On Balance May | June 2016

May | June 2016 | Vol. 12 No. 3 A publication of the Wisconsin Institute of CPAs | wicpa.org

All for

ONE

Steven G. Handrick, CPA, CGMA | 6 WICPA Board Chair

Plus: Cultivate your company’s next leaders | 12 Avoid costly penalties for not paying payroll taxes | 24 Learn the financial do’s and dont’s for starting a business | 28

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A publication of Wisconsin Institute of CPAs | wicpa.org

May/June 2016 Vol. 12 No. 3

6 Features

Columns

6 All for one New WICPA Board Chair Steven G. Handrick, CPA, CGMA counts on teamwork for success.

By Cynthia M. Hodnett

24 TAX

The more you know: Payroll taxes in 2016 Advise your clients with household workers about avoiding costly penalties for not paying employment taxes.

By Kathleen Webb and Daniel Rafeedie

12 Leadership development:

It isn’t all about you Learn how to create a positive workplace environment that nurtures strong leaders.

By David W. Gay, CPA 18 Step up and lead Elizabeth Hazi, CPA puts her best foot forward with leadership.

By Donna Pinsoneault

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28 FINANCIAL PLANNING

Financing your dream: How not to destroy your personal finances when starting a business Learn the financial do’s and don’ts for starting your business.

By Timothy M. Steffen, CPA, PFS, CFP®, CPWA® 30 SOFT SKILLS

Wanted! A CPA with courage: Alive, not dead Consider these tips to develop courage skills to become a top-performing CPA.

By Sandra Ford Walston

12 24

Departments 2

Odds & Ends | news briefs

3 Outlook | chair’s letter 5

Membership Matters | member benefits

11 In Touch | president & CEO’s message 22 Kudos | members in the news

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Odds & Ends AICPA plans to expand its joint venture with CIMA

2013 Apex Award for Publication Excellence

2016–2017 WICPA OFFICERS/BOARD MEMBERS Chair Steven G. Handrick, CPA, CGMA Chair-elect William L. Komisar, CPA, J.D. Past-chair Jean M. Hansen, CPA, MBA, CGMA Secretary-treasurer Katherine L. Hauser, CPA, CGMA Directors Michael D. Akers, CPA, CBM, CFE, CGMA, CIA, CMA, Ph.D. Lucien Beaudry, CPA, J.D. Ryan Hanson, CPA, CGMA Debra L. Lenz, CPA, CGMA, CIA, CRMA Terri M. Lillesand, CPA Matthew A. Los, CPA Scott Miller, CPA, ABV, PFS, CVA Matthew J. Schaefer, CPA, CGMA Wendi M. Unger, CPA AICPA Council Neil R. Keller, CPA, ABV, CVA Nicholas S. Lascari, CPA, CEA, CGMA President & CEO Dennis F. Tomorsky, CPA, J.D., CGMA Chief Financial & Operating Officer Tammy Hofstede Vice President of Communications Amy E. Gaeth Editor Cynthia M. Hodnett

As the accounting profession continues to evolve and expand globally, it’s critical that WICPA evolve with it. The WICPA is working with firms and companies to develop programs specifically for broader professional development needs. Also, the AICPA is proposing to expand its joint venture (http://tinyurl.com/aicpaproposal) with the Chartered Institute of Management Accountants (CIMA), where the organizations will integrate their operations to form a new global professional accounting association that will serve more than 600,000 members in 179 countries. WICPA’s Board of Directors in December joined 50 state and territorial CPA societies in passing the AICPA and CIMA proposal to establish the new global accounting association. The next step involves a vote (http://tinyurl.com/aicpavote) by AICPA members between April 18 and June 16, with majority support required to establish the new association. CIMA has a similar requirement and timeline. While this is happening, WICPA has committed to enhancing the CPA credential and expanding the pipeline of CPAs. We will continue to work on strategic advocacy initiatives and expanding membership options, among many.

SVA Certified Public Accountants debuts new website SVA Certified Public Accountants launched its new website (www.SVAaccountants.com). This new site features the typical business and financial issues that SVA Certified Public Accountants solves for its clients. The objective of the new website is to simplify the process for business owners by showcasing our expertise based on a new “I need assistance with” menu. Users can choose an issue that is top-of-mind and be directed to how SVA can help. Additionally, the site’s Biz Tips feature quick information for busy business owners and Service Spotlight videos get to the why, how and what business impact a particular service has.

Copy Editor Joan Bahr Design & Layout Kathleen Hess Advertising Manager Ellen Engel Printing The Printery, An RR Donnelley Company Join us online!

On Balance is published six times a year by the Wisconsin Institute of Certified Public Accountants (WICPA). Change of address should be sent to: Membership, W233N2080 Ridgeview Pkwy, Suite 201, Waukesha WI 53188; Phone: 262-785-0445 or 800-772-6939 (WI/MN); Fax: 262-785-0838; email: jessica@wicpa.org. Statements and opinions expressed are those of the authors and not necessarily those of the WICPA. Publication of an advertisement does not constitute an endorsement of the product or service by On Balance or the WICPA. Articles may be reproduced with permission. © Copyright 2016 On Balance.

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WANT YOUR BUSINESS MENTIONED IN ODDS & ENDS? Email your announcement to cynthia@wicpa.org.

wicpa.org

{ Outlook | chair’s letter } “Join me, your WICPA staff and board as we continue to work hard at making the WICPA The Standard Above™.”

Ready, set, go!

I

’m Steven G. Handrick, CPA, CGMA, your new chair of the WICPA Board of Directors.

I grew up in Auburndale, a small community

in central Wisconsin. Currently, I’m a partner in

the Hawkins Ash CPAs’ Green Bay office. Hawkins Ash CPAs is the only firm I’ve worked for since graduating from the University of Wisconsin-Eau Claire in 1979.

For the last 15 years, I’ve been active with the American Institute of CPAs (AICPA) Large Firm Networking Group, serving as its chair for the past three years. Recently, I stepped down as my firm’s managing partner, which allows me to devote more time as the 2016–2017 WICPA board chair.

I’m honored to be the chair of your WICPA. My year as chair-elect during 2015–2016 gave me an exciting start to being the board chair, beginning with training from both the WICPA staff and AICPA Council. I attended meetings with the WICPA Board and other committees.

