275  7TH Ave  7th floor New York , NY 10001                                                                                                                dcullinanecpa@yahoo.com

​                                                                                                                                                                                                     Chelsea / Lower Manhattan​​

​Daniel Cullinane CPA                                   p 848-250-9587                                                                                                                                     


Amazon.com's second annual Prime Day promotion was the online behemoth's biggest sales day ever, with worldwide orders climbing more than 60% over last year. Amazon created Prime Day to entice people to sign up  for the $99 a year membership, which offers free two day shipping as well as free video and music streaming. How many signed up is unknown, but the company sold a record number of itw own gadgets. Deals for tablets, Kindles and voice activated Echo speaker were plaster all over the home page. the video streaming Fire TV stick wsa the best selling Amazon gadget and helped the company triple last year's Prime Day sales of in house devices. The ultimate goal is to create a shopping experience and digital ecosystem that makes Amazon indespensible

The Federal Reserve is still on track to begin raising interest rated in September, despite he economy's weak first quarter. The factors that weighed on growth last winter have run their course.  By autumn, the economy will look healthy enough to absorb a small rate. The Fed want to move away from the near-zero rate it has imposed since 2008, if only to creae room for future cuts if recession threatens. The bank's policy makers would like to keep hiking until its benchmark rate reaches 3% in late 2017. However, it is doubtful the Fed will deem the economy strong enough to tolerate such a steep rise.

A quirky, encouraging sing for the economy: Americans are dining out more at full service restaurants. Spending on such meals has grown faster than on fast food and other consumer products recently, a sign better folks are feeling better financially and are willing to splurge. That will lift consumer spending in the second half of 2015 and suggests that the .7% drop in first quarter really was a blip, not a red flag.


Windows 10 arrived today.  Windows 8 presented radical ideas about operating computers with fingers and pens instead of mince and keyboards. But it turns out melding touch based and traditional operating systems was the wrong idea. Most people avoided upgrading like the plague. With Windows 10 which arrives as a free update wednesday, Microsoft puts us back in a familiar driver's deat. Turn it on and there is your desktop, unencumbered by gofflegook. All the important stuff is back where you can find it, including the Start Menu. It is worth the upgrade from Windows 8 for these repairs alone. 

You will love its new search. It can do some things other operating systems can not, like identify your face instead of making you type passwords. It will talk back when you call out "hey Cortana" to summon Microsift's fledgling virtual assistant. For the first year upgrading your computer to Windows 10 is free. If you do not do it in the first year Microsoft may charge you $120 or more for the upgrade. If you don not like Windows 10 you can roll back to Windows 7 or 8 within 30 days

If you knew how to use Windoes XP back in 20001 you will have no problem finding your way around Windows 10. The Start menu is back, giving easy access to your most  used applications and controls. All your apps launch in a familiar desktop view with resizable move anywhere window

Search plays a much more prominent role in Windows 10, with a box pinned next to the start button. Type anything you want on your computer, files, folders ect and up it comes. It can also query the Web at large. If your computer has a microphone, you do not have to type anything at all. Windows incorporates the Cortanta voice assistant from Windows phone. She can answer questions, launch applications, help with your calendar and even tell jokes


The Chinese government is struggling to contain the collapse of a step stock market rally it helped engineer, announcing Monday that it will step up its purchases of shares to prop up sagging indexes. Chinese share suffered their biggest one day percentage drop in over 8 years Monday , whipping out hundreds of billions of dollars of market value and putting an end to a three week period of  of stability  Beijing had achieved by intervening with stock purchases and other steps to stop the market's slide.

The Shanghai Composite Index, which includes China's biggest companies, fell 8.5%


Russia is quietly beefing up its military presence in central asia,  a region that has long been a key focus for Moscow. Some former Soviet republics in the area already host large numbers of Russina troops, with more on the way as Russia ramps up joint military excercises, border patrol, aid, arms sales, ect. In Tajikistan, for instance, the Russian force of 6,000 could double in a few years.

