Alerts

IRS Says, No More Bottom-Dollar Guarantees – What Every Partner Needs to Know

Bottom-dollar guarantees are coming to an end as a way for partners to increase their tax bases in a partnership or limited liability company. Temporary Regulations issued by the Internal Revenue Service (“IRS”) in October 2016 state that bottom-dollar guarantees can no longer be used to increase your basis in your partnership interest unless they are covered by special transition rules. That means that if you’ve made any such guarantees and the underlying debt is modified, you’ll have to restructure the guarantees in order to avoid having them be disregarded under these new rules. A seven-year phase-in period gives you. Read More.

The American Health Care Act: Latest Reactions and Guidance

“What does the new healthcare reform proposal mean for me?” That’s the question on everyone’s minds. How will the reforms the Republicans want to put into place affect businesses, individuals, the insurance industry, and the healthcare industry? Some of the initial takeaways from the proposed bill that has now passed two House committees are: Until reform is passed, the ACA is the law of the land, so don’t change what you’re doing yet. Employer-provided health benefits may still be tax deductible, so offering a group health plan could still earn tax breaks for employers. Cafeteria plans (i.e., HSAs and FSAs). Read More.

March 13 Deadline for QSEHRA Notices Has Been Extended

The March 13 deadline for employers to furnish initial written notice regarding qualified small employer health reimbursement arrangements (“QSEHRA”) has been extended indefinitely until the government can provide additional guidance to employers. The Internal Revenue Service (“IRS”) announced this extension in IRS Notice 2017-20 . QSEHRAs were made available in the 21st Century Cures Act (“Cures Act”), enacted on December 13, 2016. For the first time, the government allowed small employers (typically 50 or fewer full-time or full-time equivalent employees) without a group health plan to reimburse eligible employees for health insurance coverage they purchase individually, as long as the coverage meets minimum. Read More.

How Reviewing Your Accounting Methods Regularly Is a Smart Business Move

It’s a good idea to review your methods of accounting on a regular basis, because making strategic changes to your accounting methods could help you to: Minimize your income tax bill (by changing to a more advantageous method) Comply with new laws and regulations Reflect changes in your business activities or environment Minimize your audit risk (by correcting an impermissible accounting method) There is an extra incentive for voluntarily correcting a method of accounting that is not currently permissible. Not only do you reduce your audit risk, but in most cases you can take any additional income into account over. Read More.

How to Know When Payments from Indemnity and Wellness Plans Are Taxable

When individuals receive payments from fixed-indemnity health insurance plans (sometimes better known as supplemental insurance plans, which are the kinds of plans that pay participants a set amount of money for a hospital stay, each doctor’s visit or a certain medical diagnosis) or a wellness program, does that money count as taxable income? Is it subject to income and employment tax withholding? It can be, if specific criteria are met, such as the insurance premiums were paid from pre-tax dollars and a set amount is paid regardless of how much a person incurs in medical expenses. Chief Counsel Advice (“CCA”) 201703013 clearly outlines the scenarios. Read More.

Compensation: Lessons Learned from Two Court Cases

Two recent court cases send a very clear message about what the Internal Revenue Service (“IRS”) thinks about trying to change compensation arrangements after they’ve already been agreed upon. That message is: While you have many choices for how to structure your compensation, the choice must be made when you enter into an arrangement to provide services. It can sometimes be changed later, but not with respect to amounts that have already been earned. In other words, if you try to change your compensation arrangement after the fact to avoid or delay taxes, the IRS is very likely to challenge. Read More.

State-by-state Chart of Corporate Tax Return Due Dates

This year, the due dates for tax returns for C corporations with fiscal years ending other than June 30 have changed. The due dates are a month later than in the past. This change has prompted many states to re-examine their due dates. The American Institute of Certified Public Accountants has released a new state-by-state quick reference chart of tax return due dates for C corporations that have a December 31 year end. Do you know if your tax return due date has moved? Check out the AICPA chart to find the due date for your state. For a more comprehensive list of federal tax deadlines that have moved this year, please check out our recent alert, “ Tax Day 2017: Updated Tax Filing Deadlines for Your 2017 Tax Returns.

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