I also witnessed the passing of Assembly Bill 725 and Senate Bill 532, which provide updates to Wisconsin accountancy regulations that govern CPAs, specifically directing the Accounting Examining Board to research mandating continuing professional education for Wisconsin CPA license renewal.

I also participated in the WICPA strategic planning sessions. During our strategic planning sessions, we developed four focus points: value proposition, membership engagement, retention and recruitment of licensees, and the necessity of adapting to changing technology.

While watching these four points, I’ll give special

as chair. My involvement in the AICPA, previous board representation in the WICPA and volunteering in a variety of causes are the result of others asking me to get involved.

I’ve grown both as a professional and as a person by getting involved. The rewards of saying “yes” to those who ask for my involvement are great and have helped me develop business relationships all across the country. As a result of these relationships, I’ve gained awareness and developed an interest in a variety of issues affecting CPA firms and our profession.

As I attend conferences and meetings throughout the state during my year as chair, I’ll ask you to volunteer for leadership roles and committee opportunities at the WICPA. Join me, your WICPA staff and board as we continue to work hard at making the WICPA The Standard Above™.

attention to membership engagement during my year

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Steven G. Handrick, CPA, CGMA is partner of Hawkins Ash CPAs in Green Bay. On Balance Contact him at 920-337-4541 or May | June 2016 shandrick@hawkinsashcpas.com.

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T O G E T H E R, we can make a difference.

WICPA members participate in Advocacy Day 2015

Your contribution to the WICPA CPAC/LIF campaign for Political Awareness allows the WICPA to: Strengthen the voice and visibility of the WICPA. Educate lawmakers about the issues impacting Wisconsin CPAs.

Support the election campaigns of candidates who support our issues.

Ensure a healthy business climate for CPAs and the clients you serve.

Visit wicpa.org/cpaclif to learn more and make a contribution today.

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Ken Schneider, Managing Director-Investments, brings more than 40 years of experience in financial services to the team. Ken’s philosophy is putting his clients’ interests first and providing exceptional personal services, helping them understand the risks and rewards of investing.

Ken’s son, Jim Schneider, is a First Vice PresidentInvestment Officer and CFP® professional, as well as a non-practicing CPA and current WICPA member. Jim began his career with Deloitte & Touche before joining Wells Fargo Advisors in 2003. Jim identifies with today’s investor: “If you’re like most people, securing a comfortable retirement is near the top of your financial wish list.” His goal is to help his clients by designing the plan most appropriate for their individual or corporate objectives, navigating the complex choices available.

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5

All for

ONE

Steven G. Handrick, CPA, CGMA readies to serve as new WICPA Board chair.

by Cynthia M. Hodnett 6

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Photography by Adam Ryan Morris

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"We need to get more of our

CPAs in Wisconsin engaged and doing things with the WICPA because the

rewards are so great."

A

s a kid growing up in Auburndale in central Wisconsin, Steven G. Handrick, CPA, CGMA loved playing football in junior high and high school.

Regardless of the game’s outcome, Handrick turned the highs of winning and the lows of losing with his teammates into life lessons.

He recalls the time when his high school football coach replaced him at the halfback position with a better player. The reason? His coach wanted Handrick to play cornerback to challenge the team’s wide receivers during practice.

“They became better, we went undefeated my senior year, and I made all-conference, all-area and had some universities looking at me,” he said. “This helped me learn early on that success doesn’t come from oneself but requires putting together a team that works in unison toward a common goal. It taught me the value of vision and helping others to see that vision and wanting to be part of that excitement.”

Handrick relies on that same idea of teamwork today as a partner at Hawkins Ash CPAs’ Green Bay office and as the 2016–2017 chair of the WICPA Board of Directors.

“I’ve been active with the Wisconsin Institute of CPAs and American Institute of CPA for many years,” he said. “I thought it was time to give back to the profession because the profession has been good to me.”

A team-first approach Teamwork isn’t the only asset that Handrick brings to his role as chair. His professional experience, drive and easy-going demeanor are also assets, said Richard W. Spencer, CPA, former director of administration and chief financial officer at Hawkins Ash CPAs. “He’s confident in his abilities, but never is hesitant to seek

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Handrick and his wife, Mary, enjoy the Green Bay Botanical Gardens. counsel of others,” Spencer said. “He’s passionate about promoting a work-life balance within the firm and understands the importance that ‘family’ means to that equation. He believes strongly in sharing as much information as possible, as appropriate, with staff to enhance their understanding of the ‘big picture.’”

“He’s a leader who will focus on what is in the best interest of his clients,” said Gary S. Lofquist, CPA, a former manager at Hawkins Ash CPAs. “(For Handrick) it’s not a personal accomplishment, or a resume building opportunity.”

Improving member engagement is an issue that Handrick will promote as chair.

“We need to get more of our CPAs in Wisconsin engaged and doing things with the WICPA because the rewards are so great,” Handrick said. “We have to make sure the WICPA encompasses the entire state, not just southeastern Wisconsin and Madison.

We have pockets of CPAs we need to stay in touch with. As a WICPA member, I’m an advocate, and as chair, I want to be accessible to our members, so if our members have an issue or concern, they can give me a call.”

Handrick plans to encourage more accounting graduates to take and pass the Uniform CPA Examination. He also wants to inform more employers about the importance of encouraging their employees who are recent graduates to take and pass the CPA Exam. He earned his certified public accounting designation in 1982.

“A lot of them are graduating, but there’s not enough of them taking and passing the CPA Exam,” he said. “I think some of the graduates look at the short term instead of the long term. In the short term, they think they don’t need to be a CPA today to get a job. We need to encourage them to look long term and what it

wicpa.org

means for their career in the future and that having the CPA credential can open many doors.”

Handrick developed an interest in accounting after taking an accounting class during his junior year of high school. He graduated with an accounting degree from the University of Wisconsin-Eau Claire in 1979. He joined the WICPA the following year.

During that time, he began working as a staff accountant at what is now Hawkins Ash CPAs in Marshfield. He stayed at that office for 10 years until the firm acquired a small firm in Green Bay. He later worked in the Green Bay office as an audit manager.

