out on this tax break. 

More incentives.

The new law extends many valuable but temporary tax incentives for individuals. They include the state and local sales tax deduction, the teacher’s classroom expense deduction, and special rules for individuals who contribute IRA proceeds to charity. Keep in mind that not all of the expired temporary individual tax incentives were extended. Among the incentives not extended are the additional standard deduction for real property taxes, the $2,400 exclusion for unemployment benefits, the first-time homebuyer tax credit, COBRA premium assistance, and some others. 

BUSINESS PROVISIONS

Business spending – Bonus Depreciation, Code Section 179 Expensing and Qualified Real Property Depreciation.  

During past economic slowdowns, Congress has used bonus depreciation and enhanced Code Sec. 179 small business expensing to help jumpstart business spending. The new law provides for 100 bonus depreciation. The 100 percent bonus depreciation rate applies to qualified property acquired after September 8, 2010 and before January 1, 2012 and placed in service before January 1, 2012 (or before January 1, 2013 for certain longer-lived and transportation property). Additionally, 50 percent bonus depreciation is available for qualified property placed in service in 2012. Moreover, certain corporations may be able to elect to accelerate any alternative minimum tax (AMT) credit in lieu of bonus depreciation.

Along with bonus depreciation, the new law extends enhanced Code Sec. 179 expensing for 2012 but not at the 2010 and 2011 dollar and investment limits. For 2010 and 2011, the Code Sec. 179 dollar limit is $500,000 and the investment limit is $2 million. The new law makes no changes to these limits for 2010 and 2011. However, the dollar limit will fall to $125,000 (indexed for inflation) and the investment limit will fall to $500,000 (indexed for inflation) for tax years beginning in 2012 (and sunsetting after December 31, 2012). The 2012 amounts, while reduced from 2010 and 2011, are still above the amounts that would have been in place for 2012 absent the new law ($25,000/$200,000 respectively). 

For 2010 and 2011, special rules apply to qualified real property. Taxpayers can elect up to $250,000 of the $500,000 dollar limit for qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property. The new law does not extend these special rules beyond 2011. The new law does renew a 15-year recovery period for qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property for 2010 and 2011.

Payroll tax cut.   

The new law reduces an employee’s share of Social Security taxes (the OASDI portion) from 6.2 percent to 4.2 percent up to the taxable maximum amount of $106,800 for calendar year 2011. The new law does not reduce the employer’s share, which remains at 6.2 percent for 2011.  Self-employed individuals, including independent contractors with which a business may contract, are also entitled to a 2 percentage point reduction in payroll taxes, from 12.4 percent to 10.4 percent.

The IRS has instructed employers to start using new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011 but no later than January 31, 2011. The IRS also instructed employers to make any offsetting adjustments in an employee’s pay for Social Security over-withheld during January as soon as possible but no later than March 31, 2011. 

The new law does not extend payroll tax forgiveness for qualified new hires. This incentive was part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010 and will expire, as scheduled, after 2010. Under the HIRE Act, qualified employers do not have to pay their share of OASDI for a covered employee’s employment from the day after March 18, 2010 through December 31, 2010. The HIRE Act also provides for a worker retention credit, which qualified employers may be able to claim if the covered employee works a certain number of weeks and meets other requirements. If you have any questions about the interaction between the HIRE Act and the new law, please contact our office. 

Research tax credit.  

In recent years, Congress has come close to making the Code Sec. 41 research tax credit permanent but the cost of a permanent credit has been prohibitive. The new law renews the credit, which expired at the end of 2009, for 2010 and 2011. 

Work Opportunity Tax Credit. 

The Work Opportunity Tax Credit (WOTC) rewards employers that hire economically-disadvantaged individuals and individuals from groups with historically high rates of unemployment. The WOTC was scheduled to expire after August 31, 2011. The new law extends the WOTC through the end of 2011. However, the new law does not extend two groups that were added to the credit in 2009 (unemployed veterans and disconnected youth). 

Energy.

Recent laws have used the Tax Code to encourage the development and production of alternative fuels, such as energy from wind and biomass. Many of these incentives are temporary. The new law extends, renews or enhances some of the incentives, including:

• Grants for certain alternative energy property in lieu of tax credits
• Tax credits for biodiesel and renewable diesel fuel
• Tax credit for refined coal facilities
• Percentage depletion for oil and gas from marginal wells
• Special tax incentives for builders of energy-efficient homes
• And more 

Business tax extenders.

A package of business tax incentives, known as extenders because they regularly expire and are regularly extended, is renewed by the new law. They include:

• Differential wage credit
• New Markets Tax Credit (with modifications)
• Brownfields remediation
• Tax treatment of certain dividends of RICs and certain investments of RICs
• Active financing exception/ look-through treatment for CFCs
• Tax incentives for empowerment zones and the District of Columbia
• Indian employment credit
• Railroad track maintenance credit
• Mine rescue training credit
• Code Sec. 199 deduction for Puerto Rico
• Five-year write-off of farm machinery
• Accelerated depreciation for business property on an Indian reservation
• And more

What’s not included.

Despite significant support in Congress, the new law does not repeal a controversial expansion of information reporting. The Patient Protection and Affordable Care Act of 2010 requires businesses to report payments for property and payments to corporations aggregating $600 or more in a calendar year made after December 31, 2011. Congress may revisit this requirement before the effective date. The new law also does not lower the corporate tax rate, another proposal that could be addressed in the future.

The new law provides many options for tax planning for 2011, 2012 and beyond. Please contact Mike Vogel at (800) 880-7800 to discuss how you can maximize your tax savings.