Behind the buildup: Mounting concern about instability in Afghanistan. As the US pulls its forces out, Moscow fears that unrest in the country's north could spill into neighboring Turkmenistan and Tajikistan, threatening resources and industries of strategic value to Russia. The Kremlin also has a nervous eye on China's expanding defenses near the borders of Kasakhstan and Kygzstan. Watch of Uncle Sam to get more involved in the region. US firms already do substantial business there, and some limited arms sales might be next.  Russia is not the only power looking to foster closer relationships in Central Asia.


Gold marked its 10th straight day of losses this past wednesday, in the longest losing streak for the precious metal in almost 20 years. Some traders say the collapse is not over yet. Physical demand for gold in China is down 9 percent. Worldwide, demand for god coins, gold bars is down 17%.  You are not getting the buyers even though the price is going lower. From August to September 1996 gold fell 13 days in row Gold watchers only need to look at the dollar to find the reason for gold's decline. The dollar index is up 8% year to date. Since gold is priced in dollars it tends to fall when the dollar rises. With inflation low and the dollar strong.  Gold will stay low until there are signs of inflation.  The commodity fell as low as $1080 on wednesday, reaching new five year lows. Told is down 5% on the week and has lost 8 percent on the year. If gold were to finish the year at its current level, it would mark the first time it has posted three straight years of losses since 1996


On the upswing: Sales of illegal wireless signal jammers.  The devices are often misleadingly marketed as approved by regulators and used to nix cell service in factories and other job sites where employers might not want workers on the phone. Reduced enforcement by the feds means more interference with wireless data is likely in coming years.  The FCC is closing offices around the country to cut costs, limiting the agency's ability to handle complaints about interference on TV broadcasts, limiting the agency's ability to handle complaints about interference on TV broadcasts, calls and other data. Regulators will be tough on the offenders they do catch. Some interference is accidental.  Even a Wi-Fi router that is set incorrectly can cause it.  New regs coming from the FCC will be more complex, spelling hassles for businesses.


​The Export-Import Bank of the US is not about to go out of business even though Congress let its lending authority lapse at the end of last month. Though the bank, which prorvides credit to foreign buyers of US goods and services in order to facilitate exports, will not be able to make new loans or loan guarnatees, it will continue to service existing contracts, which currently run at $100 billion or so. US manufacturers, frrm giants such as Boeing to small firms, depend on Ex-Im aid when selling to overseas clients whose shaky finances might otherwise block the deal   Congress is sure to reauthorize new bank lending later this year.


Under a relatively new IRS undertaking, auditors are being asked to compare what is on the tax return to what they can see, hear and dig up about you. These are know as financial status , ceonomic reality or lifestyle audits The IRS is extending its lon g standing ofiice andfield audit programs into new territor fraught with perils for the taxpayer

For example, when a taxpayer under audit reports income of $40,000 but lives in an exclusive neighborhood, drives a new Porsche and has a big boat in the backyard, it appears to defy economic reality. Whether the auditor found this out in the course of a field audit does not really matter. The case is going to degenerate into a financial status audit.  The individual simply may have inherited a bundle, but the IRS is not going to go away until he explains obvious descrepanies between lifestyle and reported income. Thankfully this type of behavior by the government is restricted. The IRS Restructuring and Reform Act prohibits the use of financial status audits, except in circumstances where a regular audit establishes a reasonable likelihood of unreported income


Steep fines are on tap for employers that file incorrect Obamacare reports with the IRS beginning in 2016. Errors made on form 1094-C and 1095-C which show the health coverage an employer offers its workers will cost up to $250 per return in 2016. Deliberately misstating details will mean a $500 fine per form. Since each worker requires a separate Form 1095 the penalities can really add up. Employers that fiel incorrect forms bt make correctioNs promptly will get light fines.