Then, he worked as managing partner at the firm. In this elected position, he served the firm for three, four-year terms.

During that period, he oversaw five acquisitions, which expanded the firm’s footprint and strengthened its market presence in existing locations, growing the firm by almost 70 percent.

Reducing his role at the firm allows Handrick time to serve the WICPA and other professional groups including the American Institute of CPAs (AICPA). For the last 15 years, he’s served on the AICPA Large Firm Networking Group. He’s also served as the group’s chair for the past three years.

“I see Steve as being a sought-after resource in the community when he chooses to retire,” Lofquist said. “Additionally, he can continue to be a strong advocate for the profession, recruiting young adults to experience some of what we did.”

A lighter schedule also allows Handrick to travel and spend more time with his wife, Mary, their four adult children and three grandchildren. He credits his family and colleagues with his success.

“A good friend of mine once said, ‘It’s better to aim high and miss than to aim low and hit,’” he said. “Also, John F. Kennedy surrounded himself with individuals who were more knowledgeable than him in areas he wasn’t so strong in. I’ve always lived my career with those two beliefs in mind. I’ve aimed high, and that has helped me be do things I never thought I’d be able to accomplish.”

Cynthia M. Hodnett is editor of On Balance magazine.

Contact her at 262-785-0445 ext. 4516 or cynthia@wicpa.org.

Playing to win

As managing partner, Handrick helped the firm grow to an eight-market regional firm with 140 employees and 14 partners.

He also led the firm to create digital offices, allowing employees to work remotely and together across the two states, service clients nationwide and become a paperless firm.

He also helped staff to be well-rounded business consultants for clients and take on leadership roles within and outside the firm. Despite stepping down as the firm’s managing partner in December 2015, Handrick works as partner in the firm’s Green Bay office, volunteers in the community, assists clients and mentors staff.

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Welcome!

NEW BOARD MEMBERS The WICPA Board of Directors represents the membership, exercises leadership, participates in strategic planning, and approves the annual WICPA budget, bylaw amendments, selection of auditors, and other actions relating to governance.

The board consists of 15 members. New members began serving after they were elected May 5, 2016 at the Member Recognition Banquet and Annual Business Meeting.

CHAIR Steven G. Handrick, CPA, CGMA, managing partner, Hawkins Ash CPAs, LLP, Green Bay

CHAIR-ELECT William L. Komisar, CPA, J.D. principal, CliftonLarsonAllen, LLP Milwaukee

SECRETARY/TREASURER Katherine L. Hauser, CPA, CGMA, controller, Price Engineering Company, Hartland

DIRECTOR Michael D. Akers, CPA, CBM, CFE, CGMA, CIA, CMA, Ph.D., Charles T. Horngren, professor of accounting and chair, Department of Accounting, Marquette University, Milwaukee

DIRECTOR Debra L. Lenz, CPA, CGMA, CIA, CRMA, audit lead, Harley-Davidson, Inc., Milwaukee

DIRECTOR Terri M. Lillesand, CPA, tax shareholder, Schenck SC, Sheboygan

DIRECTOR Matthew J. Schaefer, CPA, CGMA, vice president of regulatory compliance, Bank of Wisconsin Dells, Wisconsin Dells

AICPA COUNCIL Rick E. Dreher, CPA, CGMA, managing partner, Wipfli LLP, Green Bay (term effective October 2016)

RETURNING BOARD MEMBERS PAST-CHAIR Jean M. Hansen, CPA, MBA, CGMA, vice president of finance, Manitowoc Tool & Machining, LLC, Manitowoc

DIRECTOR Lucien Beaudry, CPA, J.D., shareholder, Reinhart Boerner Van Deuren s.c., Milwaukee

DIRECTOR Ryan J. Hanson, CPA, CGMA, financial accounting manager, MGIC Investment Corporation, Milwaukee

DIRECTOR Matthew A. Los, CPA, corporate controller, Badger Magnetics, Inc., Milwaukee

DIRECTOR Scott Miller, CPA, ABV, PFS, CVA, president, Enterprise Systems, Inc., Delafield

DIRECTOR Wendi M. Unger, CPA, partner, Baker Tilly, Milwaukee

AICPA Council Neil R. Keller, CPA, ABV, CVA, partner-in-charge, tax services, Sikich LLP, Brookfield Nicholas S. Lascari, CPA, CGMA, CEA, partner, Balistreri, Jezo & Lascari, LLP, Brookfield (term expires October 2016)

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{ In Touch | president & CEO’s message } “You have the opportunity to also show leadership promoting financial literacy by contributing to the WICPA Educational Foundation, or volunteering your time to read to students or work at a half-day Reality Store event in your area.”

Leadership in financial literacy

W

ICPA members have exceptional skills that we take for granted in the area of financial literacy. Our specialized education and experience enable us to autonomically analyze complex financial information and determine appropriate responses. The WICPA Educational Foundation, through our exceptional volunteers and collaboration with other organizations, has helped empower thousands of Wisconsin students with financial literacy skills to similarly make well-informed financial decisions.

Our foundation’s collaboration with Make a Difference Wisconsin, Junior Achievement, Gov. Scott Walker’s Council on Financial Literacy and others recently helped increase the number of Wisconsin’s school districts that require financial literacy courses for high school graduation from 25 to 64 percent of Wisconsin’s nearly 250 total school districts.

WICPA members make financial literacy presentations to thousands of students each year through our Reading Makes Cents program. Additionally, your contributions to our Educational Foundation have funded training for high school teachers to sponsor Reality Stores events around the state for more than a decade. Through these Reality Store events, many Wisconsin high school students have experienced adult financial decision making relating to housing, transportation, food, day care, insurance, taxes, banking, credit and other areas.

WICPA’s financial literacy leadership is also reflected in my representing the WICPA on the Governor’s Council on Financial Literacy. It has been my privilege to serve on the council’s committee that selects recipients of annual awards recognizing organizations and individuals who have empowered thousands with financial literacy skills. My council service has introduced me to many financial literacy collaborative partners and resulted in efficiently sharing resources and skills accelerating and expanding financial literacy training in Wisconsin beyond what our respective organizations could accomplish separately.

wicpa.org

You have the opportunity to also show leadership promoting financial literacy by contributing to the WICPA Educational Foundation, or volunteering your time to read to students or work at a half-day Reality Store event in your area. You can also make a high school financial literacy presentation for Make a Difference Wisconsin, work at a half-day financial literacy event for students at Junior Achievement’s Finance Park or BizTown.

