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The new budget bill signed by President Obama included a significant change in one of the strategies that was used by married couples (and some divorced individuals) when they started to collect Social Security. In a nutshell, the rules for the collection of Social Security benefits are as follows: For married couples and some divorced …

Are you aware of the changes to social security benefits and how those changes relate to married couples? Learn more from Spire Group PC.

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On Wednesday, the Financial Accounting Standards Board announced that it would be releasing its revised standards on lease accounting in early 2016. Now, while this may not sound like a big deal, it actually will have a major impact on companies that rely heavily on leases. But in order to understand the effect it will …

Spire Group, PC offers insight into the new FASB standards set to go into effect early this year.

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Chipping Away at Credit Card Theft

Matthew Dittmann, CPA

Accountant, Spire Group, PC

Let’s conduct an experiment. Have you been issued a new credit card recently? If so, grab your wallet and compare that new card to a card you’ve had for a while. You should notice a difference on the face of the cards. The little silver box you see above the card number is actually a computer chip. Going forward, credit and debit cards will be issued with EMV chip technology. And it’s that little silver chip that’s going to improve transaction security and change how we use our cards.

While EMV chips are relatively new to the U.S., they have been utilized abroad for some time now.  The traditional magnetic strip means of processing credit cards is slowly going the way of the buffalo. Magnetic strip cards are more easily stolen because the strip contains all the information pertaining to the cardholder. If you can replicate the strip, you can duplicate the card. The technology in the EMV chip cards creates a unique transaction code for each separate use of the card. Once the transaction is complete, the transaction code is useless. Therefore, if a counterfeiter steals the EMV card information from a specific transaction, they won’t have a valid transaction code to use the card.

As cards are transitioning, they will continue to bear the magnetic strip in addition to the EMV chip.  The goal is to have most card terminals in the U.S. EMV enabled by the end of 2017. The EMV enabled terminals will process transactions in two different ways, either by inserting cards into a terminal to be read (“card dipping”) or tapping the chip against a terminal scanner (“near field communication”). The first wave of EMV chip cards supports the “card dipping” technique.  As the technology becomes more prevalent, financial institutions will transition to dual-interface cards that support both techniques.

October 1st was a big day for EMV chip cards. That date represented a soft deadline for merchants to become EMV chip card compliant.  I use the term “soft deadline” because merchants may still process these cards using the magnetic strip. The change is that the liability for card-present fraud now shifts to the merchant. If a consumer’s EMV chip card information is stolen through a merchant’s terminal that is not EMV chip enabled, the merchant may be liable since their equipment is less secure than the technology in the card. ATMs and gas stations will be subject to the same liability beginning October 1, 2017.

As with most technology overhauls, there will be some growing pains over the next few years. But as I mentioned earlier, EMV technology has a proven track record of success in other countries. It has been implemented in order to curb counterfeiting and it appears to have been successful in doing so. And once the U.S. fully integrates EMV chip technology, U.S. credit and debit cards will be more easily used by citizens traveling abroad. So you shouldn’t have any trouble buying Starbucks in London

With roots dating back to 1975, Spire Group, PC is a full-service certified public accounting firm specializing in accounting, assurance, tax, business advisory and technology services. The firm’s clients include startups, closely held/family businesses, nonprofits and governmental entities, and high-net-worth individuals.

With offices in Clark and Livingston, New Jersey, the firm remains committed to delivering sophisticated solutions, innovative thinking, and highly personalized service to ensure their clients are well-informed to make key financial decisions.

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Crowdfunding: What's Up With That?

Judith Tutela, CPA, RMA, PSA

Principal, Spire Group, PC

Lately, there seems to be a lot more fundraising for individuals in need of financial help through sites such as GoFundMe, YouCaring, Indiegogo, Kickstarter, etc. Before now I’d not paid much attention, but when a family member made a request to help pay for a mission trip to Honduras, I was curious about how it all worked. In this age of the internet, crowdfunding offers an opportunity to reach large groups or a “crowd” to fundraise for a purpose or cause.

In setting up or contributing to a crowdfunding cause or purpose, it’s important to keep in mind that crowdfunding is a business and those sites that you are using to raise money are charging fees. Each site is a little different, but either way you could be giving anywhere from 5% to 20% of your funds raised for fees. So yes, you do reach a larger audience, but it comes at a cost.

Depending on the purpose of your financial needs, there are various types of crowdfunding you would use. And depending on the type you use, there are various types of tax implications associated with it.

Generally speaking, there are four types of crowdfunding: donation, rewards, equity and debt.

Donation-Based Crowdfunding: In donation-based crowdfunding, the requests would go to raise money for a cause. For example, to help an individual to pay for medical bills, a tax-exempt organization with a charitable issue, or a student’s mission trip. In this type of crowdfunding, there is no expectation for a return on what is being donated. If the money is being raised by a tax-exempt nonprofit organization, the donation would be considered a deductible contribution for tax purposes. For any other donation type of crowdfunding, the contribution would not be deductible for tax purposes and is generally considered a gift to the organization or individual making the request.

Reward, Equity, and Debt-Based Crowdfunding: These are generally all business and/or project related type fundraising techniques and the income you received is taxable. The difference between the three is what is provided in exchange for the money contributed.

Rewards-based crowdfunding usually offers a token reward for the contribution made. The reward could be a coffee mug, a poster, a short story or something that is related to your campaign.

Equity crowdfunding offers an equity stake in the project or business seeking funding.

Debt (or lending) crowdfunding offers to repay the investment over a period of time.

With roots dating back to 1975, Spire Group, PC is a full-service certified public accounting firm specializing in accounting, assurance, tax, business advisory and technology services. The firm’s clients include startups, closely held/family businesses, nonprofits and governmental entities, and high-net-worth individuals.

With offices in Clark and Livingston, New Jersey, the firm remains committed to delivering sophisticated solutions, innovative thinking, and highly personalized service to ensure their clients are well-informed to make key financial decisions.