Legalization of same sex marriage will not eliminate domestic partner benefits at most of the firms that now offer them. Those benefits first offered in the 1990s to same sex couples who could not wed are still prized by many workers.  Young folks who are not ready to get married are especially likely to value domest partner benefits So even though the Supreme Court say gays can now tie the knot most employers will not insist that they do so to maintain health and other benefits for their partners.


IRS agents have their marching orders for auditing nonqualified deferred pay. A new guide spells out what they should be looking for when examining firms with bonus deferral plans, salary reduction arrangements and excess benefit plans. Agents will make sure the deferred amounts are included in the employees' income in the proper year Ditto for the employer's deduction. Examiners will also verify that the timing rule for triggering payroll taxes on deferred pay is followed.


Federal government grants are aimed at making it easier to start a business.  A Whie House initiative will reward cities that develop online tools to streamline permitting and other red tape so entrepreneurs can get a business going in 24 hours or less. The lengthy time it now takes to comply with regs is frustrating to many would be business owners, and it eve causes some to give up trying.  Boston and Salt Lake City ae the first out of the blocks to set up Web portals that are designed to meet the goal of implementing the "Start UP in a Day" initiative.

A new crowdfunding rule wil benefit small firms.  Called Regulatin A-plus, it will allow companies to raise money from a wider pool of investors with less red tape. Companies such as SeedInvest, an investing platform, are using the new rule and are drawing a lot of interest from start -ups and smalls, particularly businesses that already have a large customer base and would like to raise funds from it


Customizing software for your business is about to get easier with new tools to let managers create their own business apps, no coding skills required. Many firms use specialized programs to manage everything from trucking schedules to payment terminals. Developing such software in house can be slow and costly. Bendors such as Appian, MicroPact and Bizagi make the process faster and cheaper by providing  software templates that customers can easily tweak fo fit their needs. A big selling point for customizable software: Enhanced security. The sellers keep the software updated and make it easy to install on new devices, such as phone and smart watches.  That reduces the risk of hackers infiltrating outdated IT systems


The Fed's warning articulated in a pair of rules it finalized monday is among the central bank's starkest post crisis regulatory moves pressing Wall Street banks to reconsider their size and appetite for risk. The Fed completed one rule stating that the 8 largest banks should maintain an additional layer of Capital to protect against losses, its plainest effort yet to encourage them to shrink.  At the same time, it offered a reprieve to General Electric finance unit from more intensive regulation after the company promised to cut its assets by more than half.


​Is the tax burden on the super rich lower than on other high incomers? New 2012 data from IRS say yes. For the first time, the Revenue Service analyzed the income tax  burden faced by subsets of the highest 1% of all taxpayers. The average rate for on the top 1% of earners was 22.83%, the percentage paid in federal income tax.  In order to qualify for top 1% status, filers needed to have adjusted gross incomes of at least $434,682. The rate for the top .01% was 19.53% over three percentage. The average rate on the highest .001% of earners was even lower 17.6%. The favorable tax rated on capital gains and dividends are a key factor. For 2012, the maximum rate on long term gains and dividends was 15% for all filers. Tax rates jumped after 2012. The top rate on gains and dividends soared to 23.8% including a 3.8% medicare surtax.


US home construction surged in June,, driven by demand for the apartments and condominiums that new households favor Housing starts rose 9.8% a month earlier to seasonally adjusted annual rate of 1.17 million in June. The gain was driven entirely by construction of multifamily housing units, mostly rental  apartments which rose 29.4%. Starts for single family units, which represent almost 2/3 of the market dropped .9%.


Google Inc's shares soared as much as 16.8% on July 17,2015, crossing the $700 mark and adding neraly $68 billion to its market value, as strong growth in You Tube viewership allayed concerns about Facebook Inc's push into video.The stock's sure which sent Nasdaq composite index to a record intraday high, came a day after Google reported better than expected profit for the first time in six quarters.  The web search giant's market value was more than the total capitalization of Caterpillar Inc, the world's biggest construction equipment maker.  Google's shares hit a record high of $703, valuing the company at $471.5 billion and cementing its position as the world's second most valuable company after Apple Inc.