Or contact your school district to encourage the establishment of a financial literacy course requirement for high school graduation.

Other opportunities to share your skills and enhance the financial literacy of our communities include volunteering to work with startup businesses through Wisconsin Women’s Business Initiative Corporation (WWBIC) and Marquette University Law School Law & Entrepreneurship Clinic.

Please email me for more information.

Dennis F. Tomorsky, CPA, J.D., CGMA is president & CEO of the WICPA. Contact him at 262-785-0445 ext. 4519May or | June 2016 On Balance dennis@wicpa.org.

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P I H S R E D A E L DEVELOPMENT D

“

By David W. Gay, CPA 12

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avid, it’s not all about you.” Those were the words my father told me in grade school when I was a little too proud of my role in a class exercise. Those words stuck with me and have helped shape my perspective on leadership development.

I think they can help you and your organization as well.

wicpa.org

U O Y T U O B A L L A T ’ IT ISN Every organization knows it should strive to develop future leaders — people who are committed to advancing the business strategy and encouraging others to do the same. But many organizations fall short in leadership development. Why? Because for existing leaders (not just the leader, but the entire leadership team), it’s about looking beyond your own self-interest and putting 100 percent of your effort into expanding your influence. That’s hard work.

Good leaders do this some of the time. Great organizations empower their leaders to do this all of the time. So establishing a work culture that encourages the development of others is a necessary first step. Then, you can design a leadership development model that identifies what’s uniquely aligned to your organization’s vision and culture.

As the managing partner of the Milwaukee office of Ernst & Young LLP (a member firm of the global EY organization), I’m charged with ensuring our

wicpa.org

professionals have the skills and experiences they need to provide exceptional client service and, ultimately, to advance their careers and become future leaders.

Our firm has created a global framework that defines team, business, client and personal leadership. The following is how we implement this in Milwaukee.

Team leadership We rarely serve clients as solo contributors. Instead, we work in diverse and inclusive engagement teams so we can leverage the strengths and knowledge of all team members to bring better ideas to our clients.

Our focus is on demonstrating “mutual commitment” to one another and having a shared vision that inspires and engages the entire team.

Our leaders set high team expectations around effort, inclusive teaming, quality work and performance. In turn, our professionals set similarly

On Balance

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13

high expectations for our leaders and expect to receive focused support, experiences aligned with their interests and career development opportunities. This pact helps us define the roles we all have in leading our high-performing teams and, over time, strengthening our team leadership skill set.

BUSINESS leadership Technical skills are absolutely necessary for advancement, regardless of industry, and you can’t improve your business acumen until you’ve developed a baseline foundation. At EY, we have an apprenticeship model in which we learn technical skills early in our careers from our supervisors, with the expectation that we’ll eventually be the ones guiding and coaching those who follow us.

It’s important that everyone in the organization continually stays focused on improving their core competencies and staying current with trends. But the sooner you have your employees identify their fastball — the thing they do best and what they love to do at work every day — the faster they’ll develop their business leadership. Because once they’ve identified it, the leadership team can put them in a position to use their fastball as often as possible.

True business leadership does not come from

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mitigating each of your weaknesses (we all have them). Rather, it comes from differentiating yourself as “best-in-class” in a specific area and being innovative in how you maximize your talents to continually improve in that area. When you find this within your employees, encourage them to devote their time on it, and you’ll see your organization’s business leadership thrive.

CLIENT leadership Most people don’t wake up one day suddenly ready to be put in front of clients and customers. Being purposeful in getting and helping others gain this experience is important. Repetition builds insight, and insight builds value to your clients or customers.

The other request I make of all of our employees when engaging with clients is to consistently ask a simple question: “How can I help?” You don’t need to have the answer immediately, but by being connected, responsive and insightful, you’ll be more focused on your customer’s agenda, not yours.

PERSONAL leadership Exhibiting self-awareness, being influential and showing emotional consistency in the face of conflict or uncertainty are signs of strong personal leadership skills. My advice to strengthen these competencies is to be proactive in seeking feedback from others, and make it a priority in your organization to provide feedback to everyone, both positive and developmental.

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Exhibiting self-awareness, being influential and showing emotional consistency in the face of conflict or uncertainty are signs of strong personal leadership skills.

At EY, we listened to our youngest professionals, who crave consistent feedback, and we instituted “five for five,” a feedback initiative where everyone should expect at least five minutes of feedback every five days. This makes it easier for younger professionals to request feedback, and clearly articulates that feedback is a priority for our leaders.

What’s also critical for personal leadership is taking care of yourself so you have the energy and stamina to lead and be a role model for others. If you demonstrate an ability and an interest in balancing work and personal commitments and encourage team members to do the same, you’ll also build trust and be better positioned to influence and inspire others.

We’ve all seen examples of effective leadership, as well as colossal leadership failures. To ensure

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your employees are developing the leadership skills they need to advance their careers and help your organization thrive, consider creating a competency model that’s aligned to your business’s own vision and culture.

The elements I’ve highlighted here have proven successful for EY. I’m proud to lead a team that embraces them, and proud of the leaders we continue to mold. But regardless of the framework, never forget that it starts with you. Or, rather, it starts with you recognizing “it’s not about you.”

David W. Gay, CPA is the Milwaukee office managing partner for Ernst & Young LLP. Contact him at 414-223-7092 or david.gay@ey.com.

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15

Annual Tax Conference

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2014

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New and returning tax pros expected to draw crowds at annual WICPA Tax Conference as they address important developments, latest issues and biggest questions.

