Alerts

Last-Minute Tax Tips to Check Before You File Your 2016 1040

Don’t give Uncle Sam more of your money than you have to. Review these tax tips before you file your 2016 tax return. How many could apply to you and save you some money – now or down the road? And what else do you need to know? Business and Employment-Related Expenses Did you purchase depreciable assets for your business during 2016? If so, you can benefit from bonus depreciation and expensing allowed by Internal Revenue Code (“IRC”) Section 179. These provisions allow you to deduct up to $500,000 of certain tangible property and leasehold improvements placed in service during. Read More.

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.

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