At least 27 brokerages raised thier price targets on Google's stock by as much as $150 as high as $800, with analysts also welcoming new Chief Financial Officer Ruth Porat's emphasis on disciplined spending. At the highest price target, Google would be balued at $545 billion. Apple is valued at about $740 billion. The energy brought to Google by Porat, who joined in May from investment bank Morgan Stanley,  is likely to drive the stock in the short and medium term according to analysts.

Google revealed that watch time for You Tube rose 60 percent in the second quarter and the video service had more viewers aged 18-49 on mobile alone than any US cable network Online video ads could be a $17 billion opportunity in the United States alone.

Google and Facebook are trying to woo big companies to market their products via online videos. You Tube has an edge over Facebook as it has a more mature monetization platform that seem to attract the best content.  Google's advertising revenue rose 11 percent to $16.02 billion in the second quarter. the number of paid clicks increase 18 percent.


Sometimes the Service can go back more than three years to seek taxes. If more than 25% of gross income is omitted from a return. Here, a filer did not report a taxable distribution from an ESOP that was large enough to trigger the six year period.  During an unrelated audit before the three year period had expired, IRS agents discovered the unreported payout, but the deficiency notice was not sent until near the end of the six year period. The filer said that since IRS knew of the omission within the three year period and failed to act, and he was in the clear. An appeals court nixed his argument and gave IRS extra time.


Up front money from tenants is treated as rental income, the Tax Court says. A developer  agreed to put up a building and lease it to a firm for 10 years. The rent was based on the developer's project costs. The tenant exercised an option in the lease and paid $1 million before moving in to reduce the monthly rents. The Court sided with IRS that the $1 million payment is characterized as rent ant the entire amount is taxed in the year of receipt.


IRS will have to make do with much less in 2016 if the House has its way. House appropriators have signed on to a bill to cut the agency's budget by $838 million next year, down 7.7% from the funding level of for the current year.  The proposal would slash funding for enforcement by $535 million an 11% drop. The audit rate would continue to plummet with cuts of this magnitude. Taxpayer service would see  an increase of $75 million, to be earmarked for better phone service and faster response times on correspondence from taxpayers.  This increase is only a drop in the bucket compared with what the Service has requested.


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As ways to shop and pay multiply, so do fears about theft of consumer data, everything from an individual's financial details to widespread hack attacks that put information about many thousands of retail customers at risk. The thefts cost many millions of dollars. Banks pay to reissue compromised cards and to cover fraudulent charges Retailers are hit with legal fees and increase costs for insurance as well as for beefed up digital security systems.  The number of data breaches will grow, following a record high 783 reported instance in 2014, a jump of more than 27% over 2013.

​Businesses will push back aggressively, trying to stay a step ahead The tools they will use:

  • Biometrics  Banks, credit card companies and mobile device makers are all taking a close look at the developing technology as costs start to drop. Customers can be ID'd with fingerprints, iris scans and facial and voice recognition. MasterCard plans to launch a pilot program at some point this year, using a mix of biometrics.  Many new smartphones already have fingerprint readers.
  • Bank cards with embedded chips. The chips send encrypted information, making the cards harder to counterfeit and better protected than standard cards which transmit data through a magnetic stripe and require a signature so the are not foolproof. A more secure option, chips pared with a personal ID number, will not be available in the US anytime soon. They are not perfect. Card fraud in Europe hit a high in 2013, even though chip and pin cards have been in use there for several years. Thieves have come up with new tactics to work around the added security measures.

Even with the changes, mobile, and online payments will remain vulnerable.  The chip protections work for in person card sales but not for Internet purchases. One safeguard is gaining acceptance: Tokenization The technology already used by Apple Pay for Iphones and Apple Watches, replaces the card number with a random number for each sale, Visa, whose token system is used by Apple, expects major retailers to adopt it. Tokenization could become the industry standard.