KEYNOTE SPEAKER

CLOSING SPEAKER

IRS Reaches the “Tipping Point”

Minimizing the 3.8% Surtax

Robert S. Keebler, CPA, MST, AEP addresses complex issues and answers your biggest questions revolving around the 3.8% Net Investment Income Tax. 7

Rick J. Taylor, CPA, MST reviews the most important judicial, legislative and regulatory developments for late 2013 and 2014 from the practitioner’s perspective and tackles the latest hot-button issues. 4

Ways to Register: ONLINE: WWW.WICPA.ORG/CONFERENCES PHONE: 262-785-0445 FAX: 262-785-0838 MAIL: W233N2080 RIDGEVIEW PARKWAY, SUITE 201, WAUKESHA, WI 53188

Wisconsin Tax and DOR Updates

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Important changes affecting tax practitioners. 6

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Quality CPE is like a four leaf clover: HARD TO FIND & LUCKY TO HAVE

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ACCOUNTING, AUDITING &

Country Springs Hotel & Conference Center From early on, nothing has proven to be more important to a business’s success than accounting, and nothing has had a bigger impact on a business’s success than technology. As both continue to

evolve at tremendous rates, it is difficult to keep up with the changes, and even harder to anticipate and respond to them when they occur.

Join us at this year’s WICPA & K2 Technology Conference to witness accounting and technology collide as three of the nation’s leading IT consultants present on the top technology topics affecting your business’s success.

TUESDAY, MARCH 17, 2015 Country Springs Hotel & Conference Center

NONPROFIT & HEALTH CARE

FINANCIAL CONFERENCE

TUESDAY, SEPT. 29, 2015 ------COUNTRY SPRINGS HOTEL & CONFERENCE CENTER

FINANCIAL MANAGEMENT C O N F E R E N C E WEDNESDAY, NOV. 19, 2014 COUNTRY SPRINGS HOTEL & CONFERENCE CENTER

THESE CONFERENCES? If you are looking for top-quality CPE and networking events, look no further than WICPA conferences. Thousands of your peers attend each year, as every conference is an unrivalled opportunity to hear from the most highly regarded experts and thought leaders about the biggest changes and hottest issues, so save these dates for 2016!

Technology Conference Thursday, Dec. 1 – Friday, Dec. 2, 2016

Tax Conference Thursday, Nov. 3 – Friday, Nov. 4, 2016

Accounting, Auditing & Financial Management Conference Thursday, Nov. 10, 2016

Nonprofit & Health Care Financial Conference Thursday, Sept. 29, 2016

CPAs in Industry Fall Conference Thursday, Sept. 15, 2016

School District Audit Conference Thursday, May 26, 2016

School District Audit Conference Wednesday, May 25, 2016

For 2016 WICPA Conference dates, visit wicpa.org/conferences.

Join us under the big top at the

WICPA NEW CPA WELCOME DINNER

thursday, june 9, 2016

• HOLIDAY INN PEWAUKEE-MILWAUKEE WEST •

COME ONE, COME ALL TO THE GREATEST

WISCONSIN CPA EVENT ON EARTH!

The WICPA congratulates all CPAs who received their license in 2015! New CPAs and their family, friends and colleagues are invited to attend the WICPA New CPA Welcome Dinner. Together, we will celebrate their achievements and recognize their accomplishments.

During the program, keynote speaker, Kimberly Ellison-Taylor, CPA, CGMA, vice chair of the AICPA Board of Directors, will highlight the accounting profession in her presentation, “Path to Unlimited Possibilities.”

AFTER THE PROGRAM, ALL ARE INVITED TO STAY FOR ATTRACTIONS UNDER THE BIG TOP!

THANK YOU TO OUR SPONSORS ENTERTAINMENT SPONSOR

NETWORKING RECEPTION SPONSOR

VIEW EVENT DETAILS AT WICPA.ORG/NEWCPADINNER.

STEP UP AND LEAD Photography by Denise Dropik

Elizabeth Hazi, CPA puts her best foot forward with leadership

Elizabeth Hazi, CPA (center) enjoys an afternoon of fun with members of a Daisy Troop from the Girl Scouts of Southeastern Wisconsin.

By Donna Pinsoneault

E

ver been in this situation? You’re at a meeting — a professional committee meeting, for example — and they ask for nominations to become the next committee chair. Do you raise your hand? You do if you’re Elizabeth Hazi, CPA. In fact, that’s just what she did in 2012. As a newly licensed Wisconsin CPA, Hazi decided to check out the WICPA Young Professionals Committee.

As chair of the WICPA Young Professionals Committee, Hazi works with committee members to plan events designed to help young CPAs build their professional network and gain knowledge crucial for career advancement.

“They asked for a volunteer to chair the group and no one stepped up,” she said. “So I did. I sincerely believe that’s the approach young professionals need to take if they want to become leaders.”

Annual dinners and new member gatherings in

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Milwaukee were already in place at the WICPA. However, Hazi and the Young Professionals Committee also initiated and planned events with CPAs in other cities.

“We are a state society, and we feel it is impor tant to reach young professionals throughout Wisconsin,” Hazi said. “Now we are hosting events in Appleton and Madison and are hoping to expand.”

Put the passion for leadership to work Chairing the Young Professionals Committee wasn’t Hazi’s first experience with professional leadership. A University of Arizona graduate, Hazi worked as a CPA in Nor th Carolina and was an active member with the Nor th Carolina Association of CPAs. Now, in addition to her full-time role as accounting manager at Brookdale Senior Living in Milwaukee, Hazi serves on nonprofit boards and volunteers with

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Hazi’s leadership and skills make her a role model to her colleagues at Brookdale and the CPA profession, said Jeff Bryl, senior director-operations at Brookdale.

Girl Scouts of the United States of America, Special Olympics and The Salvation Army.

“I like to do something that matters and really delve into it,” she said. “Getting really involved helps me to be more efficient, which leads to being able to do even more.”

Hazi helps several Girl Scout Daisies with their art projects.

Hazi strongly encourages young CPAs to get involved with the WICPA Young Professionals Committee and other WICPA groups.

What’s the advantage?

“Being involved helps you meet different people,” she said. “You never know where that’ll lead.”

For example, at her first WICPA annual banquet, Hazi chatted with the gentleman sitting next to her at dinner. Two years later, he recruited her for her current job at Brookdale.

“I love my job, and who knew networking at that event would connect me to the person that led to it,” she said.

Hazi’s leadership and skills make her a role model to her colleagues at Brookdale and the CPA profession, said Jeff Bryl, senior director-operations at Brookdale.

“She has guts and is not afraid to ask the tough questions,” Bryl said. “She believes in giving back to the community, and she generously gives of her time to several different causes and encourages others to join her. One example is that she has stepped up to be the Brookdale Milwaukee office representative for our relationship with the Alzheimer’s Association. We have a large office, so it’s a big responsibility.”

Move others to action

Hazi recognizes that industry experience provides wicpa.org

a different, more specialized view of the accounting profession. She also recognizes that moving forward in one’s career involves risk, the kind of risk that eventually leads to raising a hand and getting involved.

“Leadership is the ability to move people to action,” she said. “You have to get people to act, not just inspire them to think different. The goal is to be the one who stands up when no one else will.”

Hazi attended AICPA Leadership Academy last fall.

The four-day intensive and educational process challenged par ticipants to examine what leadership means to them and how it impacts their personal lives, career paths and the profession.

“Everyone was there to learn,” she said. “We were surrounded by people who were open, honest and serious about developing their leadership skills.

It taught me so much about what it means to be a leader, how to think, how to better understand and work with people.”

The experience inspired her and others to develop a leadership series for WICPA. “You don’t know how good you can be until you get involved in something like that,” she said. “We want to give everyone the oppor tunity to be a better leader and professional.”

Take risks

With her chair term of the Young Professionals Committee expiring soon, Hazi will bring her experience to the WICPA Education Foundation Board. She knows being a successful leader means always engaging in new oppor tunities.

She encourages all CPAs to par ticipate in WICPA events.

“By doing that, you have the chance to meet 20 to 30 people multiple times a year,” she said.

“You’ll have a harder time prospering if you don’t take advantage of these occasions to learn what oppor tunities are available.”

Hazi also encourages young CPAs to take risks, to get involved, to step up and lead.

“Do some self-reflection and figure out what you want,” she said. “Then, if you hear that little voice that says ‘that sounds fun, but scary,’ listen to it, step up, and do it. Everything else will follow.”

Donna Pinsoneault is a freelance writer in Brookfield.

Contact her at dpinsoneault@gmail.com.

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Left: Sandy Lonergan, chief of staff, office of State Rep. Dale P. Kooyenga; State Rep. Dale P. Kooyenga, CPA (not pictured); Crystal Potts, chief of staff, office of State Sen. Howard L. Marklein; State Sen. Howard L. Marklein, CPA, CFE; Tammy J. Hofstede, WICPA chief financial and operating officer; Michael D. Akers, chair, CPA, CBM, CFE, CGMA, CIA, CMA, Ph.D., chair, Department of Accounting, Marquette University; John Scheid, CPA, chair, Accounting Examining Board; Jean M. Hansen, CPA, MBA, CGMA, Past WICPA Board chair; Dennis F. Tomorsky, CPA, J.D., CGMA, WICPA President & CEO; and Gov. Scott Walker (center).

Gov. Walker signs bill updating accounting regulations Bill also directs AEB to research the establishment of continuing education requirements for CPA license renewal

By Tammy J. Hofstede 20

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wicpa.org

The restated Administrative Code provisions were the culmination of the collaborative efforts of the Accounting Examining Board, the WICPA, the Department of Safety and Professional Services, National Association of State Boards of Accountancy and the AICPA. The restated code provisions will take effect on June 1, 2016.

On March 1, 2016, Gov. Scott Walker signed Senate Bill 532, sponsored by Sen. Howard Marklein, and companion Assembly Bill 725, sponsored by Rep. Dale Kooyenga, into law. Read Senate Bill 532 at http://tinyurl.com/SB532 and Assembly Bill 725 at http://tinyurl.com/ABill725.

The legislation accomplishes the following objectives: • Updates outdated and incorrect Wisconsin Administrative Code references to national accounting standards that CPAs must reference and follow in serving Wisconsin businesses and residents, e.g., American Institute of CPAs (AICPA) mailing address, Internet link to AICPA standards, and updated peer review definitions and processes.

• Organizes the Code provisions into a much more user-friendly format that is easier for CPAs, regulators and the public to find and understand regulatory guidance.

• Aligns the Code more closely with the Uniform Accountancy Act and related model regulations that are incorporated into statutes and regulations of all other states in order to reduce complexity and regulatory inconsistency for the many Wisconsin CPAs who serve clients in multiple states.

• Reflects the recent statutory change in the Uniform CPA Examination college education requirements by specifying college education CPA exam eligibility requirements that will

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be helpful to educators in developing curriculum and help CPA candidates select courses that are tested in the nationally administered Uniform CPA Examination.

• Directs the Accounting Examining Board to research and submit to the Legislature a report regarding the feasibility of rules to establish continuing education requirements for renewal of a Wisconsin CPA license, as required in all 54 other CPA licensing jurisdictions and for more than 30 other Wisconsin license categories.

WICPA President and CEO Dennis F. Tomorsky, CPA, J.D., CGMA, and Accounting Examining Board Chair John Scheid, CPA testified in support of the restatement of the Wisconsin Administrative Code provisions. The restated Administrative Code provisions were the culmination of the collaborative efforts of the Accounting Examining Board, the WICPA, the Department of Safety and Professional Services, National Association of State Boards of Accountancy and the AICPA. The restated code provisions will take effect on June 1, 2016.

Contact Dennis F. Tomorsky, CPA, J.D., CGMA, at 262-785-0445 ext. 4519 or dennis@wicpa.org with any additional questions.

Tammy J. Hofstede is chief financial and operating officer at the Wisconsin Institute of CPAs. Contact her at 262-785-0445 ext. 4518 or tammy@wicpa.org.

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21

kudos Christa M. Baldridge, CPA, shareholder at Schenck SC in Milwaukee, received Milwaukee Business Journal’s 40 Under 40 award.

Jennifer M. Bieck, CPA was hired as tax manager at Huberty CPAs in Fond du Lac. Nathan R. Byers, CPA

Robin C. Lutz, CPA was hired as director of tax at Huberty CPAs in Fond du Lac. Brad Netzel, CPA was named partner at Sikich LLP in Brookfield.

James L. Bryson, CPA was promoted to senior accountant at Johnson Block and Company, Inc. in Mineral Point.

Russ Plewa, CPA was hired to the commercial management team at Bank Mutual in Milwaukee.

Nathan R. Byers, CPA was promoted to tax supervisor at Johnson Block and Company, Inc. in Madison.

Gerald J. Schmit, CPA was named partner at Sikich LLP in Brookfield.

Russ Plewa, CPA

Daniel A. Schwarz, CPA was named a shareholder at Schenck SC in Milwaukee.

Mark V. Diederich, CPA was named shareholder at Schenck SC in Green Bay. Mark V. Diederich, CPA

Megan L. Ellingson, CPA was named vice president-accounting at Co-op Credit Union in Black River Falls, according to the Banner Journal.

Jessica B. Gatzke, CPA, MST was named as a shareholder of Scribner, Cohen and Company, S.C. in Milwaukee.

Karin G. Harms, CPA was hired as director of tax at Huberty CPAs in Sheboygan.

Nicole Jensen, CPA

Anthony D. Jaynes, CPA was named partner at Wegner CPAs in Baraboo.

Edward M. Thelen, CPA, CGMA was promoted to finance consultant at Humana in Waukesha.

Daniel A. Schwarz, CPA

Francis R. Vinopal, CPA was named partner at MBE CPAs in Mauston, according to the Juneau County Star-Times.

Aaron F. Wojciechowski, CPA, audit associate at Hawkins Ash CPAs in Manitowoc, received his certified public accountant designation.

Nicole Jensen, CPA, tax associate at Hawkins Ash CPAs in Manitowoc, received her certified public accountant designation.

Want your

promotion or award mentioned in Kudos?

Email your announcement and photo in JPG format to cynthia@wicpa.org.

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wicpa.org

OMG!

They’re doing it again?!

WICPA member fall seminar special:

$100 OFF June 1 – June 30 $50 OFF July 1 – July 31 Register starting June 1 at wicpa.org/register.

Not a WICPA member?

Join when registering and save! *Discount applies to 8-16 hour seminars. Does not include conferences or Tax Advisors Update by Andy Biebl. There is no limit to the amount you can save.

Summer hours The WICPA office will close at noon Fridays June 10 Sept. 2

wicpa.org

it’s time to

renew

your membership keep your vital member benefits coming If you have not yet renewed your 2016–2017 membership, visit wicpa.org/renew for quick and easy online payment to keep your valuable member benefits coming, including On Balance magazine.

Pay your dues in the “Renew My Membership” section on the Members page. For information regarding your membership or username and password, contact Jessica Murphy at 800-772-6939 ext. 4502 or Jessica@wicpa.org.

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23

PAYROLL TAXES IN 2016

A

BY KATHLEEN WEBB AND DANIEL RAFEEDIE

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perfect storm of rapidly changing conditions in the United States labor market has put the household payroll industry under renewed scrutiny.

Eerily similar to 1993’s “nannygate” scandal, when unfiled domestic employment tax returns cost two potential U.S. attorneys general their nominations, all families who employ domestic employees, e.g., nannies, elder care providers, housekeepers, etc., are faced with a variety of new challenges when it comes to compensating them.

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shutterstock.com

{ Tax | Payroll taxes }

T TH HE E M MO OR RE E Y YO OU U K KN NO OW W ::

>> “As we are in the second quarter of 2016, the best thing you can do to strengthen the relationship with your clients is to make sure they are aware and on top of their domestic employer tax situation.”

Employment taxes can be complicated, but fines and penalties for not paying them can be very expensive. If your clients have household workers, it’s important that you’re fully aware of the following enforcement issues that could directly affect them:

>> New information sharing agreements In a heightened effort to crack down on unpaid

employment taxes, including the misclassification of workers, Wisconsin signed an agreement with the federal government agreeing to share information and coordinate enforcement efforts. The independent contractor-based business model is now under close scrutiny. In the eyes of the federal government, nannies, housekeepers and caregivers are not independent contractors. They are W2 employees.

>> Misclassification of workers Made prominent by the recent lawsuit in California against Uber, misclassification of employees as independent contractors can have serious repercussions.

In 2014, Wage and Hour Division investigations into misclassified workers resulted in payments of more than $79 million in back wages for more than 109,000 workers nationwide. State unemployment funds are severely taxed, to the point of bankruptcy in some cases, due to unprecedented unemployment benefits claims.

Knowing the complicated nature of tracking hours, calculating taxes and handling payroll, CPAs should recommend that all their clients who employ household workers utilize an outsourced solutions provider that specializes in household payroll and tax compliance.

>> Domestic Workers Bill of Rights Recently, unions have been actively drawing attention

to the Domestic Workers Bill of Rights, and as these groups empower and educate previously uninformed workers, there’s now an increased liability and risk for

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families employing workers. If domestic workers are misclassified unintentionally, the employers are liable.

According to the National Employment Law Project (NELP), misclassified “independent contractors” are deprived of minimum wage, appropriate overtime pay, workers’ compensation, and unemployment insurance. Additionally, independent contractors are typically responsible for paying both portions of Federal Insurance Contributions Act (FICA), which equates to 15.3 percent of their gross wages. Domestic employees, on the other hand, are only liable for their portion of FICA, being 7.65 percent.

>> Immigration reform As enforcement continues to ramp up, federal

agencies are now requiring immigrants to file tax returns as a part of their path to citizenship. In recent years, we’ve seen a spike in Individual Taxpayer Identification Numbers for workers who are looking to become legal U.S. citizens. Household employers who employ undocumented workers must start complying with the law by paying them as full domestic employees. It’s critical that your clients do their part to help their employees meet the requirements needed to become U.S. citizens when the opportunity arises.

>> Affordable Care Act As of March 2014, all individuals are required to

obtain health insurance that meets government standards under the Affordable Care Act (ACA).

Premiums and penalties are skyrocketing, but without verifiable income, many household employees are ineligible for the ACA subsidies that help them afford insurance. Not only does verifiable income allow employees to become eligible for ACA subsidies, it also allows household employees to qualify for unemployment benefits, workers compensation coverage, Social Security and Medicare benefits, and tax credits for low-income workers. It’s truly in the best

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{ Tax | Payroll taxes }

interest of your clients — and their employees — to pay their household help legally.

As we are in the second quarter of 2016, the best thing you can do to strengthen the relationship with your clients is to make sure they are aware and on top of their domestic employer tax situation. A trustworthy outsourced payroll provider will not only handle payroll and taxes but will also help your clients stay on top of a number of other requirements.

These requirements include keeping up with changes in the minimum wage, regulations around mileage reimbursement, pay rate notices and other necessary documentation. Since these providers are immersed in this on a daily basis, they also stay on top of important enforcement changes and updates, helping to protect you and your clients.

By understanding and explaining these evolving regulations and recommending an outsourced payroll provider, you’ll add value to the relationship with your clients and free yourself from the seemingly never-ending black hole of payroll taxes.

Kathleen Webb is an author and president of HomeWork Solutions Inc. in Sterling, Va. Contact her at info@homeworksolutions.com.

Daniel Rafeedie is director of sales and marketing for HomeWork Solutions in Sterling, Va. Contact him at info@homeworksolutions.com.

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wicpa.org

Whether you’re looking for a new career or a new employee, the WICPA’s enhanced Career Center can help you make the most of your search.

You’ll find: • • • •

Modern layout.

Better organized content.

Easy access to find or post jobs.

Optimal mobile viewing experience.

Sign in today to post your resume or job and find useful resources to help you with your search.

wicpa.org/careercenter

at the NEW WICPA CAREER CENTER

FIND A JOB POST A JOB

{ Financial planning: Starting a business }

Financing your dream:

How not to

destroy your personal finances

when starting a business

By Timothy M. Steffen, CPA, PFS, CFP®, CPWA®

I

’m a fan of the show “Shark Tank.” It inspires some to think seriously about starting a business. Among a number of our millennial clients especially, there is a real desire to become an entrepreneur, and a belief that starting a business can be a way to attain both independence and wealth. As a financial planner though, I’ve seen too many people put their personal finances at risk while launching a business.

While “Shark Tank” makes it seem easy, the successful entrepreneurs I know will tell you how hard it is. They’ll reminisce about the lean years and may even admit to failing a few times before finding success. In fact, many new businesses don’t pan out.

According to the Small Business Administration (SBA), only half of business start-ups survive more than five years.1 A business failure can become dicey when an entrepreneur takes on too much debt, taps personal or family savings, and later needs to declare bankruptcy.

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While I would never want to discourage anyone from pursuing a dream, it’s possible to reduce the personal finance risk of a business start-up. Here are a few tips: • Delineate between business and personal assets. Set up a limited liability company (LLC) and separate bank account. Not only does this keep a clean line between business assets, and your personal or family assets, it can help reduce your personal liability and make tax compliance simpler.

• If you tap your savings, leave yourself a cushion. According to the SBA, the No. 1 source of financing for new businesses is personal assets/ savings.1 Most entrepreneurs pour some of their own money into a new business. If the business takes off, that can be a great investment. While you may believe your business will be a sure thing, it’s important to set parameters around how much of your personal savings you are will contribute.

In other words, don’t tap it all. wicpa.org

{ Financial planning: Starting a business }

“While I would never want to discourage anyone from pursuing a dream, it’s possible to reduce the personal finance risk of a business start-up.”

• Be careful about tapping retirement accounts.

For many young people, retirement accounts can be some of their only savings, and it can be tempting to tap those accounts believing there will be time to replenish them once the business succeeds. While you can’t borrow money from your IRA, some qualified retirement plans like 401(k)s do allow participant loans. However, you must pay the money back within a stated timeframe, and if you fail to pay back the loan, the money is considered a distribution from your account and will be taxed. In addition, you may face a penalty for early withdrawal. Withdrawing money from a traditional IRA will also lead to taxes and penalties. We’ve also seen something called “Rollovers as Business Start-ups” (ROBS), which are arrangements in which business owners use their 401(k), IRA or other retirement funds to fund a new business. The IRS has made it clear it’s watching these transactions for abuse, so be sure to follow the rules very carefully if you choose this approach.

• Don’t build your business on personal debt. Financial planners generally recommend limiting your total monthly debt service payments (including housing and personal debt) to 36 percent of your monthly gross income. If you personally borrow money for your business and it fails, you may have to declare personal bankruptcy.

• Don’t rely on credit cards if you need to finance the business. It can be easy when cash flow is slim to charge expenses to your business credit card. But most commercial credit cards charge significantly higher interest rates than other sources of credit such as a business line of credit. In addition, many small businesses owners need to provide a personal guarantee when applying for a business credit card.

So even if you’ve kept your business and personal accounts separate, if your business fails, you may be personally responsible for the credit card debt.

• Consider funding your business with money from outside investors or family members. While most entrepreneurs don’t want to give away a slice of their 1

dream, it can be a way to avoid taking on personal debt, and it may force greater discipline, as you will have to report to investors.

• Take advantage of small business loans. These funds can be attractive sources of financing. If you’re a woman or minority investor, take advantage of special loans that might be available to you.

• Don’t forgo insurance. Many married entrepreneurs rely on their spouse to provide health insurance coverage for the family, but if that isn’t an option, buy a personal policy. A severe illness or accident while uninsured can devastate your finances. As a business owner, consider any specialized insurance coverage you may need to protect those interests.

• Keep a fall back. If you’re an attorney or a CPA, maintain your license, and give careful consideration to continuing to work full or part time while your business is getting started. Once your business does become your full-time pursuit, it’s important to keep up your skills in case you need to return to your old line of work.

• Know when to throw in the towel. There may come a time when, despite all your hard work and effort, it becomes clear that a business is not going to be able to support you and your family. Identify goals upfront to define business success, and on the flip side, failure. Once it is clear that the business won’t be successful, accept that and move on.

• Align yourself with experts: When and if your business does take off, dedicate time to rebuilding your personal finances, if necessary, and working with a team of experts who understand your vision and can help you meet your goals for the future.

Timothy M. Steffen, CPA, PFS, CFP®, CPWA® is director of financial planning for Robert W. Baird & Co. Follow him on Twitter @TimSteffenCPA.

Source: Small Business Administration: https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf

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{ Soft Skills | Leadership }

By Sandra Ford Walston 30

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{ Soft Skills | Leadership }

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{ Soft Skills | Leadership }

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